Abbott Labs (ABT) to Streamline Operations; Sees $370 Million in Pre-Tax Charges

August 21, 2008 11:41 AM EDT

In Today's 8-K Filing From Abbott Labs (NYSE: ABT): On August 19, 2008, Abbott approved a plan to streamline global manufacturing operations, reduce overall costs, and improve efficiencies in Abbott's core diagnostic business. Actions have been identified and will be implemented within the next four years. When complete, this plan is expected to yield annual pre-tax savings of more than $150 million.

These actions will result in pre-tax charges of approximately $370 million over the next several years based on the timing of events, including the transfer of product manufacturing to other Abbott facilities. These charges include employee-related costs of approximately $110 million, accelerated depreciation of approximately $75 million, and other related exit costs of approximately $185 million mainly related to product transfers. Total non-cash charges will be approximately $115 million, primarily reflecting the accelerated deprecation noted above. The employee-related costs and approximately $145 million of other exit costs will require the outlay of cash.

Approximately $150 million of charges are forecast to occur in the second half of 2008, with roughly $140 million projected in the third quarter. The remainder of the charges will occur through 2011 as a result of product re-registration timelines required under manufacturing regulations in a number of countries and product transition timelines.

Abbott Laboratories is engaged in the discovery, development, manufacture and sale of a diversified line of healthcare products.[SM]

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