Watson Pharma (WPI) to Reorganize Corona, CA, Facility; Sees Charges

January 8, 2013 4:35 PM EST
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Price: $85.73 --0%

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Net income: 65.5M

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As part of its ongoing efforts to improve the efficiency of its global supply chain, on January 3, 2013, Watson Pharmaceuticals, Inc. (NYSE: WPI) announced plans to restructure operations at its Corona, California facility. In connection with the restructuring, manufacturing and related support functions at the site will be reduced and activities at the facility going forward will be focused only on the production of oral contraceptives. Manufacturing and packaging of other products will be transferred to other sites within the Company’s global supply chain. While the timing of the completion of the restructuring will depend on a number of factors, we anticipate that the restructuring will be complete by the end of 2014.

The Company expects to incur pre-tax future cash expenditures associated with the planned closures, including the following:
  • severance, retention, relocation and other employee related costs of approximately $10 to $12 million; and

  • product transfer costs of approximately $3 to $4 million.

The Company also expects to incur non-cash accelerated depreciation charges as part of the restructuring. At this time the Company is unable to estimate the accelerated depreciation charges to be incurred through the estimated completion date.

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