COLUMBIA, Md., June 30 /PRNewswire-FirstCall/ -- Martek
Biosciences Corporation (Nasdaq: MATK) announced today that it
plans to restructure its Winchester,
Ky., manufacturing facilities in an effort to streamline
operations, improve capacity utilization, and reduce manufacturing
costs and operating expenses. As part of the restructuring,
to be completed by the end of fiscal 2010, Martek plans to reduce
its workforce and transfer certain manufacturing and distribution
processes currently being performed in Winchester, Ky., to the company's Kingstree, S.C., site. Martek plans to
maintain a strong presence in Winchester after the restructuring, with
approximately 50 highly skilled employees focused primarily on lab
and pilot scale development, innovation and production, as well as
supply-chain management.
These changes are consistent with the company's strategy to
offset a significant portion of price reductions that result from
its infant formula contract extensions by implementing
manufacturing cost savings and product innovation initiatives, and
by growing its non-infant formula business. Notwithstanding the
plant restructuring, when combined with DSM's current ARA
production capabilities, Martek's DHA and ARA production capacity
will be substantially in excess of current and forecasted
requirements for the next several years.
The company's workforce in Winchester will be reduced by approximately 45
people. In connection with this workforce reduction, Martek
expects to incur total cash charges of approximately $1.5 million in fiscal 2010, of which
$0.5 million will be recognized in
the third quarter and $1.0 million in
the fourth quarter of fiscal 2010. In addition, Martek is
evaluating the potential sale or lease of a portion of its
Winchester operations. Any such
sale or lease would be contingent upon Martek's ability to maintain
the necessary production redundancies through continuing access to
certain key processes at the Winchester facility and/or arrangements with
contract manufacturers.
Martek expects that the plant restructuring will likely result
in a non-cash asset impairment charge or loss upon sale of
$30 million - $40 million in the
third or fourth quarter of fiscal 2010.
"These actions are essential to Martek becoming a stronger and
more efficient company that is better able to serve its customers,
execute on its growth strategies, and create shareholder value,"
said Steve Dubin, CEO of Martek
Biosciences Corporation. "I continue to be encouraged by the
demand for Martek's products as our base infant formula business is
expected to post solid growth this year, our non-infant formula DHA
business is growing rapidly, and our Amerifit division continues to
perform well." Further information concerning the matters
discussed in this press release will be provided on the company's
third quarter fiscal year 2010 conference call which is expected to
take place in early September.
Martek Biosciences Corporation (Nasdaq: MATK) is a leader in the
innovation, development, production and sales of high-value
products from microbial sources that promote health and wellness
through nutrition. The company's technology platform consists of
its core expertise, broad experience and proprietary technology in
areas such as microbial biology, algal genomics, fermentation and
oil processing. This technology platform has resulted in Martek's
development of a number of products including the company's
flagship product, life'sDHA™, a sustainable and vegetarian
source of algal DHA (docosahexaenoic acid) important for brain,
heart and eye health throughout life for use in infant formula,
pregnancy and nursing products, foods and beverages and dietary
supplements. The company also produces life'sARA™
(arachidonic acid), an omega-6 fatty acid, for use in infant
formula and growing-up milks. Martek's subsidiary, Amerifit Brands,
develops, markets and distributes branded consumer health and
wellness products and holds leading brand positions in all of its
key product categories. Amerifit products are sold in most major
mass, club, drug, grocery and specialty stores and include:
Culturelle®, a leading probiotic supplement; AZO, the leading OTC
brand addressing symptom relief, detection and prevention of
urinary tract infections; and ESTROVEN®, the leading all-natural
nutritional supplement brand addressing the symptoms of menopause.
Martek currently has a number of nutritional health and wellness
products under development that it plans to commercialize and
distribute through Amerifit's distribution channels.
Martek's technology platform has also made it a sought-after
partner on a range of groundbreaking projects in process, including
the development of microbially-derived biofuels and the development
of DHA-containing oilseeds. For more information on Martek
Biosciences, visit http://www.martek.com/. For a complete
list of life'sDHA and life'sARA products, visit
http://www.lifesdha.com/. For more information about
Amerifit Brands, visit www.amerifit.com.
Sections of this release contain forward-looking statements.
These statements, including statements about (i) Martek's planned
restructuring initiatives in Winchester,
Ky., and its plans with respect to future activities at that
site, (ii) expected future production and economic benefits of the
restructuring, (iii) expected charges resulting from the
restructuring, (iv) expected production capacity for DHA and ARA,
(v) expected future growth in demand for, and sales of, Martek
products, and (vi) performance of the Amerifit division, are based
upon numerous assumptions which Martek cannot control and involve
risks and uncertainties that could cause actual results to differ.
These statements should be understood in light of the risk factors
set forth in the company's filings with the Securities and Exchange
Commission, including, but not limited to, the company's Form 10-K
for the fiscal year ended October 31,
2009 and other filed reports on Form 10-K, Form 10-Q and
Form 8-K.
Contact:
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Cassie France-Kelly
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Public Relations
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(443) 542-2116
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media@martek.com
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SOURCE Martek Biosciences Corporation