Spartech Corp. is closing a sheet operation and cutting its workforce by about 10 percent to trim costs.
The Clayton, Mo., firm said it will close its Mankato, Minn., sheet plant by August and move production to other facilities. In a March 19 news release it said the extensive job cuts would take place during the next few days. The cuts include manufacturing and office personnel totaling about 350.
``Since I assumed my position in January, I have been evaluating the company's operational structure and strategies while leading the development of a comprehensive plan designed to substantially improve our performance,'' Spartech Chief Executive Officer Myles Odaniell said in a news release.
``The reduction in personnel that was effective today and the Mankato consolidation are actions that will allow us to better align our costs with the current economic and demand environment and better position Spartech for the long term.''
Spartech reported a loss of $3.5 million for its first quarter ended Feb. 2 vs. a profit of $8.1 million a year earlier. Sales declined 3.5 percent to $335.1 million.
Spartech said the restructuring will reduce operating expenses by about $9 million for fiscal 2008 and by $16 million on an annual basis after it is implemented. The restructuring will result in about $3 million is expenses, mostly cash-related items.
No job terminations will occur at the Clayton headquarters, according to a report in the St. Louis Post-Dispatch. Mankato, one of Spartech's 25 sheet and film plants, employs about 80, the report stated.
``We will continue to work on additional steps to substantively improve our company as part of our ongoing performance-improvement plan,'' Odaniell added.
Sales of sheet and rollstock - the company's major business segment - were down 9 percent in its first quarter to $147.4 million, Spartech reported. Weakness in residential construction, transportation, recreation and leisure markets figured in the sales decline and were partly offset by higher sales of sheet for material-handling uses in industrial packaging. The segment logged an operating loss of $1.8 million compared with operating earnings of $10.8 million a year earlier.
Packaging technologies sales grew 7 percent to $65.7 million on the contribution of last fall's acquisition of Creative Forming Inc. Operating profit fell, however, to $4.8 million from $6.6 million.
In the compounds segment, Spartech said its sales fell in the first quarter by 1 percent to $104.8 million. Slower sales to automotive and packaging were partly offset by higher revenues for thermoplastics polyolefins sold for roofing applications. Earnings at $2.2 million were off the $4.1 million pace of a year ago.
Engineered Products sales slipped 7 percent to $17.2 million due to lower volumes to fencing and marine markets. Earnings were $1.6 million compared with $2.2 million.