Form 8-K for ALBANY MOLECULAR RESEARCH INC 30-Nov-2012
Costs Associated with Exit or Disposal Activities, Regulation FD Di
Item 2.05 Costs Associated with Exit or Disposal Activities
On November 29, 2012, Albany Molecular Research, Inc. (the "Company") approved a restructuring plan related to its operations in Bothell, Washington.
As a result of shifting market preferences related to integrated drug discovery activities, the Company will further optimize its location footprint by closing its Bothell, WA site. The site's biology capabilities will transition to the Company's fully integrated discovery location in Singapore and certain analytical capabilities will consolidate into the Company's analytical quality group in Albany, N.Y.
In connection with the restructuring plan, the Company expects to cease all operations at its Bothell facility effective March 31, 2013. The Bothell facility currently has 24 employees.
As a result of the restructuring, the Company will be terminating the lease of its Bothell facility which will result in a reduction in annual operating expenses related to this facility. The Company expects that these cost reduction initiatives will result in annual savings of approximately $2.0 million which will begin to be recognized in the second quarter of 2013.
In connection with these actions, the Company expects to incur pre-tax charges of approximately $11 million which includes a $4.5 - $5.0 million non-cash fixed asset impairment. Cash charges will consist of $4.0 - $4.5 million for estimated lease obligations to be paid ratably over 24 months commencing in Q2 2013 and approximately $2.0 - $2.5 million for employee and other related costs to be paid during the first half of 2013. The Company expects the majority of these charges to be recorded in the fourth quarter of 2012 and in the first quarter of 2013.
Item 7.01 Regulation FD Disclosure
On November 30, 2012, the Company issued a press release announcing its restructuring plan. A copy of the press release is attached hereto and furnished herewith as Exhibit 99.1.
