TreeHouse Foods said it will to close two manufacturing plants in Azusa, California and Ripon, Wisconsin.
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The decision follows an analysis of the company's plant network to align operations with the current and future needs of its customers and eliminate excess manufacturing capacity.
The Azusa, California facility has approximately 660 employees and produces bars and snack products, primarily for retail customers. Full facility closure and the end of production at Azusa is expected to occur in the second quarter of 2017. Products produced at the Azusa facility will be moved to other manufacturing facilities within the company's existing network.
The decision is being announced well in advance of the closure in order to provide employees with as much notice as possible and to ensure a seamless transition for customers. The Company does not expect supply disruptions during the transition.
The Ripon, Wisconsin facility has approximately 60 employees and produces private label sugar wafer cookies for grocery retailers.
After evaluating various options, Treehouse Foods has decided to discontinue sugar wafer products due to declining demand. Full facility closure and the end of production at Ripon is expected to occur in the fourth quarter of 2016.
Both facilities were part of the company's acquisition of the ConAgra Foods private brands business in February 2016. The company will provide severance benefits, transitional support and outplacement services to employees whose positions are being eliminated.
Total costs to close the Azusa and Ripon facilities are expected to be approximately $17.0 million, or $0.19 per fully diluted share, of which approximately $14.5 million, or $0.17 per fully diluted share, is expected to be in cash.
Components of the charges include non-cash asset write-offs of approximately $2.5 million, employee-related costs of approximately $4.3 million and other closure costs of approximately $10.2 million.
Treehouse Foods expects approximately $1.1 million of the charges to be incurred in the second quarter of this year and approximately $4.0 million on a quarterly basis beginning in the third quarter of 2016 through the second quarter of 2017. ■
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