Last updated on June 6th, 2016 at 02:36 pm
TreeHouse Foods is closing manufacturing plants in Azusa, California, and Ripon, Wisconsin.
The Azusa facility has approximately 660 employees and produces bars and snack products primarily for retail customers. The full facility is expected to close and production is expected to end 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.
TreeHouse said 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. TreeHouse does not expect supply disruptions during the transition.
The Ripon facility has approximately 60 employees and produces private-label sugar wafer cookies for grocery retailers. After evaluating various options, the company has decided to discontinue sugar wafer products due to declining demand. Full facility closure and the end of production at Ripon are 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. TreeHouse 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.
The company 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.