Item 2.05 Costs Associated with Exit or Disposal Activities.
On April 1, 2009, as part of its overall turnaround plan and in response to
current market conditions, management of Sparton Corporation, an Ohio
corporation ("Sparton" or the "Company") committed to and executed a plan to
reduce its workforce by approximately 2% of its total workforce of about 970
employees. Employees at Sparton's Jackson, Michigan, Brooksville, Florida,
DeLeon Springs, Florida and London, Ontario facilities were affected. Neither
the Ho Chi Minh City, Vietnam nor the Strongsville, Ohio facilities were
impacted.
The workforce reduction will result in approximately $1,800,000 in annualized
savings, including base salary, employee benefits, and related payroll taxes. It
is estimated that these workforce reductions will result in a fourth quarter of
fiscal year 2009 charge of approximately $400,000 for severance and other
payroll-related expenses.
Certain statements, including, without limitation, statements regarding the
anticipated size of the Company's workforce reductions and the estimated costs,
savings and cash expenditures associated with the reduction described in this
Current Report on Form 8-K are forward-looking statements within the scope of
the Securities Act of 1933, as amended (the "Securities Act"), and the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements may be identified by the words "believe," "expect,"
"anticipate," "project," "plan," "estimate," "will" or "intend" and similar
words or expressions. These forward-looking statements reflect our current views
with respect to future events and are based on currently available financial,
economic and competitive data and our current business plans. Actual results
could vary materially depending on risks and uncertainties that may affect our
operations, markets, prices and other factors. Important factors that could
cause actual results to differ materially from those forward-looking statements
include, but are not limited to, our financial performance and the
implementations and results of our ongoing strategic initiatives. For a more
detailed discussion of these and other risk factors, see Part I, Item 1A, Risk
Factors and Part II, Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations, in our Form 10-K for the year ended
June 30, 2008, which is incorporated herein by reference. We undertake no
obligation to publicly update or revise any forward-looking statement as a
result of new information, future events or otherwise, except as otherwise
required by law.
