Item 2.05 Costs Associated with Exit or Disposal Activities.
On July 22, 2009 Minerals Technologies Inc. (the "Company") adopted
a restructuring program that will focus on its Refractories
business segment and other select operations. This restructuring
program reflects the Company's on-going strategy to be optimally
positioned for profitability in changing economic conditions.
As a result of the restructuring, the Company will consolidate
operations, rationalize some product lines, streamline management
structures for a more cost-effective business model, and record
charges resulting from impairment of assets of $43.1 million. In
addition, the Company will record restructuring charges of $8.9
million related to severance and other costs associated with the
restructuring activities. As part of the restructuring program,
the Company will reduce its workforce by approximately 200, or 10
percent of its worldwide employees. This will result in estimated
severance costs between approximately $10 million and $11 million,
of which $8.4 million was recognized in the second quarter of 2009.
The major components of the restructuring are:
º In the Refractories business segment, the Company will
consolidate North American refractory operations in Old Bridge,
New Jersey, into Bryan, Ohio, and Baton Rouge, Louisiana,
improving manufacturing efficiencies and reducing transportation
costs.
º The Company will rationalize its North American specialty shapes
product line and European refractory operations.
º In Asia, the Company will consolidate refractory operations and
actively seek a regional alliance to aid in the marketing of its
high-value products there as a result of difficulty penetrating
the market.
The majority of costs associated with this restructuring have been
recorded in the second quarter of 2009. However, the Company
estimates that it will incur additional pre-tax charges between $2
million and $4 million related to these actions. These charges
will occur partially in the third quarter of 2009 with the balance
to be recorded in the fourth quarter of 2009.
As a result of the restructuring, the Company expects to curtail
significant losses in the business segment most deeply affected by
the ongoing worldwide economic recession and improve near-term
performance. The Company anticipates annualized pre-tax savings
from the restructuring actions to be between $16 million and $20
million upon completion of the program in the second quarter of
2010.
Item 2.06 Material Impairments.
The Company also determined that certain material charges for
impairment were appropriate. In the Paper PCC product line, the
Company recorded an impairment charge of $6.5 million at its
satellite PCC facility in Millinocket, Maine, which has been idle
since September of 2008 and where the start-up of the Company's
satellite facility has become unlikely. In discontinued
operations, the Company recorded impairment charges of $5.6 million
to recognize the lower market value of its Mt. Vernon, Indiana,
operations, which have been held for sale since October of 2007.
In the Refractories business segment, the Company recorded
impairment charges of $31 million, which includes consolidation of
certain operations and rationalization of some product lines. The
Company recorded a total of $43.1 million resulting from impairment
of assets in connection with the restructuring.
