TreeHouse Foods: plans to close two Conagra facilities

Oak Brook / IL. (thf) TreeHouse Foods announced its intention to close two manufacturing plants in Azusa, California and Ripon, Wisconsin. 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, the Company 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 Inc. 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 USD, or 0.19 USD per fully diluted share, of which approximately 14.5 million USD, or 0.17 USD 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 USD, employee-related costs of approximately 4.3 million USD and other closure costs of approximately 10.2 million USD. The Company expects approximately 1.1 million USD of the charges to be incurred in the second quarter of this year and approximately 4.0 million USD on a quarterly basis beginning in the third quarter of 2016 through the second quarter of 2017.