Bandag Freezes Pension Plans
Bandag (BDG) said Thursday it is closing its pension plans to new hires in the U.S. and Canada, and freezing existing pension plans for salaried and hourly U.S employees and for salaried Canadian employees, effective Dec. 31.
The retreading materials manufacturer is offering an early retirement program for eligible employees and is considering terminating the pension plans within the next 18 months.
Bandag anticipates that freezing its pension plans will help in controlling retirement benefit expenses.
"The North American markets for commercial replacement tires have changed irreversibly over the past several years, a situation exacerbated by record-high raw material prices and intensified competition," CEO Martin G. Carver said in a statement. "To stimulate growth in Bandag's traditional retread business, we are taking steps to simplify our operations and lower our operating costs."The company said it expects to record a net curtailment pre-tax gain of $1.9 million, or 6 cents a share, in the second quarter ending June 30 and estimates pension expense of $4.9 million in 2006. Pre-tax expenses associated with the early retirement, voluntary and involuntary separation programs are estimated to be $12 million to $17 million, or 39 cents a share to 56 cents a share, which is expected to be recorded in third quarter. Bandag estimates pre-tax cost savings from the above programs to be $5 million to $7 million, or 16 cents a share to 23 cents a share, for 2006, and an annualized net pre-tax savings of $16 million to $20 million, or 52 cents a share to 65 cents a share. The company's shares were trading up $1.15, or 3.2%, at $37.59 Thursday.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV