Specialty packaging company
said Wednesday that it would slice its workforce by 5% and take a $21 million fourth-quarter charge as part of a restructuring.
Richmond, Va.-based Chesapeake said the overhaul is meant to "streamline internal processes, increase efficiency and reduce operating expenses."
The company also extended to Jan. 20 from Jan. 3 its $500 million hostile bid for New York-based rival
As part of the restructuring, Chesapeake will shut down a Mechanicsburg, Pa., assembly plant that employs 135 people. The company will reduce staff in other operations as well.
The company said it expects to generate annualized pretax savings of about $11 million (approximately 40 cents per diluted share).
During the fourth quarter, Chesapeake also will record an after-tax gain of approximately $195 million (approximately $11 per diluted share), related to the formation of the
Chesapeake continues to expect full year 1999 earnings per diluted share, excluding non-recurring gains and the impact of the fourth quarter restructuring program, to be $1.85-$2.00.
Analysts surveyed by
First Call/Thomson Financial
expected earnings of $1.96 per share, excluding restructuring charges and special gains.
Chesapeake shares were up 5/8, or 2%, to 30 7/8 in late afternoon trading. (Chesapeake closed up 1/2, or 1.65%, to 30 1/4. Shorewood closed down 5/32, or 0.82%, to 18 7/8.)