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As a result of annual goodwill impairment tests required under the new FASB 142 accounting guidelines,
the company expects to record approximately $40 million ($37 million after-tax) in impairment charges, primarily in businesses
serving the severely depressed semiconductor market and non-core units acquired in conjunction with strategic acquisitions.
The company noted that the impairment charges represent 1.6 percent of the total value of all acquisitions completed in the
last 10 years. Additionally, the company expects to ...
As a result of annual goodwill impairment tests required under the new FASB 142 accounting guidelines,
the company expects to record approximately $40 million ($37 million after-tax) in impairment charges, primarily in businesses
serving the severely depressed semiconductor market and non-core units acquired in conjunction with strategic acquisitions.
The company noted that the impairment charges represent 1.6 percent of the total value of all acquisitions completed in the
last 10 years. Additionally, the company expects to record $7 million ($4 million after-tax) in fixed-asset impairments as
calculated under the guidelines of FASB 121.
The business realignment costs, amounting to approximately $13 million
($9 million after-tax), result from the company's initiative to achieve operating improvements and greater returns on assets
as compiled in the annual plan review completed last week. Additional costs of approximately $23 million ($15 million after-tax)
will be reflected on the income statement during fiscal year 2003 as they are implemented. Current and future costs include
severance, operating realignments, plant closures and consolidations in the company's industrial divisions.
In aggregate,
these realignment actions should enable the company to achieve savings of about $12 million in fiscal year 2003, and another
$20 million in fiscal year 2004, for ongoing savings of $32 million per year.
"Our managers have thoroughly reviewed
every business unit for performance," said Parker CEO Don Washkewicz. "They've outlined very aggressive actions to remedy
those that have consistently performed below our financial objectives. These actions will position us to achieve results consistent
with our Win Strategy."
The company remains on track to earn between $ 1.78 and $ 1.90 per diluted share in the
fiscal year ending June 30, excluding the anticipated fourth- quarter actions and 13 cents per share in realignment costs,
as well as an investment write down, recorded through the third quarter. As customary, Parker will issue earnings guidance
for fiscal year 2003 in the next quarterly earnings report scheduled July 30.
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