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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
February 9, 1998
COMMISSION FILE NUMBER 0-3085
WYMAN-GORDON COMPANY
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1992780
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
244 WORCESTER STREET, BOX 8001, NO. GRAFTON, MASSACHUSETTS 01536-8001
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code 508-839-4441
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ITEM 5. OTHER EVENTS
On December 9, 1997, the Company announced that it had taken
the 29,000 ton press at its Houston, Texas facility out of
service to repair structural cracking identified by ultrasonic
inspection. The purpose of this release is to provide an update
on the status of actions the Company implemented to meet customer
requirements.
At the time of the announcement, the Company stated it had
the capability of producing 80% of the closed-die parts
previously produced on the 29,000 ton press on its newly
installed 20,000 ton press in Houston and the remaining 20% of
the parts on its other large presses in Houston, Grafton,
Massachusetts and Livingston, Scotland. The Company noted that
the transfer of production would require customer approval and,
in certain areas, recertification of the parts.
At the end of January, the Company had increased production
on the alternate presses to 85% of the steady-state production
level on the 29,000 ton press before the incident, and expects
that the final die transfer and process improvements will
increase the rate to 105% by the end of February. Additionally,
the Company plans to transfer certain products to Scotland that
are destined for European customers and which will continue to be
manufactured there even after the 29,000 ton press comes back in
service.
The Company is in the process of disassembling the 29,000
ton press and removing the damaged columns. Until such
disassembly is complete, the Company cannot determine precisely
when it will recommence production on the press. However, based
on known lead times, the Company does not believe that full
production will recommence before May, 1998.
Although the Company has been able to provide alternative
capacity for its customer requirements by moving production to
its other presses, the Company estimates that net income for the
second half of the year will be reduced by $9.0 million compared
to first half levels as a result of delivery delays, operating
inefficiencies, transportation costs and special engineering
charges associated with the press outage.
The Company expects to incur capital costs of approximately
$2.5 million in refurbishing the 29,000 ton press. During the
period the press is out of commission, the Company will spend an
additional $2.0 million on new ancillary equipment, such as
manipulators and controls, designed to enhance reliability, cycle
time and throughput capacity. When repairs and modifications to
the press are complete, the Company expects that its production
capacity will substantially exceed customer demands for
aeroturbine forgings and that its production flexibility will be
enhanced.
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ITEM 5. OTHER EVENTS, Continued
The Company also announced that it will take an
extraordinary one-time charge of approximately $5.0 million net
of tax benefits against third quarter earnings to recognize the
cost of refinancing its 10 3/4% Senior Notes due 2003. On
December 20, 1997, the Company redeemed those Notes utilizing a
portion of the proceeds of the sale of $150.0 million of 8%
Senior Notes due 2007.
This press release contains forward-looking statements made
in reliance upon the safe harbor of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements
involve a number of assumptions, risks and uncertainties that
could cause actual results of the Company to differ materially
from those matters expressed in or implied by such forward-
looking statements. Additional information regarding this risk
factor and uncertainties is detailed from time-to-time in the
Company's SEC filing.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
WYMAN-GORDON COMPANY
Date: 2/9/98 By: /S/ANDREW C. GENOR
Vice President
Chief Financial Officer
and Treasurer
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