AMRI Announces Additional Actions to Streamline Operations
ALBANY, NY--December 23, 2011: AMRI , a global contract services organization with services spanning the entire R&D continuum, today announced actions taken in the fourth quarter of 2011 to reduce the Company's workforce, right size capacity, and reduce operating costs in 2012. The actions will better align the business to current and expected market conditions and are expected to improve the Company's overall cost competitiveness and increase cash flow generation.
“As we stated in our announcement in November, we are committed to taking the necessary actions to reduce the Company's operating expenses to focus on our core contract research and manufacturing business and to ensure profitability”
The workforce reduction primarily affects personnel based in the Company's U.S. operations and includes certain positions associated with the previously announced decision to wind down all internal R&D activities as the Company enters 2012. In addition, the Company will be terminating the lease of one of its U.S. facilities, which will result in a reduction in annual operating expenses related to this facility. AMRI expects that these cost-reduction initiatives will result in annual savings of approximately $10-11 million, including $7 million relating to the previously announced cessation of R&D activities, and that these savings will begin to be recognized in the first quarter of 2012.
In connection with the actions, AMRI expects to incur a pre-tax restructuring charge in the fourth quarter of approximately $5-6 million, primarily related to lease-termination and employee severance costs of which $5 million is a non-cash charge to write off fixed assets in association with the Company's plans to consolidate operations.
"As we stated in our announcement in November, we are committed to taking the necessary actions to reduce the Company's operating expenses to focus on our core contract research and manufacturing business and to ensure profitability," said AMRI Chairman, President and CEO Thomas E. D'Ambra. "These actions will place AMRI in a more cost-competitive position while ensuring we continue to provide the highest quality service to our clients. We are moving quickly on these carefully considered actions and expect them to positively impact cash flow during the next year. Although our outlook for growth in outsourced contract services by global pharmaceutical companies remains positive, as evidenced by our recent strategic deals, we continue to evaluate our global infrastructure for additional opportunities to streamline our operations and reduce cost."
In addition, the Company today filed a shelf registration statement with the Securities and Exchange Commission. After the shelf registration statement has become effective, AMRI may, from time-to-time, offer its common stock, preferred stock, and warrants up to an aggregate public offering price of up to $50 million. The shelf registration statement is intended to provide AMRI with flexibility to raise funds from the offering of its securities in one or more offerings, subject to market conditions and AMRI's capital needs. A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Albany Molecular Research, Inc. (AMRI) is a global contract research and manufacturing organization with more than twenty years experience providing customers fully integrated drug discovery, development, and manufacturing services. AMRI supplies a broad range of services and technologies that support the discovery and development of pharmaceutical products and the manufacturing of API and drug product for existing and experimental new drugs. With locations in the United States, Europe, and Asia, AMRI maintains geographic proximity and flexible cost models. AMRI has also historically leveraged its drug-discovery expertise to execute on several internal drug discovery programs, which have progressed to the development candidate stage and in some cases into Phase I clinical development. AMRI has successfully partnered certain programs and is actively seeking to out-license its remaining programs to strategic partners for further development.