SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15 (d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 31, 2003
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ENGINEERED SUPPORT SYSTEMS, INC.
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MISSOURI 0-13880 43-1313242
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
201 Evans Lane, St. Louis, Missouri 63121
(Address of principal executive officer) (Zip Code)
Registrant's telephone number including area code: (314) 553-4000
Item 5. Other Events.
On March 31, 2003, Engineered Support Systems, Inc. (the
Company) announced a restructuring plan in which
electronics assembly work currently performed at its
Sanford, Florida facility would be relocated to a new
state-of-the-art electronics assembly and test facility
located at its St. Louis, Missouri headquarters or to its
West Plains, Missouri manufacturing facility. In
conjunction with the plan, the Company anticipates a $3.0
million pre-tax ($1.8 million after-tax) restructuring
expense to be recorded during the year ending October 31,
2003. Recurring after-tax cost savings related to the
restructuring plan of an estimated $1.5 to $2.0 million
are expected to be realized annually beginning in the year
ending October 31, 2004.
Item 7. Financial Statements and Exhibits
(c) (1) Engineered Support Systems, Inc. press release,
dated March 31, 2003, announcing the closing of the
Company's Sanford, Florida facility.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ENGINEERED SUPPORT SYSTEMS, INC.
Date: March 31, 2003 BY: /s/ Gary C. Gerhardt
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Gary C. Gerhardt
Vice Chairman - Administration and
Chief Financial Officer
Item 7(c)(1) - Engineered Support Systems, Inc. press release, dated March 31,
2003, announcing the closing of the Company's Sanford, Florida
facility.
[ESSI logo]
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201 Evans Lane * St. Louis, MO 63121-1126
For further information, please contact:
Gary C. Gerhardt
314/553-4982
ENGINEERED SUPPORT SYSTEMS TO
CONSOLIDATE ELECTRONICS MANUFACTURING OPERATIONS
ST. LOUIS, MO., MARCH 31, 2003 - ENGINEERED SUPPORT SYSTEMS, INC.
(Nasdaq: EASI) announced another phase of its ongoing facility rationalization
plan aimed at improving operating efficiency and long-term profitability within
the Company. Under this phase of the plan, electronics assembly work currently
performed at the Sanford, Florida facility of its Systems & Electronics Inc.
(SEI) subsidiary will be relocated to alternate SEI facilities. The curtailment
of operations at this facility will result in improved overall utilization of
Engineered Support's existing production capacity and in substantial recurring
cost savings, according to MICHAEL F. SHANAHAN, SR., CHAIRMAN AND CEO.
The 177,000 square foot Sanford electronics plant currently employs
approximately 150 workers who provide system integration, electro-mechanical
assemblies and cable/harnesses for certain of the Company's key defense
programs including the Knight Fire Support System, the High Power Off-Load to
CASS and the Tunner 60-K Aircraft Cargo Loader. SEI expects to vacate the
facility by the end of calendar 2003 with operations fully transferred to
either a new state-of-the-art electronics assembly and test facility located at
its St. Louis headquarters or to its manufacturing facility in West Plains, Mo.
The Company intends to sell the Sanford property in 2004.
Shanahan commented, "The consolidation of our Sanford operation is another
significant step for us in our continuing effort to better utilize the
Company's internal capabilities and to maximize shareholder value. While we
regret the need to dislocate any of our valuable employees, we must retain a
competitive cost structure within the defense industry in order to pursue
future business growth. We possess outstanding resources in all functional
areas within Engineered Support Systems and are ready and able to meet the
demanding needs of today's military, particularly in these times of global
unrest."
In conjunction with the curtailment of the Sanford operation, the Company will
incur a pre-tax restructuring charge of approximately $3 million ($1.8 million
after-tax) relating to the estimated cost of severance, related employee
benefits and asset write-downs. In accordance with recently issued accounting
guidance for the disposal of business activities, the Company expects to record
restructuring costs of approximately $1.5 million ($900,000 after-tax) of this
amount during the current quarter ending April 30, 2003. The remainder of the
$3 million pre-tax charge will be recorded primarily over the second half of
the year.
Recurring after-tax cost savings of an estimated $1.5 million to $2 million are
expected to be realized annually commencing in fiscal 2004 as a direct result
of this restructuring. Engineered Support will provide an updated financial
forecast for its anticipated 2003 and 2004 operating results in conjunction
with its earnings release for the second quarter ended April 30, 2003, which
will be announced May 28, 2003. This forecast will include the incremental
revenues and earnings
anticipated from the Company's pending acquisition of Technical and Management
Services Corporation (TAMSCO) that is expected to close by the end of the
current quarter.
Engineered Support Systems, Inc. is a diversified supplier of high-tech,
integrated military electronics, support equipment and logistics services for
all branches of America's armed forces and certain foreign militaries. The
Company also serves a variety of commercial customers. For additional
information about Engineered Support Systems, please visit the Company's
website at www.engineeredsupport.com.
Certain statements in this press release are forward looking in nature and,
accordingly, are subject to risks and uncertainties. The actual results may
differ materially from those described or contemplated.
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