Item 2.05 Costs Associated with Exit or Disposal Activities
OnNovember 14, 2019 , the Board of Directors ofTimkenSteel Corporation (the "Company") approved a plan to close the Company's TimkenSteel Material Services facility inHouston, Texas , in the first quarter of 2020. The 100,000-square-foot facility currently employs approximately 100 people who provide value-add and finishing services, primarily to customers that service the energy market. The Company will begin to execute a facility phase-down plan to be completed in the first quarter of 2020. As a result of the plant closure, the Company expects to realize approximately$6 million to$8 million of annual savings beginning in 2020. The Company anticipates recognizing the following estimated charges related to this plant closure: • severance and other employee termination charges of$0.5 million to$1 million in the fourth quarter of 2019 with cash payments occurring in the first half of 2020; • inventory write-downs of$7 million to$12 million in the fourth quarter of 2019 based on expected results of the Company's phase-down plan; and • machinery, equipment, and information technology related asset non-cash accelerated depreciation of$7 million to$8 million , split relatively evenly between the fourth quarter of 2019 and first quarter of 2020.
The Company will finalize these charges during the fourth quarter of 2019 as
management begins to execute the phase-down plan. In total, these actions are
expected to result in estimated total charges of approximately
FORWARD LOOKING STATEMENTS
Certain statements in this Current Report on Form 8-K (including statements
regarding the Company's estimates and expectations) that are not historical in
nature are "forward-looking" statements within the meaning of the federal
securities laws. In particular, the statements regarding the Company's
expectations for its closure of its TimkenSteel Material Services facility,
including the amount and timing of cash and non-cash charges related to the
closure, are forward-looking. The Company cautions that actual results may
differ materially from those projected or implied in forward-looking statements
due to a variety of important factors, including the nature and timing of
employee terminations and amounts for charges relating to inventory, machinery,
equipment, information technology and intangible assets that differ from the
original estimates based on the final fair value determinations. Additional
factors are discussed in the Company's filings with the
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