ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES
On January 13, 2021, Navistar International Corporation (the "Company") approved
a plan to sell its facility in Melrose Park, IL (the "Melrose Park Facility")
and cease all operations at the Melrose Park Facility by November 2021. Due to a
reduction in the Company's overall engine manufacturing, the lack of engine
manufacturing at the Melrose Park Facility, and the trucking industry's
increasing interest in alternative fuel drivetrains, a property the size of the
Melrose Park Facility is not necessary for the remaining engine testing and
administrative functions currently performed. In connection with the cessation
of operations at the Melrose Park Facility, the Company expects that half of its
current workforce of approximately 500 employees at the Melrose Park Facility
will be transferred to the Company's other facilities.
As a result of the Company's disposition of, and exit from, the Melrose Park
Facility, the Company expects to incur pre-tax charges of approximately
$85 million, of which, $75 million are expected to be incurred in fiscal year
2021, with the remainder being incurred in fiscal year 2022. The total charges
consist of $22 million for employee separation and other pension and post
retirement contractual termination benefits, and approximately $31 million for
other-related charges. In addition, the Company anticipates approximately
$32 million in charges for accelerated depreciation and impairment impacts
related to the sale and the cessation of the operations at the Melrose Park
Facility. Approximately $40 million of these charges will result in additional
future cash outlays.
ITEM 7.01 REGULATION FD DISCLOSURE
In accordance with General Instruction B.2. to Form 8-K, the following
information shall not be deemed "filed" for purposes of Section 18 of the
Securities Act of 1934, as amended, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended, except as
shall be expressly set forth by specific reference in such a filing.
On January 13, 2021, the Company issued a press release announcing its plan to
sell the Melrose Park Facility and cease all operations at the Melrose Park
Facility by November 2021. The press release is attached hereto as Exhibit 99.1
and is incorporated in this Item 7.01 by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit
No. Description of Exhibit
99.1 Press release, dated January 13, 2021, "Navistar to Sell Melrose
Park, Ill. Campus to Developer"
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
Forward-Looking Statements
Information provided and statements contained in this report that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended ("Securities Act"), Section 21E of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements only
speak as of the date of this report and Navistar International Corporation
assumes no obligation to update the information included in this report. Such
forward-looking statements include our expectations as to the portion of the
Melrose Park Facility workforce that will be transferred to the Company's other
facilities, our expectations concerning the amount of pre-tax charges that will
be incurred and information concerning our possible or assumed future results of
operations, including descriptions of our business strategy. These statements
often include words such as believe, expect, anticipate, intend, plan,
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estimate, or similar expressions. These statements are not guarantees of
performance or results and they involve risks, uncertainties, and assumptions.
For a further description of these factors, see the risk factors set forth in
our filings with the Securities and Exchange Commission, including our annual
report on Form 10-K for the fiscal year ended October 31, 2020. Although we
believe that these forward-looking statements are based on reasonable
assumptions, there are many factors that could affect our actual financial
results or results of operations and could cause actual results to differ
materially from those in the forward-looking statements. All future written and
oral forward-looking statements by us or persons acting on our behalf are
expressly qualified in their entirety by the cautionary statements contained or
referred to above. Except for our ongoing obligations to disclose material
information as required by the federal securities laws, we do not have any
obligations or intention to release publicly any revisions to any
forward-looking statements to reflect events or circumstances in the future or
to reflect the occurrence of unanticipated events.
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