Reorganization enhances service to customers and maximizes operational
Toronto Stock Exchange: ARF.UN
GUELPH, ON, Oct. 5, 2009 /CNW/ - Armtec Infrastructure Income Fund (the "Fund") (TSX: ARF.UN) today announced a corporate reorganization designed to capitalize on the significant acquisition growth the Fund has undertaken over the last two years, and transform the Fund by transitioning the various companies acquired into one operating company. Management believes that the new structure will put the Fund in the best position to compete effectively in North American infrastructure markets by making available nationally its comprehensive range of products and services. Following a transitional period, the new structure will come into effect January 1, 2010.
The corporate reorganization initiative brings together the Fund's Armtec, Con-Force and Durisol divisions into one national organization, headquartered in Guelph, Ontario, with a comprehensive regional presence across the country. The new structure comprises four regionally-based operating business units, Pacific, Prairies, Central and East, supported by a national Shared Services business unit providing strategic sales & marketing, human resources, finance, IT and operations support to the regions. The new regional management teams will also review manufacturing facilities to determine how the organization can better leverage its expanded manufacturing capacity.
"With the introduction of our new streamlined management and corporate structure, the Fund will be a leaner, stronger and more resilient organization that is more efficient, cost-effective and customer focused," said Charles Phillips, President and Chief Executive Officer. "These changes will allow the Fund to capitalize on our operational scale, product diversity and market depth to deliver a full range of innovative products and enhanced quality services to customers in local markets across Canada. The resulting cost savings are expected to be realized over the next two years as the transition process is completed."
The Fund's regional operations will share a common structure of sales, engineering, finance, human resources and operations personnel drawn from the former divisions and will be headed by a regional vice president who is a member of the Fund's senior management team. The Pacific region will cover British Columbia and will be led by Doug Carter, currently in the Durisol division; the Prairies region will cover Alberta, Saskatchewan and Manitoba and will be led by John Moody, currently in the Con-Force division; the Central region will cover Ontario and will be led by Peter Quail, currently in the Con-Force division; and the East region covers Quebec and the Atlantic provinces and will be led by Eric Caron who is currently in the Con-Force division.
The Shared Services group, which will operate out of the Guelph office, will also include a new national sales & marketing unit responsible for coordinating national accounts, branding, strategic marketing, sales training and compensation and product development. This group will be headed by Kevin Young, the current president of the Armtec division.
Annualized cost savings which will be realized, are expected to be in the $6 to $8 million range, with approximately 100 positions being made redundant over time. The Fund expects to incur additional charges of $6.1 million in connection with the reorganization into the regional structure, of which $5.0 million is expected to be recognized in 2009 and the balance in 2010. Further costs will be recognized in 2010 as back-office services are reorganized in line with the Fund wide implementation of SAP. Savings from these initiatives are expected to start in the second half of 2010.
Conference Call & Webcast
Management will host a conference call on Tuesday, October 6, 2009 at 10:00 a.m. (ET) to discuss the reorganization. Persons who wish to participate can access the call using the following numbers: 416-644-3416 or 1-800-814-4861. The call will be webcast live and archived on the Fund's website at www.armtecincomefund.com.
A taped rebroadcast will be available to listeners following the call until 12:00 a.m. on Tuesday, October 13, 2009. To access the rebroadcast, please dial 416-640-1917 or 1-877-289-8525 and quote the passcode 4166136No..
About Armtec Infrastructure Income Fund
Armtec Infrastructure Income Fund is a leading manufacturer and marketer of a comprehensive range of infrastructure products and engineered construction solutions for customers in a diverse cross-section of industries that are located in every region of Canada, as well as in selected markets in North America and worldwide. These markets include Canada's national and regional public infrastructure markets and private sector markets in agricultural drainage, commercial building, residential construction and natural resources. Operating through its network of regional offices and production facilities across the country, Armtec is Canada's only national multi-material infrastructure application manufacturer. The Fund specializes in high density polyethylene and corrugated steel pipe products for drainage and bridge applications, water management systems, a full suite of highway noise barriers and offers a wide variety of precast and pre-stressed concrete products, which provide advanced construction components and high-value engineered solutions to its customers. Armtec Infrastructure Income Fund is listed on the TSX under the ARF.UN symbol. For more information, please visit www.armtecincomefund.com.
This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). All statements other than statements of historical fact contained herein are forward-looking statements, including, without limitation, statements regarding the impact of the above noted contract award and capacity expansion on the Fund's financial performance and statements regarding the business strategy, plans and objectives of or involving the Fund or the businesses in which it has invested. Prospective investors can identify many of these statements by looking for words such as "believe", "expects", "will", "intends", "plans", "projects", "anticipates", "estimates", "continues" and similar words or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.
By their nature, forward-looking statements require assumptions and are subject to inherent risks and uncertainties, including those discussed herein. There is significant risk that forward-looking statements will not prove to be accurate. You are cautioned not to place undue reliance on forward-looking statements made herein because a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.
The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: industry cyclicality; competition; reduction in demand for products; collection from customers; relationships with suppliers; lack of long-term agreements; expiration of rights under licence and distribution arrangements; raw material price volatility; product liability; intellectual property; reliance on key personnel; environmental; collective bargaining; interest rates; uninsured and underinsured losses; operating hazards; risks of future legal proceedings; dependence on other Fund subsidiaries; income tax matters; leverage and restrictive covenants; credit facilities; nature of units; distribution of securities on redemption or termination of Fund; restrictions on potential growth; effect of market interest rates on price of Units; undiversified and illiquid holdings in Armtec Operating Trust; and potential dilution. You are cautioned that the foregoing list of factors is not exhaustive and that when relying on forward-looking statements to make decisions with respect to the Fund, investors and others should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements.
The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The Fund undertakes no obligation to publicly update or revise any forward-looking statements except as expressly required by applicable securities law.
Risks related to the Fund have been summarized in the Fund's latest Annual Information Form, Management's Discussion and Analysis included in the Annual Report and quarterly financial reports available on www.sedar.com or the Fund's web site at www.armtecincomefund.com.
SOURCE ARMTEC INFRASTRUCTURE INCOME FUND
For further information: For further information: Charles M. Phillips, President & Chief Executive Officer, Armtec Limited Partnership, Tel: (519) 822-0210, Fax: (519) 822-8894; James R. Newell, Chief Financial Officer, Armtec Limited Partnership, Tel: (519) 822-0210, Fax: (519) 822-8894; Carrie Boutcher, Vice President, Investor Relations & Treasurer, Armtec Limited Partnership, Tel: (519) 822-0210, Fax: (519) 822-8894