Huntington Ingalls Industries Announces Closure of the Gulfport Composite
Center of Excellence
NEWPORT NEWS, Va., Sept. 4, 2013 (GLOBE NEWSWIRE) -- Huntington Ingalls
Industries (NYSE:HII) announced today the closure of its Gulfport Composite
Center of Excellence (the "Gulfport Facility") in Gulfport, Miss.
"This is a difficult but necessary decision," said HII President and CEO Mike
Petters. "Due to the reduction in the Zumwalt-class (DDG 1000) ship
construction and the recent U.S. Navy decision to use steel products on Lyndon
B. Johnson (DDG 1002), there is both limited and declining Navy use for
composite products from the Gulfport Facility."
Current work being performed at Gulfport is expected to be completed by the
end of the first quarter of 2014, with closure expected by May 2014. "Ingalls
Shipbuilding continues to perform well in building the composite products for
the Zumwalt-class (DDG 1000) program and has demonstrated considerable
learning curve improvements," said Irwin F. Edenzon, HII corporate vice
president and president of Ingalls Shipbuilding. "We are working closely with
our Navy customer to efficiently complete our composite work on Michael
Monsoor (DDG 1001) and the mast of Portland (LPD 27) by the end of the first
In connection with this closure, HII expects to impact 427 employees either
through headcount reductions or transfers and to incur total costs of
approximately $59 million. All but approximately $7 million of the total costs
are non-cash, and approximately $14 million of the total costs will be
recorded in the third quarter of 2013, with the remainder expected to be
recognized over the following six quarters. HII estimates that these costs
will reduce operating income in the third quarter of 2013 by $15 to $20
million with no material impact in subsequent periods. Additional details are
contained in HII's Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 4, 2013.
Huntington Ingalls Industries (HII) designs, builds and maintains nuclear and
non-nuclear ships for the U.S. Navy and Coast Guard and provides after-market
services for military ships around the globe. For more than a century, HII has
built more ships in more ship classes than any other U.S. naval shipbuilder at
its Newport News Shipbuilding and Ingalls Shipbuilding divisions. Employing
about 37,000 in Virginia, Mississippi, Louisiana and California, HII also
provides a wide variety of products and services to the commercial energy
industry and other government customers, including the Department of Energy.
For more information, please visit www.huntingtoningalls.com.
This release contains forward-looking statements, which are subject to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include the amount, timing and
components of the charges that HII expects to incur in connection with the
closure of the Gulfport Facility and the impact on operating income, and HII's
actual results could vary from these estimates. HII undertakes no obligation
to update any forward-looking statements and you should not place undue
reliance on any forward-looking statements that it may make.
CONTACT: Jerri Fuller Dickseski (Media)
Dwayne Blake (Investors)
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