ALPHARETTA, Ga. (News release) -- Neenah, Inc., a leading global manufacturer of specialty materials focused on filtration media, specialty coatings, engineered materials and imaging & packaging, announced a number of operational changes consistent with the Company's commitment to accelerating growth, strengthening margins, and creating value for customers and shareholders.
* Investing $13 million in new release liner coating capacity in support of its growing specialty coatings business and the recent ITASA acquisition
* Restarting an idled Fine Paper & Packaging asset in support of its premium packaging business
* Ceasing operations at its Appleton, Wisconsin facility
"These actions will drive accretive value and accelerate efforts toward our long-term revenue growth goal of 5% annually with strong, consistent margins. Both the investment in coating capacity for release liners and the start-up of an idled asset in support of premium packaging are aligned with our strategy to extend our capabilities into larger, growing markets with customers that value unique, premium solutions," said Julie Schertell, Neenah's President and Chief Executive Officer. "Closing a facility is always a difficult decision and not one we take lightly. This decision is not a reflection of our employees or their efforts, as the team has consistently worked hard to overcome obstacles, improve safety and drive results. We'll continue to provide innovative filtration solutions and serve customers from our other manufacturing facilities in Europe and North America."
Schertell added, "I'm confident these footprint changes will unlock immediate value for our shareholders as we continue to transform Neenah into a faster growing, more profitable company. We remain focused on investing for growth, maintaining a strong balance sheet and providing meaningful shareholder returns."
Financial implications associated with the closure of the Appleton facility include an estimated annual EBITDA benefit of $7 million to $8 million, excluding estimated one-time cash closure costs of $5 million to $6 million and one-time non-cash charges of approximately $45 million. Annual revenues are estimated to decrease by $20 million to $25 million from the closure. The facility is expected to be closed by the end of the third quarter of 2021.
The release liner coating capacity is planned to come on-line in mid-2023, providing necessary capacity to fuel growth in North America and Latin America. The Fine Paper & Packaging asset is expected to be restarted in the fourth quarter of 2021.
Additional information regarding these announced actions will be provided when Neenah, Inc. issues its second quarter 2021 earnings news release before the market opens on Thursday, August 5, followed by an earnings conference call with investors at 11 a.m. E.T. that day.