Furon to Lay Off Up to 450 Due to Dip in Earnings : Industry: Supplier of Teflon to manufacturers reports that its customers are still weakened by recession. Reduced income prompts cost cutting.
Furon Co., a supplier of Teflon and other materials used by manufacturers, reported weak second-quarter earnings Wednesday and said it would begin laying off as many as 450 workers.
Furon earned $148,000, or 2 cents a share, for its second quarter ended Aug. 3. That compares to profits of $2.3 million, or 28 cents a share, a year earlier. Revenue was $74 million, down 12% from $84 million last year.
Furon’s customers--makers of equipment for a broad array of industries--are still weakened by the recession, Furon said, and orders are far down from previous quarters.
“We believe the recession may well have bottomed out,” said Chairman J. Michael Hagan. “But since the recovery has not yet started, the second half of our fiscal year is difficult to predict.”
For the first six months, the company earned $1.8 million, or 21 cents a share, compared to $5.5 million, or 69 cents a share, last year. Revenue was $156 million, down from $172 million last year.
To cut costs, Furon said it would lay off up to 15% of its 3,000 employees--or about 450 workers--around the nation and in Europe in order to cut payroll costs about 10%.
The cuts won’t be across the board, Hagan said. Of the company’s 24 factories, for instance, those making materials for the slumping auto industry would probably see more layoffs than would factories serving the healthier chemicals-processing industry.
The company has about 450 employees in Orange County.
Furon President Terrence A. Noonan says the company isn’t sure how many employees will be laid off in Orange County. All but one of the local plants--he won’t say which--is in the black, but all have seen their business decline in the last year.