UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 2.05. | Costs Associated with Exit or Disposal Activities |
On April 6, 2020, Woodward, Inc. (the “Company”) committed to a plan of termination (the “Termination Plan”) in response to the ongoing global economic challenges resulting from the coronavirus (COVID-19) pandemic and its impact on the Company’s business. The Termination Plan, which was predominantly implemented on April 8, 2020, involves the termination of employees and contractors at certain of the Company’s operating facilities, primarily in the U.S. As a result of the Termination Plan, the Company anticipates that it will incur approximately $13 million of restructuring and related charges related to employee severance and benefits costs as of June 30, 2020, with the majority of the cash expenditures being paid by June 30, 2020.
Separately, as part of its recently announced responsive actions to the COVID-19 pandemic, the Company is implementing certain additional measures for the duration of 2020, as well as other, more temporary, measures. The measures for 2020 include a reduction in work hours for certain employees globally and company-wide overtime restrictions (collectively, the “Work Reductions”), as well as a hiring freeze, a company-wide wage freeze, a reduction of officers’ salaries and directors’ base retainers, and the elimination of annual bonus payments. The more temporary measures involve various furloughs of employees (the “Employee Furloughs”), primarily at its aerospace fuel systems and controls facilities in Loves Park, Illinois that is expected to last up to approximately eight weeks.
The Termination Plan has resulted in a decrease, on a full-time employee (“FTE”) equivalent basis, of approximately 11% of the Company’s total workforce. The Work Reductions will result, for the remainder of 2020, in a further incremental reduction of the Company’s workforce of approximately 4%, also on an FTE-equivalent basis. Thus, the Company anticipates a combined workforce reduction of approximately 15% on an FTE-equivalent basis for the remainder of 2020. Due to their more temporary nature, the Employee Furloughs are not included in these workforce reduction calculations.
The Company continues to evaluate additional actions as may be necessary related to the ongoing economic challenges.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| WOODWARD, INC. | ||||
| Date: April 10, 2020 |
By: |
/s/ A. Christopher Fawzy | ||
| A. Christopher Fawzy | ||||
| Corporate Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer | ||||
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