SEPTEMBER 22--Key Technology (Walla Walla, WA, USA), a designer and manufacturer of process-automation systems for the food-processing and industrial markets,
has announced the implementation of cost-reduction actions aimed at bringing operating expenses in line with the current business level. The Freshline Machines manufacturing and engineering operations in Sydney, Australia, will be closed effective September 30, 2006, and integrated into existing operations in Walla Walla.
Key Technology will continue to maintain its sales and service offices in Sydney and Melbourne, Australia, for the full line of Key products in that geographic market.
"The acquisition of Freshline in early 2005 added a product offering that is complementary to our optical and vibratory lines and consistent with our strategy to expand into the fresh-cut market," commented Gordon Wicher, senior vice president, Americas and Asia. "The fresh-cut industry is an important growth segment of the food industry for Key Technology, and we will be a player in this market as it matures and adopts more automated processing technology. This restructuring will allow us to significantly reduce our costs associated with the business, without compromising our ability to offer a broad line of processing solutions to the fresh-cut industry."
The company will consolidate the majority of its Medford, OR, USA, operations into its Walla Walla headquarters. Following the consolidation, a small number of aftermarket and service personnel will remain in Medford.
The company also announced that it has agreed, in principle, to sell its 50% interest in InspX LLC, a jointly owned manufacturer of x-ray inspection systems formed in 2004, to that entity. Under the terms of the agreement, Key will receive $1.5 million in a combination of cash and secured notes, plus rights to a contingent payment based upon future performance of the business. The transaction, expected to close early in the first quarter of fiscal 2007, is expected to result in a nominal gain that will not materially impact fiscal 2007 results.
