AMRI to reduce US workforce by 10%

AMRI (NASDAQ: AMRI) today announced that it is repositioning itself to meet a continued shift in demand from customers for services in Asia and Europe. Overall for 2009 and 2010, the company anticipates investing in excess of $30 million on international facility and capability expansions and estimates its non-US workforce will increase by approximately 180 positions in order to meet known and anticipated customer demand.

As part of its strategy to increase global competitiveness and remain diligent in managing its costs, the company is also implementing significant cost reduction activities at its operations in the US. The company expects a cost savings of approximately $7 million for the remainder of 2010 and an annualized savings of $10 million beginning in 2011.

As part of cost reduction efforts, AMRI is reducing its US workforce by approximately 10%, or an estimated 80 jobs. This includes currently open positions that the company is not filling at this time. AMRI expects that actions to reduce 2010 workforce related costs will result in an estimated $4 million in savings. The company expects to record termination related charges of approximately $1 million in the second quarter of 2010.

Further, the company is suspending operations at one of its research laboratory facilities in Rensselaer, New York. Employees and equipment will be consolidated into nearby AMRI locations. As a result of this action, the company expects to record a restructuring charge of $3-5 million related to lease and fixed asset charges in the second quarter of 2010.

AMRI Chairman, President and CEO Thomas E. D'Ambra said, "These actions reflect the focus by our customers on cost of services amid a highly competitive environment coming primarily from Asia. This has led to a continued shift in demand for AMRI's services from the US to lower cost resources in Asia and Europe. While we remain cautiously optimistic about a return in demand for contract research outsourcing by the biopharmaceutical industry, softness in the US market has extended beyond our expectations. The actions we are taking today are part of our on-going commitment to tightly manage costs while also managing our infrastructure to support future growth and development."

Dr. D'Ambra continued, "We regret the need to take the actions we announce today. We are very grateful for the dedication and contributions of the employees who will be leaving AMRI and we are committed to providing them with resources and services to help them through this difficult transition. The AMRI that moves forward will continue to stay focused on our strategy to support our customers' needs by expanding services, technologies, expertise and geographic options."

AMRI Chief Financial Officer Mark T. Frost said, "AMRI remains healthy and financially sound. The merit of our strategy to build a business that is both global and diverse in product offerings is being proven out in our ability to add and/or expand customer relationships even as the overall economy and industry trends remain in flux. The decision to reduce our structure in the US was difficult, but after exhausting all other options, we believe necessary to achieve our longer term success."

The company reaffirms its full year 2010 non-GAAP financial guidance, expecting an increase in contract revenue of up to 13% versus 2009, which was previously provided on May 5, 2010.