THE FACTS

Why is New Era consolidating its U.S. manufacturing operations?
The global recession has resulted in sharply lower consumer demand for our domestically-manufactured caps, resulting in significant layoffs (30% of the workforce) at all of our U.S. plants. With the large number of business closures among independent retailers that we have seen over the last nine months, we do not see demand for these products rebounding for the foreseeable future.

We have tried to keep as many people working in our U.S. facilities as long as possible through the building of stock product resulting in significant levels of excess inventory. We have now reached a point where we can no longer put off making the necessary changes to adjust to the realities of market demand.

What impact will these changes have on New Era Employees?
New Era recognizes the significant impact that this decision is going to have on our employees and the local communities and will do everything we can to lessen that impact and assist our employees through this difficult process, including providing them with comprehensive severance packages, extending their health benefits and providing them with job retraining support and outplacement services. We will also be exploring ways that we can directly support the affected communities.

How will New Era's customers be impacted by this consolidation?
These changes are being made to right-size our capacity to meet the current and foreseeable demand, so we don't expect there will be any impact on our customers and we will continue to be able to meet their needs with no interruption of service.

What is the timeline for the consolidation plan?
We plan to begin the consolidation by closing the Jackson, Alabama plant by mid-February, followed by shutdown of the Mobile, Alabama distribution facility several weeks later. Once a decision has been made regarding which of the remaining two plants will be closed, we project that closing would occur in the second quarter of 2010.

Will New Era continue to make products in the United States?
Yes. Our Authentic Collection (AC) product line, which is our most popular and best-selling, will continue to be made in the U.S.

As difficult as this decision is, we believe that by acting now, we are helping ensure that we will continue to do apparel manufacturing in the United States in the future.