FREQUENTLY ASKED QUESTIONS

What factors are behind the shift in demand that has made this consolidation necessary?
The recession has reduced overall demand for our caps and it has hurt the small independent retailers who drove our domestic custom product business. We have seen a number of these independents close over the last year while the larger retailers have fared much better, similar to the trends seen in other industries. We do not see this trend reversing or these small independent retailers coming back. Consequently, we are forecasting a further decline in our domestic custom business of 2 - 2.5 million units next year and a widening gap between demand and excess manufacturing capacity.

How and when will the consolidation take place?
We are currently planning to consolidate our three existing U.S. facilities into one beginning with the closing of our Jackson, Alabama facility by mid-February. We hope to meet with the Teamsters, which represent the employees in Jackson, next week to discuss this. We also plan to close our distribution center in Mobile, Alabama by late March.

In the coming weeks, we will be talking with the CWA (which represents the workers in our Derby, NY and Demopolis, Alabama facilities) in an effort to determine which of the remaining plants will stay open. We have developed a strong working relationship with the CWA over the years and we hope that this will prove helpful in managing through this difficult time.

What criteria will the company use to decide which plant will remain open?
These difficult decisions require thorough consideration on a number of factors, including efficiency and cost, and will be done in close consultation with representatives of the CWA.

What is New Era going to do to help its 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 we can directly support the affected communities.