RESTRUCTURING ACTIVITIES AND ASSETS HELD FOR SALE

3 Months Ended

Oct. 29, 2011

RESTRUCTURING ACTIVITIES AND ASSETS HELD FOR SALE

RESTRUCTURING ACTIVITIES AND ASSETS HELD FOR SALE

4. RESTRUCTURING ACTIVITIES AND ASSETS HELD FOR SALE

In the fourth quarter of fiscal 2011, the Company entered into an asset purchase agreement with L&R Distributors, Inc. (“L&R Distributors”), a leading national distributor of non-food products and general merchandise, to divest the Company’s conventional non-foods and general merchandise lines of business. The conventional non-foods and general merchandise lines of business, which the Company acquired as part of its fiscal 2008 acquisition of Distribution Holdings, Inc.,  included cosmetics, seasonal products, conventional health and beauty products and hard goods.  The divestiture will allow the Company to concentrate on its core business of the distribution of natural, organic, and specialty foods and products. In connection with the divestiture, the Company has ceased operations at its Harrison, Arkansas facility in the first quarter of fiscal 2012 and transferred all organic and natural specialty food product inventory from the facility into the Company’s other distribution centers across the United States.

During the fourth quarter of fiscal 2011, the Company recognized a non-cash impairment charge on long-lived assets including land, building and equipment of $5.8 million related to the divestiture. In addition, the Company incurred $0.5 million during the fourth quarter of fiscal 2011 for other non-recurring charges to transition the specialty food line of business into the Company’s other facilities.

During the three months ended October 29, 2011, the Company recognized $5.3 million in severance and other expenses related to the completion of the divestiture.  Upon the closure of the Harrison, Arkansas facility, the carrying value of $2.6 million in long-term property and equipment was reclassified to assets held for sale.