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Special Charge
12 Months Ended
Aug. 31, 2014
Restructuring and Related Activities [Abstract]  
Special Charge
Special Charge
Fiscal 2012 Actions
During fiscal 2012, the Company continued efforts to streamline the organization through the planned closure of its Cochran, Georgia production facility (“Cochran facility”) and reductions in workforce resulting from the downsizing of the Company’s operations in Spain as well as the realignment of responsibilities primarily within various Selling, Distribution, and Administrative (“SD&A”) departments. The Company expects that these actions to streamline its business activities, in addition to those taken in previous fiscal years, will allow it to reduce costs and enhance customer service capabilities, while permitting for the continued investment in future growth initiatives, such as new products, expanded market presence, and technology and innovation.
The Company recorded a $2.7 pre-tax special charge in the first quarter of fiscal 2012 related to the realignment of responsibilities primarily within various SD&A departments. The Company recorded a pre-tax special charge of approximately $1.2 during the second quarter of fiscal 2012 associated with a reduction in workforce, primarily at its operations in Spain. The reduction in workforce was due to the decline in market conditions in Spain, which were not expected to rebound materially in the near future. The pre-tax charge consisted primarily of severance and other employee related costs.
During the second quarter of fiscal 2012, the Company decided to close its Cochran facility. The closure was principally completed by the end of the second quarter of fiscal 2013. The Company transitioned production from the Cochran facility, which produced less than 10% of the Company’s total sales, to various existing facilities in North America.
During fiscal 2012, approximately $9.4 of pre-tax special charges related to the Cochran facility closure consisting primarily of severance and employee-related costs of $7.6, production transfer expenses of $1.4, and non-cash impairments and other miscellaneous costs of $0.4 were recognized and were included in Special Charge in the Consolidated Statements of Comprehensive Income. In addition, related pre-tax expenses of $4.4 were recognized in fiscal 2012 and were included in Cost of Products Sold in the Company’s Consolidated Statements of Comprehensive Income. These related expenses consisted of manufacturing inefficiencies of $3.2 and non-cash asset impairments of $1.2 related to the abandonment of certain otherwise usable inventory at the Cochran facility.
During fiscal 2013, approximately $0.8 of net pre-tax special charges related to fiscal 2012 actions, consisting primarily of production transfer expenses, were recognized and were included in Special Charge in the Consolidated Statements of Comprehensive Income. In addition, related pre-tax expenses of $8.4 directly attributable to temporary manufacturing inefficiencies were recorded in the first nine months of fiscal 2013 and were included in Cost of Products Sold in the Consolidated Statements of Comprehensive Income. No further costs related to this streamlining effort were incurred after fiscal 2013.
Fiscal 2013 Actions
During fiscal 2013, the Company continued efforts to streamline the organization through the planned closure of certain production facilities as well as the realignment of responsibilities primarily within various SD&A departments. The Company expects that these actions to streamline its business activities, in addition to those taken in previous fiscal years, will allow it to reduce costs and enhance customer service capabilities, while permitting continued investment in future growth initiatives, such as new products, expanded market presence, and technology and innovation.
During fiscal 2013, the Company recorded a pre-tax special charge of $7.8 consisting of severance and employee-related costs of $7.6 and lease termination costs of $0.2, which are included in Special Charge in the Consolidated Statements of Comprehensive Income.
The remaining severance reserve related to these programs is included in Accrued Compensation on the Consolidated Balance Sheets. The remaining balance in the reserve as of August 31, 2014 and 2013 was $0.8 and $5.1, respectively. The change in the reserve during the year ended August 31, 2014 was due primarily to $3.7 in payments.