Restructuring of Operations

9 Months Ended

Jul. 31, 2013

Restructuring of Operations [Abstract]

Restructuring of Operations

10.  Restructuring of Operations

In fiscal 2010 and 2011, the Company recorded charges related to a restructuring and profitability enhancement plan. This plan was implemented to effectuate certain key initiatives and was an integral component of the Second Amendment and Waiver to the Credit Agreement among the Company, Fifth Third Bank, as Lender, L/C Issuer and Administrative Agent for Lenders and other Lenders dated March 31, 2010 (the "Second Amendment"). These actions were taken to comply with the provisions and targeted covenants of the Second Amendment and to address the impact of the global economic crisis on the Company. The Company may incur additional costs in future periods to address the ongoing and fluid nature of the economic crisis, and may incur costs pursuant to certain initiatives being reviewed in accordance with the provisions of the Restated Credit Agreement and May 2013 Forbearance Agreement. The Company incurred costs in 2012 and 2013 related to the consolidation of the Company's commercial printing production operation in Cincinnati, Ohio into existing Company facilities in other locations. In 2013, the Company also incurred costs associated with personnel of approximately $55,000 and inventory costs of approximately $153,000, associated primarily with the sale of substantially all of the property, plant and equipment of the Donihe Graphics subsidiary in Kingsport, Tennessee. These costs associated with Donihe are reflected as a component of discontinued operations. The amount of future charges not discussed herein is currently not estimable by the Company.

The Company's restructuring plans were implemented to address several key initiatives, including streamlining production and administrative operations and headcount reductions. The aggregate pre-tax charge resulting from these actions was $2.5 million. The charges were comprised of $1.7 million associated with excess facility and maintenance costs, primarily related to operating leases, inventory related costs of $200,000 and costs associated with streamlining production and personnel related separation costs of $613,000. The costs associated with the restructuring and profitability enhancement plan are primarily recorded in the restructuring charges line item as part of operating income. Inventory is recorded as a component of cost of sales.

The following information summarizes the costs incurred with respect to restructuring, integration and asset impairment charges during the three and nine months ended July 31, 2013 and 2012, as well as the cumulative total of such costs representing fiscal 2011, fiscal 2012, and the first three quarters of fiscal 2013 to the extent applicable, such costs are included as a component of the printing segment:

		Three Months Ended July 31, 2013		Three Months Ended July 31, 2012		Nine Months Ended July 31, 2013		Nine Months  Ended July 31, 2012		Cumulative Total
Occupancy and equipment related costs	$	43,848	$	-	$	43,848	$	-	$	1,662,813
Costs incurred to streamline production, personnel and other		-		48,038		-		48,038		612,764
Inventory		-		-		-		-		200,380
Total	$	43,848	$	48,038	$	43,848	$	48,038	$	2,475,957

The activity pertaining to the Company’s accruals related to restructuring and other charges since October 31, 2012, including additions and payments made are summarized below:

		Occupancy and equipment related costs		Costs incurred to streamline production, personnel and other		Total
Balance at October 31, 2012	$	241,821	$	-	$	241,821
2013 expenses		43,848		-		43,848
Paid in 2013		(270,739)		-		(270,739)
Balance at July 31, 2013	$	14,930	$	-	$	14,930

The restructuring payments in 2013 were primarily related to a contractual settlement in the form of a promissory note with the Lessor at the Company’s former location in Bridgeville, Pennsylvania. (see Note 5)