Corporate Relocation Plan

On February 5, 2015, the Company announced the Corporate Relocation Plan pursuant to which the Company will close its Torrance facility and relocate these operations to a new facility housing the Company's manufacturing, distribution, coffee lab and corporate headquarters. Approximately 350 positions are impacted as a result of the Torrance facility closure. The new facility will be located in Northlake, Texas in the Dallas/Fort Worth area. The Company’s decision resulted from a comprehensive review of alternatives designed to make the Company more competitive and better positioned to capitalize on growth opportunities.

The Company expects to close its Torrance facility in phases, and the Company began the process in the spring of 2015. Through April 2015, coffee purchasing, roasting, grinding, packaging and product development took place at the Company’s Torrance, California, Portland, Oregon and Houston, Texas production facilities. In May 2015, the Company moved the coffee roasting, grinding and packaging functions that had been conducted in Torrance to its Houston and Portland production facilities and in conjunction relocated its Houston distribution operations to its Oklahoma City distribution center. Spice blending, grinding, packaging and product development continue to take place at the Company’s Torrance production facility. As of September 30, 2015, distribution continued to take place out of the Company’s Torrance and Portland production facilities, as well as separate distribution centers in Northlake, Illinois; Oklahoma City, Oklahoma; and Moonachie, New Jersey. Effective September 15, 2015, the Company transferred a majority of its primary administrative offices from Torrance to Fort Worth, Texas, where the Company has leased 32,000 square feet of temporary office space. The transfer of the Company’s primary administrative offices to this temporary office space is expected to be completed by the end of the second quarter of fiscal 2016. Construction of and relocation to the new facility are expected to be completed by the end of the second quarter of fiscal 2017. The Company's Torrance facility may be sold as part of the Corporate Relocation Plan.

Based on current assumptions and subject to continued implementation of the Corporate Relocation Plan as planned, the Company estimates that it will incur approximately $25 million in cash costs in connection with the exit of the Torrance facility consisting of $14 million in employee retention and separation benefits, $4 million in facility-related costs and $7 million in other related costs. Expenses related to the Corporate Relocation Plan in the three months ended September 30, 2015 consisted of $3.6 million in employee retention, relocation and separation benefits, $0.7 million in facility-related costs including lease of temporary office space, costs associated with the move of the Company's headquarters, and expenses associated with production transition and relocation of certain distribution centers, and $1.1 million in other related costs including travel, legal, consulting, dedicated project management and other professional services. Facility-related costs in the three months ended September 30, 2015 also included $0.3 million in non-cash depreciation expense associated with the Torrance production facility resulting from the consolidation of coffee production operations with the Houston and Portland production facilities.

Since adoption of the Corporate Relocation Plan through September 30, 2015, the Company has recognized a total of $15.3 million of the estimated $25 million in aggregate cash costs consisting of an aggregate of $10.1 million in employee retention and separation benefits, $0.8 million in facility-related costs and $4.4 million in other related costs. The remainder is expected to be recognized in the balance of fiscal 2016 and the first quarter of fiscal 2017. The Company may incur certain other non-cash asset impairment costs, pension-related costs and postretirement benefit costs in connection with the Corporate Relocation Plan.

The following table sets forth the activity in liabilities associated with the Corporate Relocation Plan for the three months ended September 30, 2015:



(In thousands)	Balances, June 30, 2015		Additions		Payments		Non-Cash Settled		Adjustments		Balances, September 30, 2015
Employee-related costs(1)	$	6,156	$	3,596	$	7,405	$	—	$	—	$	2,347
Facility-related costs(2)	—		730		387		343		—		—
Other(3)	200		1,124		1,124		—		—		200
Total	$	6,356	$	5,450	$	8,916	$	343	$	—	$	2,547
Current portion	6,356										2,547
Non-current portion	—										—
Total	$	6,356									$	2,547

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(1) Included in "Accrued payroll expenses" on the Company's consolidated balance sheets.

(2) Non-cash settled facility-related costs represent depreciation expense associated with the Torrance production facility resulting from the consolidation of coffee production operations with the Houston and Portland production facilities.

(3) Included in "Accounts payable" on the Company's consolidated balance sheets.