SPECIAL CHARGES

Capacity Rationalization Charges

In fiscal 2012 we announced the planned relocation of production of our industrial floor absorbent and cat litter products from our facility located in Mounds, Illinois, to our plants located in Mississippi. This decision was made due to the continued decline in the coarse cat litter market and after a comprehensive evaluation of our manufacturing operations and cost structure, including state regulatory requirements. During fiscal 2012 we incurred a pre-tax asset write-off of $1,187,000 and severance and other employee-related costs of $436,000. During fiscal 2013 we recorded pre-tax employee-related costs of $70,000 (net of an adjustment to reduce the reserve estimate), which concluded our expenditures and eliminated our reserve related to this production relocation. These costs are shown as “Capacity Rationalization Charges” on the Consolidated Statements of Operations in fiscal years 2013 and 2012. Allocation of these expenses between operating segments is impracticable due to the shared nature of our production facilities.

The table below shows a rollforward of the reserve included in Other Accrued Expenses on the Consolidated Balance Sheets as of July 31, 2013.



	Severance and other employee related costs
Reserve balance at July 31, 2012	$	413
Charges against reserve	(403		)
Reserve adjustment	(10		)
Reserve balance at July 31, 2013	$	—