Exit and Realignment Costs

6 Months Ended

Jun. 30, 2014

Restructuring and Related Activities [Abstract]

We periodically incur exit and realignment and other charges associated with optimizing our operations, which includes the consolidation of distribution centers, the realignment of our distribution network, and the closure of offsite warehouses.

For the six months ended June 30, 2014, we recognized $6.7 million in total charges associated with exit and realignment activities. Of this amount, $4.1 million was incurred in the current quarter, of which $2.3 million was in the Domestic segment and $1.8 million was in the International segment. These charges include $2.2 million in estimated severance accruals. The remaining charges of $1.9 million were comprised of costs that were expensed as incurred in the quarter and not reflected in the table below, including $0.9 million in property related costs, $0.7 million in labor costs, and $0.2 million in information technology costs. Charges in the first quarter of 2014 were $2.6 million, of which $1.3 million was in the Domestic segment and $1.3 million was in the International segment. These charges included $1.3 million in loss accruals associated with our operating leases and estimated severance. The remaining charges of $1.3 million were comprised of costs that were expensed as incurred in the first quarter and not reflected in the table below, including $0.5 million in relocation costs, $0.5 million in property related costs, and $0.3 million in labor and other costs. We expect additional exit and realignment charges of approximately $5.0 million over the remainder of 2014 for activities initiated in the Domestic and International segments through June 30, 2014.

For the six month period ended June 30, 2013, we recognized total charges of $1.8 million. The second quarter 2013 charges of $0.4 million were expensed as incurred in the Domestic segment. During the first quarter of 2013, we recognized total charges of $1.4 million, of which $0.9 million was in the Domestic segment and $0.5 million in the International segment. These charges included $0.5 million in loss accruals for operating leases. The remaining charges of $0.9 million were comprised of costs that were expensed as incurred and not reflected in the table below, including losses on property and equipment and other expenses.

The following table summarizes the activity related to exit and realignment cost accruals through June 30, 2014 and 2013:



	Lease Obligations			Severance and Other			Total
Accrued exit and realignment costs, December 31, 2013	$	2,434		$	475		$	2,909
Provision for exit and realignment activities	532			807			1,339
Cash payments, net of sublease income	(411		)	(327		)	(738		)
Accrued exit and realignment costs, March 31, 2014	2,555			955			3,510
Provision for exit and realignment activities	6			$	2,236		$	2,242
Cash payments, net of sublease income	(383		)	$	(1,095	)	$	(1,478	)
Accrued exit and realignment costs, June 30, 2014	$	2,178		$	2,096		$	4,274

Accrued exit and realignment costs, December 31, 2012	$	5,098		$	1,116		$	6,214
Provision for exit and realignment activities	538			3			541
Cash payments, net of sublease income	(4,844		)	(147		)	(4,991		)
Accrued exit and realignment costs, March 31, 2013	792			972			1,764
Cash payments, net of sublease income	(118		)	(137		)	(255		)
Accrued exit and realignment costs, June 30, 2013	$	674		$	835		$	1,509

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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