Note 14 - Contingencies

9 Months Ended

Jun. 27, 2015

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(14) Contingencies

Insurance recoveries.

On January 21, 2014, a fire occurred at the Company’s Gallatin, Tennessee PC strand manufacturing facility. The fire damaged a portion of the facility, requiring the temporary curtailment of operations until the necessary repairs were completed. The Company reassigned a portion of its production requirements to its PC strand facility located in Sanderson, Florida, which was operating at a reduced utilization level. During the first quarter of fiscal 2015, the Company completed the remainder of the repairs and the Gallatin facility was fully operational as of December 27, 2014.

The Company maintained general liability, business interruption and replacement cost property insurance coverage on its facilities that was sufficient to cover the losses incurred from the fire. During the three- and nine-month periods ended June 27, 2015, the Company received $0.1 million and $2.0 million of insurance proceeds, respectively, related to the expenses that were incurred and capital outlays that were required to replace property and equipment damaged in the fire. During the nine-month period ended June 27, 2015, the insurance proceeds attributable to the additional expenses incurred were recorded in cost of sales ($244,000) and selling, general and administrative expense (“SG&A expense”) ($69,000) on the consolidated statement of operations and comprehensive income. During the three- and nine-month periods ended June 28, 2014 the Company received $2.7 million and $4.0 million of insurance proceeds, respectively, related to the expenses that were incurred and capital outlays that were required to replace property and equipment damaged in the fire. During the three-month period ended June 28, 2014, the insurance proceeds attributable to the additional expenses incurred were recorded in cost of sales ($1.4 million) and SG&A expense ($73,000) on the consolidated statement of operations and comprehensive income. During the nine-month period ended June 28, 2014, the insurance proceeds attributable to the additional expenses incurred were recorded in cost of sales ($2.5 million) and SG&A expense ($98,000). The insurance proceeds attributable to the property and equipment damaged in the fire were reported in cash flows from investing activities and all other insurance proceeds received were reported in cash flows from operating activities on the consolidated statement of cash flows. The Company reached a final settlement with its insurance carrier on this claim during the third quarter of fiscal 2015.

Customer dispute.

During the three-month period ended June 27, 2015, the Company settled a dispute with a customer resulting in a $0.7 million charge that was recorded in other expense on the consolidated statement of operations and comprehensive income.

Legal proceedings

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The Company is involved in lawsuits, claims, investigations and proceedings, including commercial, environmental and employment matters, which arise in the ordinary course of business. The Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on its financial position, results of operations or cash flows.