Plant Closure

9 Months Ended

Sep. 30, 2012

Plant Closure

Plant Closure

10.Plant Closure

In September 2012, the Company committed to a plan to close its heavy-duty anchor production facility in Ireland and to exit the heavy-duty mechanical anchor business in the Company’s European segment. The Company expects that the closure to be completed as early as December 2012 or first quarter 2013. The facility produces heavy duty metric anchors used in commercial applications and sold mainly in Europe. After the facility is closed, the Company will continue to sell light and medium-duty anchor products in Europe and its other markets, including metric anchors for commercial use. As a result of this decision, the Company recorded an employee severance obligation of $1.0 million in September 2012, representing the estimated minimum statutory amount due to employees that will be involuntarily terminated. Severance expense was allocated in the statement of operations on the same basis as employee labor cost with 85% allocated to cost of sales. It is likely that additional severance expense will be accrued after negotiations with employees or trade unions have concluded, although amounts are unknown at this time.

Long-lived assets include land, building, equipment and product code approvals. At September 30, 2012, the net book value of this land, building and equipment was $2.9 million and of these product code approvals was $1.2 million. These assets will either be sold to outside parties or be transferred to other branches within the Company. Future depreciation for assets expected to be transferred will not be revised.  The Company has engaged an outside firm to assist in the sale and valuation of the assets for sale. While the facility is operating, gains or losses on the sale of long-lived assets will be recognized in the period sold.  Long-lived assets to be disposed of are considered to be held and in use. Future depreciation for these assets will be revised to reflect the use of the assets over a shortened period. When the assets cease being used, the carrying amount will equal their expected salvage or net realizable value. During the quarter-ended September 30, 2012, the Company had not committed to sell any of these long-lived assets. The Company has not sufficiently progressed in its sale or valuation efforts to have a reasonable estimate of the fair value of held and in-use long-lived assets.

The Company has not yet estimated other closing liabilities, such as professional and consulting fees, environmental clean-up costs, and on-going maintenance and utility costs. Closing liabilities are accrued when a transaction or event has occurred that leaves little or no discretion to avoid future settlement of the liability.  As of September 30, 2012, the Company had not accrued any closing liabilities because the conditions for accruing a liability were not met.