Note 9 - Impairment of Assets and Restructuring Costs

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Asset Impairment Charges [Text Block]

9.

IMPAIRMENT OF ASSETS AND RESTRUCTURING COSTS

In fiscal

2016,

the Company adopted a plan to consolidate certain saw manufacturing operations for greater efficiency. This restructuring generally shifted production from facilities in the U.S. and China to facilities in the U.K. and Brazil and was carried out during fiscal

2017.

A primary element of the plan involved transfer of production of certain saw products from its facility in Mt. Airy, North Carolina to its facility in Itú, Brazil. Because the transfer left

one

of the buildings at the Mt. Airy facility vacant, the Company determined in fiscal

2016

that the carrying value of the building exceeded its fair value. Consequently, the Company recorded an impairment loss of

$4,114,000,

which represents the excess of the carrying value of the building over its fair value. The Company determined the amount of the impairment charge by relating the square footage of the vacated section of the building complex with the values in its fixed asset registers specifically related to that building addition.

Fair value of the vacated section of the complex was determined by comparison to the price per square foot obtained in recent sales of similar property in the local region.

The impairment loss is recorded as a separate line item (‘‘Impairment of assets’’) in the Consolidated Statement of Operations for fiscal

2016.

The vacated building is

one

within a larger complex of buildings which remains in use. While a particular area of the production floor has been vacated, the Company does

not

intend to close the facility or to decommission machinery and equipment.

In addition to the impairment loss recognized in fiscal

2016,

the Company has incurred

$988

,000

in related restructuring charges

, representing severance compensation, equipment installation and freight costs, in fiscal

2017.