12. Restructuring and Other Nonrecurring Costs
|
| In February 2000, the Company initiated a plan to close its paperboard mill located in Baltimore, Maryland and recorded a charge to operations of approximately $6,913,000. The plan to close the mill was adopted in conjunction with the Company's ongoing efforts to increase manufacturing efficiency and reduce costs in its mill system. The $6,913,000 charge included a $5,696,000 noncash asset impairment charge to write-down machinery and equipment to estimated net realizable value. The charge also included a $604,000 accrual for severance and termination benefits for 21 salaried and 83 hourly employees terminated in connection with this plan and a $613,000 accrual for other exit costs. All exit costs were paid as of December 31, 2000. As of December 31, 2001, one employee remained to assist in marketing the land and building. The Company will complete the exit plan upon the sale of the property, which is anticipated to occur prior to December 31, 2002. The mill closure did not have a material impact on the Company's operations.
In September 2000, the Company initiated a plan to close its paperboard mill located in Camden, New Jersey and recorded a pretax charge to operations of approximately $8,564,000. The mill experienced a slowdown in gypsum facing paper shipments during the third quarter of 2000, and the shut down was precipitated by the refusal of the Company's largest gypsum facing paper customer to continue purchasing facing paper under a long-term supply agreement. The $8,564,000 charge included a $7,038,000 noncash asset impairment write down of fixed assets to estimated net realizable value and a $558,000 accrual for severance and termination benefits for 19 salaried and 46 hourly employees terminated in connection with this plan as well as a $968,000 accrual for other exit costs. The remaining other exit costs will be paid by June 30, 2002. As of December 31, 2001, no employees remained at the mill. The Company is marketing the property and will complete the exit plan upon the sale of the property, which it anticipates will occur prior to December 31, 2002. This mill contributed sales and operating income of $12,400,000 and $1,200,000, respectively, for the nine months ended September 30, 2000 and $20,500,000 and $2,100,000, respectively, for the year ended December 31, 1999.
|
|
The following is a summary of restructuring activity from plan adoption to December 31, 2001:
|
 |
|
Asset
Impairment |
Severance and
Other
Termination
Benefits
|
Other Exit
Costs |
Total |
|
| 2000 provision |
$7,038,000 |
|
$ 558,000 |
|
$ 968,000 |
|
$8,564,000 |
|
|
Noncash |
7,038,000 |
|
-- |
|
-- |
|
7,038,000 |
|
|
|
Cash |
-- |
|
558,000 |
|
968,000 |
|
1,526,000 |
|
| 2000 cash activity |
-- |
|
(380,000) |
|
(346,000) |
|
(726,000) |
|
|
| Balance as of December 31, 2000 |
-- |
|
178,000 |
|
622,000 |
|
800,000 |
|
| 2001 cash activity |
-- |
|
(178,000) |
|
(548,000) |
|
(726,000) |
|
|
| Balance as of December 31, 2001 |
$ -- |
|
$ -- |
|
$ 74,000 |
|
$ 74,000 |
|
|
In January 2001, the Company initiated a plan to close its paperboard mill located in Chicago, Illinois and recorded a pretax charge to operations of approximately $4,447,000. The mill was profitable through 1998, but declining sales resulted in losses of approximately $2,600,000 and $1,500,000 in 1999 and 2000, respectively. The $4,447,000 charge included a $2,237,000 noncash asset impairment write down of fixed assets to estimated net realizable value and a $1,221,000 accrual for severance and termination benefits for 16 salaried and 59 hourly employees terminated in connection with this plan as well as a $989,000 accrual for other exit costs. The remaining other exit costs will be paid by December 31, 2002. As of December 31, 2001, one employee remains to assist in the closing of the mill. The Company is marketing the property and will complete the exit plan upon the sale of the property, which it anticipates will occur prior to December 31, 2002.
|
The following is a summary of restructuring activity from plan adoption to December 31, 2001:
|
|
|
Asset
Impairment |
Severance and
Other
Termination
Benefits
|
Other Exit
Costs |
Total |
|
| 2001 provision |
$2,237,000 |
|
$ 1,221,000 |
|
$ 989,000 |
|
$ 4,447,000 |
|
|
Noncash |
2,237,000 |
|
-- |
|
-- |
|
2,237,000 |
|
|
|
Cash |
-- |
|
1,221,000 |
|
989,000 |
|
2,210,000 |
|
| 2001 cash activity |
-- |
|
(1,221,000) |
|
(597,000) |
|
(1,818,000) |
|
|
| Balance as of December 31, 2001 |
$ -- |
|
$ -- |
|
$ 392,000 |
|
$ 392,000 |
|
|
|
