| In March 2001, the Company initiated a plan to consolidate the operations of the Salt Lake City, Utah carton plant into the Denver, Colorado carton plant and recorded a pretax charge to operations of approximately $2,636,000. The $2,636,000 charge included a $1,750,000 noncash asset impairment write down of fixed assets to estimated net realizable value and a $464,000 accrual for severance and termination benefits for 5 salaried and 31 hourly employees terminated in connection with this plan as well as a $422,000 accrual for other exit costs. All exit costs were paid as of December 31, 2001. As of December 31, 2001, no employees remained at the plant. |
|
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 |
$1,750,000 |
|
$ 464,000 |
|
$ 422,000 |
|
$2,636,000 |
|
|
Noncash |
1,750,000 |
|
-- |
|
-- |
|
1,750,000 |
|
|
|
Cash |
-- |
|
464,000 |
|
422,000 |
|
886,000 |
|
| 2001 cash activity |
-- |
|
(464,000) |
|
(422,000) |
|
(886,000) |
|
|
| Balance as of December 31, 2001 |
$ -- |
|
$ -- |
|
$ -- |
|
$ -- |
|
|
In December 2000, the Company recognized nonrecurring costs of $1,300,000 related to the settlement of a dispute over abandoned property.
|
13. Disclosures About Fair Value of Financial Instruments
|
| The following table sets forth the fair values and carrying amounts of the Company's significant financial instruments where the carrying amount differs from the fair value. The carrying amount of cash and cash equivalents, short-term debt and long-term variable-rate debt approximates fair value. The fair value of long-term debt is based on quoted market prices. |
|
Fair |
Carrying |
|
Value |
Amount (1) |
|
| 9 7/8 percent senior subordinated notes |
$299,250 |
|
$283,563 |
|
| 7 1/4 percent senior notes |
28,130 |
|
25,449 |
|
| 7 3/8 percent senior notes |
196,000 |
|
198,897 |
|
|
|
$523,380 |
|
$507,909 |
|
|
(1) The carrying amount excludes the $7,418,000 adjustment for the fair value of the interest rate
swap agreements discussed in Note 5. |
14. Subsequent Events
|
| In January 2002, the Company completed a third amendment to its senior credit facility that modified the definitions of "Interest Expense", "Premier Boxboard Interest Expense" and "Standard Gypsum Interest Expense" to include interest income and the benefit or expense derived from interest rate swap agreements or other interest hedge agreements. Additionally, the amendment lowered the minimum allowable interest coverage ratio for the fourth quarter of 2001 from 2.5:1.0 to 2.25:1.0, the first quarter of 2002 from 2.75:1.0 to 2.25:1.0, and the second quarter of 2002 from 2.75:1.0 to 2.50:1.0.
Also in January 2002, the Company entered into agreements with the PBL and Standard Gypsum lenders that correspond to the amendments made in the third amendment to the senior credit facility described above, in order to avoid events of default under those guarantees resulting from a violation of the interest ratio coverage covenants.
|
|
