Environmental Matters - During the fourth quarter of fiscal 2000, the Company
presented an environmental cleanup plan for a portion of a site in Pennsylvania which
continues to be owned although the related business has been sold. This plan was submitted
pursuant to the Consent Order and Agreement with the Pennsylvania Department of Environmental
Protection ("PaDEP") concluded in fiscal 1999. Pursuant to the Consent Order, upon its
execution the Company paid $0.2 million for past costs, future oversight expenses and in full
settlement of claims made by PaDEP related to the environmental remediation of the site with
an additional $0.2 million paid in fiscal 2001. A second Consent Order was concluded with
PaDEP in the third quarter of fiscal 2001 for another portion of the site, and a third Consent
Order for the remainder of the site is contemplated by October 1, 2002. The Company is also
administering an agreed settlement with the Federal government under which the government pays
50% of the environmental response costs associated with a portion of the site. The Company is
also in the process of finalizing the documentation of an agreed settlement under which the
Federal government will pay 45% of the environmental response costs associated with another
portion of the site. At March 31, 2001, the Company's cleanup reserve was $1.7 million based
on the net present value of future expected cleanup costs. In fiscal 1999, the Company settled
for a recovery of a portion of cleanup costs with its insurance carriers for approximately
$5.1 million (net) which is included in Other income-net The Company expects that remediation
at the Pennsylvania site will not be completed for several years.
The Company also continues to participate in environmental assessments and remediation work at
ten other locations, which include operating facilities, facilities for sale, and previously
owned facilities. The Company estimates that its potential cost for implementing corrective
action at these sites will not exceed $0.2 million payable over the next several years, and
has provided for the estimated costs in its accrual for environmental liabilities.
In addition, the Company has been named as a potentially responsible party in seven
environmental proceedings pending in several other states in which it is alleged that the
Company was a generator of waste that was sent to landfills and other treatment facilities
and, as to several sites, it is alleged that the Company was an owner or operator. Such
properties generally relate to businesses which have been sold or discontinued. The Company
estimates that its expected future costs, and its estimated proportional share of remedial
work to be performed, associated with these proceedings will not exceed $0.1 million and has
provided for these estimated costs in its accrual for environmental liabilities.
Litigation - The Company is also engaged in various other legal proceedings
incidental to its business. It is the opinion of management that, after taking into
consideration information furnished by its counsel, the above matters will have no material
effect on the Company's consolidated financial position or the results of the Company's
operations in future periods.
