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NOTE 5 - COST SAVINGS INITIATIVE
During fiscal 2006, the Company recorded special
charges associated with a cost savings initiative that was
designed to support its long-term financial objectives.
As part of this multi-faceted initiative, the Company had
identified savings opportunities that include streamlined
processes and organizational changes. The principal component
of the initiative was a voluntary separation
program offered primarily to North America-based
employees. During the fourth quarter of fiscal 2006,
involuntary separations were communicated to certain
employees. Under this initiative, the Company incurred
expenses related to one-time termination benefits for 494
employees, of which 28 were involuntary, which benefits
were based principally upon years of service. Employees
designated for separation under the cost savings initiative
have been separated as of June 30, 2007.
In addition, the Company identified other cost savings
opportunities to improve efficiencies in the Company's
distribution network and product offerings and to eliminate
other nonessential costs. These charges primarily
related to employee severance for facilities that are
closing, contract cancellations, counter and door closings
and product returns.
For the years ended June 30, 2007 and 2006, aggregate
expenses of $1.1 million and $92.1 million, respectively,
were recorded as special charges related to the cost
savings initiative in the accompanying consolidated statements
of earnings. The fiscal 2007 charges were primarily
related to facility closings. At June 30, 2007 and 2006,
$15.4 million and $40.7 million, respectively, and $7.5
million and $28.2 million, respectively, related to the
cost savings initiative were recorded in other accrued
liabilities and other noncurrent liabilities, respectively, in
the accompanying consolidated balance sheet.
The following table summarizes the cost savings initiative,
which impacted the Company's operating expenses
and cost of sales:
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