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Subsequent Events
6 Months Ended
Jun. 30, 2014
Subsequent Events  
Subsequent Events

(12)Subsequent Events

 

Plant Consolidation

 

On July 16, 2014, the Company committed to move forward with a plan to cease operations at its Costa Mesa, California plant and consolidate operations into its Rancho Dominguez, California facility and other UFP facilities. The Company’s decision was in response to the December 31, 2014 expiration of the lease on the Costa Mesa facility as well as the close proximity of the two properties. The Company expects the activities related to this consolidation to be completed on or before December 31, 2014.

 

The Company expects to incur approximately $535,000 in one-time expenses in connection with the consolidation. Included in the $535,000 amount above are approximately $50,000 of expenses the Company expects to incur relating to employee severance payments, approximately $465,000 in moving expenses and expenses associated with vacating the Costa Mesa property and approximately $20,000 in expenses in moving equipment within the Rancho Dominguez location. The Company does not expect to incur any lease separation costs as the completion of the move is expected to coincide with the expiration of the Costa Mesa lease. Total cash charges are estimated at $535,000. The Company expects annual cost savings of approximately $550,000 as a result of the plant consolidation.

 

Building Purchase

 

On July 1, 2014, the Company completed the purchase of a new facility in El Paso, Texas, for approximately $3.0 million.  The Company plans for the new facility to house the Company’s current Texas foam and medical packaging business and to provide capacity to expand its molded fiber operations.  The expansion will include two additional manufacturing lines that are expected to be operational by the first quarter of 2015.