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Restructuring Charges

6 Months Ended

Jul. 02, 2011

Restructuring Charges [Abstract]

Restructuring Charges

3. Restructuring Charges

We account for exit and disposal costs by recognizing a liability for costs associated with an exit or disposal activity at fair value in the period in which it is incurred or when the entity ceases using the right conveyed by a contract (i.e. the right to use a leased property). Our restructuring charges included accruals for estimated losses on facility costs based on our contractual obligations net of estimated sublease income based on current comparable market rates for leases. We reassess this liability periodically based on current market conditions. Revisions to our estimates of this liability could materially impact our operating results and financial position in future periods if anticipated events and key assumptions, such as the timing and amounts of sublease rental income, either do not materialize or change. These costs are included in “Selling, general, and administrative” expenses in the Consolidated Statements of Operations for the first six months of fiscal 2011 and the first six months of fiscal 2010, and “Other current liabilities” and “Other non-current liabilities” on the Consolidated Balance Sheets at July 2, 2011 and January 1, 2011.

We account for severance and outplacement costs by recognizing a liability for employees’ rights to post-employment benefits. These costs are included in “Selling, general, and administrative” expenses in the Consolidated Statements of Operations for the first six months of fiscal 2011 and the first six months of fiscal 2010, and in “Accrued compensation” on the Consolidated Balance Sheets for the periods ended July 2, 2011 and January 1, 2011.

2007 Facility Consolidation and Severance Costs

During fiscal 2007, we announced a plan to adjust our cost structure in order to manage our costs more effectively. The plan included the consolidation of our corporate headquarters and sales center to one building from two buildings and reduction in force initiatives which resulted in charges of $17.1 million during the fourth quarter of fiscal 2007. As of July 2, 2011 and January 1, 2011, there was no remaining accrued severance related to reduction in force initiatives completed in fiscal 2007.

The table below summarizes the balance of accrued facility consolidation reserve and changes in the accrual for the second quarter of fiscal 2011 (in thousands):

Balance at April 2, 2011		$	9,821
Payments			(537	)
Accretion of liability			132
Balance at July 2, 2011		$	9,416

The table below summarizes the balance of accrued facility consolidation reserve and changes in the accrual for the first six months of fiscal 2011 (in thousands):

Balance at January 1, 2011		$	10,227
Payments			(1,074	)
Accretion of liability			263
Balance at July 2, 2011		$	9,416

2008 Facility Consolidation and Severance Costs

During fiscal 2008, our board of directors approved a plan to exit our custom milling operations in California primarily due to the impact of unfavorable market conditions on that business. The closure of the custom milling facilities resulted in facility consolidation charges of $2.0 million and severance and outplacement costs of $1.0 million. In addition, we executed other reduction in force initiatives which resulted in $4.2 million of severance. At July 2, 2011 and January 1, 2011, there was no remaining severance reserve.

The table below summarizes the balance of accrued facility consolidation reserve and changes in the accrual for the second quarter of fiscal 2011 (in thousands):

Balance at April 2, 2011		$	40
Payments			(76	)
Sublease income			46
Balance at July 2, 2011		$	10

The table below summarizes the balance of accrued facility consolidation reserve and changes in the accrual for the first six months of fiscal 2011 (in thousands):

Balance at January 1, 2011		$	72
Payments			(152	)
Sublease income			90
Balance at July 2, 2011		$	10

2009 Facility Consolidations and Severance Costs

During fiscal 2009, we exited our BlueLinx Hardwoods facility in Austin, Texas to improve overall effectiveness and efficiency by consolidating these operations with our San Antonio and Houston branches. Our exit of the Austin facility resulted in a facility consolidation charge of $0.7 million. In May of 2011, we terminated the lease via a termination payment of $0.4 million. In addition, we recorded severance charges related to reduction in force initiatives of $1.8 million. There were no facility or severance reserves remaining as of July 2, 2011.

The table below summarizes the balances of the accrued facility consolidation and the changes in the accruals for the second quarter of fiscal 2011 (in thousands):

Balance at April 2, 2011		$	484
Assumption Changes			(99	)
Payments			(385	)
Balance at July 2, 2011		$	0

The table below summarizes the balances of the accrued facility consolidation and the changes in the accruals for the first six months of fiscal 2011 (in thousands):

Balance at January 1, 2011		$	523
Assumption Changes			(95	)
Payments			(428	)
Balance at July 2, 2011		$	0

2010 Severance Costs

During fiscal 2010, we had certain reduction in force activities, which resulted in severance charges of $1.1 million.

The table below summarizes the balances of the accrued severance reserves and the changes in the accruals for the second quarter of fiscal 2011 (in thousands):

Balance at April 2, 2011		$	486
Assumption Changes			(191	)
Payments			(103	)
Balance at July 2, 2011		$	192

The table below summarizes the balances of the accrued severance reserves and the changes in the accruals for the first six months of fiscal 2011 (in thousands):

Balance at January 1, 2011		$	777
Assumption Changes			(254	)
Payments			(331	)
Balance at July 2, 2011		$	192

2011 Severance Costs

During fiscal 2011, we had certain reduction in force activities, which resulted in severance charges of $0.5 million.

The table below summarizes the balances of the accrued severance reserves and the changes in the accruals for the second quarter of fiscal 2011 (in thousands):

Balance at April 2, 2011		$	21
Charges			345
Payments			(258	)
Balance at July 2, 2011		$	108

The table below summarizes the balances of the accrued severance reserves and the changes in the accruals for the first six months of fiscal 2011 (in thousands):

Balance at January 1, 2011		$	—
Charges			461
Payments			(353	)
Balance at July 2, 2011		$	108

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- Definition

Description of restructuring activities including exit and disposal activities, which should include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. This description does not include restructuring costs in connection with a business combination or discontinued operations and long-lived assets (disposal groups) sold or classified as held for sale. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 146
-Paragraph 20

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 5
-Section P
-Subsection 3, 4

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