Restructuring Charges

6 Months Ended

Jul. 05, 2014

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). We account for severance and outplacement costs by recognizing a liability for employees’ rights to post-employment benefits when management has committed to a plan, due to the existence of a post employment benefit agreement. These costs are included in “Selling, general, and administrative” expenses in the Consolidated Statements of Operations and Comprehensive Loss for the first six months of fiscal 2014 and the six months of fiscal 2013, and in “Accrued compensation” on the Consolidated Balance Sheets at July 5, 2014, and January 4, 2014.

2013 Facility Lease Obligation and Severance Costs

During the second quarter of fiscal 2013, we announced the 2013 restructuring which included the realignment of headquarters resources and the strategic review of our distribution centers. This review resulted in the Company designating five distribution centers to be sold or closed. These distribution centers were closed or ceased operations during the third quarter of fiscal 2013. During the second quarter of fiscal 2013, we also announced that George R. Judd no longer would serve as President and Chief Executive Officer of the Company.

The table below summarizes the balance of reduction in force activities and the related accrued facility lease obligation reserve and the changes in the accrual for the second quarter of fiscal 2014 (in thousands):


	Reduction in Force Activities			Facility Lease Obligation			Total
Balance at April 5, 2014	$	2,021		$	835		$	2,856
Charges		—			—			—
Assumption changes		(7	)		—			(7	)
Payments		(566	)		(103	)		(669	)
Accretion of liability		—			8			8
Balance at July 5, 2014	$	1,448		$	740		$	2,188

The table below summarizes the balance of reduction in force activities and the related accrued facility lease obligation reserve and the changes in the accrual for the six months ending on July 5, 2014 (in thousands):


	Reduction in Force Activities			Facility Lease Obligation			Total
Balance at January 4, 2014	$	2,550		$	928		$	3,478
Charges		—			—			—
Assumption changes		(36	)		2			(34	)
Payments		(1,066	)		(206	)		(1,272	)
Accretion of liability		—			16			16
Balance at July 5, 2014	$	1,448		$	740		$	2,188

During the third quarter of fiscal 2011, we entered into an amendment to our corporate headquarters lease in Atlanta, GA related to the unoccupied 4100 building, which was exited during fiscal 2007. The final payment related to this amendment was made during the first quarter of fiscal 2014 in the amount of $0.3 million.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, 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.

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