Quarterly report pursuant to Section 13 or 15(d)

Restructuring Charges

v2.4.0.6
Restructuring Charges
9 Months Ended
Dec. 31, 2011
Restructuring Charges  
Restructuring Charges

Note 4. Restructuring Charges

 

A summary of the expenses aggregated on the Condensed Consolidated Statements of Operations line item “Restructuring charges” in the quarters and nine months ended December 31, 2011 and 2010, is as follows (amounts in thousands):

 

 

 

Quarter Ended December 31,

 

Nine Months Ended December 31,

 

 

 

2011

 

2010

 

2011

 

2010

 

Manufacturing relocation costs

 

$

261

 

$

1,176

 

$

1,646

 

$

4,256

 

Personnel reduction costs

 

10,487

 

(74

)

11,732

 

941

 

Restructuring charges

 

$

10,748

 

$

1,102

 

$

13,378

 

$

5,197

 

 

Nine months Ended December 31, 2011

 

In the second quarter of fiscal year 2010, the Company initiated the first phase of a plan to restructure the Film and Electrolytic Business Group (“Film and Electrolytic”) and to reduce overhead within the Company as a whole.  The restructuring plan includes implementing programs to make the Company more competitive, removing excess capacity, moving production to lower cost locations and eliminating unnecessary costs throughout the Company.  Restructuring charges in the nine months ended December 31, 2011 relate to this plan and are primarily comprised of termination benefits of $6.1 million related to facility closures in Italy that will commence during fiscal year 2013 and the Company incurred charges of $4.5 million to participate in a plan to save labor costs whereby a company may temporarily “lay off” employees while the government continues to pay their wages for a certain period of time.  These charges are a continuation of the Company’s efforts to restructure its manufacturing operations within Europe, primarily within Film and Electrolytic. Construction has commenced on a new manufacturing facility in Pontecchio, Italy, that will allow the closure and consolidation of multiple manufacturing operations located in Italy.  In addition, the Company incurred $1.2 million in personnel reduction costs primarily due to headcount reductions in the Mexican operations of Tantalum.  In addition to these personnel reduction costs, the Company incurred manufacturing relocation costs of $1.6 million for relocation of equipment to China and Mexico.

 

Nine months Ended December 31, 2010

 

Restructuring expenses in the nine months ended December 31, 2010 are primarily comprised of manufacturing relocation costs of $4.3 million for relocation of equipment from various plants to Mexico and China as well as a distribution center relocation project.  In addition, the Company incurred $0.9 million in personnel reduction costs due primarily to headcount reductions for twelve individuals at the upper management or executive level related to the Company’s initiative to reduce overhead within the Company as a whole.

 

Reconciliation of restructuring liability

 

A reconciliation of the beginning and ending liability balances for restructuring charges included in the line items “Accrued expenses” and “Other non-current obligations” on the Condensed Consolidated Balance Sheets are as follows (amounts in thousands):

 

 

 

Quarter Ended December 31, 2011

 

Nine Months Ended December 31, 2011

 

 

 

Personnel

 

Manufacturing

 

Personnel

 

Manufacturing

 

 

 

Reductions

 

Relocations

 

Reductions

 

Relocations

 

Beginning of period

 

$

1,121

 

$

 

$

1,825

 

$

 

Costs charged to expense

 

10,487

 

261

 

11,732

 

1,646

 

Costs paid or settled

 

(617

)

(261

)

(2,521

)

(1,646

)

Change in foreign exchange

 

(390

)

 

(435

)

 

End of period

 

$

10,601

 

$

 

$

10,601

 

$

 

 

 

 

Quarter Ended December 31, 2010

 

Nine Months Ended December 31, 2010

 

 

 

Personnel

 

Manufacturing

 

Personnel

 

Manufacturing

 

 

 

Reductions

 

Relocations

 

Reductions

 

Relocations

 

Beginning of period

 

$

6,739

 

$

 

$

8,398

 

$

 

Costs charged to expense

 

(74

)

1,176

 

941

 

4,256

 

Costs paid or settled

 

(1,418

)

(1,176

)

(4,188

)

(4,256

)

Change in foreign exchange

 

(161

)

 

(65

)

 

End of period

 

$

5,086

 

$

 

$

5,086

 

$