Quarterly report pursuant to Section 13 or 15(d)

Closure Costs

v3.19.1
Closure Costs
3 Months Ended
Mar. 31, 2019
Closure Costs  
Closure Costs

13.  CLOSURE COSTS

 

We generally recognize expenses related to closures and position eliminations at the time of announcement or notification.  Such costs include termination and other severance benefits, lease abandonment costs, and other transition costs.  Closure costs are reflected in our condensed consolidated statements of operations as selling, general, and administrative expense.  In our condensed consolidated balance sheets, accrued severance closure costs are reflected as accrued liabilities and accrued lease abandonment costs are reflected as short-term and long-term lease liabilities.

   

In connection with the acquisition of USI, management performed an evaluation of the resources necessary to effectively operate the acquired business.  During the second quarter of 2018, management committed to a plan to close the USI corporate office in St. Paul, Minnesota, and consolidate certain administrative functions to our Daytona Beach, Florida, Branch Support Center.  As a result, the Company expects to incur an aggregate of approximately $6.9 million of closure costs in connection with this activity of which $6.7 million was incurred during the year ended December 31, 2018 and $0.2 million was incurred during the first quarter of 2019.  Closure costs pertaining to the USI acquisition are primarily included in general corporate expenses for segment reporting purposes.

 

The following table details our total estimated closure costs, by cost type, pertaining to the above closure and transition related to the USI acquisition (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment / Cost Type

   

Closure Costs Liability at December 31, 2018

   

Closure Costs Incurred for the Three Months Ended
March 31, 2019

   

Cash Payments for the Three Months Ended
March 31, 2019

   

Non-cash Adjustments for the Three Months Ended
March 31, 2019

   

Closure Costs Liability at
March 31, 2019

Corporate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Severance

 

$

3,065

 

$

239

 

$

(2,357)

 

$

(119)

 

$

828

Lease abandonment

 

 

301

 

 

 —

 

 

(49)

 

 

229

 

 

481

Other costs

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Total Corporate:

 

$

3,366

 

$

239

 

$

(2,406)

 

$

110

 

$

1,309

 

We expect to pay the remaining accrued severance closure costs primarily in the second quarter of 2019. Non-cash adjustments in the table above relate to true-up of estimates to actual amounts.