Restructuring Plan |
9 Months Ended |
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Jul. 02, 2016 | |
| Restructuring and Related Activities [Abstract] | |
| Restructuring Plan |
Restructuring Plan
On May 10, 2016, in connection with our ongoing strategic manufacturing initiatives, we announced plans to restructure our manufacturing operations with the closing of our textile manufacturing facility in Maiden, North Carolina, the consolidation of sew facilities in Mexico, and the expansion of production at our lower-cost Ceiba Textiles facility in Honduras. In June, 2016, we received an offer to purchase the real estate and certain machinery, equipment and supply parts used in the Maiden facility for approximately $1.7 million, and are currently in negotiations on that transaction. Based upon the offer received and further evaluation of the expected cash flows related to the remaining machinery, equipment and supply parts, we recorded a non-cash impairment charge of $0.9 million during the quarter ended July 2, 2016. We also recorded a $0.1 million non-cash impairment charge related to certain inventory items that would have to be disposed. The restructuring plan also includes a third quarter 2016 charge of $0.6 million related to employee termination benefits as part of the plan to close these operations. These charges totaling $1.7 million are reflected on the Condensed Consolidated Statement of Operations on the line item "Restructuring costs". At the end of the third quarter, we had paid $0.2 million in employee termination benefits and had $0.4 million accrued. The restructuring plan also includes charges to cost of sales of $0.2 million related to expensing excess manufacturing costs associated with the start-up of the expanded offshore operations. All of these expenses have been recorded in our basics segment. In July, we closed our domestic textile facility in Maiden, North Carolina. When operations ceased, the Maiden facility was considered held for sale. We expect to incur approximately $1.2 million in the fourth quarter of fiscal year 2016 associated with the completion of the restructuring plan, with charges of $0.5 million related to the closing of the Maiden facility and $0.7 million of excess start-up expenses associated with the expanded offshore operations.
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