Other Severance Expense
|12 Months Ended|
Dec. 31, 2017
|Restructuring and Related Activities [Abstract]|
|Other Severance Expense||
PLANT CLOSURE EXPENSES
In the third quarter of 2017, our board of directors approved the closure of two Wood Flooring segment manufacturing facilities, including a solid wood plant in Jackson, Tennessee and an engineered wood plant in Vicksburg, Mississippi (the "Wood Plant Closures"), in response to a decline in sales. The Wood Plant Closures were completed in the fourth quarter of 2017 and resulted in the separation of approximately 300 employees.
As part of these activities, we incurred expenses consisting of employee separations and other direct exit costs, accelerated depreciation and other incremental costs. The Wood Plant Closures resulted in $29.6 million of pre-tax expenses during the second half of 2017, reflected in cost of goods sold. We expect to incur up to $2.0 million of additional pre-tax cash expenses in 2018 related to continued decommissioning costs.
The following table details expenses related to the Wood Plant Closures:
As a result of the Wood Plant Closures, we tested the long-lived assets within our Wood Flooring segment for recoverability during the third quarter of 2017 and determined the carrying value to be recoverable, as the projected undiscounted cash flows exceeded the carrying value of the assets.
OTHER SEVERANCE EXPENSE
In 2017, we announced the combination of our commercial and residential go-to-market structures and related organization. The new structure was designed to provide enhanced support and responsiveness to retailers and contractors and to foster greater alignment with distributors, which cover both commercial and residential markets. As a result of this reorganization, approximately 40 positions were eliminated, and the impacted employees received severance benefits. We recognized charges of $4.6 million in SG&A expense as a result of this reorganization, of which $2.7 million and $1.9 million was recognized in the Resilient Flooring segment and Wood Flooring segment, respectively.
In 2016, we reorganized certain administrative functions, resulting in the elimination of six positions, including the Chief Operating Officer position. We recognized charges of $1.7 million in SG&A expense as a result of this reorganization, of which $1.0 million and $0.7 million was recognized in the Resilient Flooring segment and Wood Flooring segment, respectively.
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef