15.
Restructuring and Other Charges
During fiscal 2001, the Company recorded pretax restructuring and other charges aggregating
$2,050,000, which included severance pay for a former officer ($360,000), and for a restructuring
plan ($1,690,000) to streamline operations and reduce costs in light of decreased consumer
spending and an uncertain economy (the "Plan"). Under the Plan, the Company eliminated
approximately 12% of its salaried workforce and consolidated its Las Vegas Call Center into its
National Distribution Center located in Virginia Beach. Changes in the accrued balance for Plan
costs during the twelve months ended February 23, 2002 were as follows (dollars in thousands):
Initial
Plan
Cost
Asset Write-
offs &
Expenditures
Adjustment
Balance as of
February 23, 2002
Severance and related benefits. . . . . .
$ 687
$ (687)
$ --
Write-off of leasehold improvements
and equipment. . . . . . . . . . . . . . . .
317
(204)
$(113)
--
Lease termination costs . . . . . . . . . . .
686
(299)
387
$1,690
$(1,190)
$(113)
$387
In the second quarter ended August 25, 2001, a $113,000 restructuring credit was recorded due
to the favorable disposition of certain fixed assets.
The Company has attempted to sublease the Las Vegas Call Center, but has been unable to do
so. On April 24, 2002, the Company decided to reactivate the facility as a seasonal call center for
the upcoming peak holiday selling season.
F-20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
L I L L I A N V E R N O N
