NOTE 16 – RESTRUCTURING

In the second quarter of fiscal year 2013, we initiated several restructuring actions. In the Paints segment, the initiatives primarily include consolidations of manufacturing and distribution operations following the acquisition of Ace Hardware Corporation's paint manufacturing business and in Australia as part of our ongoing profit improvement plans. These initiatives also include actions to lower operating expenses in Asia. In our Coatings segment, we undertook several smaller actions to rationalize manufacturing operations and lower operating expenses. These restructuring activities resulted in after-tax charges of $6,415 or $0.07 per share for the three and six months ended April 26, 2013. We expect the total after-tax cost of these activities in 2013 and 2014 to be approximately $18,000 to $23,000 or $0.22 per share.

In fiscal year 2012, we exited the gelcoat products market and initiated the consolidation of a manufacturing facility in our Paints segment. Our gelcoat product line was categorized in Other and Administrative. During the 2011 fiscal year, we initiated restructuring actions in our Coatings segment, primarily in our wood product line, which further rationalized our manufacturing capacity and reduced our overall global headcount. We also initiated restructuring actions to improve the profitability of our Australian operations, which included facility consolidations in manufacturing and distribution, store rationalization and the reduction of other related costs. Total restructuring activities for the three and six months ended April 27, 2012 resulted in after-tax charges of $3,293 or $0.04 per share and $6,817 or $0.07 per share, respectively.

The expenses comprising the above restructuring initiatives included severance and employee benefits, asset impairments, professional services and site clean-up.

The following restructuring charges by segment were recorded in the 2013 and 2012 periods:


Six Months Ended April 26, 2013	Liability Beginning Balance 10/26/2012		Expense		Payments and Other Activity			Liability Ending Balance 4/26/2013
Coatings
Severance and employee benefits	$	2,234	$	2,725	$	(169	)	$	4,790
Exit costs (consulting/site clean-up)		390		—		(189	)		201
Total Coatings		2,624		2,725		(358	)		4,991
Paints
Severance and employee benefits		2,104		5,806		(2,797	)		5,113
Asset impairments		—		381		(381	)		—
Exit costs (consulting/site clean-up)		3,984		—		(856	)		3,128
Total Paints		6,088		6,187		(4,034	)		8,241
Other and Administrative
Severance and employee benefits		297		300		(144	)		453
Asset impairments		—		61		(61	)		—
Exit costs (consulting/site clean-up)		—		47		(47	)		—
Total Other and Administrative		297		408		(252	)		453
Total	$	9,009	$	9,320	$	(4,644	)	$	13,685


Six Months Ended April 27, 2012	Liability Beginning Balance 10/28/2011		Expense		Payments and Other Activity			Liability Ending Balance 4/27/2012
Coatings
Severance and employee benefits	$	3,884	$	532	$	(2,125	)	$	2,291
Asset impairments		—		312		(312	)		—
Exit costs (consulting/site clean-up)		2,802		191		(1,860	)		1,133
Total Coatings		6,686		1,035		(4,297	)		3,424
Paints
Severance and employee benefits		2,915		3,066		(2,318	)		3,663
Asset impairments		—		2,911		(2,911	)		—
Exit costs (consulting/site clean-up)		408		1,821		(691	)		1,538
Total Paints		3,323		7,798		(5,920	)		5,201
Other and Administrative
Severance and employee benefits		437		682		(962	)		157
Total Other and Administrative		437		682		(962	)		157
Total	$	10,446	$	9,515	$	(11,179	)	$	8,782

The ending liability balance at April 26, 2013 and April 27, 2012 is included in other accrued liabilities on our Condensed Consolidated Balance Sheets. The restructuring reserve balances presented are considered adequate to cover committed restructuring actions. The restructuring expenses recorded are included in the Condensed Consolidated Statements of Operations. For the three and six months ended April 26, 2013, $6,669 was charged to cost of sales, $241 was recorded to research and development (R&D) expenses and $2,410 was charged to selling, general and administrative (SG&A) expenses. For the three months ended April 27, 2012, $1,706 was charged to cost of sales and $2,712 was charged to SG&A expenses. For the six months ended April 27, 2012, $4,660 was charged to cost of sales and $4,855 was charged to SG&A expenses.