Other Expense (Income), Net

6 Months Ended

Jul. 02, 2016

Other Income And Expenses [Abstract]

Other Income And Other Expense Disclosure [Text Block]

9. Other Expense, Net

The components of other expense (income) are as follows:

	Quarter ended		Two quarters ended
	July 2, 2016	July 4, 2015	July 2, 2016	July 4, 2015
	$	$	$	$
Legal settlement⁽¹⁾	9,000	-	9,000	-
Severance and rationalization costs⁽²⁾	543	-	2,750	-
Product withdrawal and recall costs⁽³⁾	229	-	1,697	-
Business development costs	113	398	210	523
Fair value of contingent consideration (see note 5)	(1,603)	82	(1,405)	82
Other	151	157	159	136
	8,433	637	12,411	741

(1) Legal settlement

In the second quarter of 2016, the Company recorded a charge of $9.0 million in connection with the settlement of a complaint filed by Plum, PBC (“Plum”) that arose out of a voluntary recall by Plum of certain resealable pouch products manufactured at the Company’s Allentown, Pennsylvania facility in 2013 (see note 13). Previously, in the fourth quarter of 2013, the Company recorded a $5.2 million provision for the expected loss associated with this recall, which reflected at that time the amount due to the Company for product sold to Plum that was subject to the recall, as well as the carrying value of recalled product still in inventory at the Company. The previously recorded provision did not include any potential amounts payable in connection with the settlement of litigation relating to the voluntary recall.

(2) Severance and rationalization costs

For the two quarters ended July 2, 2016, severance and rationalization costs primarily related to the consolidation of the Company’s frozen fruit processing facilities following the Sunrise Acquisition. In the first quarter of 2016, the Company transferred all production volume from its Buena Park, California facility into Sunrise’s facilities located in Kansas and California. Costs recognized include an impairment charge of $1.7 million, mainly related to leasehold improvements at the Buena Park facility. In the second quarter of 2016, the Company fully vacated the Buena Park facility and associated corporate office located in Cerritos, California, and recognized lease termination costs of $0.3 million.

(3) Product withdrawal and recall costs

For the two quarters ended July 2, 2016, the Company recognized costs of $1.1 million associated with the voluntary withdrawal by a customer, in coordination with the Company, of private label orange juice product produced at the Company’s San Bernardino, California premium juice facility, due to instances of early spoilage within the prescribed shelf life of the product. In addition, for the two quarters ended July 2, 2016, the Company recognized an estimated loss of $0.6 million, net of estimated insurance recoveries in connection with a voluntary recall of certain sunflower kernel products that was announced in the second quarter of 2016 (see note 4).