Note 14 - Fire at Australian Manufacturing Facility

9 Months Ended

Sep. 29, 2013

Fire At Manufacturing Facility [Abstract]

Fire At Manufacturing Facility [Text Block]

NOTE 14 – FIRE AT AUSTRALIAN MANUFACTURING FACILITY

On July 20, 2012, a fire occurred at the Company’s manufacturing facility in Picton, Australia. The facility’s carpet production line, primarily comprised of tufting and backing machinery, sustained extensive damage and was rendered inoperable. The Picton facility served the Company’s customers throughout Australia and New Zealand. Since the fire, the Company has utilized adequate production capacity at its manufacturing facilities in Thailand, China and elsewhere to meet customer demand typically serviced from Picton. The Company has business interruption and property damage insurance. The Company is in the process of building a new manufacturing facility in Minto, Australia and expects it to become operational in January 2014.

Since the fire, the Company has recorded charges of approximately $25.0 million ($2.6 million in 2013) for impairment of fixed assets related to the fire, and has incurred approximately $31.8 million of excess production costs related to the fire, as it has utilized other facilities to service customers in the Australia and New Zealand markets. As of September 29, 2013, the Company has determined that the receipt of reimbursement of these expenses from its insurer is probable in accordance with its insurance policies and has therefore recorded a receivable for these items. As of September 29, 2013, the Company had received $54.9 million of reimbursement from the insurance company related to the fire at the Picton facility. The table below details the nature of expenses as well as insurance receivables and amounts already received related to the fire:

	(In millions)
Impairment of fixed assets at the Picton facility	$	25.0
Incremental payroll costs		17.9
Incremental shipping costs		7.6
Other incremental costs		6.3
Total incurred costs through September 29, 2013	$	56.8
Insurance recovery receivable	$	1.9
Insurance recoveries already received	$	54.9

The receivable related to this claim is included in prepaid expenses and other current assets in our consolidated condensed balance sheet.

The Company also has made an additional claim for loss of profits related to the fire. The amount of this claim is approximately $7.0 million and relates to loss of profits from the date of the fire through the second quarter of 2013. The Company continues to gather information related to additional insurance claims for loss of profits as a result of the fire. As of September 29, 2013, the Company had not recorded any receivables or amounts for loss of profits, but expects to do so at a later date as information and analysis become more complete and recovery becomes probable.