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Operations Optimization Costs
12 Months Ended
Aug. 31, 2019
Operations Optimization Costs  
Operations Optimization Costs

 

 

 

 

 

 

 

 

 

 

 

Note 20—Operations Optimization Costs

 

 

Relocation of Pulling and Detection Manufacturing to Hickory, NC

 

During the second half of fiscal 2019, Chase began moving the pulling and detection operations housed in its Granite Falls, NC location to its Hickory, NC facility. This is in line with the Company’s ongoing initiative to consolidate its manufacturing plants and streamline its existing processes. As of August 31, 2019, the pulling and detection operations are the only Chase-owned production operations in Granite Falls, NC, with the remaining portions of the building being either utilized for research and development or leased to a third party. The process of moving has continued subsequent to the fourth quarter of fiscal 2019 and is anticipated to be completed during the first half of fiscal 2020. The Company recognized $526 in expense related to the move in fiscal 2019. Future costs related to this move are currently anticipated to be approximately $700, and the Company plans to disclose these amounts separately on the consolidated financial  statements in future periods.

 

Engineering Studies Related to Facility Consolidation and Rationalization Initiative

 

During the fourth quarter of fiscal 2019, Chase commissioned engineering studies of certain legacy operations, machinery and locations in relation to the Company’s facility rationalization and consolidation initiative. Chase is currently reviewing the data and recommendations provided by the study and may further utilize third party engineering, IT and other professional services firms in the future for similar work, as well as work around optimizing our computer systems. The Company recognized $200 in expense related to these services in fiscal 2019; but given the ongoing nature of the review, an estimate of future costs cannot currently be determined. 

   

Closure of Pawtucket, RI Facility

 

On June 25, 2018, the Company announced to its employees the planned closing of its Pawtucket, RI manufacturing facility effective August 31, 2018. This is in line with the Company’s ongoing efforts to consolidate its manufacturing plants and streamline its existing processes. The manufacturing of products previously produced in the Pawtucket, RI facility was moved to Company facilities in Oxford, MA and Lenoir, NC during a two-month transition period. The Company expensed $1,272 in the fourth quarter of fiscal 2018 related to the closure, including: (a) cash-related employee-related, logistics and uncapitalized facilities improvement costs of $590;  and (b) non-cash-related accelerated depreciation expense of $682. The Company expensed $260 in the three-month period ended November 30, 2018 related to the move, with no additional expense recognized in fiscal 2019. Future costs related to this move are not anticipated to be significant to the consolidated financial statements.

 

Demolition of Idle Randolph, MA Facility

 

In fiscal 2017, the Company recognized $70 in expenses to raze its Randolph, MA facility, which had been idle regarding production for several years. The Company began marketing the site for sale during the second quarter of fiscal 2016. The Company substantially completed the demolition of the structure in the fourth fiscal quarter of 2016, and completed other environmental aspects of the project during fiscal 2017. The sale of the property is anticipated to follow in a subsequent period, and any future expenses related to the project are not anticipated to be material.