Commitments And Contingencies

12 Months Ended

Aug. 31, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

L. COMMITMENTS AND CONTINGENCIES

In the ordinary course of its business operations, the Company is involved, from time to time, in commercial litigation, employment disputes, administrative proceedings, and other legal proceedings.  No such current proceedings, individually or in the aggregate, are expected to have a material effect on the business or financial condition of the Company.

Environmental Remediation

In 1992, the Company entered into a consent decree with the U.S. Environmental Protection Agency (the “EPA”) in which the Company committed to remediate environmental contamination of the groundwater that was discovered in 1982 through 1990 at and adjacent to its Lindsay, Nebraska facility (the “site”).  The site was added to the EPA’s list of priority superfund sites in 1989.  Between 1993 and 1995, remediation plans for the site were approved by the EPA and fully implemented by the Company.  Since 1998, the primary remaining contamination at the site has been the presence of volatile organic chemicals in the groundwater.  The remediation process consists of drilling wells into the aquifer and pumping water to the surface to allow these contaminants to be removed by aeration. The Company accrues the anticipated cost of remediation when the obligation is probable and can be reasonably estimated.    

In 2008, the Company and the EPA conducted their periodic five-year review of the status of the remediation of the contamination of the site. In response to the review, the Company and its environmental consultants have developed a remedial action work plan. In the first quarter of fiscal 2012, the Company undertook an investigation to assess further potential site remediation and containment actions.  In connection with the receipt of preliminary results of this investigation and other evaluations, the Company estimated that it would incur $7.2 million in remediation and operating costs and accrued that undiscounted amount as an operating expense in fiscal 2012.  

Although the Company has accrued all reasonably estimable costs associated with remediation of the site, it is expected that additional testing and environmental monitoring and remediation will be required in the future as part of the Company’s ongoing discussions with the EPA regarding the development and implementation of the remedial action plans, which could result in changes to its estimates.  In addition, the current investigation has not yet been completed and does not include all affected areas on the site.  Estimates continue to be refined and evaluated on a number of remediation alternatives and the EPA has not provided approval of possible action plans.  While additional estimated expenses could significantly exceed the amount accrued as of August 31, 2012 and could be material to the operating results of any fiscal quarter or fiscal year, the Company does not expect that such additional expenses would have a material adverse effect on its liquidity or financial condition. 

The following table summarizes the undiscounted environmental remediation liability classifications included in the balance sheet as of August 31, 2012 and 2011: 

Environmental Remediation Liabilities
$ in thousands	August 31,		August 31,
Balance Sheet Location	2012		2011
Other current liabilities	$	2,414	$	1,540
Other noncurrent liabilities		5,200		-
Total environmental remediation liabilities	$	7,614	$	1,540

Leases

The Company leases land, buildings, machinery, equipment, and computer equipment under various noncancelable operating lease agreements.  At August 31, 2012, future minimum lease payments under noncancelable operating leases were as follows:

Fiscal Years	$ in thousands
2013	$	2,404
2014		1,329
2015		1,077
2016		992
2017		848
Thereafter		1,714
	$	8,364

Lease expense was $3.6million,  $3.4 million and $2.8 million for the years ended August 31, 2012, 2011, and 2010, respectively.