Circuit City 2007 Annual Report Download - page 52

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8. RESTRUCTURING AND OTHER CHARGES
The Company periodically assesses its operations to ensure that they are efficient, aligned with market conditions and responsive to
customer needs. During the year ended December 31, 2005, management approved and implemented restructuring actions which included
workforce reductions and facility consolidations. The following table summarizes the amounts recognized by the Company as restructuring
and other charges for the periods presented (in thousands):
2003 United States Warehouse Consolidation Plan
In the fourth quarter of 2003, the Company implemented a plan to consolidate the warehousing facilities in its United States computer
supplies business. The Company recorded $122,000 of additional severance costs in 2005 related to this plan.
2002 United Kingdom Consolidation Plan
In 2002 the Company implemented a restructuring plan to consolidate the activities of three United Kingdom locations into a new facility
constructed for the Company. During 2005 the Company recorded $93,000 of gain related to this plan as actual costs were less than
anticipated.
Litigation Settlements
In May 2006, the Company entered into a stipulation of settlement with all of the plaintiffs who had filed derivative complaints in 2005
alleging misconduct in connection with the Company’s restatement of its 2004 financial results (see Note 10).
Other Severance and Exit Costs
The Company recorded restructuring costs of $3.8 million during 2005 in Europe in connection with workforce reductions and facility exit
costs. In 2005, these costs were comprised of employee severance costs.
The following table summarizes the components of the accrued restructuring charges and the movements within these components during
2007, 2006 and 2005 (in thousands). The balance of the restructuring reserves is included in the Consolidated Balance Sheets within accrued
expenses and other current liabilities.
50
Years ended December 31,
2005
2003 United States warehouse consolidation plan
$
122
2002 United Kingdom consolidation plan
(93
)
Litigation settlements
300
Other severance and exit costs
3,822
Total restructuring and other charges
$
4,151
Severance and
Personnel Costs
Other
Exit Costs
Total
Balance as of January 1, 2005
$
633
$
1,396
$
2,029
Charged to expense in 2005
3,945
(93
)
3,852
Amounts utilized
(4,325
)
(1,038
)
(5,363
)
Balance at December 31, 2005
253
265
518
Amounts utilized
(253
)
(176
)
(429
)
Balance at December 31, 2006
$
0
$
89
$
89
Amounts utilized
(0
)
(89
)
(89
)
Balance at December 31, 2007
$
0
$
0
$
0