NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Lancaster Colony Corporation and our wholly-owned subsidiaries, collectively referred to as “we,” “us,” “our,” “registrant” or the “Company” and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and SEC Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the results of operations and financial position for such periods. All such adjustments reflected in the interim condensed consolidated financial statements are considered to be of a normal recurring nature. Intercompany transactions and accounts have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of results for the full year. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in our
2016
Annual Report on Form 10-K. Unless otherwise noted, the term “year” and references to a particular year pertain to our fiscal year, which begins on July 1 and ends on June 30; for example,
2017
refers to fiscal
2017
, which is the period from
July 1, 2016
to
June 30, 2017
.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation, except for those acquired as part of a business combination, which are stated at fair value at the time of purchase. Purchases of property, plant and equipment included in Accounts Payable and excluded from the property additions and the change in accounts payable in the Condensed Consolidated Statements of Cash Flows were as follows:
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
2017
|
|
2016
|
Construction in progress in Accounts Payable
|
$
|
1,887
|
|
|
$
|
185
|
|
Accrued Distribution
Accrued distribution costs included in Accrued Liabilities were
$6.6 million
and
$4.5 million
at
March 31, 2017
and
June 30, 2016
, respectively.
Earnings Per Share
Earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock and common stock equivalents (restricted stock and stock-settled stock appreciation rights) outstanding during each period. Unvested shares of restricted stock granted to employees are considered participating securities since employees receive nonforfeitable dividends prior to vesting and, therefore, are included in the earnings allocation in computing EPS under the two-class method. Basic EPS excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing income available to common shareholders by the diluted weighted average number of common shares outstanding during the period, which includes the dilutive potential common shares associated with nonparticipating restricted stock and stock-settled stock appreciation rights.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Basic and diluted net income per common share were calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Nine Months Ended
March 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income
|
$
|
14,471
|
|
|
$
|
29,011
|
|
|
$
|
86,827
|
|
|
$
|
91,150
|
|
Net income available to participating securities
|
(23
|
)
|
|
(54
|
)
|
|
(149
|
)
|
|
(216
|
)
|
Net income available to common shareholders
|
$
|
14,448
|
|
|
$
|
28,957
|
|
|
$
|
86,678
|
|
|
$
|
90,934
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding – basic
|
27,379
|
|
|
27,338
|
|
|
27,369
|
|
|
27,329
|
|
Incremental share effect from:
|
|
|
|
|
|
|
|
Nonparticipating restricted stock
|
1
|
|
|
2
|
|
|
3
|
|
|
3
|
|
Stock-settled stock appreciation rights
|
62
|
|
|
36
|
|
|
66
|
|
|
33
|
|
Weighted average common shares outstanding – diluted
|
27,442
|
|
|
27,376
|
|
|
27,438
|
|
|
27,365
|
|
|
|
|
|
|
|
|
|
Net income per common share – basic
|
$
|
0.53
|
|
|
$
|
1.06
|
|
|
$
|
3.17
|
|
|
$
|
3.33
|
|
Net income per common share – diluted
|
$
|
0.53
|
|
|
$
|
1.06
|
|
|
$
|
3.16
|
|
|
$
|
3.32
|
|
Accumulated Other Comprehensive Loss
The following table presents the amounts reclassified out of accumulated other comprehensive loss by component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Nine Months Ended
March 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Accumulated other comprehensive loss at beginning of period
|
$
|
(11,194
|
)
|
|
$
|
(8,631
|
)
|
|
$
|
(11,350
|
)
|
|
$
|
(10,057
|
)
|
Defined Benefit Pension Plan Items:
|
|
|
|
|
|
|
|
Amortization of unrecognized net loss
|
179
|
|
|
135
|
|
|
536
|
|
|
405
|
|
Postretirement Benefit Plan Items:
|
|
|
|
|
|
|
|
Prior service credit arising during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
2,038
|
|
Amortization of unrecognized net gain
|
(9
|
)
|
|
(11
|
)
|
|
(28
|
)
|
|
(23
|
)
|
Amortization of prior service credit
|
(46
|
)
|
|
(47
|
)
|
|
(136
|
)
|
|
(79
|
)
|
Total other comprehensive income, before tax
|
124
|
|
|
77
|
|
|
372
|
|
|
2,341
|
|
Total tax expense
|
(46
|
)
|
|
(28
|
)
|
|
(138
|
)
|
|
(866
|
)
|
Other comprehensive income, net of tax
|
78
|
|
|
49
|
|
|
234
|
|
|
1,475
|
|
Accumulated other comprehensive loss at end of period
|
$
|
(11,116
|
)
|
|
$
|
(8,582
|
)
|
|
$
|
(11,116
|
)
|
|
$
|
(8,582
|
)
|
Significant Accounting Policies
There were no changes to our Significant Accounting Policies from those disclosed in our
2016
Annual Report on Form 10-K.
Recently Issued Accounting Standards
In March 2016, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance to simplify the accounting for stock-based compensation. The amendments include changes to the accounting for share-based payment transactions, including: the inclusion of the tax consequences related to stock-based compensation within the computation of income tax expense versus equity; the classification of awards as either equity or liabilities; and the classification of share-based activity on the statement of cash flows. We will adopt the new guidance on July 1, 2017 and will elect to continue to estimate forfeitures. The adoption may result in increased volatility to our income tax expense in future periods dependent upon, among other variables, the price of our common stock and the timing and volume of share-based payment award activity such as employee exercises of stock-settled stock appreciation rights and vesting of restricted stock awards. The transition method that will be applied on adoption varies for each of the amendments.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
In March 2017, the FASB issued new accounting guidance to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost by disaggregating the service cost component from the other components of net periodic benefit cost. The amendments require an employer to present service cost in the same line item(s) as compensation costs for the pertinent employees whereas the other components of net periodic benefit cost must be reported separately from service cost and outside of income from operations. The amendments also allow only the service cost component to be eligible for capitalization. The amendments require retrospective application for the income statement presentation provisions and prospective application for the capitalization of the service cost component. However, as a result of prior years’ restructuring activities, we no longer have any active employees continuing to accrue service cost. Therefore, the service cost provisions are not applicable to us, and we expect only changes in classification on the income statement. The guidance will be effective for us in fiscal 2019 including interim periods.
In May 2014, the FASB issued new accounting guidance for the recognition of revenue and issued subsequent clarifications of this new guidance in 2016 and 2017. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This model is based on a control approach rather than the current risks and rewards model. The new guidance would also require expanded disclosures. Since we do not plan to early adopt this standard, the guidance will be effective for us in fiscal 2019 including interim periods and will require either retrospective application to each prior period presented or modified retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. We are currently evaluating the impact of this guidance.
In February 2016, the FASB issued new accounting guidance to require lessees to recognize a right-of-use asset and a lease liability for leases with terms of more than 12 months. The updated guidance retains the two classifications of a lease as either an operating or finance lease (previously referred to as a capital lease). Both lease classifications require the lessee to record a right-of-use asset and a lease liability based upon the present value of the lease payments. Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-of-use asset. Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease. The updated guidance requires expanded qualitative and quantitative disclosures, including additional information about the amounts recorded in the consolidated financial statements. The guidance will be effective for us in fiscal 2020 including interim periods using a modified retrospective approach. We are currently evaluating the impact of this guidance.
Recently Adopted Accounting Standards
In July 2015, the FASB issued new accounting guidance which requires entities to measure most inventory “at the lower of cost or net realizable value,” thereby simplifying current guidance. Under current guidance an entity must measure inventory at the lower of cost or market, where market is defined as one of three different measures, one of which is net realizable value. We adopted this guidance effective July 1, 2016 on a prospective basis, and it did not have a material impact on our condensed consolidated financial statements.
In August 2016, the FASB issued new accounting guidance to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. Current guidance is either unclear or does not include specific requirements for the classification of these transactions. The majority of the new provisions are not currently applicable to us, and those that are applicable are consistent with our current practice. The guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 using a retrospective transition method for all periods presented. Early adoption is permitted provided that all amendments are adopted in the same period. We adopted this guidance effective July 1, 2016, and it did not have an impact on our Condensed Consolidated Statements of Cash Flows.
Note 2 – Acquisition
On November 17, 2016, we acquired substantially all of the assets of Angelic Bakehouse, Inc. (“Angelic”). Angelic, a privately owned manufacturer and marketer of premium sprouted grain bakery products, is based near Milwaukee, Wisconsin. The initial purchase price of
$35.0 million
was funded by cash on hand and excludes contingent consideration relating to an additional earn-out payment which is tied to performance-based conditions. In general, the terms of the acquisition specify that the sellers will receive an earn-out based upon a pre-determined multiple of the defined adjusted EBITDA of Angelic in fiscal 2021. We are unable to provide a range for the amount of this earn-out because it is based on the future adjusted EBITDA of Angelic, and the earn-out does not contain a minimum or maximum value. See further discussion of the earn-out in Note 3.
Angelic is reported in our Specialty Foods segment, and its results of operations have been included in our condensed consolidated financial statements from the date of acquisition. Such results were not material.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
The following table summarizes the consideration related to the acquisition and the preliminary purchase price allocation based on the fair value of the net assets acquired, as adjusted for the preliminary net working capital adjustment recorded as of
March 31, 2017
. The initial fair value of the contingent consideration is a noncash investing activity.
|
|
|
|
|
Consideration
|
|
Cash paid for acquisition
|
$
|
34,997
|
|
Contingent consideration - fair value of earn-out at date of closing
|
13,872
|
|
Working capital adjustment receivable
|
(63
|
)
|
Fair value of total consideration
|
$
|
48,806
|
|
|
|
Preliminary Purchase Price Allocation
|
|
Trade receivables
|
$
|
831
|
|
Other receivables
|
550
|
|
Inventories
|
430
|
|
Other current assets
|
19
|
|
Property, plant and equipment
|
5,083
|
|
Goodwill (tax deductible)
|
21,120
|
|
Other intangible assets
|
21,491
|
|
Current liabilities
|
(718
|
)
|
Net assets acquired
|
$
|
48,806
|
|
Further adjustments may occur to the allocation above as certain aspects of the transaction are finalized during the measurement period.
The goodwill recognized above arose because the purchase price for Angelic reflects a number of factors including the future earnings and cash flow potential of Angelic, as well as the impact of the inclusion of the initial fair value of the earn-out associated with the acquisition. Angelic is a fast growing, on-trend business with placement in the specialty deli/bakery section of the grocery store and provides innovation opportunities within and beyond our present product lines. Goodwill also resulted from the workforce acquired with Angelic.
We have determined preliminary values and lives of the other intangible assets listed in the allocation above as:
$18.6 million
for the tradename with a
20
-year life;
$0.3 million
for the customer relationships with a
10
-year life;
$2.4 million
for the technology / know-how with a
10
-year life and
$0.2 million
for the non-compete agreements with a
5
-year life.
Pro forma results of operations have not been presented herein as the acquisition was not material to our results of operations.
Note 3 – Fair Value
Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. GAAP sets forth a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three levels are as follows:
Level 1 – defined as observable inputs, such as quoted market prices in active markets.
Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable.
Level 3 – defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.
Our financial assets and liabilities consist principally of cash, accounts receivable, accounts payable and contingent consideration payable. The estimated fair value of cash, accounts receivable and accounts payable approximates their carrying value. Contingent consideration payable is recorded at fair value.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Our contingent consideration, which is measured at fair value on a recurring basis and did not have a balance at June 30, 2016, is included in Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheets. The following table summarizes our contingent consideration as of
March 31, 2017
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at March 31, 2017
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Acquisition-related contingent consideration
|
$
|
—
|
|
$
|
—
|
|
$
|
14,554
|
|
$
|
14,554
|
|
The contingent consideration resulted from the earn-out associated with our November 17, 2016 acquisition of Angelic. The initial purchase price of
$35.0 million
did not include the future earn-out payment which is tied to performance-based conditions. In general, the terms of the acquisition specify that the sellers will receive an earn-out based upon a pre-determined multiple of the defined adjusted EBITDA of Angelic in fiscal 2021. The fair value of the contingent consideration was estimated using a present value approach, which incorporates factors such as business risks and projections, to estimate an expected value. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. Using this valuation technique, the fair value of the contingent consideration was determined to be
$13.9 million
at November 17, 2016.
The following table represents our Level 3 fair value measurements using significant other unobservable inputs for acquisition-related contingent consideration:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2017
|
|
Nine Months Ended
March 31, 2017
|
Acquisition-related contingent consideration at beginning of period
|
$
|
14,096
|
|
|
$
|
—
|
|
Additions
|
—
|
|
|
13,872
|
|
Changes in fair value included in Selling, General and Administrative Expenses
|
458
|
|
|
682
|
|
Acquisition-related contingent consideration at end of period
|
$
|
14,554
|
|
|
$
|
14,554
|
|
Note 4 – Long-Term Debt
At
March 31, 2017
and
June 30, 2016
, we had an unsecured credit facility (“Facility”) under which we could borrow, on a revolving credit basis, up to a maximum of
$150 million
at any one time, with potential to expand the total credit availability to
$225 million
subject to us obtaining consent of the issuing banks and certain other conditions. The Facility expires on
April 8, 2021
, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to LIBOR or an alternative base rate defined in the Facility, at our option. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt.
At
March 31, 2017
and
June 30, 2016
, we had
no
borrowings outstanding under the Facility. At
March 31, 2017
, we had
$5.1 million
of standby letters of credit outstanding, which reduced the amount available for borrowing on the Facility. We paid
no
interest for the three and
nine
months ended
March 31, 2017
and
2016
.
The Facility contains certain restrictive covenants, including limitations on indebtedness, asset sales and acquisitions. There are two principal financial covenants: an interest expense test that requires us to maintain an interest coverage ratio not less than 2.5 to 1 at the end of each fiscal quarter; and an indebtedness test that requires us to maintain a consolidated leverage ratio not greater than 3 to 1 at all times. The interest coverage ratio is calculated by dividing Consolidated EBIT by Consolidated Interest Expense, and the leverage ratio is calculated by dividing Consolidated Debt by Consolidated EBITDA. All financial terms used in the covenant calculations are defined more specifically in the Facility.
Note 5 – Commitments and Contingencies
At
March 31, 2017
, we were a party to various claims and litigation matters arising in the ordinary course of business. Such matters did not have a material effect on the current-year results of operations and, in our opinion, their ultimate disposition will not have a material effect on our consolidated financial statements.
With our recent acquisition of Angelic, we have a contingent liability recorded for the earn-out associated with the transaction. See further discussion in Note 3.
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Note 6 – Goodwill and Other Intangible Assets
Goodwill attributable to the Specialty Foods segment was
$164.9 million
and
$143.8 million
at
March 31, 2017
and
June 30, 2016
, respectively. The increase in goodwill is the result of the acquisition of Angelic in November 2016. See further discussion in Note 2.
The following table is a rollforward of goodwill from
June 30, 2016
to
March 31, 2017
:
|
|
|
|
|
|
Carrying Value
|
Goodwill at beginning of year
|
$
|
143,788
|
|
Goodwill acquired during the period
|
21,120
|
|
Goodwill at end of period
|
$
|
164,908
|
|
The following table summarizes our identifiable other intangible assets, all included in the Specialty Foods segment. The intangible asset values and lives related to the Angelic acquisition, which are included in the table below, are preliminary and subject to further review over the measurement period. See further discussion in Note 2.
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
June 30,
2016
|
Tradenames (20 to 30-year life)
|
|
|
|
Gross carrying value
|
$
|
53,063
|
|
|
$
|
34,500
|
|
Accumulated amortization
|
(2,696
|
)
|
|
(1,485
|
)
|
Net carrying value
|
$
|
50,367
|
|
|
$
|
33,015
|
|
Trademarks (40-year life)
|
|
|
|
Gross carrying value
|
$
|
370
|
|
|
$
|
370
|
|
Accumulated amortization
|
(239
|
)
|
|
(232
|
)
|
Net carrying value
|
$
|
131
|
|
|
$
|
138
|
|
Customer Relationships (10 to 15-year life)
|
|
|
|
Gross carrying value
|
$
|
14,207
|
|
|
$
|
13,920
|
|
Accumulated amortization
|
(6,879
|
)
|
|
(6,048
|
)
|
Net carrying value
|
$
|
7,328
|
|
|
$
|
7,872
|
|
Technology / Know-how (10-year life)
|
|
|
|
Gross carrying value
|
$
|
6,350
|
|
|
$
|
3,900
|
|
Accumulated amortization
|
(888
|
)
|
|
(504
|
)
|
Net carrying value
|
$
|
5,462
|
|
|
$
|
3,396
|
|
Non-compete Agreements (5-year life)
|
|
|
|
Gross carrying value
|
$
|
791
|
|
|
$
|
600
|
|
Accumulated amortization
|
(260
|
)
|
|
(155
|
)
|
Net carrying value
|
$
|
531
|
|
|
$
|
445
|
|
Total net carrying value
|
$
|
63,819
|
|
|
$
|
44,866
|
|
Amortization expense for our other intangible assets, which is reflected in Selling, General and Administrative Expenses, was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Nine Months Ended
March 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Amortization expense
|
$
|
1,001
|
|
|
$
|
691
|
|
|
$
|
2,538
|
|
|
$
|
2,214
|
|
LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
Total annual amortization expense for each of the next five years is estimated to be as follows:
|
|
|
|
|
|
|
2018
|
$
|
4,004
|
|
2019
|
$
|
4,004
|
|
2020
|
$
|
3,969
|
|
2021
|
$
|
3,884
|
|
2022
|
$
|
3,811
|
|
Note 7 – Income Taxes
Prepaid federal income taxes of
$10.2 million
and
$4.3 million
were included in Other Current Assets at
March 31, 2017
and
June 30, 2016
, respectively. Prepaid state and local income taxes of
$1.0 million
and
$0.5 million
were included in Other Current Assets at
March 31, 2017
and
June 30, 2016
, respectively.
Note 8 – Business Segment Information
The
March 31, 2017
identifiable assets by reportable segment are generally consistent with that of
June 30, 2016
. However, due to the acquisition of Angelic in November 2016, the amount of Specialty Foods assets increased as compared to
June 30, 2016
. The following summary of financial information is consistent with the basis of segmentation and measurement of segment profit or loss presented in our
June 30, 2016
consolidated financial statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Nine Months Ended
March 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Sales
|
$
|
293,834
|
|
|
$
|
287,765
|
|
|
$
|
911,968
|
|
|
$
|
906,619
|
|
Operating Income
|
|
|
|
|
|
|
|
Specialty Foods
|
$
|
25,080
|
|
|
$
|
46,476
|
|
|
$
|
141,957
|
|
|
$
|
146,866
|
|
Corporate Expenses
|
(3,067
|
)
|
|
(2,532
|
)
|
|
(9,832
|
)
|
|
(8,919
|
)
|
Total
|
$
|
22,013
|
|
|
$
|
43,944
|
|
|
$
|
132,125
|
|
|
$
|
137,947
|
|
Note 9 – Stock-Based Compensation
There have been no changes to our stock-based compensation plans from those disclosed in our
2016
Annual Report on Form 10-K.
Our stock-settled stock appreciation rights (“SSSARs”) compensation expense was
$0.4 million
for the three months ended
March 31, 2017
and
2016
. Year-to-date SSSARs compensation expense was
$1.3 million
for the current-year period compared to
$0.9 million
for the prior-year period. At
March 31, 2017
, there was
$4.3 million
of unrecognized compensation expense related to SSSARs that we will recognize over a weighted-average period of
2 years
.
Our restricted stock compensation expense was
$0.6 million
and
$0.4 million
for the three months ended
March 31, 2017
and
2016
, respectively. Year-to-date restricted stock compensation expense was
$1.8 million
for the current-year period compared to
$1.3 million
for the prior-year period. At
March 31, 2017
, there was
$3.8 million
of unrecognized compensation expense related to restricted stock that we will recognize over a weighted-average period of
2 years
.
Note 10 – Defined Contribution and Other Employee Plans
Multiemployer Plans
In the quarter ended March 31, 2017, we recorded a one-time charge of
$17.6 million
for our complete withdrawal from the underfunded multiemployer Cleveland Bakers and Teamsters Pension Fund and to initially fund a new union-sponsored 401(k) plan for the current union employees at our Bedford Heights, Ohio plant. This event was detailed in our Form 8-K filing, which was issued on January 24, 2017. The liability related to this charge was included in Accrued Liabilities at March 31, 2017.