The pre-tax special charge of $2.7 million recorded in the first quarter of fiscal 2012 relates primarily to actions to streamline the organization by realigning responsibilities within various selling, distribution, and administrative departments. The special charge consisted primarily of severance and related employee benefit costs associated with a modest reduction in workforce. The Company expects to achieve annualized pre-tax savings of approximately $5 million related to these streamlining efforts with approximately $3.5 million to be realized in fiscal 2012. Management continues to evaluate possible further streamlining measures that may result in additional charges this fiscal year.
Fiscal 2012 first quarter results included $2.9 million of net miscellaneous income compared with $1.2 million of net miscellaneous expense in the prior-year period. Net miscellaneous income/expense consists primarily of gains and losses resulting from the impact of exchange rates changes on foreign currency exposures, particularly those associated with the Mexican Peso.
Mr. Nagel commented, “We remain very positive about the future prospects for our company, particularly as we become more diversified and less reliant on new building construction for growth. We believe our diversification strategy, which includes providing high quality, energy-efficient lighting solutions for all types of renovation, has allowed us to achieve volume growth for seven consecutive quarters in spite of weak new construction. We continue to position the Company to deliver short-term performance while investing in and deploying resources to further our longer-term profitable growth opportunities.“Our performance expectations for fiscal 2012 have not changed materially during the past quarter. Updated third-party forecasts suggest that the North American lighting market, which includes renovation and relight activity, will increase in the low-to-mid single digits during the remainder of our fiscal 2012. We believe opportunities continue to exist that will allow us to outperform the markets we serve. These opportunities include benefits from growing renovation and tenant improvement projects, further expansion in underpenetrated geographies and channels, and growth from the introduction of new products and lighting solutions. This notwithstanding, we anticipate on-going volatility in both customer demand and commodity costs. Similar to prior years, the second fiscal quarter, typically our weakest quarter, is expected to once again be influenced by normal seasonality and the potential for year-end inventory rebalancing by certain customers.”