RESTRUCTURING CHARGES

6 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

In November 2019, Griffon announced the development of a next-generation business platform for CPP to enhance the growth, efficiency, and competitiveness of its U.S. operations.

This initiative includes three key development areas. First, multiple independent information systems will be unified into a single data and analytics platform which will serve the whole CPP U.S. enterprise. Second, certain CPP U.S. operations will be consolidated to optimize facilities footprint and talent. Third, strategic investments in automation and facilities expansion will be made to increase the efficiency of our manufacturing and fulfillment operations, and support e-commerce growth.

The expected costs to implement this new business platform, over the three-year duration of the project, will include approximately $35,000 of one-time charges and approximately $40,000 in capital investments. The one-time charges are comprised of $16,000 of cash charges, which includes $12,000 personnel-related costs such as training, severance, and duplicate personnel costs and $4,000 of facility and lease exit costs. The remaining $19,000 of charges are non-cash and are primarily related to asset write-downs.

In the quarter and six months ended March 31, 2020, CPP incurred pre-tax restructuring and related exit costs approximating $3,104 and $9,538, respectively. For the six month period ended March 31, 2020, the cash charges are comprised of $4,846 and non-cash, asset-related charges of $4,692; the cash charges included $3,792 for one-time termination benefits and other personnel-related costs and $1,054 for facility exit costs. Non-cash charges included a $1,968 impairment charge related to a facility’s operating lease as well as $671 of leasehold improvements made to the leased facility and $304 of inventory that have no recoverable value, and a $1,749 impairment charge related to machinery and equipment that have no recoverable value at one of the Company's owned manufacturing locations. As a result of these transactions, headcount was reduced by 148.

A summary of the restructuring and other related charges included in Cost of goods and services and Selling, general and administrative expenses in the Company's Condensed Consolidated Statements of Operations were as follows:



	For the Three Months Ended March 31, 2020		For the Six Months Ended March 31, 2020
Cost of goods and services	$	1,353	$	4,076
Selling, general and administrative expenses	1,751		5,462
Total restructuring charges	$	3,104	$	9,538



	For the Three Months Ended March 31, 2020		For the Six Months Ended March 31, 2020
Personnel related costs	$	1,658	$	3,792
Facilities, exit costs and other	914		1,054
Non-cash facility and other	532		4,692
Total	$	3,104	$	9,538

The following table summarizes the accrued liabilities of the Company's restructuring actions:



	Cash Charges						Non-Cash
	Personnel related costs			Facilities & Exit Costs			Facility and Other Costs			Total
Accrued liability at September 30, 2019	$	—		$	—		$	—		$	—
Q1 restructuring charges	2,134			140			4,160			6,434
Cash payments	(621		)	(140		)	—			(761		)
Non-cash charges ⁽¹⁾	—			—			(4,160		)	(4,160		)
Accrued liability at December 31, 2019	$	1,513		$	—		$	—		$	1,513
Q2 restructuring charges	1,658			914			532			3,104
Cash payments	(1,041		)	(914		)	—			(1,955		)
Non-cash charges ⁽¹⁾	—			—			(532		)	(532		)
Accrued liability at March 31, 2020	$	2,130		$	—		$	—		$	2,130
(1) Non-cash charges in Facility and Other Costs primarily represent the non-cash write-off of certain long-lived assets in connection with certain facility closures.