RESTRUCTURING CHARGES

12 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

In September 2020, Telephonics initiated a Voluntary Employee Retirement Plan, which was subsequently followed by a reduction in force in November 2020, to improve efficiencies by combining functions and responsibilities. The combined actions are expected to incur severance charges of approximately $4,500, with $2,120 recognized in the fourth quarter, and the balance to be recognized in the first quarter of 2021. At the conclusion of these actions, headcount is expected to be reduced by approximately 90 people. In addition, during fiscal 2020 Telephonics commenced a facility project to consolidate three Long Island based facilities into two company owned facilities with a total cost of approximately $4.0 million primarily comprised of capital expenditures in 2021.

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, and on November 12, 2020, Griffon announced that CPP is broadening this strategic initiative to include additional North American facilities, the AMES UK and Australia businesses, and a manufacturing facility in China.

The expanded focus of this initiative leverages the same three key development areas being executed within our U.S. operations. First, multiple independent information systems will be unified into a single data and analytics platform, which will serve the whole AMES global enterprise. Second, certain AMES global 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 cost to implement this new business platform, over the five years duration of the project, will include approximately $65,000 (increased from $35,000) of one-time charges and approximately $65,000 (increased from $40,000) in capital investments. The one-time charges are comprised of $46,000 of cash charges, which includes $26,000 of personnel-related costs such as training, severance, and duplicate personnel costs as well as $20,000 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 year ended September 30, 2020, CPP incurred pre-tax restructuring and related exit costs approximating $13,669. For the year ended September 30, 2020, cash charges totaled $8,977 and non-cash, asset-related charges totaled $4,692; the cash charges included $5,620 for one-time termination benefits and other personnel-related costs and $3,357 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 167.

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 Consolidated Statements of Operations were as follows:



	For the Year Ended September 30, 2020
Cost of goods and services	$	4,159
Selling, general and administrative expenses	11,630
Total restructuring charges	$	15,789



	For the Year Ended September 30, 2020
Personnel related costs	$	7,740
Facilities, exit costs and other	3,357
Non-cash facility and other	4,692
Total	$	15,789

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



	Cash Charges			Cash Charges			Non Cash Charges
	Personnel related costs			Facilities & Exit Costs			Facility and Other Costs			Total
Accrued liability at September 30, 2019	$	—		$	—		$	—		$	—
Charges	7,740			3,357			4,692			15,789
Payments	(5,039		)	(3,093		)	—			(8,132		)
Non-cash charges ⁽¹⁾	—			$	—		(4,692		)	(4,692		)
Accrued liability at September 30, 2020	$	2,701		$	264		$	—		$	2,965
(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.