RESTRUCTURING CHARGES

3 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

In response to changing market conditions, Griffon announced in May 2023 that CPP is expanding its global sourcing strategy to include long handled tools, material handling, and wood storage and organization product lines.

By transitioning these product lines to an asset-light structure, CPP’s operations will be better positioned to serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world, while improving its competitive positioning in a post-pandemic marketplace.

The global sourcing strategy expansion is expected to be complete by the end of calendar 2024. Over that period, CPP expects to reduce its facility footprint by approximately 1.2 million square feet, or approximately 15% of CPP's square footage, and its headcount by approximately 600. Operations have ceased at Camp Hill and Harrisburg, PA; Fairfield, IA; and four wood mills. The final facility, in Grantsville, MD, is expected to close by March 2024. The closed locations, totaling a net book value of $15,010, have met the held for sale criteria and have been classified as such on our Balance Sheet as of December 31, 2023.

Implementation of this strategy over the duration of the project will result in charges of $120,000 to $130,000, including $50,000 to $55,000 of cash charges for employee retention and severance, operational transition, and facility and lease exit costs, and $70,000 to $75,000 of non-cash charges primarily related to asset write-downs. Capital investment in the range of $3,000 to $5,000 will also be required. These costs exclude cash proceeds from the sale of real estate and equipment, which are expected to largely offset the cash charges, and also exclude inefficiencies due to duplicative labor costs and absorption impacts during transition.

In the quarter ended December 31, 2023, CPP incurred pre-tax restructuring and related exit costs approximating $12,400. During the quarter ended December 31, 2023, cash charges totaled $3,918 and non-cash, asset-related charges totaled $8,482. The cash charges included $1,847 for one-time termination benefits and other personnel-related costs and $2,071 for facility exit costs. Non-cash charges of $8,482 were recorded to adjust inventory to net realizable value.

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


	For the Three Months Ended December 31,
		2023
Cost of goods and services		$	11,646
Selling, general and administrative expenses		754
Total restructuring charges		$	12,400


	For the Three Months Ended December 31,
		2023
Personnel related costs		$	1,847
Facilities, exit costs and other		2,071

Non-cash facility and other		8,482
Total		$	12,400

The following tables summarizes the accrued liabilities of the Company's restructuring actions for the three months ended December 31, 2023:


	Cash Charges				Non-Cash
	Personnel related costs		Facilities & Exit Costs		Facility and Other Costs(1)		Total
Accrued liability at September 30, 2023	$	14,107	$	5,551	$	—	$	19,658
Restructuring charges	1,847		2,071		8,482		12,400
Cash payments	(7,215)		(3,362)		—		(10,577)
Non-cash charges	—		—		(8,482)		(8,482)
Accrued liability at December 31, 2023	$	8,739	$	4,260	$	—	$	12,999

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(1) Non-cash charges in Facility and Other Costs represent non-cash impairment charges to adjust inventory to net realizable value.