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. By that time, CPP expects to have reduced its facility footprint by approximately 1.2 million square feet, or approximately 15% of CPP's square footage, and its headcount by approximately 600. Manufacturing Operations have ceased at all affected sites: Camp Hill and Harrisburg, PA; Fairfield, IA; Grantsville, MD; and four wood mills. The closed locations, which have a total net book value of $24,172, have met the held for sale criteria and have been classified as such on our Balance Sheet as of March 31, 2024.

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 March 31, 2024, CPP incurred pre-tax restructuring and related exit costs comprised of cash charges totaling $2,401. The cash charges included $482 for one-time termination benefits and other personnel-related costs and $1,919 for facility exit costs. In the six months ended March 31, 2024, CPP incurred pre-tax restructuring and related exit costs approximating $14,801, comprised of cash charges totaling $6,319 and non-cash, asset-related charges totaling $8,482. The cash charges included $2,329 for one-time termination benefits and other personnel-related costs and $3,990 for facility exit costs. Non-cash charges of $8,482 were recorded to adjust inventory to net realizable value.

In both the quarter and six months ended March 31, 2023, CPP incurred pre-tax restructuring and related exit costs approximating $78,334. During both the quarter and six months ended March 31, 2023, cash charges totaled $19,216 and non-cash, asset-related charges totaled $59,118; the cash charges included $8,050 for one-time termination benefits and other personnel-related costs and $11,166 for facility exit costs. Non-cash charges included a $22,018 impairment charge related to certain fixed assets at several manufacturing locations and $37,100 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 March 31,				For the Six Months Ended March 31,
	2024		2023		2024		2023
Cost of goods and services	$	1,334	$	74,645	$	12,980	$	74,645
Selling, general and administrative expenses	1,067		3,689		1,821		3,689
Total restructuring charges	$	2,401	$	78,334	$	14,801	$	78,334


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2024		2023		2024		2023
Personnel related costs	$	482	$	8,050	$	2,329	$	8,050
Facilities, exit costs and other	1,919		11,166		3,990		11,166

Non-cash facility and other	—		59,118		8,482		59,118
Total	$	2,401	$	78,334	$	14,801	$	78,334

The following tables summarizes the accrued liabilities of the Company's restructuring actions for the six months ended March 31, 2024 and 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
Q1 Restructuring charges	1,847		2,071		8,482		12,400
Q1 Cash payments	(7,215)		(3,362)		—		(10,577)
Q1 Non-cash charges	—		—		(8,482)		(8,482)
Accrued liability at December 31, 2023	$	8,739	$	4,260	$	—	$	12,999
Q2 Restructuring charges	482		1,919		—		2,401
Q2 Cash payments	(608)		(1,919)		—		(2,527)

Accrued liability at March 31, 2024	$	8,613	$	4,260	$	—	$	12,873

___________________


	Cash Charges				Non-Cash
	Personnel related costs		Facilities & Exit Costs		Facility and Other Costs (2)		Total
Accrued liability at September 30, 2022	$	386	$	264	$	—	$	650

Q1 Cash payments	(74)		(93)		—		(167)

Accrued liability at December 31, 2022	$	312	$	171	$	—	$	483
Q2 Restructuring charges	8,050		11,166		59,118		78,334
Q2 Cash payments	(244)		(1,883)		—		(2,127)
Q2 Non-cash charges	—		—		(59,118)		(59,118)
Accrued liability at March 31, 2023	$	8,118	$	9,454	$	—	$	17,572

(2) Non-cash charges in Facility and Other Costs represent the non-cash impairment charges related to certain fixed assets at several manufacturing sites and to adjust inventory to net realizable value.