Restructuring

3 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

We recognized pre-tax restructuring expense of $0.4 million in the three months ended September 30, 2022, and recognized $1.5 million for the three months ended September 30, 2021.

We utilized available market prices and management estimates to determine the fair value of impaired assets. Restructuring is included in the Restructuring Expense line item on our Condensed Consolidated Statements of Operations.

Transformation Restructuring Plan:

Current actions under our transformation restructuring plan are focused on activities such as the streamlining of manufacturing facilities, the consolidation of showrooms, and the closure of our manufacturing facility in Tijuana, Mexico which was completed during the first quarter of fiscal year 2023. This phase of the transformation restructuring plan began in the first quarter of our fiscal year 2021, and we expect a substantial majority of the restructuring actions to be completed by the end of fiscal year 2023.

In addition to the savings already generated from the first phase of the transformation restructuring plan, the efforts of this second phase of the transformation restructuring plan are expected to generate annualized pre-tax savings of approximately $19.0 million when it is fully implemented. We currently estimate this phase of the transformation restructuring plan will incur total pre-tax restructuring charges of approximately $21.5 million to $22.0 million, with approximately $2.5 million expected to be recorded in remainder of fiscal year 2023. The restructuring charges are expected to consist of approximately $7.0 million for severance and other employee-related costs, $6.3 million to $6.5 million for facility costs, and $8.2 million to $8.5 million for lease and other asset impairment. Approximately 55% of the total cost estimate is expected to be cash expense.

A summary of the charges recorded in connection with the second phase of the transformation restructuring plan is as follows:


	Three Months Ended				Charges Incurred to Date
	September 30
(Amounts in Thousands)	2022		2021
Cash-related restructuring charges:
Severance and other employee related costs	$	190	$	146		$	7,025
Facility exit costs and other cash charges	933		456			4,881
Total cash-related restructuring charges	$	1,123	$	602		$	11,906
Non-cash charges:
(Gain) on sale, impairment of assets and accelerated depreciation	(753)		853			7,778



Total charges	$	370	$	1,455		$	19,684

A summary of the current period activity in accrued restructuring related to the second phase of the transformation restructuring plan is as follows:


(Amounts in Thousands)	Severance and other employee related costs
Balance at June 30, 2022	$	974
Additions charged to expense	210
Cash payments charged against reserve	(1,133)
Non-cash adjustments	(47)
Balance at September 30, 2022	$	4