Restructuring

6 Months Ended

Mar. 31, 2024

Restructuring and Related Activities [Abstract]

Restructuring

7. Restructuring

2024 Restructuring Plan

In the second quarter of fiscal year 2024, the Company launched initiatives designed to optimize resources for future growth and improve efficiency across its organization. The focus of the initiatives is to improve the Company’s profitability, which includes facilities consolidation, portfolio optimization, and organization structure simplification. The Company expects to complete the activities included in these initiatives by the end of fiscal year 2026. As of May 9, 2024, the date of issuance of the financial statements for the quarterly period ended March 31, 2024, the Company has not identified restructuring actions related to these initiatives that will result in additional material charges. The Company expects to identify additional actions related to these initiatives in future periods which will be recorded when specified criteria are met, such as communication of benefit arrangements or when the costs have been incurred.

The majority of the restructuring expenses associated with the initiatives described above for the three months ended March 31, 2024 are severance and related costs, operating lease related right-of-use (“ROU”) asset abandonment, and fixed assets and other asset write-offs. Of the total restructuring expenses in the three months ended March 31, 2024, $4.6 million is related to B Medical Systems segment; $1.6 million is related to SMS segment; $1.1 million is the Company’s headquarters operating lease related ROU asset abandonment and corporate related severance costs.

2023 Cost Savings Plans

In the second and third quarters of fiscal year 2023, the Company announced cost savings plans designed to position the Company to meet the needs of its customers and accelerate growth of the business.

The restructuring expenses associated with the 2023 cost savings plans for the three and six months ended March 31, 2023 are severance and related costs.

The following table sets forth restructuring charges recognized for the three and six months ended March 31, 2024 and 2023 (in thousands):

	Three Months Ended March 31,				Six Months Ended March 31,
		2024		2023		2024		2023
Severance and related costs	$	2,111	$	1,499	$	3,231	$	2,961
Property, plant and equipment and other asset write-offs		3,663		—		3,663		—
ROU asset abandonment		901		—		901		—
Other		669		—		669		—
Total restructuring charges	$	7,344	$	1,499	$	8,464	$	2,961

The following table sets forth the activity in the severance and related costs accruals for the six months ended March 31, 2024 and 2023 (in thousands):

	Six Months Ended March 31,
	2024		2023
Balance at beginning of period	$	1,011	$	462
Provisions		3,231		2,961
Payments		(1,760)		(2,139)
Balance at end of period	$	2,482	$	1,284