Accrued Restructuring

12 Months Ended

Jun. 30, 2019

4. ACCRUED RESTRUCTURING

On May 15, 2019, the Company announced its plans to exit the Commercial Office and custom-designed Hospitality product lines which represent approximately 7% of its revenue. In addition, the Company will permanently close its Riverside, California manufacturing facility. These changes were initial outcomes driven from customer and product line profitability and footprint utilization analyses. The changes are designed to increase organizational effectiveness, gain manufacturing efficiencies and provide cost savings that can be invested in growing the business.

On June 18, 2019, the Company announced it completed the analysis and planning process and set forth the comprehensive transformation program to be executed over the next two years, which includes previously announced restructuring activities. The transformation program includes activities such as business simplification, process improvement, exiting of non-core businesses, facility closures, and reductions in work force over the next two years.

As a result of these planned actions, the Company expects to incur pre-tax restructuring and related expenses of approximately $48 to $53 million over this two-year timeframe of which $36 to $40 million will be cash and $12 - $13 million non-cash. In addition, the Company plans to list several properties for sale when the footprint optimization is completed. When sold, the Company expects to generate $45 to $55 million in proceeds dependent upon market conditions at time of sale.

The components of restructuring costs are as follows (in thousands):

	Accrued			Accrued
	Restructuring		Expenses	Restructuring
	6/30/2018	Cost incurred	Paid	6/30/2019
One-time employee termination benefits	$ -	$ 3,775	$2,044	$1,731
Contract termination costs	-	249	-	249
Other associated costs	-	6,024	1,801	4,223
Total	$ -	$ 10,048	$3,845	$6,203