Special Charges

6 Months Ended

Mar. 31, 2020

In connection with various organizational changes to improve our business alignment and cost structure, we recognized Special charges of $8.8 million and $16.6 million for the three and six months ended March 31, 2020 compared to $3.5 million and $11.5 million for the three and six months ended March 31, 2019. Although these charges are non-recurring in nature, additional Special charges are expected to be incurred related to restructuring and transformative initiatives in future periods. It is not practicable to estimate the amount of these future expected costs until such time as the evaluations are complete.

These charges are summarized as follows:

Business Optimization and Realignment

Management pursues opportunities to align our operations to achieve synergies and position the business for growth. In fiscal 2018, a global transformation program was launched that was focused on reducing complexity, increasing efficiency and improving our cost structure with targeted investments that align with our strategic priorities.

As part of this program, management launched an initiative related to a global information technology transformation, including rationalizing and transforming our enterprise resource planning software solutions and other complementary information technology systems. For the three months ended March 31, 2020, the Company incurred $9.9 million related to this initiative, of which $5.4 million was capitalized and $4.5 million was expensed in Special charges. For the six months ended March 31, 2020, the Company incurred $19.3 million, of which $10.7 million was capitalized and $8.6 million was expensed in Special charges. The objective of this initiative is to consolidate and streamline our key workstreams that interact with customers and vendors and support our financial reporting processes while maintaining the security of our data. The solutions designed under this initiative will be implemented over the next five to seven years.

We acquired several businesses in fiscal 2019 and 2020 as disclosed within Note 4. Business Combinations for which we continue to incur integration-related costs and severance costs. These costs were recorded to Special charges for the three and six months ended March 31, 2020. We also incurred costs, including severance and benefit costs, associated with other business realignment and integration activities.

For the three and six months ended March 31, 2020, we incurred total business optimization and realignment charges of $8.2 million and $15.5 million, of which $2.1 million and $3.9 million were severance and benefit costs with the remainder related to professional fees and project management costs. These amounts compare to charges of $2.5 million and $6.3 million for the three and six months ended March 31, 2019, of which $1.0 million and $3.8 million were severance and benefit costs with the remainder related to professional fees and project management costs.

Site Consolidation

We continue to streamline our operations and simplify our supply chain by consolidating certain manufacturing and distribution operations (“Site Consolidation”). For the three and six months ended March 31, 2020, we recorded charges of $0.7 million and $1.2 million related to these efforts, primarily comprised of site closure costs and severance and benefit costs. These amounts compare to charges of $1.0 million and $5.1 million related to these efforts for the three and six months ended March 31, 2019, primarily comprised of severance and benefit costs, lease termination and facility closure costs.

For all accrued severance and other benefit charges described above, we record restructuring reserves within Other current liabilities. The reserve activity for severance and other benefits for the six months ended March 31, 2020 was as follows:


Balance as of September 30, 2019	$	8.5
Expenses	4.4
Cash Payments	(7.8)
Reversals	(0.3)
Balance as of March 31, 2020	$	4.8