Restructuring Expense

We recognized pre-tax restructuring expense related to continuing operations of $0.4 million and $3.7 million in the three and nine months ended March 31, 2015, respectively, and recognized no restructuring expense related to continuing operations in the three and nine months ended March 31, 2014. We utilize available market prices and management estimates to determine the fair value of impaired fixed assets. Restructuring charges are included in the Restructuring Expense line item on the Company's Condensed Consolidated Statements of Income.

For more information related to restructuring activities that are included in the discontinued operations line item on the Company's Condensed Consolidated Statements of Income, refer to our Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

Capacity Utilization Restructuring Plan:

In November 2014, we announced a capacity utilization restructuring plan which includes the consolidation of our metal fabrication production from an operation located in Post Falls, Idaho, into existing production facilities in Indiana, and the reduction of our Company plane fleet from two jets to one.

Key factors in the decision to consolidate the Post Falls operation into the Indiana facilities include the improvement of customer delivery, supply chain dynamics, and transportation costs. The transfer of work involves the start-up of metal fabrication capabilities in a Company-owned facility, along with the transfer of certain assembly operations into two additional company-owned facilities, all located in southern Indiana. The manufacturing capacity realignment will be carefully managed to mitigate customer disruptions. The consolidation activities began immediately after the announcement in November 2014, and we are actively marketing for sale the Post Falls, Idaho facility. Incremental capital for equipment purchases to transfer this operation to Indiana is approximately $5 million, exclusive of the capital reduction that is estimated to occur upon the sale of the Post Falls facility. No changes in operating income are anticipated until the later quarters of the transfer of work. When fully implemented by September 2016, we anticipate pre-tax savings of approximately $5 million per year thereafter.

The reduction of our plane fleet from two jets to one reduces our cost structure while aligning the plane fleet size with our needs following the spin-off of Kimball Electronics on October 31, 2014. Previously, one of our jets was used primarily for the successful strategy of transporting customers to visit our showrooms and manufacturing locations, while the remaining jet was used primarily for management travel. The plane used primarily for management travel was sold in the third quarter of fiscal year 2015. The sale of the plane resulted in a $0.2 million pre-tax gain in the third quarter of fiscal year 2015 which partially offset the impairment charge of $1.1 million recorded in the second quarter of fiscal year 2015. As a result of the aircraft fleet reduction, we expect to realize annual pre-tax savings of $0.8 million. In regards to the remaining jet, we believe that our location in rural Jasper, Indiana and the location of our manufacturing locations in small towns away from major metropolitan areas necessitates the need for the remaining jet to efficiently transport customers.

We currently estimate that the pre-tax restructuring charges will be approximately $9.9 million, with $3.7 million recorded in the nine months ended March 31, 2015 and the remainder expected to be incurred over the remaining anticipated transition period. The restructuring charges are expected to consist of approximately $5.6 million of transition, training, and other employee costs, $3.1 million of plant closure and other exit costs, and $1.2 million of non-cash asset impairment. Approximately 88% of the total cost estimate is expected to be cash expense.



Summary of Restructuring Plan:
	Accrued June 30, 2014		Nine Months Ended March 31, 2015									Total Charges Incurred Since Plan Announcement		Total Expected Plan Costs
(Amounts in Thousands)	Accrued June 30, 2014		Amounts Charged Cash		Amounts Charged Non-cash		Amounts Utilized/ Cash Paid			Accrued March 31, 2015⁽¹⁾		Total Charges Incurred Since Plan Announcement		Total Expected Plan Costs

Capacity Realignment and Post Falls, Idaho Exit
Transition and Other Employee Costs	$	—	$	2,006	$	—				$	2,006	$	2,006	$	5,432
Asset Write-downs	—		—		108		(108		)	—		108		334
Plant Closure and Other Exit Costs	—		563		—		(563		)	—		563		3,113
Total	$	—	$	2,569	$	108	$	(671	)	$	2,006	$	2,677	$	8,879
Plane Fleet Reduction
Transition and Other Employee Costs	$	—	$	224	$	—	$	(224	)	$	—	$	224	$	224
Asset Write-downs	—		—		822		(822		)	—		822		822
Total	$	—	$	224	$	822	$	(1,046	)	$	—	$	1,046	$	1,046
Total Restructuring Plan	$	—	$	2,793	$	930	$	(1,717	)	$	2,006	$	3,723	$	9,925


(1)	The accrued restructuring balance at March 31, 2015 includes $0.5 million recorded in current liabilities and $1.5 million recorded in other long-term liabilities.