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

In June 2019, we announced a transformation restructuring plan to optimize resources for future growth, improve efficiency, and build capabilities across our organization. We believe phase 1 of our transformation restructuring plan has established a more cost-efficient structure to better align our operations with our long-term strategic goals. Phase 1 of our transformation restructuring plan is substantially complete as of June 30, 2021. The transformation restructuring plan included the following:

•We reviewed our overall manufacturing facility footprint to reduce excess capacity and gain efficiencies by centralizing manufacturing operations. We have ceased operations at a leased seating manufacturing facility in Martinsville, Virginia, and consolidated a David Edward production facility in Red Lion, Pennsylvania into our Baltimore, Maryland facility.

•The creation of center-led functions for finance, human resources, information technology and legal functions resulted in the standardization of processes and the elimination of duplication. In addition, we centralized our supply chain efforts to maximize supplier value and plan to drive more efficient practices and operations within our logistics function.

•Kimball brand selling resources were reallocated to higher-growth markets. We also ceased use of four leased furniture showrooms across our brands during the first quarter of fiscal year 2020 and recognized impairment of the lease and associated leasehold improvements, and recognized subsequent impairment due to degradation of sublease assumptions resulting from the current economic environment.


	Year Ended						Charges Incurred to Date
(Amounts in Thousands)	June 30, 2021		June 30, 2020		June 30, 2019
Cash-related restructuring charges:
Severance and other employee related costs	$	62	$	2,159	$	663	$	2,884
Facility exit costs and other cash charges	998		1,837		203		3,038

Total cash-related restructuring charges	$	1,060	$	3,996	$	866	$	5,922
Non-cash charges:
Transition stock compensation	—		654		71		725
Impairment of assets	770		3,690		—		4,460
Other non-cash charges	72		149		—		221

Total non-cash charges	$	842	$	4,493	$	71	$	5,406
Total charges	$	1,902	$	8,489	$	937	$	11,328


(Amounts in Thousands)	Severance and other employee related costs		Other costs		Total
Balance at June 30, 2019	$	619	$	203	$	822
Additions charged to expense	2,716		444		3,160
Cash payments charged against reserve	(2,792)		(582)		(3,374)
Non-cash adjustments	(376)		—		(376)
Balance at June 30, 2020	$	167	$	65	$	232
Additions charged to expense	62		—		62
Cash payments charged against reserve	(229)		(60)		(289)
Non-cash adjustments	—		(5)		(5)
Balance at June 30, 2021	$	—	$	—	$	—

In August 2020, we announced the next phase of our transformation restructuring plan that will align our business units to a new market-centric orientation and is expected to yield additional cost savings that will aid us in effectively managing through the downturn caused by the COVID-19 pandemic. Phase 2 of the transformation restructuring plan builds on the initial strategy and the transformation restructuring plan announced in June 2019. The following is a summary of the activities we will be undertaking pursuant to phase 2 of the transformation restructuring plan:

•As part of the previously announced plan to consolidate manufacturing of all brands into one world-class global operations group, we are streamlining our manufacturing facilities by leveraging production capabilities across all facilities, establishing centers of excellence, and setting up processes to facilitate flexing of product between facilities in response to volume fluctuations. We are also reviewing our overall facility footprint to identify opportunities to reduce capacity and gain efficiencies, including the consolidation of our Baltimore, Maryland facility into other manufacturing facilities.

•We are streamlining our workforce to align with the new organizational structure and respond to lower volumes created by the COVID-19 pandemic, creating a more efficient organization to deliver on our Connect 2.0 strategy.

•In the third quarter of fiscal 2021, we offered two voluntary retirement incentive programs to eligible employees. Employees electing to participate were paid special termination benefits, including a severance benefit and cash payment that may be used to pay for a period of healthcare coverage or for any other purpose.

•Starting in fiscal year 2022, many of our showrooms will feature multiple brands thus eliminating the need for more than one showroom in the same city. Showroom locations are being reviewed and select leased showroom locations will be closed.

Phase 2 of the transformation restructuring plan began in the first quarter of our fiscal year 2021, and we expect a substantial majority of the underlying activities of these aforementioned actions to be completed by the end of fiscal year 2023.

In addition to the savings already generated from phase 1 of the transformation restructuring plan, the efforts of the phase 2 transformation restructuring plan are expected to generate annualized pre-tax savings of approximately $16.0 million when it is fully implemented. We currently estimate the phase 2 transformation restructuring plan will incur total pre-tax restructuring charges of approximately $16.0 million to $18.0 million, with approximately $6.0 million expected to be recorded in fiscal year 2022, and approximately $2.0 million thereafter. The restructuring charges are expected to consist of approximately $5.0 million to $5.5 million for severance and other employee-related costs, $5.0 million to $6.0 million for facility costs, and $6.0 million to $6.5 million for lease and other asset impairment. Approximately 65% of the total cost estimate is expected to be cash expense.


	Year Ended
(Amounts in Thousands)	June 30, 2021
Cash-related restructuring charges:
Severance and other employee related costs	$	5,082
Facility exit costs and other cash charges	1,587
Total cash-related restructuring charges	$	6,669
Non-cash charges:
Impairment of assets and accelerated depreciation	2,156



Total charges	$	8,825


(Amounts in Thousands)	Severance and other employee related costs
Balance at June 30, 2020	$	—
Additions charged to expense	5,716
Cash payments charged against reserve	(3,696)
Non-cash adjustments	(634)
Balance at June 30, 2021	$	1,386