Restructuring

6 Months Ended

Dec. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

We recognized pre-tax restructuring expense of $1.7 million and $2.0 million in the three and six months ended December 31, 2022, and recognized $1.0 million and $2.5 million for the three and six months ended December 31, 2021.

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

Transformation Restructuring Plan:

Current actions under our transformation restructuring plan are focused on activities such as the streamlining of manufacturing facilities, the consolidation of showrooms, and the closure of our manufacturing facility in Tijuana, Mexico which was completed during the year-to-date period of fiscal year 2023. This phase of the transformation restructuring plan began in the first quarter of our fiscal year 2021, and we expect a substantial majority of the restructuring actions to be completed by the end of fiscal year 2023.

This phase of the transformation restructuring plan is expected to generate annualized pre-tax savings of approximately $19.0 million when it is fully implemented. We currently estimate this phase of the transformation restructuring plan will incur total pre-tax restructuring charges of approximately $22.7 million to $23.3 million, with approximately $1.8 million expected to be recorded in remainder of fiscal year 2023. The restructuring charges are expected to consist of approximately $7.3 million for

severance and other employee-related costs, $6.0 million to $6.2 million for facility costs, and $9.4 million to $9.8 million for lease and other asset impairment. Approximately 60% of the total cost estimate is expected to be cash expense.

A summary of the charges recorded in connection with the second phase of the transformation restructuring plan is as follows:

	Three Months Ended				Six Months Ended				Charges Incurred to Date
	December 31				December 31
(Amounts in Thousands)	2022		2021		2022		2021
Cash-related restructuring charges:
Severance and other employee related costs	$	284	$	87	$	474	$	233	$	7,309
Facility exit costs and other cash charges	363		434		1,296		890		5,244
Total cash-related restructuring charges	$	647	$	521	$	1,770	$	1,123	$	12,553
Non-cash charges:
Impairment of assets and accelerated depreciation	1,032		489		279		1,342		8,810
Total charges	$	1,679	$	1,010	$	2,049	$	2,465	$	21,363

A summary of the current period activity in accrued restructuring related to the second phase of the transformation restructuring plan is as follows:

(Amounts in Thousands)	Severance and other employee related costs
Balance at June 30, 2022	$	974
Additions charged to expense	466
Cash payments charged against reserve	(1,393)
Non-cash adjustments	(47)
Balance at December 31, 2022	$	—