2016 Business Transformation Program

3 Months Ended

Sep. 30, 2015

2016 Business Transformation Program [Abstract]

2016 Business Transformation Program

NOTE 4. 2016 BUSINESS TRANSFORMATION PROGRAM

During the fourth quarter of fiscal 2015, the Company identified certain additional restructuring and cost savings initiatives that it expects to implement during fiscal 2016 (the "2016 Business Transformation Program"). The 2016 Business Transformation Program is intended to further align the Company's organizational structure and distribution arrangements with the current needs and demands of its business in order to improve the Company's go-to-market capability and execution and to streamline its organization.

The Company expects to incur approximately $23 million to $28 million in pre-tax charges, primarily during fiscal 2016, under the 2016 Business Transformation Program, of which an estimated $17 million to $22 million is expected to be comprised of cash expenditures. The Company has incurred approximately $8.5 million of pre-tax charges under the 2016 Business Transformation Program during the three months ended September 30, 2015, and approximately $10.9 million of pre-tax charges inception-to-date. The pre-tax charges for the three months ended September 30, 2015 and since inception consisted of the following:

Three Months Ended September 30, 2015:


	Cost of			Selling,
	Goods			General and
(Amounts in thousands)	Sold			Administrative		Depreciation		Total
Inventory Costs ⁽¹⁾	$	3,284	$	-	$	-	$	3,284
Severance and other employee-related costs ⁽²⁾		-		2,084		-		2,084
Other ⁽³⁾		-		3,059				3,059
Depreciation ⁽⁴⁾		-		-		114		114
Total	$	3,284	$	5,143	$	114	$	8,541

*Since Inception:*
	Cost of			Selling,
	Goods			General and
(Amounts in thousands)	Sold			Administrative		Depreciation		Total
Inventory Costs ⁽¹⁾	$	3,284	$	-	$	-	$	3,284
Severance and other employee-related costs ⁽²⁾		-		3,658		-		3,658
Other ⁽³⁾		-		3,890				3,890
Depreciation ⁽⁴⁾		-		-		114		114
Total	$	3,284	$	7,548	$	114	$	10,946

(1) Consists of inventory costs related to the closing of the Company's Brazil affiliate, as well changes in certain distribution
and customer arrangements.
(2) Severance and other employee-related costs associated with reduction in global headcount positions.
(3) Consists primarily of transition expenses and lease termination costs.
(4) Consists of accelerated depreciation expense for leasehold improvements related to vacated leased space.

As of September 30, 2015, the related liability balance and activity for costs associated with the 2016 Business Transformation Program are as follows:


		Severance and
		Other Employee-
*(Amounts in thousands)*		Related Costs			Other			Total
Liability balance at June 30, 2015	$	1,415		$	832		$	2,247
Accruals⁽¹⁾		2,084			3,059			5,143
Cash payments-First Quarter Fiscal 2015		(2,680	)		(3,059	)		(5,739	)
Liability balance at September 30, 2015 ⁽²⁾	$	819		$	832		$	1,651

(1) Included in selling, general and administrative expenses in the Company's consolidated statements of operations.
(2) The Company expects to pay the balance of these liabilities during fiscal 2016.

As discussed in Note 16, none of the expenses discussed above have been attributed to any of the Company's reportable segments and are included in unallocated corporate expenses or depreciation expense.