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. During the three and six months ended December 31, 2015, the Company has incurred approximately $6.7 million and $15.2 million, respectively, of pre-tax charges under the 2016 Business Transformation Program. Since inception, the Company has incurred approximately $17.6 million of pre-tax charges under the 2016 Business Transformation Program. The pre-tax charges for the three and six months ended December 31, 2015 and since inception consisted of the following:


*Three Months Ended December 31, 2015:*
	Cost of					Selling,
	Goods					General and
(Amounts in thousands)	Sold					Administrative			Depreciation		Total
Inventory Costs ⁽¹⁾	$		596	$	-	-	$	-	-	$	596
Severance and other employee-related costs ⁽²⁾		-	-			3,169		-	-		3,169
Other ⁽³⁾		-	-			2,798		-	-		2,798
Depreciation ⁽⁴⁾		-	-		-	-			114		114
Total	$		596	$		5,967	$		114	$	6,677

*Six Months Ended December 31, 2015:*
	Cost of					Selling,
	Goods					General and
(Amounts in thousands)	Sold					Administrative			Depreciation		Total
Inventory Costs ⁽¹⁾	$		3,880	$	-	-	$	-	-	$	3,880
Severance and other employee-related costs ⁽²⁾		-	-			5,253		-	-		5,253
Other ⁽³⁾		-	-			5,857		-	-		5,857
Depreciation ⁽⁴⁾		-	-		-	-			228		228
Total	$		3,880	$		11,110	$		228	$	15,218

*Since Inception:*
	Cost of					Selling,
	Goods					General and
(Amounts in thousands)	Sold					Administrative			Depreciation		Total
Inventory Costs ⁽¹⁾	$		3,880	$	-	-	$	-	-	$	3,880
Severance and other employee-related costs ⁽²⁾		-	-			6,827		-	-		6,827
Other ⁽³⁾		-	-			6,688					6,688
Depreciation ⁽⁴⁾		-	-		-	-			228		228
Total	$		3,880	$		13,515	$		228	$	17,623

(1)	Consists of inventory costs related to the closing of the Company's Brazilian affiliate, as well as 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, including salaries for terminated employees during their remaining service period, and exit costs and rent expense related to leased space being vacated.
(4)	Consists of accelerated depreciation expense for leasehold improvements related to vacated leased space.

As of December 31, 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		(2,680	)		(3,059	)		(5,739	)
Liability balance at September 30, 2015		819			832			1,651
Accruals⁽¹⁾		3,169			2,798			5,967
Cash payments		(1,763	)		(3,287	)		(5,050	)
Liability balance at December 31, 2015 ⁽²⁾	$	2,225		$	343		$	2,568

(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.