NOTE 4. 2016 BUSINESS TRANSFORMATION PROGRAM

During the fourth quarter of fiscal 2015, the Company identified certain restructuring and cost savings initiatives that it expected 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 nine months ended March 31, 2016, the Company has incurred approximately $2.4 million and $17.7 million, respectively, of pre-tax charges under the 2016 Business Transformation Program. Since inception, the Company has incurred approximately $20.1 million of pre-tax charges under the 2016 Business Transformation Program. The pre-tax charges for the three and nine months ended March 31, 2016 and since inception consisted of the following:


*Three Months Ended March 31, 2016:*
	Cost of			Selling,
	Goods			General and
(Amounts in thousands)	Sold			Administrative		Depreciation		Total
Inventory Costs ⁽¹⁾	$	514	$	-	$	-	$	514
Severance and other employee-related costs ⁽²⁾		-		236		-		236
Other ⁽³⁾		-		1,578		-		1,578
Depreciation ⁽⁴⁾		-		-		114		114
Total	$	514	$	1,814	$	114	$	2,442

*Nine Months Ended March 31, 2016:*
	Cost of			Selling,
	Goods			General and
(Amounts in thousands)	Sold			Administrative		Depreciation		Total
Inventory Costs ⁽¹⁾	$	4,394	$	-	$	-	$	4,394
Severance and other employee-related costs ⁽²⁾		-		5,489		-		5,489
Other ⁽³⁾		-		7,435		-		7,435
Depreciation ⁽⁴⁾		-		-		342		342
Total	$	4,394	$	12,924	$	342	$	17,660

*Since Inception:*
	Cost of			Selling,
	Goods			General and
(Amounts in thousands)	Sold			Administrative		Depreciation		Total
Inventory Costs ⁽¹⁾	$	4,394	$	-	$	-	$	4,394
Severance and other employee-related costs ⁽²⁾		-		7,063		-		7,063
Other ⁽³⁾		-		8,266		-		8,266
Depreciation ⁽⁴⁾		-		-		342		342
Total	$	4,394	$	15,329	$	342	$	20,065

(1)	Amounts for the three months ended March 31, 2016, consists of inventory costs related to changes in certain distribution and customer arrangements. The amounts for the nine months ended March 31, 2016, and since inception, also include inventory costs related to the closing of the Company's Brazilian affiliate.
(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 March 31, 2016, 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		2,225			343			2,568
Accruals⁽¹⁾		236			1,578			1,814
Cash payments		(1,923	)		(1,578	)		(3,501	)
Liability balance at March 31, 2016 ⁽²⁾	$	538		$	343		$	881

(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.