During fiscal we began to execute plans to consolidate our manufacturing and logistics operations as part of an overall strategy to maximize production efficiencies and maintain our competitive advantage. In the following changes to our operations were announced as we continue to improve the vertical integration of our business operations. 

 

 

 

 

 

As of we have permanently ceased operations at our Passaic, New Jersey facility and, for the most part, transferred our Old Fort case goods manufacturing operations to other existing operations. As a result, approximately of our associates in Old Fort and associates in Passaic were terminated. We plan to continue with the optimization project during fiscal as we convert Old Fort into a distribution center and expand our existing Maiden, North Carolina campus.

 

For these quarter of fiscal actions, we recorded pre-tax restructuring, impairment, and other related charges totaling million, consisting of million in impairments of long-lived assets, million in employee severance and other payroll and benefit costs, million in inventory write-downs and manufacturing variances and million of other associated costs, including freight and relocation expenses. The inventory write-downs and abnormal manufacturing overhead variances of million were recorded within with the remaining million recorded within the line item in the consolidated statement of comprehensive income.

 

 

During the quarter of fiscal we recorded a non-cash impairment charge of million related to the impairment of long-lived assets held at certain retail design center locations. Due to retail segment operating losses and a recent organizational realignment, we identified this as a fiscal triggering event requiring assessment of recoverability. The asset group used in the impairment analysis, which represented the lowest level for which identifiable cash flows were available and largely independent of the cash flows of other groups of assets, was the individual retail design center. We estimated future cash flows based on design center-level historical results, current trends, and operating and cash flow projections. The impairment charge of million was recorded in the consolidated statement of comprehensive income within the line item

 

 

During the quarter of fiscal we recorded million of charges primarily related to remaining contractual obligations under leased retail design center space for which we ceased using as of The amount of the charge was equal to all costs that will continue to be incurred under our lease for its remaining term without economic benefit and measured at fair value when we ceased using the right conveyed by the contract. The pre-tax charge was recorded in the consolidated statement of comprehensive income within the line item

 

 

Restructuring, impairment and other related fiscal charges are summarized in the table below (in thousands):

 

		Fiscal 2019
		Charges
Optimization of manufacturing and logistics		$	6,330
Impairment of long-lived assets at retail design centers			9,913
Lease exit costs (remaining lease rentals)			2,662
Other charges (income)			(525	)
Total Restructuring, Impairments and other charges		$	18,380
Inventory write-downs and manufacturing overhead costs			1,994	(1)
Total		$	20,374

 

 

 

Activity in the Company’s restructuring reserves is summarized in the table below (in thousands):

 

		Balance				Fiscal 2019 Activity												Balance
Optimization of Manufacturing and Logistics		June 30, 2018				New Charges				Non-Cash				Payments				June 30, 2019
Employee severance, other payroll and benefit costs		$	-			$	2,837			$	-			$	(1,123	)		$	1,714	(1)
Accelerated depreciation of long-lived assets			-				3,112				3,112				-				-
Inventory write-downs and manufacturing overhead costs			-				1,994				1,128				(866	)			-
Other exit and relocation costs			-				381				283				(98	)			-
Sub-total			-				8,324				4,523				(2,087	)			1,714
Retail Design Center Impairment
Impairment of long-lived assets			-				9,913				9,913				-				-
Other Restructuring and Impairment Charges
Lease exit costs (remaining lease rentals)			-				2,662				(483	)			-				3,145	(2)
Other charges (income)			958				(525	)			-				(209	)			224	(3)
Sub-total			958				2,137				(483	)			(209	)			3,369
Total Restructuring, Impairments and other exit costs		$	958			$	20,374			$	13,953			$	(2,296	)		$	5,083