During the quarter of fiscal we initiated restructuring plans to consolidate our manufacturing and logistics operations as part of an overall strategy to maximize production efficiencies and maintain our competitive advantage. As of we permanently discontinued operations at our Passaic, New Jersey property and ceased using most of our Old Fort, North Carolina case goods manufacturing operations, which we transferred to our other existing case goods operations.

 

During the half of fiscal we continued with this optimization project as we converted the Old Fort facility into a distribution center and expanded our existing Maiden, North Carolina manufacturing campus while finalizing severance and other exit costs. In connection with the foregoing fiscal initiatives, we recorded pre-tax restructuring and other exit charges totaling million, consisting of million in abnormal manufacturing variances associated with the Passaic and Old Fort facilities, million in employee severance and other payroll and benefit costs and million in other exit costs partially offset by million in gains from the sale of property, plant and equipment held at our Old Fort facility. The abnormal manufacturing overhead variances of million were recorded within with the remaining recorded within the line item in the consolidated statements of comprehensive income.

 

As part of our optimization plans, we also completed the sale of our Passaic property in to an independent party and received million in cash less certain adjustments, including million in selling and other closing costs. As a result of the sale, the Company recognized a pre-tax gain of million in the quarter of fiscal which was recorded within the line item in the consolidated statements of comprehensive income.

 

 

During the half of fiscal we recorded a non-cash charge of million related to the write-down and disposal of certain slow moving and discontinued inventory items, which was due to actual demand and forecasted market conditions for these inventory items being less favorable than originally estimated. Of the total inventory write-down, million related to slow moving finished goods with the remaining million consisting of raw materials that were disposed. The non-cash inventory write-down was recorded in the consolidated statement of comprehensive income within the line item 

 

 

Restructuring, impairment and other related costs incurred during the and months ended were as follows (in thousands):

 

		Three months ended				Six months ended
		December 31, 2019				December 31, 2019
Optimization of manufacturing and logistics		$	(178	)		$	462
Gain on sale of Passaic property			-				(11,497	)
Total Restructuring and other exit costs (income)		$	(178	)		$	(11,035	)
Manufacturing overhead costs			271				1,323	(1)
Inventory write-downs			121				3,209	(1)
Total		$	214			$	(6,503	)

 

 

 

The Company’s restructuring activity is summarized in the table below (in thousands):

 

						Fiscal 2020 Activity
Optimization of Manufacturing and Logistics		Balance June 30, 2019				New Charges (Income)				Non-Cash				(Payments) Receipts				Balance Dec 31, 2019
Employee severance, other payroll and benefit costs		$	1,714			$	712			$	23			$	(2,380	)		$	23	(1)
Manufacturing overhead costs			-				1,323				-				(1,323	)			-
Sale of Passaic property			-				(11,497	)			245				11,742				-
Sale of other property, plant and equipment			-				(675	)			-				675				-
Other exit costs			-				425				(522	)			(947	)			-
Sub-total		$	1,714			$	(9,712	)		$	(254	)		$	7,767			$	23
Inventory write-downs
Inventory write-downs		$	-			$	3,209			$	3,209			$	-			$	-
Other Restructuring and Impairment Charges
Lease exit costs (remaining lease rentals)		$	3,145			$	-			$	2,878			$	(267	)		$	-	(2)
Other charges (income)			224				-				-				(104	)			120	(3)
Sub-total			3,369				-				2,878				(371	)			120
Total Restructuring, Impairments and other exit costs		$	5,083			$	(6,503	)		$	5,833			$	7,396			$	143