IMPAIRMENT, RESTRUCTURING AND OTHER

9 Months Ended

Jul. 03, 2021

Restructuring and Related Activities [Abstract]

Activity described herein is classified within the “Cost of sales—impairment, restructuring and other,” “Impairment, restructuring and other” and “Income (loss) from discontinued operations, net of tax” lines in the Condensed Consolidated Statements of Operations. The following table details impairment, restructuring and other charges (recoveries) for each of the periods presented:


	Three Months Ended				Nine Months Ended
	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020

Cost of sales—impairment, restructuring and other:
COVID-19 related costs	$	1.5	$	12.2	$	22.5	$	15.3
Restructuring and other charges (recoveries), net	(0.7)		(0.5)		(0.3)		—

Operating expenses:
COVID-19 related costs	0.4		4.3		3.6		5.0
Restructuring and other charges (recoveries), net	0.1		(0.1)		0.1		(3.0)

Impairment, restructuring and other charges from continuing operations	1.3		15.9		25.9		17.3
Restructuring and other charges (recoveries), net, from discontinued operations	—		—		—		(3.1)
Total impairment, restructuring and other charges (recoveries)	$	1.3	$	15.9	$	25.9	$	14.2

The following table summarizes the activity related to liabilities associated with restructuring and other during the nine months ended July 3, 2021:


Amounts accrued for restructuring and other at September 30, 2020	$	3.9
Restructuring and other charges from continuing operations	25.9

Payments and other	(27.8)
Amounts accrued for restructuring and other at July 3, 2021	$	2.0

Included in restructuring accruals, as of July 3, 2021, is $1.1 that is classified as long-term. Payments against the long-term accruals will be incurred as the employees covered by the restructuring plan retire or through the passage of time. The remaining amounts accrued will continue to be paid out over the course of the next twelve months.

COVID-19

The COVID-19 pandemic has had, and continues to have, an impact on financial markets, economic conditions, and portions of the Company’s business and industry. The Company has actively addressed the pandemic’s ongoing impact on its employees, operations, customers, consumers, and communities, by, among other things, implementing contingency plans, making operational adjustments where necessary, and providing assistance to organizations that support front-line workers. Many of the Company’s employees continue to work from home. In those instances where the Company’s employees cannot perform their work at home, the Company has implemented additional health and safety measures and social distancing protocols, consistent with government recommendations and/or requirements, to help to ensure their safety. In addition, the Company implemented an interim premium pay allowance for certain associates in its field sales force and its manufacturing or distribution centers. During the three and nine months ended July 3, 2021, the Company incurred costs of $1.9 and $26.1, respectively, associated with the COVID-19 pandemic primarily related to premium pay. The Company incurred costs of $0.8 and $19.8 in its U.S. Consumer segment, $0.5 and $2.4 in its Hawthorne segment and $0.2 and $0.3 in its Other segment in the “Cost of sales—impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and nine months ended July 3, 2021, respectively. The Company incurred costs of $0.3 and $3.5 in its U.S. Consumer segment and $0.1 in its Other segment in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and nine months ended July 3, 2021, respectively. Since the inception of the COVID-19 pandemic, total costs classified within the “Cost of sales—impairment, restructuring and other” and the “Impairment, restructuring and other” lines in the Condensed Consolidated Statements of Operations are $39.5 for the U.S. Consumer segment, $5.0 for the Hawthorne segment and $1.0 for the Other segment.

During the three and nine months ended June 27, 2020, the Company incurred costs of $16.5 and $20.3, respectively, associated with the COVID-19 pandemic primarily related to premium pay. The Company incurred costs of $9.6 and $12.2 in its U.S. Consumer segment, $2.0 and $2.5 in its Hawthorne segment and $0.6 in its Other segment in the “Cost of sales—

impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and nine months ended June 27, 2020, respectively. The Company incurred costs of $4.2 and $4.9 in its U.S. Consumer segment and $0.1 in its Other segment in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations during the three and nine months ended June 27, 2020, respectively.

Project Catalyst

In connection with the acquisition of Sunlight Supply during the third quarter of fiscal 2018, the Company announced the launch of an initiative called Project Catalyst, which is a company-wide restructuring effort to reduce operating costs throughout the U.S. Consumer, Hawthorne and Other segments and drive synergies from acquisitions within the Hawthorne segment. Costs incurred during the three and nine months ended July 3, 2021 and June 27, 2020 related to Project Catalyst were not material. Costs incurred to date since the inception of Project Catalyst are $24.5 for the Hawthorne segment, $13.9 for the U.S. Consumer segment, $1.3 for the Other segment and $2.8 for Corporate. Additionally, during the three and nine months ended June 27, 2020, the Company received zero and $2.6, respectively, from the final settlement of escrow funds related to a previous acquisition within the Hawthorne segment that was recognized in the “Impairment, restructuring and other” line in the Condensed Consolidated Statements of Operations.