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RESTRUCTURING CHARGES | 9 Months Ended
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Jul. 03, 2022
Restructuring and Related Activities [Abstract] |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES The Company regularly enters into various restructuring initiatives, optimization projects, strategic transactions, and other business development activities that may include the recognition of exit or disposal costs. Exit or disposal costs include, but are not limited to, the costs of one-time termination benefits, such as a severance or retention bonuses, one-time contract termination costs (excluding leases), and other costs associated with exit or disposal activity such as the sale or termination of a line of business, closure of an operating facility or business location in a country or region, relocation of business activities from one location to another, change in management structure, and a fundamental reorganization that affects the nature and focus of operations. During the three month period ended July 3, 2022, the Company entered into a new initiative in response to changes observed within consumer products and retail markets, continued inflationary cost pressures and headwinds, and to facilitate changes in the management structure for enabling functions of the consolidated group, resulting in the realization of headcount reduction. Total cumulative costs associated with the new restructuring initiative were $8.1 million. Substantially all costs associated with the initiative have been recognized with no further significant costs expected to be incurred. During the year ended September 30, 2021, the GPC segment entered into an initiative to update its supply chain and distribution operations within the U.S. to address capacity needs, and optimize and improve fill rates attributable to recent growth in the business and consumer demand, and improve overall operational effectiveness and throughput. The initiative includes the transition of its third party logistics (3PL) service provider at its existing distribution center, incorporating new facilities into the distribution footprint by expanding warehouse capacity and securing additional space to support long-term distribution and fulfillment, plus updating engagement and processes with suppliers and its transportation and logistics handlers. Incremental costs include one-time transition, implementation and start-up cost with the new 3PL service provider, including the integration of provider systems and technology, incentive-based compensation to maintain performance during transition, duplicative and redundant costs, and incremental costs for various disruptions in the operations during the transition period including supplemental transportation and storage costs, and incremental detention and demurrage costs. Costs attributable to the initiative are expected to be incurred through the end of the fiscal year ending September 30, 2022. Total cumulative costs associated with the initiative were $35.5 million with expected costs of approximately $4 million expected to be incurred. During the year ended September 30, 2019, the Company initiated the Global Productivity Improvement Program, which is a company-wide, multi-year program, consisting of various initiatives to redirect resources and spending to drive growth, identify cost savings and pricing opportunities through standardization and optimization, develop organizational and operating optimization, and reduce overall operational complexity across the Company. With the Company's divestitures of GBL and GAC during the year ended September 30, 2019, the project focus includes the transition of the Company's continuing operations in a post-divestiture environment and exiting of TSAs, which were fully exited in January 2022. The initiatives include review of global processes and organization design and structures, headcount reductions and transfers, and rightsizing the Company’s shared operations and commercial business strategy, and exit of certain internal production to third-party suppliers, among others, resulting in the recognition of severance benefits and other exit and disposal costs to facilitate such activity. As of July 3, 2022, total cumulative exit and disposal costs associated with the project were $157.5 million with the project being substantially complete and no significant anticipated costs expected to be incurred. The Company may enter into small, less significant initiatives to reduce costs and improve margins throughout the organization. Individually these activities are not substantial and occur over a shorter time period (generally less than 12 months). The following summarizes restructuring charges for the three and nine month periods ended July 3, 2022 and July 4, 2021:
|  | Three Month Periods Ended |  | Nine Month Periods Ended
(in millions) |  | July 3, 2022 |  | July 4, 2021 |  | July 3, 2022 |  | July 4, 2021
Fiscal 2022 restructuring |  | $ | 8.1 |  |  | $ | — |  |  | $ | 8.1 |  |  | $ | — |
GPC distribution center transition |  | 8.1 |  |  | 3.9 |  |  | 24.1 |  |  | 3.9 |
Global productivity improvement program |  | 1.2 |  |  | 4.8 |  |  | 5.2 |  |  | 15.7 |
Other project costs |  | 0.1 |  |  | 1.4 |  |  | 14.0 |  |  | 3.8 |
Total restructuring charges |  | $ | 17.5 |  |  | $ | 10.1 |  |  | $ | 51.4 |  |  | $ | 23.4 |
Reported as: |  |  |  |  |  |  |  |
Cost of goods sold |  | $ | 0.4 |  |  | $ | 0.3 |  |  | $ | 1.4 |  |  | $ | 1.7 |
Selling expense |  | 8.1 |  |  | 3.5 |  |  | 24.1 |  |  | 3.5 |
General and administrative expense |  | 9.0 |  |  | 6.3 |  |  | 25.9 |  |  | 18.2 |
The following is a summary of restructuring charges by segment for the three and nine month periods ended July 3, 2022 and July 4, 2021.
|  | Three Month Periods Ended |  | Nine Month Periods Ended
(in millions) |  | July 3, 2022 |  | July 4, 2021 |  | July 3, 2022 |  | July 4, 2021
HPC |  | $ | 4.2 |  |  | $ | 2.1 |  |  | $ | 8.5 |  |  | $ | 6.2 |
GPC |  | 11.6 |  |  | 3.9 |  |  | 31.1 |  |  | 6.0 |
H&G |  | 0.6 |  |  | — |  |  | 0.6 |  |  | — |
Corporate |  | 1.1 |  |  | 4.1 |  |  | 11.2 |  |  | 11.2 |
Total restructuring charges |  | $ | 17.5 |  |  | $ | 10.1 |  |  | $ | 51.4 |  |  | $ | 23.4 |
The following is a summary of restructuring charges by cost type for the three and nine month periods ended July 3, 2022 and July 4, 2021.
(in millions) |  | Termination Benefits |  | Other Costs |  | Total
For the three month period ended July 3, 2022 |  | $ | 8.5 |  |  | $ | 9.0 |  |  | $ | 17.5 |
For the three month period ended July 4, 2021 |  | 5.0 |  |  | 5.1 |  |  | 10.1 |
For the nine month period ended July 3, 2022 |  | 10.4 |  |  | 41.0 |  |  | 51.4 |
For the nine month period ended July 4, 2021 |  | 8.3 |  |  | 15.1 |  |  | 23.4 |
The following is a rollforward of the accrual for restructuring charges by cost type for the nine month period ended July 3, 2022.
(in millions) |  | Termination Benefits |  | Other Costs |  | Total
Accrual balance at September 30, 2021 |  | $ | 4.6 |  |  | $ | 5.6 |  |  | $ | 10.2 |
Provisions |  | 8.0 |  |  | (0.8) |  |  | 7.2 |
Cash expenditures |  | (3.0) |  |  | (0.7) |  |  | (3.7) |
Foreign currency and other |  | (1.5) |  |  | (1.8) |  |  | (3.3) |
Accrual balance at July 3, 2022 |  | $ | 8.1 |  |  | $ | 2.3 |  |  | $ | 10.4 |

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -URI https://asc.fasb.org/extlink&oid=115931487&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI https://asc.fasb.org/topic&trid=2175745 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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