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Restructuring and Integration Expense | 9 Months Ended
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Mar. 02, 2024
Restructuring and Related Activities [Abstract] |
Restructuring and Integration Expense | Restructuring and Integration Expense As part of restructuring and integration activities the Company has incurred expenses that qualify as exit and disposal costs under U.S. GAAP. These include severance and employee benefit costs as well as other direct separation benefit costs. Severance and employee benefit costs primarily relate to cash severance, as well as non-cash severance, including accelerated equity award compensation expense. The Company also incurs expenses that are an integral component of, and directly attributable to, our restructuring and integration activities, which do not qualify as exit and disposal costs under U.S. GAAP. These include integration implementation costs that relate primarily to professional fees and non-cash losses incurred on debt extinguishment. The expenses associated with integration initiatives are included in Selling, general and administrative and the expenses associated with restructuring activities are included in Restructuring expense in the Condensed Consolidated Statements of Comprehensive Income. Knoll Integration: Following the Knoll acquisition, the Company announced a multi-year program (the "Knoll Integration") designed to reduce costs and integrate and optimize operations of the combined organization. The Company currently expects that the Knoll Integration will result in pre-tax cash costs that are expected to be approximately $150 million, comprised of the following categories: •Severance and employee benefit costs associated with plans to integrate our operating structure, resulting in workforce reductions. These costs will primarily include: severance and employee benefits (cash severance, non-cash severance, including accelerated stock-compensation award expense and other termination benefits). •Exit and disposal activities include those incurred as a direct result of integration activities, primarily including the reorganization and consolidation of facilities as well as asset impairment charges. •Other integration costs include professional fees and other incremental third-party expenses, including a loss on extinguishment of debt associated with financing of the Knoll acquisition. For the three months ended March 2, 2024, we incurred $7.6 million of costs related to the Knoll Integration which was comprised of $6.6 million of exit and disposal costs related to the consolidation of facilities, and $1 million of other integration costs. For the three months ended March 4, 2023, we incurred $4.0 million of costs related to the Knoll Integration including: $1.7 million of severance and employee benefit costs, $0.8 million of exit and disposal costs related to the consolidation of facilities, and $1.5 million of other integration costs For the nine months ended March 2, 2024, we incurred $18.4 million of costs related to the Knoll Integration which was comprised of $15.3 million of exit and disposal costs related to the consolidation of facilities and $3.1 million of other integration costs. For the nine months ended March 4, 2023, we incurred $12.7 million of costs related to the Knoll Integration including: $3.1 million of severance and employee benefit costs, $3.6 million of of exit and disposal costs related to the consolidation of facilities, and $6.0 million of other integration costs. The following table provides an analysis of the changes in liability balance for Knoll Integration costs that qualify as exit and disposal costs under U.S. GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the nine months ended March 2, 2024:
(In millions) | Severance and Employee Benefit |  | Exit and Disposal Activities |  | Total
June 3, 2023 | $ | 2.9 |  |  | $ | — |  |  | $ | 2.9 |
Integration Costs | — |  |  | 15.3 |  |  | 15.3 |
Amounts Paid | (2.8) |  |  | (10.2) |  |  | (13.0) |
Non-cash costs | — |  |  | (3.9) |  |  | (3.9) |
March 2, 2024 | $ | 0.1 |  |  | $ | 1.2 |  |  | $ | 1.3 |
The Company expects that a substantial portion of the liability for the Knoll Integration as of March 2, 2024 will be paid in the balance of fiscal year 2024. The following is a summary of integration expenses by segment for the periods indicated:
| Three Months Ended |  | Nine Months Ended
(In millions) | March 2, 2024 |  | March 4, 2023 |  | March 2, 2024 |  | March 4, 2023
Americas Contract | $ | 5.8 |  |  | $ | 2.2 |  |  | $ | 15.3 |  |  | $ | 6.2 |
International Contract & Specialty | 1.8 |  |  | 0.5 |  |  | 3.0 |  |  | 2.0 |
Global Retail | — |  |  | — |  |  | — |  |  | 0.2 |
Corporate | — |  |  | 1.3 |  |  | 0.1 |  |  | 4.3 |
Total | $ | 7.6 |  |  | $ | 4.0 |  |  | $ | 18.4 |  |  | $ | 12.7 |
In the second quarter of fiscal 2024 a manufacturing facility located in Wisconsin met the criteria to be classified as an asset held for sale. The decision to sell this facility was made as a result of facility integration activities performed in connection with the integration of Knoll. The carrying amount of these assets held for sale was $4.6 million and is classified as current assets within "Assets held for sale" in the Condensed Consolidated Balance Sheets as of March 2, 2024. No impairment has been recorded on the carrying value of the asset. Restructuring Activities During fiscal year 2023, the Company announced a series of actions that relate to the 2023 restructuring plan ("2023 restructuring plan") to reduce expenses. These restructuring activities included voluntary and involuntary reductions in workforces and charges incurred in connection with the decision to cease operating Fully as a stand-alone brand. As the result of these actions, the Company projected an annualized expense reduction of approximately $30 million to $35 million. The Company incurred $34.0 million of costs related to the 2023 restructuring plan comprised of $27.9 million of severance and employee benefit costs and $6.1 million of non-impairment charges related to the closure of the Fully business. The restructuring plan was complete in fiscal 2023 and no future costs related to this plan are expected. During fiscal year 2024, the Company announced an action related to the 2024 restructuring plan ("2024 restructuring plan") to reduce expenses. This restructuring activity included involuntary reductions in workforces. As the result of the action, the Company projects an annualized expense reduction of approximately $15.0 million to $17.0 million. During the three and nine months ended March 2, 2024 the Company incurred $1.7 million and $8.7 million, respectively of severance and employee benefit costs related to the 2024 restructuring plan. The following table provides an analysis of the changes in the restructuring cost reserve for the nine months ended March 2, 2024:
| Severance and Employee-Related |  |
(In millions) | 2024 Restructuring Plan |  | 2023 Restructuring Plan |  |
June 3, 2023 | $ | — |  |  | $ | 7.3 |  |  |
Restructuring Costs | 8.7 |  |  | — |  |  |
Amounts Paid | (6.4) |  |  | (7.0) |  |  |
March 2, 2024 | $ | 2.3 |  |  | $ | 0.3 |  |  |
The Company expects that remaining liability for the 2023 restructuring plan as of March 2, 2024 will be paid in fiscal year 2024. The Company expects that remaining liability for the 2024 restructuring plan as of March 2, 2024, will be paid in fiscal year 2024 and fiscal 2025. The following is a summary of restructuring costs by segment for the periods indicated:
| Three Months Ended |  | Nine Months Ended
(In millions) | March 2, 2024 |  | March 4, 2023 |  | March 2, 2024 |  | March 4, 2023
Americas Contract | $ | 1.5 |  |  | $ | 4.4 |  |  | $ | 5.8 |  |  | $ | 17.5 |
International Contract & Specialty | 0.1 |  |  | — |  |  | 1.6 |  |  | 0.7 |
Global Retail | 0.1 |  |  | 0.2 |  |  | 1.3 |  |  | 1.6 |
Total | $ | 1.7 |  |  | $ | 4.6 |  |  | $ | 8.7 |  |  | $ | 19.8 |

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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 -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//420/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479823/420-10-S99-2 + Details
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