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Note 11 - Restructuring and Other Charges, Net of Gains

3 Months Ended

Sep. 30, 2024

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

(11)

Restructuring and Other Charges, Net of Gains

Restructuring and other charges, net of gains were as follows (in thousands):

	Three months ended September 30,
	2024			2023
Hurricane Helene impact ⁽¹⁾	$	335		$	-
Orleans, Vermont flood ⁽²⁾		18			2,096
Gain on sale-leaseback transaction ⁽³⁾		(218	)		(655	)
Severance and other charges		97			51
Total Restructuring and other charges, net of gains	$	232		$	1,492

(1)

In September 2024, an Ethan Allen distribution center located in Old Fort, North Carolina was impacted from significant flooding caused by Hurricane Helene. The distribution center, which primarily focuses on shipping custom-made home furnishings to select wholesale customers, suffered losses related to damaged inventory, impaired equipment, a temporary work stoppage and a disruption in shipments. Total losses incurred during the first quarter of fiscal 2025 was a pre-tax charge of $0.3 million. Restoration efforts, including electricity and internet connectivity and a full return of the workforce, are well underway, and have helped our warehouse operations to resume normal shipping and receiving capacity.

(2)

In July 2023, our wood furniture manufacturing operations located in Orleans, Vermont sustained damage from flooding of the nearby Barton River. In addition to losses related to wood furniture inventory parts and state-of-the-art manufacturing equipment, the flooding also resulted in a temporary work stoppage for many Vermont employees and a disruption and delay of shipments. Total losses incurred from the disposal of damaged inventory, inoperable machinery equipment from water damage, facility cleanup, and restoration, during fiscal 2024 was $2.2 million, net of insurance recoveries and grant proceeds.

(3)

On August 1, 2022, we completed a sale-leaseback transaction with an independent third party for the land, building and related fixed assets of a retail design center which resulted in a deferred gain of $5.2 million to be amortized over the term of the operating lease agreement which expired on July 31, 2024.

Restructuring payments made by the Company during the three months ended September 30, 2024 were $0.1 million, which were primarily for severance. The restructuring balance at September 30, 2024 was $0.6 million and is anticipated to be paid during the remainder of fiscal 2025.