Restructuring Activities

6 Months Ended

Jun. 30, 2024

Restructuring and Related Activities [Abstract]

Post-RH Divestiture Restructuring Plan

During 2024, we initiated a post-RH Divestiture restructuring plan (the “Plan”). The Plan is intended to align our organizational structure and operational footprint with our remaining business. We expect the Plan will be substantially complete by the end of 2025 and currently expect to incur up to $7.5 million of cash expenses, primarily for employee termination benefits. In the three and six months ended June 30, 2024, we incurred $3.4 million and $4.1 million, respectively, of costs related to the Plan. These costs were included in “Selling and general expenses” in the accompanying condensed consolidated income statements.

Transformation Process

In January 2023, we initiated a three-year restructuring initiative intended to align the Company under a single commercial organization, rationalize our product portfolio, undertake additional cost management activities to enhance the Company’s operating profitability and pursue efficient capital allocation strategies (the “Transformation Process”). The RH Divestiture represents a key component of our three-year transformation process. We expect the Transformation Process will be substantially complete by the end of 2025.

We expect to incur up to $30.0 million of cash expenses in connection with the Transformation Process, consisting of between $9.0 million and $12.0 million of program management consulting and employee retention expenses; between $8.0 million and $11.0 million of expenses associated with manufacturing and supply chain improvements and portfolio rationalization; and the remainder for expenses associated with organization design and alignment and other related activities. These amounts include between $6.0 million and $8.0 million of employee severance and benefits costs.

In the three and six months ended June 30, 2024, we incurred expenses of $1.6 million and $4.5 million, respectively, primarily related to employee severance and benefits costs in connection with the Transformation Process, compared to $9.8 million and $18.7 million in the three and six months ended June 30, 2023. These costs were included in “Cost of products sold” and “Selling and general expenses” in the accompanying condensed consolidated income statements. Plan-to-date we have incurred expenses of $32.7 million in connection with the Transformation Process.

Restructuring Liability

Our liability for costs associated with our restructuring initiatives as of June 30, 2024 is summarized below (in millions):


	As of June 30, 2024
Beginning balance	$	2.3
Restructuring and transformation costs, excluding non-cash charges	7.0
Payments and adjustments, net	(6.7)
Ending balance	$	2.6