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Restructuring Plan | 9 Months Ended
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Sep. 30, 2023
Restructuring and Related Activities [Abstract] |
Restructuring Plan | 4. Restructuring Plan As previously disclosed, in July 2023 the Board of Directors authorized the Company's management team to undertake restructuring activities to simplify and streamline our organization and strengthen the overall effectiveness of our operations (the "Restructuring Plan"). In addition to the initial streamlining and re-balancing efforts contemplated in July, the Company is undertaking further restructuring activities (collectively, the "Restructuring Plan") which include consolidating a portion of our manufacturing operations between certain U.S. locations, discontinuing the sale of certain product SKUs, and evaluating raw materials and components secured during the 2020-2022 COVID-19 pandemic period (the "COVID-19 Period") to meet increasing demand during a challenging supply chain environment in the industry. These activities are expected to be substantially completed by the end of 2023. The Company recorded pre-tax costs of $24.0 million for the three and nine months ended September 30, 2023, related to the Restructuring Plan and for the full year of 2023 the Company expects to record charges of approximately $26 million, with the remaining costs in the fourth quarter related to remaining severance and employee-related costs. Approximately $21 million will be non-cash, relating primarily to an inventory write-off to adjust inventory to net realizable value and accelerated depreciation on equipment related to the shutdown of manufacturing facilities and production lines, the remaining costs will be cash expenses, primarily related to severance and employee-related costs. The Company recorded pre-tax costs of $24.0 million for the three and nine months ended September 30, 2023 related to the Restructuring Plan and for the full year of 2023 the Company expects to record charges of approximately $26 million. The following table summarizes the charges related to restructuring activities by type of cost:
|  | Three and Nine Months Ended September 30, 2023 |
|  | Severance & Employee-Related Costs |  |  | Inventory Write-Off |  |  | Accelerated Depreciation |  |  | Facility and Other Exit Costs |  |  | Total |
|  | (Amounts in thousands) |
Cost of product revenue |  | $ | 1,654 |  |  | $ | 17,185 |  |  | $ | 3,788 |  |  | $ | 84 |  |  | $ | 22,711 |
Research and development |  |  | 34 |  |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 35 |
Selling, general and administrative |  |  | 1,142 |  |  |  | — |  |  |  | 27 |  |  |  | 97 |  |  |  | 1,266 |
|  | $ | 2,830 |  |  | $ | 17,185 |  |  | $ | 3,816 |  |  | $ | 181 |  |  | $ | 24,012 |
Severance and employee-related costs under the Restructuring Plan are associated with actual headcount reductions. Costs incurred include cash severance and non-cash severance, including other termination benefits. Severance and other termination benefit packages are based on established benefit arrangements or local statutory requirements and we recognized the contractual component of these benefits when payment was probable and could be reasonably estimated. The inventory write-off includes the impact of the Company discontinuing the sale of certain product SKUs and the impact of having proactively secured materials during the COVID-19 Period to meet accelerated demand during a challenging supply chain environment in the industry. Where demand has reduced, finished goods and raw materials, whose value exceeded the projected requirements to be used before reaching their expiration date, were written down to their realizable value. The Restructuring Plan also includes the closing of manufacturing facilities and production lines, which included inventory that could not be repurposed. Non-cash charges for accelerated depreciation were recognized on long-lived assets that were taken out of service before the end of their normal service due to the shutdown of manufacturing facilities and production lines, in which case depreciation estimates were revised to reflect the use of the assets over their shortened useful life. The restructuring accrual is included in accrued liabilities in the condensed consolidated balance sheet as of September 30, 2023 and the balance is expected to be paid by the end of 2023. Activity related to the Restructuring Plan for the nine months ended September 30, 2023 was as follows (amounts in thousands):
|  | Restructuring Costs |  |  | Amounts Paid in the Nine Months Ended September 30, 2023 |  |  | Non-Cash Restructuring Items |  |  | Restructuring Liability |
Severance & employee-related costs |  | $ | 2,830 |  |  | $ | (2,478 | ) |  | $ | (214 | ) |  | $ | 138 |
Inventory write-off |  |  | 17,185 |  |  |  | — |  |  | $ | (17,185 | ) |  |  | — |
Accelerated depreciation |  |  | 3,816 |  |  |  | — |  |  | $ | (3,816 | ) |  |  | — |
Facility exit and other exit costs |  |  | 181 |  |  |  | (171 | ) |  | $ | (10 | ) |  |  | — |
Total |  | $ | 24,012 |  |  | $ | (2,649 | ) |  | $ | (21,225 | ) |  | $ | 138 |

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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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