Restructuring Plan

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

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. Since the initial streamlining and re-balancing efforts contemplated in July, the Company continues to undertake further restructuring activities (collectively, the “2023 Restructuring Plan”) which has included consolidating a portion of our manufacturing operations between certain U.S. locations, discontinuing the sale of certain product SKUs, and evaluating the fair value of finished goods and raw materials, mostly 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.

The Company recorded pre-tax restructuring activity of $2.9 million and $5.3 million, respectively, for the three and nine months ended September 30, 2024, and $24.0 million for the three and nine months ended September 30, 2023, related to the 2023 Restructuring Plan, which the Company expects to complete during the fourth quarter of 2024.

The following tables summarize the charges related to restructuring activities by type of cost for the periods presented on the Company’s condensed consolidated statements of comprehensive income (loss):


	Three Months Ended September 30, 2024
	Severance and Employee-Related Costs		Facility and Other Exit Costs			Total
	(Amounts in thousands)
Cost of goods sold	$	23	$	1,461		$	1,484
Selling, general and administrative		631		1,037			1,668
Other (income) expenses		—		(234	)		(234	)
	$	654	$	2,264		$	2,918


	Nine Months Ended September 30, 2024
	Severance and Employee-Related Costs		Accelerated Depreciation		Facility and Other Exit Costs			Total
	(Amounts in thousands)
Cost of goods sold	$	876	$	19	$	1,661		$	2,556
Research and development		449		—		—			449
Selling, general and administrative		1,486		—		1,054			2,540
Other (income) expenses		—		—		(234	)		(234	)
	$	2,811	$	19	$	2,481		$	5,311


	Three and Nine Months Ended September 30, 2023
	Severance and Employee-Related Costs		Inventory Write-Off		Accelerated Depreciation		Facility and Other Exit Costs		Total
	(Amounts in thousands)
Cost of goods sold	$	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 primarily 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 in 2023 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, the value of which exceeded the projected requirements to be used before reaching their expiration date, were written down to their realizable value. The 2023 Restructuring Plan also includes the closing of manufacturing facilities and production lines, which include inventory that could not be re-purposed.

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, 2024. Activity related to the Restructuring Plan for the nine months ended September 30, 2024 was as follows (amounts in thousands):


	Restructuring Liability December 31, 2023		Restructuring Costs		Amounts Paid in 2024			Noncash Restructuring Items			Restructuring Liability September 30, 2024

Severance & employee-related costs	$	464	$	2,811	$	(3,030	)	$	(49	)	$	196
Accelerated depreciation		—		19		—			(19	)		—
Facility and other exit costs		—		2,481		(2,715	)		234			—
Total	$	464	$	5,311	$	(5,745	)	$	166		$	196