Long-lived asset impairment and restructuring charges

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

Long-lived asset impairment and restructuring charges

Impairment of long-lived assets

The Company tests its long-lived assets that are held and used for recoverability whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

During the second quarter of 2023, due to deterioration in performance and resulting downward revisions to our internal Bioservices forecast made during the second quarter, including future expected cash flows, the Company determined there were sufficient indicators of impairment on certain asset groups within the Bioservices reporting unit to require an impairment analysis. As a result, the Company performed recoverability tests on certain asset groups within the Bioservices reporting unit and concluded that the impacted asset groups were not recoverable as the undiscounted expected cash flows did not exceed their carrying values.

Asset groups are written down only to the extent that their carrying value is higher than their respective fair value. The Company, with the assistance of a third-party valuation firm, applied valuation methods to estimate the fair values for each of the assets within the different asset classes. An orderly liquidation value was applied to estimate the fair value of the personal property assets and market and cost based approaches were applied to estimate the fair value of the real property assets. All of the valuation approaches applied represented Level 3 non-recurring fair value measurements. Based on this analysis, the Company allocated and recognized a non-cash impairment charge of $306.7 million during the year ended December 31, 2023.

The table below presents the total impairment charge by asset class for the year ended December 31, 2023:


	Year Ended December 31, 2023
Buildings, building improvements and leasehold improvements	$	81.5
Furniture and equipment	117.5
Software	0.3
Construction-in-progress	107.4

Total impairment of long-lived assets	$	306.7

January 2023 Organizational Restructuring Plan

In January 2023, the Company initiated an organizational restructuring plan (the “January 2023 Plan”) intended to reduce operating costs, improve operating margins, and continue advancing the Company’s ongoing commitment to profitable growth. As part of the January 2023 Plan, the Company reduced its workforce by approximately 125 employees. The Company incurred $9.3 million in charges during the year ended December 31, 2023. These charges consist primarily of charges related to employee transition, severance payments and employee benefits. All activities related to the January 2023 Plan were substantially completed during the first quarter of 2023. Restructuring costs are recognized as an operating expense within the Consolidated Statement of Operations and are classified based on the Company's classification policy for each category of operating expense.

August 2023 Organizational Restructuring Plan

In August 2023, the Company initiated the August 2023 Plan intended to strengthen its core business and financial position by reducing investment in and de-emphasizing focus on its Bioservices business for future growth. As part of the August 2023 Plan, the Company reduced its workforce by approximately 400 employees. The Company incurred $20.0 million in charges in connection with the August 2023 Plan during the year ended December 31, 2023. These charges consist primarily of charges related to severance payments, transition services, and employee benefits. All activities related to the August 2023 Plan were substantially completed during the third quarter of 2023. Restructuring costs are recognized as an operating expense within the Consolidated Statement of Operations and are classified based on the Company's classification policy for each category of operating expense.

The following table presents the total restructuring costs associated with the Company’s segments as well as unallocated corporate and research and development ("R&D") charges for the year ended December 31, 2023:


	Year Ended December 31, 2023
Commercial Products	$	—
MCM Products	5.6
Services	8.4
Total restructuring costs by segment	14.0
Corporate	11.7
R&D	3.6
Total restructuring costs	$	29.3

The following table presents the total restructuring costs, by function, for the year ended December 31, 2023:


	Year Ended December 31, 2023
Employee transition	$	0.6
Severance payments	27.0
Employee benefits	1.7
Total restructuring costs	$	29.3

The following table provides the components of and changes in the Company's restructuring accrual for the January 2023 Plan during the year ended December 31, 2023:


	Employee Transition		Severance Payments		Employee Benefits		Total
Balance at December 31, 2022	$	—	$	—	$	—	$	—
Accruals	0.3		8.7		0.3		9.3
Cash payments	(0.3)		(7.3)		(0.3)		(7.9)
Balance at December 31, 2023	$	—	$	1.4	$	—	$	1.4

The following table provides the components of and changes in the Company's restructuring accrual for the August 2023 Plan during the year ended December 31, 2023:


	Employee Transition		Severance Payments		Employee Benefits		Total
Balance at December 31, 2022	$	—	$	—	$	—	$	—
Accruals	0.3		18.3		1.4		20.0
Cash payments	(0.3)		(13.0)		(1.3)		(14.6)
Balance at December 31, 2023	$	—	$	5.3	$	0.1	$	5.4