RESTRUCTURING CHARGES

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

The Company continually evaluates its operations to identify opportunities to streamline operations and optimize operating efficiencies as an anticipation to changes in the business environment.

In November 2019, the Company announced an acceleration of cost-saving initiatives that included a decision to discontinue its relationship with its contract sales organization, a reduction in the use of certain outside vendors and consultants, and the reorganization of certain functions resulting in a reduction of staff at its headquarters office and remote positions during the fourth quarter of 2019. As a result, $3.9 million of severance and benefits costs for the reduction of staff were recognized during the year ended December 31, 2019. The 2019 cost-saving initiative was substantially complete as of December 31, 2019.

In April 2020, the Company executed a limited reduction to its sales force due to the impact of COVID-19 on its ability to see in-person providers who prescribe our products. As a result, $0.6 million of severance and benefits costs was recognized, and the initiative completed during the second quarter of 2020.

Subsequent to the Zyla Merger in May 2020, the Company began implementing reorganization plans of its workforce and other restructuring activities to realize the synergies of the Zyla Merger and to re-align resources to strategic areas and drive growth. The reorganization plan primarily focused on reduction of staff at the Company’s headquarters offices. As a result, $5.1 million of severance and benefits costs, $1.0 million of stock-based compensation expense associated with equity modifications for certain executives and $0.1 million of other exit costs were recognized as restructuring cost during the nine months ended September 30, 2020.

The following table reflects total expenses related to restructuring activities recognized within the Condensed Consolidated Statement of Comprehensive Income as restructuring costs for the three and nine months ended September 30, 2020 (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2020		2020
Employee compensation costs	$	260	$	5,695
Equity compensation costs	—		999
Other exit costs	8		93
Total restructuring costs	$	268	$	6,787

The following table reflects cash activity relating to the Company’s accrued restructure as of September 30, 2020 (in thousands):


	Employee compensation costs		Other exit costs		Total
Balance as of December 31, 2019	$	3,763	$	—	$	3,763
Cash paid	(2,431)		—		(2,431)
Balance as of March 31, 2020	$	1,332	$	—	$	1,332
Net accrual additions	5,435		85		5,520

Cash paid	(1,484)		(85)		(1,569)
Balance at June 30, 2020	$	5,283	$	—	$	5,283
Net accrual additions	260		8		268
Cash paid	(2,596)		(8)		(2,604)
Balance as of September 30, 2020	$	2,947	$	—	$	2,947

As of September 30, 2020, the remaining accrued restructuring liability balance of $2.9 million related to Zyla Merger restructuring activities and was classified as accrued liabilities in the Condensed Consolidated Balance Sheet.