Note 3. Restructuring Charges

Cody Restructuring Program

On June 29, 2018, the Company announced a restructuring plan related to the future of Cody Laboratories, Inc. and the Company’s operations (the “Cody Restructuring Plan”). The plan focuses on a more select set of opportunities which will result in streamlined operations, improved efficiencies and a reduced cost structure. The Company incurred approximately $2.5 million of severance and employee-related costs under this plan.

In addition, the Company recorded a $21.5 million non-cash impairment charge in connection with the Cody Restructuring Plan relating to the facility, equipment and other plant-related assets primarily associated with the expansion project at Cody Labs.

The expenses associated with the Cody Restructuring Plan included in restructuring expenses during the fiscal year ended June 30, 2019 were as follows:


	Fiscal Year Ended
(In thousands)	June 30, 2019
Employee separation costs	$	(585)
Facility closure costs		—
Total	$	(585)

A reconciliation of the changes in restructuring liabilities associated with the Cody Restructuring Plan from June 30, 2018 through June 30, 2019 is set forth in the following table:


	Employee		Facility Closure
(In thousands)	Separation Costs		Costs		Total
Balance at June 30, 2018	$	3,092	$	—	$	3,092
Restructuring Charges		(585)		—		(585)
Payments		(2,399)		—		(2,399)
Balance at June 30, 2019	$	108		—	$	108

Cody API Restructuring Plan

In September 2018, the Company approved a plan to sell the active pharmaceutical ingredient manufacturing distribution business of Cody Labs (the “Cody API business”). The Company was unable to sell the Cody API business as an ongoing operation and now intends to sell the real estate utilized by the Cody API business upon receiving approval of the Company’s cocaine hydrochloride solution Section 505(b)(2) NDA application and to have Cody Labs cease all operations. In June 2019, the Company approved the Cody API Restructuring Plan. In connection with the Cody API Restructuring Plan, there has been a reduction of almost 70 positions at Cody Labs. The Company expects that the actions contemplated under the Cody API Restructuring Plan will be substantially completed by September 30, 2019. In July 2019, the Company completed the sale of the equipment associated with the Cody API business for approximately $3.0 million.

The Company currently estimates that it will incur approximately $6.0 million of total costs to implement the Cody API Restructuring Plan, including approximately $3.5 million of severance and employee-related costs and approximately $2.0 million of contract termination costs, as well as approximately $0.5 million of costs to be incurred in connection with moving equipment and other property to other Company-owned facilities that were originally anticipated to be incurred in connection with the Cody Restructuring Plan announced in June 2018 but that have not yet been incurred thereunder.

The expenses associated with the Cody API Restructuring Plan included in restructuring expenses during the fiscal year ended June 30, 2019 were as follows:


	Fiscal Year Ended
(In thousands)	June 30, 2019
Employee separation costs	$	2,430
Facility closure costs		—
Total	$	2,430

A reconciliation of the changes in restructuring liabilities associated with the Cody API Restructuring Plan from June 30, 2018 through June 30, 2019 is set forth in the following table:


			Contract
	Employee		Termination		Facility Closure
(In thousands)	Separation Costs		Costs		Costs		Total
Balance at June 30, 2018	$	—	$	—	$	—	$	—
Restructuring Charges		2,430		—		—		2,430
Payments		(223)		—		—		(223)
Balance at June 30, 2019	$	2,207	$	—		—	$	2,207

2016 Restructuring Program

On February 1, 2016, in connection with the acquisition of KUPI, the Company announced a plan related to the future integration of KUPI and the Company’s operations (the “2016 Restructuring Program”). The plan focused on the closure of KUPI’s corporate functions and the consolidation of manufacturing, sales, research and development and distribution functions. The restructuring activities under the 2016 Restructuring Program were completed as of March 31, 2019. The Company incurred an aggregate of approximately $21.0 million in restructuring charges for actions that have been announced or communicated since the 2016 Restructuring Program began. Of this amount, approximately $11.0 million related to employee separation costs, approximately $1.0 million relates to contract termination costs and approximately $9.0 million related to facility closure costs and other actions.

The expenses associated with the restructuring program included in restructuring expenses during the fiscal years ended June 30, 2019 and 2018 were as follows:


	Fiscal Year Ended		Fiscal Year Ended
(In thousands)	June 30, 2019		June 30, 2018
Employee separation costs	$	1,084	$	246
Contract termination costs		—		—
Facility closure costs		1,166		3,723
Total	$	2,250	$	3,969

A reconciliation of the changes in restructuring liabilities associated with the 2016 Restructuring Program from June 30, 2017 through June 30, 2019 is set forth in the following table:


			Contract
	Employee		Termination		Facility Closure
(In thousands)	Separation Costs		Costs		Costs		Total
Balance at June 30, 2017	$	5,431	$	—	$	—	$	5,431
Restructuring Charges		246		—		3,723		3,969
Payments		(2,063)		—		(3,723)		(5,786)
Balance at June 30, 2018		3,614		—		—		3,614
Restructuring Charges		1,084		—		1,166		2,250
Payments		(4,698)		—		(1,166)		(5,864)
Balance at June 30, 2019	$	—	$	—	$	—	$	—