Restructuring Plan

6 Months Ended

Jun. 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 “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 to meet increasing demand during a challenging supply chain environment in the industry.

The Company recorded pre-tax restructuring activity of $1.0 million and $2.4 million, respectively, for the three and six months ended June 30, 2024, related to the Restructuring Plan and expects the Restructuring Plan to be completed by the end of the third quarter of 2024.

The following table summarizes the charges related to restructuring activities by type of cost:


	For the Three Months Ended June 30, 2024
	Severance & Employee-Related Costs		Accelerated Depreciation		Facility and Other Exit Costs		Total
	(Amounts in thousands)
Cost of goods sold	$	371	$	—	$	143	$	514
Research and development		284		—		—		284
Selling, general and administrative		157		—		17		174
	$	812	$	—	$	160	$	972


	For the Six Months Ended June 30, 2024
	Severance & Employee-Related Costs		Accelerated Depreciation		Facility and Other Exit Costs		Total
	(Amounts in thousands)
Cost of goods sold	$	853	$	19	$	201	$	1,073
Research and development		449		—		—		449
Selling, general and administrative		856		—		17		873
	$	2,158	$	19	$	218	$	2,395

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.

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 June 30, 2024 and the balance is expected to be paid by the third quarter of 2024. Activity related to the Restructuring Plan for the six months ended June 30, 2024 was as follows (amounts in thousands):


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

Severance & employee-related costs	$	464	$	2,158	$	(1,909	)	$	(74	)	$	639
Accelerated depreciation		—		19		—			(19	)		—
Facility and other exit costs		—		218		(218	)		—			—
Total	$	464	$	2,395	$	(2,127	)	$	(93	)	$	639