In July 2023, the Board authorized the Company's management team to undertake restructuring activities to simplify and streamline our organization and strengthen the overall effectiveness of our operations. In addition to the initial streamlining and re-balancing efforts contemplated in July, the Company is undertaking further restructuring activities (collectively, the “Restructuring Plan”) which include 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 costs of $32.2 million in 2023 related to the Restructuring Plan and expects the Restructuring Plan to be completed by the end of the third quarter of 2024. Of the $32.2 million in pre-tax costs in 2023, $27.6 million is non-cash, relating primarily to inventory adjustments to record inventory at net realizable value and accelerated depreciation on equipment related to the shutdown of manufacturing facilities and production lines, the remaining costs are cash expenses, primarily related to severance and employee-related costs.

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


	For the Year Ended December 31, 2023
	Severance & Employee-Related Costs		Inventory Adjustments		Accelerated Depreciation		Facility and Other Exit Costs		Total
	(Amounts in thousands)
Cost of product revenue	$	2,077	$	23,588	$	3,788	$	933	$	30,386
Research and development		116		—		—		—		116
Selling, general and administrative		1,532		—		28		138		1,698
	$	3,725	$	23,588	$	3,816	$	1,071	$	32,200

Severance and employee-related costs under the Restructuring Plan are 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 adjustments include 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, whose value exceeded the projected requirements to be used before reaching their expiration date, were written down to their realizable value. The Restructuring Plan also includes the closing of manufacturing facilities and production lines, which included inventory that could not be repurposed.

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 on the condensed consolidated balance sheets as of December 31, 2023 and the balance has been paid as of that date. Activity related to the Restructuring Plan for 2023 was as follows (amounts in thousands):


	Restructuring Costs		Amounts Paid in 2023			Non-Cash Restructuring Items			Restructuring Liability

Severance & employee-related costs	$	3,725	$	(3,044	)	$	(217	)	$	464
Inventory adjustments		23,588		—			(23,588	)		—
Accelerated depreciation		3,816		—			(3,816	)		—
Facility exit and other exit costs		1,071		(1,061	)		(10	)		—
Total	$	32,200	$	(4,105	)	$	(27,631	)	$	464