Desktop Metal, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING CHARGES

RESTRUCTURING CHARGES

6 Months Ended

Jun. 30, 2023

24. RESTRUCTURING CHARGES

In June 2022, the Board of Directors approved a strategic integration and cost optimization initiative that includes a global workforce reduction, facilities consolidation, and other operational savings measures. As part of the facilities consolidation, the Company has approved plans to sell two facilities and relocate operations from those locations to existing facilities. The purpose of the Initiative is to streamline the Company’s operational structure, reducing its operating expenses and managing its cash flows.

In January 2023, the Company committed to additional action to continue and expand the Initiative, resulting in an estimated $19.6 million to $26.0 million of total restructuring costs. The Company anticipates that the Initiative will be substantially complete by the end of 2023.

During the six months ended June 30, 2023 and 2022, the Company recorded the following activity related to the Initiative in accrued expenses and other current liabilities on the balance sheet (in thousands):


	Six Months Ended June 30,
	2023		2022
Accrued expenses, beginning of period	$	1,096	$	—
Restructuring charges		6,468		9,697
Cash payments		(1,974)		(390)
Stock-based compensation		—		(7,313)
Inventory write-off		(2,484)		—
Accrued expenses, end of period	$	3,106	$	1,994

As of June 30, 2023, the Company recorded $3.1 million of restructuring charges in accrued expenses and other current liabilities in the condensed consolidated balance sheet.

During the three and six months ended June 30, 2023, the Company recorded restructuring charges of $2.9 million and $6.5 million, respectively, related to employee severance, benefits and related costs, inventory write-offs, royalty expenses associated with discontinued product offerings, and facility consolidations which were expensed as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of sales	$	2,488	$	41	$	3,205	$	41
Research and development		265		8,117		2,898		8,117
Sales and marketing		4		667		130		667
General and administrative		93		489		235		489
Interest and other (expense) income, net		—		383		—		383
Total restructuring charges	$	2,850	$	9,697	$	6,468	$	9,697