Acquisition, Restructuring and Other Expense

Acquisition, restructuring and other expense consists of the following:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2017		2016

Facility consolidation and other costs	$	1,306	$	—		$	2,778	$	991
Termination of a product offering	—		—			—		4,546
Restructuring costs included in cost of sales	$	1,306	$	—		$	2,778	$	5,537

Restructuring costs	$	—	$	361		$	1,347	$	4,105
Business acquisition costs	128		2,695			1,020		14,547
Legal matters	327		619			17,041		2,808
Gain on sale of facility	—		(1,890		)	—		(1,890		)
Acquisition, restructuring and other expense included in selling and administrative expense	$	455	$	1,785		$	19,408	$	19,570

Debt refinancing costs included in other expense	$	—	$	—		$	—	$	2,942

During the three and nine months ended September 30, 2017, we incurred $0.1 million and $1.0 million, respectively, in costs associated with the January 4, 2016 acquisition of SurgiQuest, Inc. as further described in Note 3. During the three and nine months ended September 30, 2016, we incurred $2.7 million and $14.5 million in costs, respectively. The costs incurred in 2016 consist of investment banking fees, consulting fees, legal fees associated with the acquisition, costs associated with expensing of unvested options acquired and integration related costs. The costs incurred in 2017 consist of costs associated with expensing of unvested options acquired and integration related costs.

During the nine months ended September 30, 2017, we incurred $12.2 million in costs associated with the SurgiQuest, Inc. vs. Lexion Medical litigation verdict whereby SurgiQuest was found liable for $2.2 million in compensatory damages with an additional $10.0 million in punitive damages as further described in Note 13. These costs are accrued in other current liabilities at September 30, 2017. In addition, during the three and nine months ended September 30, 2017, we incurred $0.3 million and $4.8 million, respectively, in costs associated with this litigation and other legal matters. In the three and nine months ended September 30, 2016, we incurred $0.6 million and $2.8 million, respectively, in legal fees associated with the SurgiQuest, Inc. vs. Lexion Medical litigation.

During the nine months ended September 30, 2016, we incurred a $2.7 million charge related to commitment fees paid to certain of our lenders, which provided a financing commitment for the SurgiQuest acquisition and recorded a loss on the early extinguishment of debt of $0.3 million in conjunction with the fifth amended and restated senior credit agreement.

During 2017 and 2016, we continued our operational restructuring plan. As part of this plan, we engaged a consulting firm to assist us in streamlining our product offering and improving our operational efficiency. As a result, we identified certain catalog numbers to be discontinued and consolidated into existing product offerings and recorded a $1.3 million charge in the three months ended September 30, 2017 to write-off inventory which will no longer be offered for sale. For the nine months ended September 30, 2017 and 2016, we incurred $2.8 million and $1.0 million, respectively, in costs associated with the operational restructuring, including severance, inventory and other charges. These costs were charged to cost of sales.

During 2016, the Company discontinued our Altrus product offering as part of our ongoing restructuring and incurred $4.5 million in non-cash charges primarily related to inventory and fixed assets which were included in cost of sales for the nine months ended September 30, 2016.

During the three and nine months ended September 30, 2016, we sold our Centennial, Colorado facility. We received net cash proceeds of $5.2 million and recorded a gain of $1.9 million on the sale of our facility in Centennial, Colorado.

During 2017 and 2016, we restructured certain selling and administrative functions and incurred severance and other related costs in the amount of $0.4 million for the three months ended September 30, 2016 and $1.3 million and $4.1 million for the nine months ended September 30, 2017 and 2016, respectively.

We have recorded an accrual in current and other long term liabilities of $1.3 million at September 30, 2017 mainly related to severance costs associated with the restructuring. Below is a roll forward of the costs incurred and cash expenditures associated with these activities during the nine months ended September 30, 2017 and 2016:



	2017			2016
Balance as of January 1,	$	2,643		$	7,175

Expenses incurred	4,125			5,096

Payments made	(5,428		)	(10,447		)

Balance at September 30,	$	1,340		$	1,824