XML 19 R10.htm IDEA: XBRL DOCUMENT
v3.24.1.u1

Discontinued Operations | 3 Months Ended
--- | ---
Mar. 31, 2024
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 2. Discontinued Operations As discussed in Note 1, on December 15, 2023, we entered into a definitive agreement to sell our spine segment. The historical financial condition and results of operations of our spine segment have been reflected as discontinued operations in our condensed consolidated financial statements. The assets and liabilities associated with this segment are classified as assets and liabilities of discontinued operations in the condensed consolidated balance sheets. On April 1, 2024, we completed the sale of our spine segment for a total purchase price of $377.2 million (inclusive of $2.2 million in preliminary closing adjustments), subject to certain customary adjustments as set forth in the agreement, and received proceeds of $311.8 million, excluding the promissory note and transaction costs. In conjunction with the sale, we entered into a Transition Services Agreement ("TSA") to provide certain support services for up to 12 months from the closing date of the sale. These services include, among others, accounting, information technology, human resources, quality assurance, regulatory affairs and customer support. Income recognized related to the TSA will be recorded as Other income in our condensed consolidated statements of operations. Details of earnings (loss) from discontinued operations included in our condensed consolidated statement of operations are as follows (in thousands):
|  | For the Three Months Ended March 31, |
|  | 2024 |  |  | 2023 |
Net Sales |  |  |  |  |  |
Third party, net |  | $ | 93,824 |  |  | $ | 104,918 |
Related party, net |  |  | — |  |  |  | 103 |
Total Net Sales |  |  | 93,824 |  |  |  | 105,021 |
Cost of products sold, excluding intangible asset amortization |  |  | (28,441 | ) |  |  | (27,842 | )
Related party cost of products sold, excluding intangible asset amortization |  |  | — |  |  |  | (97 | )
Intangible asset amortization |  |  | — |  |  |  | (13,715 | )
Research and development |  |  | (6,654 | ) |  |  | (8,168 | )
Selling, general and administrative |  |  | (54,121 | ) |  |  | (60,995 | )
Restructuring and other cost reduction initiatives |  |  | (1,851 | ) |  |  | (3,802 | )
Acquisition, integration, divestiture and related |  |  | (6,373 | ) |  |  | (341 | )
Other expense, net |  |  | (344 | ) |  |  | (876 | )
Interest expense, net (1) |  |  | (5,294 | ) |  |  | (3,891 | )
Loss from discontinued operations before income taxes |  |  | (9,254 | ) |  |  | (14,706 | )
Adjustment of spine disposal group to fair value (2) |  |  | 11,143 |  |  |  | — |
Benefit for income taxes from discontinued operations |  |  | 1,833 |  |  |  | 1,107 |
Earnings (loss) from discontinued operations, net of tax |  | $ | 3,722 |  |  | $ | (13,599 | )
(1) A portion of the interest on our Term Loan (as defined and described in Note 8) has been allocated to discontinued operations consistent with the amount of proceeds used to repay a portion of the amounts outstanding under our Term Loan in accordance with our Credit Agreement (as defined and described in Note 8). (2) We performed an impairment analysis of the spine segment in December 2023 on a held-for-sale basis. The fair value of consideration to be received upon closure of the transaction was less than the carrying value of the spine segment's net assets resulting in a write-down of $289.5 million. We updated our analysis as of March 31, 2024, which resulted in a reduction of the December 2023 write-down of $11.1 million. Details of assets and liabilities of discontinued operations are as follows (in thousands):
|  | As of |
|  | March 31, 2024 |  |  | December 31, 2023 |
Cash and cash equivalents |  | $ | 25,056 |  |  | $ | 16,257 |
Accounts receivable, less allowance for credit losses |  |  | 84,622 |  |  |  | 83,871 |
Inventories |  |  | 125,115 |  |  |  | 130,430 |
Prepaid expenses and other current assets |  |  | 13,522 |  |  |  | 12,215 |
Total Current Assets of Discontinued Operations |  |  | 248,315 |  |  |  | 242,773 |
Property, plant and equipment, net |  |  | 63,488 |  |  |  | 62,692 |
Intangible assets, net |  |  | 468,008 |  |  |  | 477,110 |
Other assets |  |  | 14,311 |  |  |  | 14,743 |
Total Noncurrent Assets of Discontinued Operations |  |  | 545,807 |  |  |  | 554,545 |
Accounts payable |  | $ | 22,547 |  |  | $ | 24,186 |
Income taxes payable |  |  | 512 |  |  |  | 410 |
Other current liabilities |  |  | 45,820 |  |  |  | 51,262 |
Total Current Liabilities of Discontinued Operations |  |  | 68,879 |  |  |  | 75,858 |
Deferred income taxes |  |  | 83,712 |  |  |  | 86,037 |
Lease liability |  |  | 7,102 |  |  |  | 8,032 |
Other long-term liabilities |  |  | 1,460 |  |  |  | 972 |
Total Noncurrent Liabilities of Discontinued Operations |  | $ | 92,274 |  |  | $ | 95,041 |
Adjustment of spine disposal group to fair value (1) |  |  | (278,313 | ) |  |  | (289,456 | )
(1) This adjustment is reflected in Noncurrent assets of discontinued operations in the condensed consolidated balance sheets. Cash flows attributable to our discontinued operations are included on our condensed consolidated statements of cash flows. Significant non-cash operating and investing activities attributable to discontinued operations consisted of the following (in thousands):
|  | For the Three Months Ended March 31, |
|  | 2024 |  |  | 2023 |
Depreciation and amortization |  | $ | — |  |  | $ | 24,003 |
Share-based compensation |  |  | 712 |  |  |  | 617 |
Adjustment of spine disposal group to fair value |  |  | 11,143 |  |  |  | — |
Additions to instruments |  |  | 1,316 |  |  |  | 1,951 |
Additions to other property, plant & equipment |  |  | 88 |  |  |  | 795 |

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration