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Discontinued Operations (Tables)
 3 Months Ended
Mar. 31, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Summary of Details of Earnings (Loss), Asset and Liabilities, Significant Non-Cash Operating Activities and Capital Expenditures from Discontinued 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