XML 22 R9.htm IDEA: XBRL DOCUMENT
v3.23.1

Balance sheet information | 3 Months Ended
--- | ---
Apr. 01, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Balance sheet information | Balance sheet information Accounts receivable, net Accounts receivable, net are amounts billed and currently due from customers. The Company records the amounts due net of allowance for credit losses. Collection of the consideration that the Company expects to receive typically occurs within 30 to 90 days of billing. The Company applies the practical expedient for contracts with payment terms of one year or less which does not consider the effects of the time value of money. Occasionally, the Company enters into payment agreements with patients that allow payment terms beyond one year. In those cases, the financing component is not deemed significant to the contract. Accounts receivable, net of allowances, consisted of the following as of:
| April 1, 2023 |  | December 31, 2022
Accounts receivable(a) | $ | 125,945 |  |  | $ | 143,317 |
Less: Allowance for credit losses(b) | (7,401) |  |  | (7,022) |
| $ | 118,544 |  |  | $ | 136,295 |
(a)Other receivables of $350 attributable to CartiHeal was reclassified to current assets attributable to discontinued operations within the December 31, 2022 consolidated balance sheets. Accounts receivable of $5,012 was reclassified into assets held for sale within the April 1, 2023 consolidated condensed balance sheets. Refer to Note 3. Acquisitions and divestitures and Note 14. Discontinued operations for further details regarding assets held for sale and the deconsolidation of CartiHeal. (b)Allowance for credit losses of $898 was reclassified to assets held for sale within the April 1, 2023 consolidated condensed balance sheets. Refer to Note 3. Acquisitions and divestitures for further details regarding assets held for sale. Due to the short-term nature of the Company’s receivables, the estimate of expected credit losses is based on aging of the account receivable balances. The allowance is adjusted on a specific identification basis for certain accounts as well as pooling of accounts with similar characteristics. The Company has a diverse customer base with no single customer representing ten percent or more of sales. The Company has one customer representing approximately 11.8% of the accounts receivable balance as of April 1, 2023. Historically, the Company’s reserves have been adequate to cover credit losses. Changes in credit losses were as follows:
|  |  | Three Months Ended
|  |  |  |  | April 1, 2023 |  | April 2, 2022
Beginning balance |  |  |  |  | $ | (7,022) |  |  | $ | (3,402) |
Provision for losses |  |  |  |  | (1,079) |  |  | (1,152) |
Write-offs |  |  |  |  | 286 |  |  | 369 |
Recoveries |  |  |  |  | (484) |  |  | (69) |
Reclassification to held for sale |  |  |  |  | 898 |  |  | — |
Ending balance |  |  |  |  | $ | (7,401) |  |  | $ | (4,254) |
Inventory Inventory consisted of the following as of:
| April 1, 2023 |  | December 31, 2022
Raw materials and supplies(a) | $ | 24,729 |  |  | $ | 19,133 |
Finished goods(b) | 65,461 |  |  | 67,484 |
Gross | 90,190 |  |  | 86,617 |
Excess and obsolete reserves | (2,237) |  |  | (1,851) |
| $ | 87,953 |  |  | $ | 84,766 |
(a)Raw material inventory of $642 attributable to CartiHeal has been reclassified to current assets attributable to discontinued operations within the December 31, 2022 consolidated balance sheets. Refer to Note 3. Acquisitions and divestitures and Note 14. Discontinued operations for further details regarding the deconsolidation of CartiHeal. (b)Finished goods inventory of $1,481 was reclassified to assets held for sale within the April 1, 2023 consolidated condensed balance sheets. Refer to Note 3. Acquisitions and divestitures for further information. Prepaid and other current assets Prepaid and other current assets consisted of the following as of:
| April 1, 2023 |  | December 31, 2022
Prepaid taxes | $ | 4,400 |  |  | $ | 4,442 |
Prepaid and other current assets(a) | 12,792 |  |  | 14,109 |
| $ | 17,192 |  |  | $ | 18,551 |
(a)Prepaid and other current assets of $134 attributable to CartiHeal was reclassified to current assets attributable to discontinued operations within the December 31, 2022 balance sheet. Refer to Note 3. Acquisitions and divestitures and Note 14. Discontinued operations for further details regarding the deconsolidation of CartiHeal. Intangible assets, net Intangible assets consisted of the following as of:
| April 1, 2023 |  | December 31, 2022
Intellectual property(a)(b)(c) | $ | 676,549 |  |  | $ | 790,049 |
Distribution rights | 61,325 |  |  | 61,325 |
Customer relationships(b) | 57,950 |  |  | 67,450 |
IPR&D | 5,500 |  |  | 5,500 |
Developed technology and other | 13,998 |  |  | 13,998 |
Total carrying amount | 815,322 |  |  | 938,322 |
Less accumulated amortization: |  |  |
Intellectual property(a)(b)(c) | (188,094) |  |  | (187,767) |
Distribution rights | (45,563) |  |  | (44,319) |
Customer relationships(b) | (57,950) |  |  | (58,842) |
Developed technology and other | (6,587) |  |  | (6,276) |
Total accumulated amortization | (298,194) |  |  | (297,204) |
Intangible assets, net before currency translation | 517,128 |  |  | 641,118 |
Currency translation | (1,089) |  |  | (1,267) |
| $ | 516,039 |  |  | $ | 639,851 |
(a)Intellectual property and accumulated depreciation attributable to CartiHeal totaling $410,200 and $11,327, respectively, were reclassified to long-term assets attributable to discontinued operations within the December 31, 2022 consolidated balance sheets. Refer to Note 3. Acquisitions and divestitures and Note 14. Discontinued operations for further details regarding the deconsolidation of CartiHeal. (b)Net intellectual property and customer relationships of $23,458 and $8,377, respectively, were reclassified into assets held for sale within the April 1, 2023 consolidated condensed balance sheets. Refer to Note 3. Acquisitions and divestitures for further details regarding assets held for sale. (c)The Company recorded an impairment loss of $78,615 in the U.S. reporting segment of net intellectual property attributable to a business held for sale. The loss was recorded in impairment of assets within the consolidated condensed statements of operations and comprehensive loss. Refer to Refer to Note 3. Acquisitions and divestitures for further details regarding businesses held for sale. Estimated amortization expense for intangibles subsequent to reclassifications and impairment for the remainder of 2023 and for the years ended December 31, 2024 through 2027 is expected to be $22,041, $26,347, $22,874, $20,030 and $19,652, respectively. Goodwill Goodwill is evaluated for impairment annually or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The Company assesses goodwill impairment by applying a quantitative impairment analysis comparing the carrying value of the Company’s reporting units to their respective fair values. A goodwill impairment exists if the carrying value of the reporting unit exceeds its fair value. The Company has two reporting units and assesses impairment based upon qualitative factors and if necessary, quantitative factors. A reporting unit's fair value is determined using the income approach and discounted cash flow models by utilizing Level 3 inputs and assumptions such as future cash flows, discount rates, long-term growth rates, market value and income tax considerations. Specifically, the value of each reporting unit is determined on a stand-alone basis from the perspective of a market participant and represents the price estimated to be received in a sale of the reporting unit in an orderly transaction between market participants at the measurement date. The Company then reconciles the values of all reporting units to the market capitalization of the Company. The Company’s goodwill resides within the International segment, of which $6,297 related to CartiHeal and was reclassified to long-term assets attributable to discontinued operations within the December 31, 2022 consolidated balance sheets. The amount was recorded in discontinued operations, net of tax on the consolidated condensed statements of operations for the three months ended April 1, 2023 as a result of CartiHeal’s deconsolidation. Refer to Note 3. Acquisitions and divestitures and Note 14. Discontinued operations for further details concerning the deconsolidation of CartiHeal. On November 8, 2022, due to a significant decline in the Company’s Class A common stock price, circumstances became evident that a possible goodwill impairment existed as of the third quarter 2022 balance sheet date. The Company concluded that the carrying value of the U.S. reporting unit exceeded its fair value and recorded a non-cash goodwill impairment charge of $189,197 during the year ended December 31, 2022. There were no accumulated impairment losses prior to the year ended December 31, 2022. Accrued liabilities Accrued liabilities consisted of the following as of:
| April 1, 2023 |  | December 31, 2022
Gross-to-net deductions | $ | 66,557 |  |  | $ | 71,227 |
Bonus and commission(a) | 9,462 |  |  | 9,179 |
Compensation and benefits | 6,843 |  |  | 11,428 |
Accrued interest | 6,210 |  |  | 217 |
Income and other taxes | 4,496 |  |  | 2,572 |
Other liabilities(b) | 22,201 |  |  | 16,947 |
| $ | 115,769 |  |  | $ | 111,570 |
(a)Bonus and commissions of $588 were reclassified into liabilities held for sale within the April 1, 2023 consolidated balance sheets. Refer to Note 3. Acquisitions and divestitures for further details. (b)Other liabilities attributable to CartiHeal of $384 were reclassified into current liabilities attributable to discontinued operations within December 31, 2022 consolidated balance sheets. Refer to Note 3. Acquisitions and divestitures and Note 14. Discontinued operations for further details.

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

X
- Definition The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -URI https://asc.fasb.org/topic&trid=2122208 + Details
Name: | us-gaap_SupplementalBalanceSheetDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration