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Discontinued Operations | 9 Months Ended
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Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations In August 2020, we entered into a Stock Purchase Agreement (the “SPA”) with affiliates of American Securities LLC for the sale of our Life Sciences business for an aggregate purchase price of up to $825 million, which includes a $755 million cash base purchase price and a potential earnout payment of up to $70 million. The cash base purchase price was subject to certain adjustments and was payable at the closing of the transaction, which occurred on October 6, 2020. See Note 19 for more information about the closing of the transaction. The earnout payment is subject to the performance of the Life Sciences business during the year ending December 31, 2022, measured by Adjusted EBITDA targets, as defined by the SPA. The Life Sciences business includes facilities that are engaged in the production of a variety of components, assemblies, and instruments, such as surgical knives, bioresorbable implants, surgical staples, cases and trays, orthopaedic implants and tools, laparoscopic devices, and drug delivery devices for the orthopaedics and medical/surgical end markets. The sale of the Life Sciences business furthers management’s strategy to improve liquidity and creates the financial flexibility to pursue key growth areas in the Mobile Solutions and Power Solutions segments. In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, the operating results of the Life Sciences business are classified as discontinued operations. The presentation of discontinued operations includes revenues and expenses of the discontinued operations and will also include any gain on the disposition of the business, all net of tax, as one line item on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for all periods presented have been revised to reflect this presentation. Accordingly, the results of the Life Sciences business have been excluded from continuing operations and segment results for all periods presented in the condensed consolidated financial statements and the accompanying notes unless otherwise stated. The Condensed Consolidated Statements of Cash Flows include cash flows of the Life Sciences business in each line item unless otherwise stated. The following table presents the results of operations of the discontinued operations.
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019 |  |
Net sales |  | $ | 68,525 |  |  | $ | 93,438 |  |  | $ | 223,944 |  |  | $ | 269,981 |  |  |
Cost of sales (exclusive of depreciation and amortization shown separately below) |  | 50,444 |  |  | 64,420 |  |  | 158,538 |  |  | 186,694 |  |  |
Selling, general and administrative expense |  | 6,164 |  |  | 8,550 |  |  | 20,189 |  |  | 25,917 |  |  |
Depreciation and amortization |  | 12,030 |  |  | 11,337 |  |  | 35,731 |  |  | 35,418 |  |  |
Goodwill impairment |  | — |  |  | — |  |  | 146,757 |  |  | — |  |  |
Other operating expense (income), net |  | 24 |  |  | (94) |  |  | 20 |  |  | (114) |  |  |
Income (loss) from operations |  | (137) |  |  | 9,225 |  |  | (137,291) |  |  | 22,066 |  |  |
Interest expense |  | 12,248 |  |  | 10,928 |  |  | 37,857 |  |  | 33,663 |  |  |
Loss on extinguishment of debt and write-off of debt issuance costs |  | 1,388 |  |  | — |  |  | 1,388 |  |  | 2,391 |  |  |
Other expense (income), net |  | (234) |  |  | (535) |  |  | (325) |  |  | 21 |  |  |
Loss from discontinued operations before costs of disposal and benefit for income taxes |  | (13,539) |  |  | (1,168) |  |  | (176,211) |  |  | (14,009) |  |  |
Benefit for income taxes |  | 39,954 |  |  | 149 |  |  | 59,598 |  |  | 2,159 |  |  |
Income (loss) from discontinued operations before costs of disposal |  | 26,415 |  |  | (1,019) |  |  | (116,613) |  |  | (11,850) |  |  |
Costs of disposal of discontinued operations (1) |  | (6,598) |  |  | — |  |  | (7,956) |  |  | — |  |  |
Benefit for income taxes on disposal costs |  | 513 |  |  | — |  |  | 603 |  |  | — |  |  |
Income (loss) from discontinued operations, net of tax |  | $ | 20,330 |  |  | $ | (1,019) |  |  | $ | (123,966) |  |  | $ | (11,850) |  |  |
_______________________________ (1) Represents legal, accounting, and other incremental direct costs related to the sale of the Life Sciences business that were incurred prior to the closing of the sale. Our credit facility required us to use proceeds from the sale of the Life Sciences business to prepay a portion of our existing debt. We paid $700 million in the aggregate on our term loans as described in Note 10. The prepayment was applied to debt in accordance with the prepayment provisions of the credit agreement immediately after the transaction closed on October 6, 2020. Average quarterly interest rates were multiplied by the required prepayment amounts to calculate interest expense to be reclassified to discontinued operations for all periods presented. Write-offs of credit facility debt issuance costs were allocated to discontinued operations by multiplying the ratio of the required prepayment amounts as a percentage of total outstanding principal by the total write-off charges in each period. Write-offs of credit facility debt issuance costs that have been allocated to discontinued operations are presented in the “Loss on extinguishment of debt and write-off of debt issuance costs” line the table above. The following table summarizes the amount of interest expense related to the credit facility that has been reclassified to discontinued operations.
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019 |  |
Interest on debt |  | $ | 11,060 |  |  | $ | 10,217 |  |  | $ | 34,410 |  |  | $ | 31,490 |  |  |
Amortization of debt issuance costs |  | 1,215 |  |  | 812 |  |  | 3,692 |  |  | 2,478 |  |  |
Capitalized interest and other |  | (27) |  |  | (101) |  |  | (245) |  |  | (305) |  |  |
Total interest expense of discontinued operations |  | $ | 12,248 |  |  | $ | 10,928 |  |  | $ | 37,857 |  |  | $ | 33,663 |  |  |
The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for each of the periods presented.
|  | September 30, 2020 |  | December 31, 2019
Cash and cash equivalents |  | $ | 15,986 |  |  | $ | 13,792 |
Accounts receivable, net |  | 37,465 |  |  | 48,318 |
Inventories |  | 49,646 |  |  | 51,644 |
Other current assets |  | 3,042 |  |  | 3,246 |
Total current assets |  | 106,139 |  |  | 117,000 |
Property, plant and equipment, net |  | 114,364 |  |  | 118,536 |
Operating lease right-of-use assets |  | 24,199 |  |  | 20,044 |
Goodwill |  | 197,353 |  |  | 344,316 |
Intangible assets, net |  | 188,584 |  |  | 211,847 |
Other non-current assets |  | 261 |  |  | 311 |
Total non-current assets |  | 524,761 |  |  | 695,054 |
Total assets held for sale (1) |  | $ | 630,900 |  |  | $ | 812,054 |
Accounts payable |  | $ | 11,362 |  |  | $ | 16,367 |
Accrued salaries, wages and benefits |  | 15,709 |  |  | 14,844 |
Income tax payable |  | 218 |  |  | 344 |
Current portion of operating lease liabilities |  | 2,768 |  |  | 2,364 |
Other current liabilities |  | 5,962 |  |  | 7,627 |
Total current liabilities |  | 36,019 |  |  | 41,546 |
Deferred tax liabilities |  | 55,728 |  |  | 61,338 |
Operating lease liabilities, net of current portion |  | 22,333 |  |  | 18,405 |
Other non-current liabilities |  | 6,752 |  |  | 4,456 |
Total non-current liabilities |  | 84,813 |  |  | 84,199 |
Total liabilities held for sale (1) |  | $ | 120,832 |  |  | $ | 125,745 |
_______________________________ (1) As of September 30, 2020, all assets and liabilities held for sale are classified as current on the Condensed Consolidated Balance Sheet because they were expected to be sold within twelve months. The following table presents the significant noncash items and cash paid for capital expenditures of discontinued operations for each period presented.
|  | Nine Months Ended September 30,
|  | 2020 |  | 2019 |  |
Depreciation and amortization |  | $ | 35,731 |  |  | $ | 35,418 |  |  |
Goodwill impairment |  | 146,757 |  |  | — |  |  |
Amortization of debt issuance costs |  | 3,692 |  |  | 2,478 |  |  |
Loss on extinguishment of debt and write-off of debt issuance costs |  | 1,388 |  |  | 2,391 |  |  |
Acquisition of property, plant and equipment |  | 7,626 |  |  | 16,358 |  |  |
Right-of-use assets obtained in exchange for new finance lease liabilities |  | 695 |  |  | 1,208 |  |  |
Right-of-use assets obtained in exchange for new operating lease liabilities (1) |  | 6,174 |  |  | 115 |  |  |
_______________________________ (1) Includes new leases, renewals, and modifications.

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- 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 -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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