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DISPOSITION OF THE CORE BUSINESS DISPOSITION OF THE CORE BUSINESS | 12 Months Ended
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Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract] |
DISPOSITION OF THE CORE BUSINESS | DISPOSITION OF THE CORE BUSINESS On August 30, 2018, we closed on a definitive asset purchase agreement (the "Asset Purchase Agreement") with Specialty Surgical Instrumentation Inc., a Tennessee Corporation and wholly-owned subsidiary of Symmetry Surgical Inc. (“Symmetry”), pursuant to which the Company divested and sold the Company's electrosurgical "Core" business segment and related intellectual property, including the Bovie® brand and trademarks, to Symmetry for gross proceeds of $97 million in cash. In connection with the Asset Purchase Agreement, we entered into an Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement with Symmetry for a four-year term, whereby we will manufacture certain Core products and sell them to Symmetry at agreed upon prices. Any revenue, costs and expenses resulting from this agreement are netted and reported in our Consolidated Statements of Operations as Other gains or (losses) in the amount of $(0.2) million for 2018. Core sales following the divestiture amounted to $1.5 million with cost of sales of $1.5 million and related operating expenses of $0.2 million. Additionally, in connection with the Asset Purchase Agreement, we entered into a Manufacture and Supply Agreement with Symmetry for a ten-year term, whereby we will manufacture certain products and sell them to Symmetry at agreed upon prices. Revenue, costs and expenses resulting from this agreement are reported as a component in our Consolidated Statements as income or loss from operations of our OEM reporting segment. We concluded that the divestiture of the Core business met the criteria for discontinued operations set forth in FASB ASC Topic No. 205, "Presentation of Financial Statements". Gross sales of the Core business prior to the divestiture during 2018 amounted to $19.6 million with a cost of sales of $10.5 million and related operating expenses of $2.8 million. The table below summarizes the cash consideration and the carrying values of disposed assets at the disposition date of August 30, 2018 included as part of discontinued operations:
(In thousands) |
Gross consideration from the sale of the Core Business | $ | 97,000 |
Closing and transaction costs | 5,905 |
Net proceeds from sale of the Core Business before taxes | $ | 91,095 |
Non-cash commitment to provide inventory | $ | 2,305 |
Book value of the Core Business |
Current assets: |
Inventories, net | $ | 2,195 |
Prepaid expenses and other current assets | 57 |
Total current assets | 2,252 |
Property and equipment, net of depreciation | 375 |
Brand name and trademark | 1,510 |
Purchased technology and license rights, net of depreciation | 112 |
Total non-current assets | 1,997 |
Total assets | $ | 4,249 |
Net gain on sale of the Core Business before taxes | 84,541 |
Income tax expense | 16,137 |
Net gain on sale of the Core Business after income taxes | $ | 68,404 |
Cash flows associated with discontinued operations are shown in the table below:
(in thousands) | 2018 | 2017 | 2016
Net Income from discontinued operations | 73,503 |  | 8,620 |  | 7,600 |
Depreciation and amortization | 126 |  | 529 |  | 563 |
Change in current assets from discontinued operations | (2,378 | ) | 362 |  | (139 | )
Change in non current assets from discontinued liabilities | (1,997 | ) | (632 | ) | (583 | )
Change in current liabilities from discontinued operations | (1,021 | ) | (1,451 | ) | 1,007 |
Net cash provided by operating activities | 68,233 |  | 7,428 |  | 8,448 |

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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