Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jul. 01, 2016 | |
Document And Entity Information [Abstract] | |
Document Type | S4 |
Amendment Flag | false |
Document Period End Date | Jul. 1, 2016 |
Entity Registrant Name | DJO FINANCE LLC |
Entity Central Index Key | 1,395,317 |
Entity Filer Category | Non-accelerated Filer |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | |||
Cash and cash equivalents | $ 41,699 | $ 48,943 | $ 31,144 |
Accounts receivable, net | 177,128 | 172,360 | 169,207 |
Inventories, net | 177,548 | 174,573 | 168,930 |
Deferred tax assets, net | 24,598 | ||
Prepaid expenses and other current assets | 22,309 | 21,179 | 16,793 |
Current assets of discontinued operations | 2,878 | 25,642 | |
Total current assets | 418,684 | 419,933 | 436,314 |
Property and equipment, net | 130,845 | 117,273 | 116,476 |
Goodwill | 1,019,186 | 1,018,104 | 1,023,890 |
Intangible assets, net | 710,549 | 749,045 | 825,905 |
Other assets | 6,599 | 5,174 | 4,205 |
Non-current assets of discontinued operations | 29 | 163,071 | |
Total assets | 2,285,863 | 2,309,558 | 2,569,861 |
Current liabilities: | |||
Accounts payable | 73,968 | 58,492 | 59,245 |
Accrued interest | 11,062 | 16,998 | 29,600 |
Current portion of debt obligations | 10,550 | 10,550 | 8,975 |
Other current liabilities | 92,168 | 102,173 | 94,178 |
Current liabilities of discontinued operations | 946 | 13,371 | 8,681 |
Total current liabilities | 188,694 | 201,584 | 200,679 |
Long-term debt obligations | 2,392,464 | 2,344,562 | 2,233,309 |
Deferred tax liabilities, net | 219,930 | 213,856 | 243,123 |
Other long-term liabilities | 21,319 | 15,092 | 14,366 |
Total liabilities | 2,822,407 | 2,775,094 | 2,691,477 |
Commitments and contingencies | |||
DJO Finance LLC membership deficit: | |||
Member capital | 842,627 | 841,510 | 839,781 |
Accumulated deficit | (1,354,934) | (1,293,339) | (952,412) |
Accumulated other comprehensive loss | (27,273) | (16,341) | (11,603) |
Total membership deficit | (539,580) | (468,170) | (124,234) |
Noncontrolling interests | 3,036 | 2,634 | 2,618 |
Total deficit | (536,544) | (465,536) | (121,616) |
Total liabilities and deficit | $ 2,285,863 | $ 2,309,558 | $ 2,569,861 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jul. 01, 2016 | Dec. 31, 2015 | Sep. 26, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Dec. 31, 2014 | Sep. 27, 2014 | Jun. 28, 2014 | Mar. 29, 2014 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | ||||||||||||||
Net sales | $ 292,852 | $ 307,951 | $ 278,263 | $ 279,902 | $ 247,511 | $ 290,182 | $ 270,407 | $ 278,289 | $ 248,651 | $ 571,758 | $ 527,413 | $ 1,113,627 | $ 1,087,529 | $ 1,020,784 |
Costs and operating expenses: | ||||||||||||||
Cost of sales, exclusive of amortization of intangible assets | 120,474 | 117,770 | 238,557 | 219,654 | 466,019 | 462,000 | 434,708 | |||||||
Selling, general and administrative | 121,627 | 108,612 | 243,556 | 215,797 | 454,724 | 439,872 | 409,192 | |||||||
Research and development | 10,122 | 8,688 | 19,976 | 17,552 | 35,105 | 37,277 | 32,976 | |||||||
Amortization of intangible assets | 19,085 | 19,818 | 38,663 | 39,646 | 79,964 | 83,944 | 86,412 | |||||||
Impairment of goodwill | 49,600 | |||||||||||||
Costs and Expenses, Total | 271,308 | 254,888 | 540,752 | 492,649 | 1,035,812 | 1,023,093 | 1,012,888 | |||||||
Operating income | 21,544 | 20,571 | 22,480 | 25,014 | 9,750 | 27,745 | 16,979 | 15,426 | 4,286 | 31,006 | 34,764 | 77,815 | 64,436 | 7,896 |
Other (expense) income: | ||||||||||||||
Interest expense, net | (42,396) | (44,564) | (84,666) | (87,430) | (172,290) | (174,325) | (177,570) | |||||||
Loss on extinguishment of debt | (67,967) | (67,967) | (68,473) | (938) | (1,059) | |||||||||
Other income (expense), net | 468 | 743 | 752 | (3,413) | (7,303) | (5,197) | (1,277) | |||||||
Nonoperating Income (Expense), Total | (41,928) | (111,788) | (83,914) | (158,810) | (248,066) | (180,460) | (179,906) | |||||||
Loss before income taxes | (20,384) | (86,774) | (52,908) | (124,046) | (170,251) | (116,024) | (172,010) | |||||||
Income tax provision (benefit) | 3,577 | 5,911 | 8,990 | 7,856 | 12,256 | (4,720) | 17,451 | |||||||
Net loss from continuing operations | (23,961) | (25,443) | (25,162) | (92,685) | (39,217) | (18,031) | (28,516) | (26,342) | (38,415) | (61,898) | (131,902) | (182,507) | (111,304) | (189,461) |
Net (loss) income from discontinued operations | 855 | 14,873 | 665 | 18,865 | (157,580) | 21,742 | (13,101) | |||||||
Net loss | (23,106) | (77,812) | (61,233) | (113,037) | (340,087) | (89,562) | (202,562) | |||||||
Net income attributable to noncontrolling interests | (169) | (165) | (362) | (466) | (840) | (972) | (890) | |||||||
Net loss attributable to DJO Finance LLC | $ (23,275) | $ (49,586) | $ (177,838) | $ (77,977) | $ (35,526) | $ (7,372) | $ (21,206) | $ (25,434) | $ (36,522) | $ (61,595) | $ (113,503) | $ (340,927) | $ (90,534) | $ (203,452) |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||||||
Cost of sales, amortization of intangible assets | $ 7,080 | $ 7,535 | $ 14,487 | $ 15,070 | $ 30,719 | $ 32,962 | $ 33,719 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||||||
Net loss | $ (23,106) | $ (77,812) | $ (61,233) | $ (113,037) | $ (340,087) | $ (89,562) | $ (202,562) |
Other comprehensive (loss) income, net of taxes: | |||||||
Foreign currency translation adjustments, net of tax benefit (provision) | (8,458) | 4,137 | (2,850) | (5,305) | (5,630) | (13,167) | 19 |
Unrealized gain (loss) on cash flow hedges, net of tax provision | (2,651) | (8,042) | 609 | ||||
Other comprehensive (loss) income | (11,109) | 4,137 | (10,892) | (5,305) | (5,021) | (13,167) | 19 |
Comprehensive loss | (34,215) | (73,675) | (72,125) | (118,342) | (345,108) | (102,729) | (202,543) |
Comprehensive income attributable to non-controlling interests | (101) | (243) | (402) | (260) | (557) | (591) | (1,010) |
Comprehensive loss attributable to DJO Finance LLC | $ (34,316) | $ (73,918) | $ (72,527) | $ (118,602) | $ (345,665) | $ (103,320) | $ (203,553) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||||||
Foreign currency translation adjustment, tax benefit (provision) | $ 111,000 | $ (152,000) | $ (166,000) | $ 340,000 | $ 540,000 | $ 3,871,000 | $ (1,212,000) |
Unrealized gain (loss) on cash flow hedges, tax provision | $ 0 | $ 0 | $ 375,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of (Deficit) Equity - USD ($) $ in Thousands | Total | Member capital | Accumulated Deficit | Accumulated other comprehensive income (loss) | Total membership (deficit) equity | Non-controlling interests |
Beginning balance at Dec. 31, 2012 | $ 184,410 | $ 839,234 | $ (658,426) | $ 1,284 | $ 182,092 | $ 2,318 |
Net (loss) income | (202,562) | (203,452) | (203,452) | 890 | ||
Other comprehensive (loss) income, net of taxes | 19 | (101) | (101) | 120 | ||
Investment by parent | 2,155 | 2,155 | 2,155 | |||
Stock-based compensation | (2,001) | (2,001) | (2,001) | |||
Exercise of stock options | (619) | (619) | (619) | |||
Dividend paid by subsidiary to owners of non-controlling interests | (684) | (684) | ||||
Ending balance at Dec. 31, 2013 | (19,282) | 838,769 | (861,878) | 1,183 | (21,926) | 2,644 |
Net (loss) income | (89,562) | (90,534) | (90,534) | 972 | ||
Other comprehensive (loss) income, net of taxes | (13,167) | (12,786) | (12,786) | (381) | ||
Stock-based compensation | 1,869 | 1,869 | 1,869 | |||
Exercise of stock options | (857) | (857) | (857) | |||
Dividend paid by subsidiary to owners of non-controlling interests | (617) | (617) | ||||
Ending balance at Dec. 31, 2014 | (121,616) | 839,781 | (952,412) | (11,603) | (124,234) | 2,618 |
Net (loss) income | (340,087) | (340,927) | (340,927) | 840 | ||
Other comprehensive (loss) income, net of taxes | (5,021) | (4,738) | (4,738) | (283) | ||
Stock-based compensation | 1,805 | 1,805 | 1,805 | |||
Exercise of stock options | (76) | (76) | (76) | |||
Dividend paid by subsidiary to owners of non-controlling interests | (541) | 0 | (541) | |||
Ending balance at Dec. 31, 2015 | (465,536) | 841,510 | (1,293,339) | (16,341) | (468,170) | 2,634 |
Net (loss) income | (61,233) | (61,595) | (61,595) | 362 | ||
Other comprehensive (loss) income, net of taxes | (10,892) | (10,932) | (10,932) | 40 | ||
Stock-based compensation | 1,521 | 1,521 | 1,521 | |||
Exercise of stock options | (404) | (404) | (404) | |||
Ending balance at Jul. 01, 2016 | $ (536,544) | $ 842,627 | $ (1,354,934) | $ (27,273) | $ (539,580) | $ 3,036 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities: | |||||
Net loss | $ (61,233) | $ (113,037) | $ (340,087) | $ (89,562) | $ (202,562) |
Net loss (income) from discontinued operations | (665) | (18,865) | 157,580 | (21,742) | 13,101 |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||
Depreciation | 20,513 | 16,837 | 37,491 | 35,213 | 32,507 |
Amortization of intangible assets | 38,663 | 39,646 | 79,964 | 83,944 | 86,412 |
Amortization of debt issuance costs and non-cash interest expense | 3,815 | 4,235 | 7,850 | 8,692 | 8,012 |
Stock-based compensation expense | 1,521 | 1,152 | 1,805 | 1,869 | 2,155 |
Impairment of goodwill | 49,600 | ||||
Loss (gain) on disposal of assets, net | 530 | 258 | 1,447 | (1,118) | (1,012) |
Deferred income tax provision (benefit) | 3,812 | 3,735 | 5,940 | (10,710) | 9,809 |
Loss on modification and extinguishment of debt | 67,967 | 68,473 | 938 | 1,059 | |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||
Accounts receivable | (4,209) | (5,949) | (8,064) | (14,460) | (19,459) |
Inventories | (5,650) | (8,751) | (8,106) | (19,497) | 3,239 |
Prepaid expenses and other assets | (637) | (2,032) | (7,516) | 11,424 | (8,669) |
Accrued interest | (5,937) | (5,420) | (12,600) | (81) | (1,969) |
Accounts payable and other current liabilities | (2,589) | (1,945) | 25,488 | 7,725 | 3,808 |
Net cash (used in) provided by continuing operating activities | (12,066) | (22,169) | 9,665 | (7,365) | (23,969) |
Net cash (used in) provided by discontinued operations | (8,853) | 29,397 | 39,861 | 53,852 | 53,749 |
Net cash (used in) provided by operating activities | (20,919) | 7,228 | 49,526 | 46,487 | 29,780 |
Cash Flows From Investing Activities: | |||||
Purchases of property and equipment | (31,500) | (16,608) | (44,089) | (52,741) | (37,484) |
Cash paid in connection with acquisitions, net of cash acquired | (24,000) | (4,587) | (1,953) | ||
Proceeds from disposition of assets | 700 | ||||
Other investing activities, net | 27 | (1,038) | (1,626) | ||
Net cash used in investing activities from continuing operations | (30,800) | (16,608) | (68,062) | (58,366) | (41,063) |
Net cash used in investing activities from discontinued operations | (451) | (575) | (52) | ||
Net cash used in investing activities | (30,800) | (17,059) | (68,637) | (58,418) | (41,063) |
Cash Flows from Financing Activities: | |||||
Proceeds from issuance of debt | 63,000 | 2,445,826 | 2,518,033 | 1,000,294 | 549,417 |
Repayments of debt obligations | (18,913) | (2,356,121) | (2,419,027) | (990,219) | (523,037) |
Payment of debt issuance, modification and extinguishment costs | (61,662) | (62,375) | (1,812) | (2,387) | |
Payment of contingent consideration | (5,690) | ||||
Cash paid in connection with the cancellation of vested options | (2,001) | ||||
Dividend paid by subsidiary to owners of noncontrolling interests | (541) | (617) | (684) | ||
Exercise of stock options | 11 | 22 | 0 | ||
Net cash provided by (used in) financing activities | 44,087 | 28,043 | 36,101 | (23) | 23,309 |
Effect of exchange rate changes on cash and cash equivalents | 388 | (971) | 809 | (480) | 329 |
Net (decrease) increase in cash and cash equivalents | (7,244) | 17,241 | 17,799 | (12,434) | 12,355 |
Cash and cash equivalents at the beginning of the period | 48,943 | 31,144 | 31,144 | 43,578 | 31,223 |
Cash and cash equivalents at the end of the period | 41,699 | 48,385 | 48,943 | 31,144 | 43,578 |
Supplemental disclosures of cash flow information: | |||||
Cash paid for interest | 86,793 | 88,506 | 176,739 | 165,469 | 171,361 |
Cash paid for taxes, net | 2,684 | 3,753 | $ 7,584 | $ 7,442 | $ 7,834 |
Non-cash investing activities: | |||||
Purchases of surgical instruments included in accounts payable | $ 4,234 | $ 2,383 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
ORGANIZATION AND BASIS OF PRESENTATION | 1. ORGANIZATION AND BASIS OF PRESENTATION Organization and Business We are a global developer, manufacturer and distributor of medical devices that provide solutions for musculoskeletal health, vascular health and pain management. Our products address the continuum of patient care from injury prevention to rehabilitation after surgery, injury or from degenerative disease, enabling people to regain or maintain their natural motion. Our products are used by orthopedic specialists, spine surgeons, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers and other healthcare professionals. Our product lines include rigid and soft orthopedic bracing, hot and cold therapy, bone growth stimulators, vascular therapy systems and compression garments, therapeutic shoes and inserts, electrical stimulators used for pain management and physical therapy products. Our surgical implant business offers a comprehensive suite of reconstructive joint products for the hip, knee and shoulder. DJO Finance LLC (DJOFL) is a wholly owned indirect subsidiary of DJO Global, Inc. (DJO). Substantially all business activities of DJO are conducted by DJOFL and its wholly owned subsidiaries. Except as otherwise indicated, references to “us,” “we,” “DJOFL,” “our,” or “the Company,” refers to DJOFL and its consolidated subsidiaries. Segment Reporting We market and distribute our products through four operating segments: Bracing and Vascular; Recovery Sciences; Surgical Implant; and International. Our Bracing and Vascular, Recovery Sciences, and Surgical Implant segments generate their revenues within the United States. Our Bracing and Vascular segment offers rigid knee braces, orthopedic soft goods, cold therapy products, vascular systems, compression therapy products and therapeutic footwear for the diabetes care market. Our Recovery Sciences segment offers home electrotherapy, iontophoresis, home traction products, bone growth stimulation products and clinical physical therapy equipment. Our Surgical Implant segment offers a comprehensive suite of reconstructive joint products for the knee, hip and shoulder. Our International segment offers all of our products to customers outside the United States. See Note 15 for additional information about our reportable segments. During the fourth quarter of 2015, we ceased manufacturing, selling and distributing products of our Empi business and the related insurance billing operations domestically. The Empi business primarily manufactured and sold transcutaneous electrical nerve stimulation (TENS) devices for pain relief, other electrotherapy and orthopedic products and the related supplies. Empi was facing a challenging regulatory and compliance environment, decreasing reimbursement rates and remained below the level needed to reach adequate profitability within an economically justified period of time. Empi was part of our Recovery Sciences operating segment. For financial statement purposes, the results of the Empi business are reported within discontinued operations. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are used in accounting for, among other things, contractual allowances, rebates, product returns, warranty obligations, allowances for doubtful accounts, valuation of inventories, self-insurance reserves, income taxes, loss contingencies, fair values of derivative instruments, fair values of long-lived assets and any related impairments, capitalization of costs associated with internally developed software and stock-based compensation. Actual results could differ from those estimates. Basis of Presentation We consolidate the results of operations of our 50% owned subsidiary, Medireha GmbH (Medireha), and reflect the 50% share of results not owned by us as non-controlling interests in our Consolidated Statements of Operations. We maintain control of Medireha through certain rights that enable us to prohibit certain business activities that are not consistent with our plans for the business and provide us with exclusive distribution rights for products manufactured by Medireha. Interim Reporting The accompanying Unaudited Condensed Consolidated Financial Statements include our accounts and all voting interest entities where we exercise a controlling financial interest through the ownership of a direct or indirect majority voting interest. All significant intercompany accounts and transactions have been eliminated in consolidation. Our Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP and with the instructions to Form 10–Q and Article 10 of Regulation S–X for interim financial information. Accordingly, these financial statements do not include all of the information required by GAAP or Securities and Exchange Commission (SEC) rules and regulations for complete annual financial statements. In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. The Company operates on a manufacturing calendar. Each quarter consists of thirteen weeks, two four week and one five week period. Our first quarters may have more or fewer shipping days from year to year based on the days of week holidays fall. The first half of 2016 had more shipping days than in the first half of 2015. Recent Accounting Standards In May 2014, the FASB issued an accounting standards update related to revenue from contracts with customers. The new standard provides a five-step approach to be applied to all contracts with customers. The accounting standards update also requires expanded disclosures about revenue recognition. On July 9, 2015, the FASB decided to defer the effective date of the standard. The guidance is now effective for fiscal years beginning after December 15, 2017 and interim periods within that reporting period. Early adoption is permitted as early as the original effective date of December 15, 2016. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In April 2015, the FASB issued an accounting standards update related to the presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The guidance is effective for annual and interim periods beginning after December 15, 2015. Early application is permitted. The Company has early adopted this update and the impact is reflected in the current and prior periods presented. In April 2015, the FASB issued an accounting standards update related to internal-use software. The standard provides guidance to clarify the customer’s accounting for fees paid in a cloud computing arrangement. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company adopted this ASU with prospective application in the first quarter of 2016. Adoption of this new guidance did not have a material effect on the Company’s financial statements. In July 2015, the FASB issued an accounting standards update which requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance does not apply to inventory that is measured using last-in, first-out (LIFO). The guidance is effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In September 2015, the FASB issued an accounting standards update which eliminates the requirement for an acquirer in a business combination to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The new guidance also sets forth new disclosure requirements related to the adjustments. The guidance is effective for annual and interim periods beginning after December 15, 2015. Early adoption is permitted. Adoption of this new guidance did not have a material effect on the Company’s financial statements. In November 2015, the FASB issued an accounting standards update which requires all deferred income taxes be presented on the balance sheet as noncurrent. The new guidance is intended to simplify financial reporting by eliminating the requirement to classify deferred taxes between current and noncurrent. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company has early adopted this update and the impact is reflected prospectively in the Company’s financial statements. In January 2016, the FASB issued an accounting standards update which affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This guidance retains the current accounting for classifying and measuring investments in debt securities and loans but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient permitted by the guidance to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. The guidance is effective for annual periods beginning after December 15, 2017. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In February 2016, the FASB issued an accounting standards update which affects the accounting for leases. The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The amendment also will require qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are still assessing the impact of adoption on our consolidated financial statements. In March 2016, the FASB issued an accounting standards update which affects the accounting for employee share-based payments. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The guidance is effective for interim and annual reporting periods beginning after beginning after December 15, 2016. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. | 1. ORGANIZATION AND BASIS OF PRESENTATION Organization and Business We are a global developer, manufacturer and distributor of medical devices that provide solutions for musculoskeletal health, vascular health and pain management. Our products address the continuum of patient care from injury prevention to rehabilitation after surgery, injury or from degenerative disease, enabling people to regain or maintain their natural motion. Our products are used by orthopedic specialists, spine surgeons, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers and other healthcare professionals. Our product lines include rigid and soft orthopedic bracing, hot and cold therapy, bone growth stimulators, vascular therapy systems and compression garments, therapeutic shoes and inserts, electrical stimulators used for pain management and physical therapy products. Our surgical implant business offers a comprehensive suite of reconstructive joint products for the hip, knee and shoulder. DJO Finance LLC (DJOFL) is a wholly owned indirect subsidiary of DJO Global, Inc. (DJO). Substantially all business activities of DJO are conducted by DJOFL and its wholly owned subsidiaries. Except as otherwise indicated, references to “us,” “we,” “DJOFL,” “our,” or “the Company,” refers to DJOFL and its consolidated subsidiaries. Infrequent Events In September 2013, a fire occurred at our factory in Tunisia. As a result of the fire, certain inventory and fixed assets were destroyed and the leased facility became inoperable. Estimated losses of $5.0 million related to destroyed inventory and fixed assets, excess expenses incurred and building reconstruction costs were recorded for the year ended December 31, 2013. Additionally, we recorded $1.3 million in revenue from business interruption insurance proceeds for the year ended December 31, 2013. Final claims were settled against the policies in September 2014. As a result, estimated losses were adjusted to $3.3 million, and additional $2.3 million in revenue from business interruption insurance proceeds was recorded for the year ended December 31, 2014. The activity in the corresponding insurance receivable was follows (in thousands): Year Ended Balance, beginning of period $ 6,261 Change in estimated losses (1,617 ) Business interruption 2,274 Claim payments (6,918 ) Balance, end of period $ — Segment Reporting We market and distribute our products through four operating segments: Bracing and Vascular; Recovery Sciences; Surgical Implant; and International. Our Bracing and Vascular, Recovery Sciences, and Surgical Implant segments generate their revenues within the United States. Our Bracing and Vascular segment offers rigid knee braces, orthopedic soft goods, cold therapy products, vascular systems, compression therapy products and therapeutic footwear for the diabetes care market. Our Recovery Sciences segment offers home electrotherapy, iontophoresis, home traction products, bone growth stimulation products and clinical physical therapy equipment. Our Surgical Implant segment offers a comprehensive suite of reconstructive joint products for the knee, hip and shoulder. Our International segment offers all of our products to customers outside the United States. See Note 18 for additional information about our reportable segments. During the fourth quarter of 2015, we ceased manufacturing, selling and distributing products of our Empi business and the related insurance billing operations domestically. The Empi business primarily manufactured and sold TENS devices for pain relief, other electrotherapy and orthopedic products and the related supplies. Empi was facing a challenging regulatory and compliance environment, decreasing reimbursement rates and remained below the level needed to reach adequate profitability within an economically justified period of time. Empi was part of our Recovery Sciences operating segment. For financial statement purposes, the results of the Empi business are reported within discontinued operations. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are used in accounting for, among other things, contractual allowances, rebates, product returns, warranty obligations, allowances for doubtful accounts, valuation of inventories, self-insurance reserves, income taxes, loss contingencies, fair values of derivative instruments, fair values of long-lived assets and any related impairments, capitalization of costs associated with internally developed software and stock-based compensation. Actual results could differ from those estimates. Basis of Presentation The Consolidated Financial Statements include the Company and its controlled subsidiaries. Intercompany transactions are eliminated. We consolidate the results of operations of our 50% owned subsidiary, Medireha GmbH (Medireha), and reflect the 50% share of results not owned by us as noncontrolling interests in our Consolidated Statements of Operations. We maintain control of Medireha through certain rights that enable us to prohibit certain business activities that are not consistent with our plans for the business and provide us with exclusive distribution rights for products manufactured by Medireha. Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The reclassifications were not material to the Consolidated Financial Statements. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents. Accounts Receivable and Allowance for Doubtful Accounts. Sales Returns and Allowances. Inventories. Property and Equipment. Software Developed For Internal Use. As of December 31, 2015 and 2014, we had $6.8 million and $8.5 million respectively, of unamortized internally developed software costs included within property and equipment in our Consolidated Balance Sheets. Intangible Assets and Amortization. We evaluate the carrying value of goodwill and indefinite life intangible assets annually on the first day of the fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. We evaluate the carrying value of finite life intangible assets whenever events or circumstances indicate the carrying value may not be recoverable. Significant assumptions are required to estimate the fair value of goodwill and intangible assets, most notably estimated future cash flows generated by these assets. As such, these fair valuation measurements use significant unobservable inputs, which are inputs that are classified as Level 3 in the fair value hierarchy. Changes to these assumptions could require us to record impairment charges on these assets. Self Insurance. Revenue Recognition. We recognize revenue, both rental and purchase, for products sold directly to patients or their third party insurance payors, when our product has been dispensed or shipped to the patient and the patient’s insurance has been verified. We record revenues from sales or our surgical implant products when the products are used in a surgical procedure (implanted in a patient). We reduce revenue by estimates of potential future product returns and other allowances. Revenues are also reduced by rebates related to sales transacted through distribution agreements that provide the distributors with a right to return inventory or take certain pricing adjustments based on sales mix or volume. Provisions for product returns and other allowances are recorded as a reduction to revenue in the period sales are recognized. Cost of Sales. We provide expressed warranties on certain products for periods typically ranging from one to three years. We estimate our warranty obligations at the time of sale based upon historical experiences and known product issues, if any. A summary of the activity in our warranty reserves is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 1,942 $ 1,847 $ 1,488 Amount charged to expense for estimated warranty costs 1,517 1,788 1,138 Deductions for actual costs incurred (1,765 ) (1,693 ) (779 ) Balance, end of year $ 1,694 $ 1,942 $ 1,847 Selling, General and Administrative Expense Research and Development. Other Expense, Net. Stock Based Compensation. Income Taxes. Foreign Currency Translation and Transactions. Transactions denominated in currencies other than our or our subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in our Consolidated Balance Sheets related to such transactions result in transaction gains and losses that are reflected in our Consolidated Statements of Operations as either unrealized (based on the applicable period end translation) or realized (upon settlement of the transactions). For the years ended December 31, 2015, 2014 and 2013, foreign transaction (losses) gains were $(7.3) million, $(5.3) million, and $(1.5) million, respectively. Derivative Financial Instruments. We make use of debt financing as a source of funds and are therefore exposed to interest rate fluctuations in the normal course of business. Our credit facilities are subject to floating interest rates. We manage the risk of unfavorable movements in interest rates by hedging interest rate on a portion of the outstanding loan balance, thereby locking in a fixed rate on a portion of the principal, reducing the effect of possible rising interest rates and making interest expense more predictable. We have designated these interest rate cap agreements as cash flow hedges for accounting purposes. Therefore, changes in the fair values of the derivative are recorded in accumulated other comprehensive income (loss) and are subsequently recognized in earnings when the hedged item affects earnings. We use foreign exchange forward contracts to hedge expense commitments that are denominated in currencies other than the U.S. dollar. The purpose of our foreign currency hedging activities is to fix the dollar value of specific commitments and payments to foreign vendors. Before acquiring a derivative instrument to hedge a specific risk, potential natural hedges are evaluated. While our foreign exchange contracts act as economic hedges, we have not designated such instruments as hedges for accounting purposes. Therefore, gains and losses resulting from changes in the fair values of these derivative instruments are recorded in other income (expense), net, in our Consolidated Statements of Operations. The fair value of our derivative instruments has been determined through the use of models that consider various assumptions, including time value and other relevant economic measures, which are inputs that are classified as Level 2 in the fair value hierarchy (see Notes 10 and 11). Comprehensive Income (Loss). Concentration of Credit Risk. Fair Value of Financial Instruments. Recent Accounting Standards. In May 2014, the FASB issued an accounting standards update related to revenue from contracts with customers. The new standard provides a five-step approach to be applied to all contracts with customers. The accounting standards update also requires expanded disclosures about revenue recognition. On July 9, 2015, the FASB decided to defer the effective date of the standard. The guidance is now effective for fiscal years beginning after December 15, 2017 and interim periods within that reporting period. Early adoption is permitted as early as the original effective date of December 15, 2016. The Company is currently evaluating the new guidance to determine the impact it may have to its consolidated financial statements. In April 2015, the FASB issued an accounting standards update related to the presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The guidance is effective for annual and interim periods beginning after December 15, 2015. Early application is permitted. The Company has early adopted this update and the impact is reflected in the current and prior periods presented. In April 2015, the FASB issued an accounting standards update related to internal-use software. The standard provides guidance to clarify the customer’s accounting for fees paid in a cloud computing arrangement. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In July 2015, the FASB issued an accounting standards update which requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance does not apply to inventory that is measured using last-in, first-out (LIFO). The guidance is effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In September 2015, the FASB issued an accounting standards update which eliminates the requirement for an acquirer in a business combination to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The new guidance also sets forth new disclosure requirements related to the adjustments. The guidance is effective for annual and interim periods beginning after December 15, 2015. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In November 2015, the FASB issued an accounting standards update which requires all deferred income taxes be presented on the balance sheet as noncurrent. The new guidance is intended to simplify financial reporting by eliminating the requirement to classify deferred taxes between current and noncurrent. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company has early adopted this update and the impact is reflected prospectively in the Company’s financial statements. In January 2016, the FASB issued an accounting standards update which affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient permitted by the guidance to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. The guidance is effective for annual periods beginning after December 15, 2017. Early application is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In February 2016, the FASB issued an accounting standards update which affects the accounting for leases. The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The amendment also will require qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are still assessing the impact of adoption on our consolidated financial statements. |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
ACQUISITIONS AND DIVESTITURES | 2. DIVESTITURES Discontinued Operations For disposal transactions that occur on or after January 1, 2015, a component of an entity is reported in discontinued operations after meeting the criteria for held-for-sale classification, is disposed of by sale or is disposed of other than by sale (e.g. abandonment) if the disposition represents a strategic shift that has (or will have) a major effect on the entity’s operations and financial results. The Company has evaluated the quantitative and qualitative factors related to the disposal of the Empi business and concluded that those conditions for discontinued operations presentation have been met. For financial statement purposes, the Empi business financial results are reported within discontinued operations in the Consolidated Financial Statements. Income (loss) from discontinued operations, net of taxes, is comprised of the following (in thousands): Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Net sales $ — $ 30,941 $ — $ 63,531 Costs and operating expenses: Cost of sales — 7,766 — 15,124 Selling, general and administrative — 10,412 — 22,999 Research and development — 51 — 87 Amortization of intangible assets — 2,281 — 4,563 Impairment of intangible assets 4,500 4,500 Other income 855 24 665 74 Income from discontinued operations before income taxes $ 855 $ 5,955 $ 665 $ 16,332 Income tax benefit — 8,918 — 2,533 Net income from discontinued operations $ 855 $ 14,873 $ 665 $ 18,865 Net liabilities for discontinued operations are as follows (in thousands): July 1, 2016 December 31, 2015 Accounts receivable, net $ — $ 2,743 Other current assets — 135 Property and equipment, net — 22 Intangible and other non-current assets — 7 Total assets — 2,907 Accounts payable and other liabilities 946 13,371 Net liabilities $ (946 ) $ (10,464 ) | 3. ACQUISITIONS AND DIVESTITURES On June 30, 2015, our subsidiary Encore Medical, L.P., dba DJO Surgical, acquired certain assets from Zimmer Biomet Holdings, Inc., including the Biomet Cobalt ™ ® ™ ® The primary reason for the acquisition was to further invest in our growing Surgical Implant segment and improve our position in the orthopedic implant market. The Discovery Elbow will be our first elbow technology and builds upon our successful upper extremity portfolio and shoulder arthroplasty experience. The Cobalt products have a substantial base of customers for hip, knee, shoulder, elbow and other orthopedic implant technologies. Goodwill represents the excess of the purchase price over fair value of tangible and identifiable intangible assets acquired. All goodwill associated with the acquisition is allocated to our Surgical Implant segment. Goodwill related to this acquisition is expected to be deductible for tax purposes. On January 23, 2014, we acquired all of the outstanding shares of capital stock of Speetec Implantate GmbH (“Speetec”). Speetec is a distributor and manufacturer of knee, hip and shoulder arthroplasty products in Germany. The purchase price consisted of a cash payment at closing of $5.0 million, a holdback of $1.3 million for potential indemnity claims and $1.6 million for the fair value of contingent consideration. The fair value of contingent consideration was approximately 25% of the total potential contingent consideration of $7.3 million. The valuation was based on the probability weighted average estimate of achievement of revenue targets for 2014 and 2015. The indemnity holdback accrues interest at the Euribor rate plus 100 basis points and is 50% payable in March 2015 and March 2016, respectively, if not used for indemnification claims. The first indemnity holdback payment was made on March 31, 2015. The contingent consideration is 50% payable in March 2015 and March 2016, respectively, if earned. As of December 31, 2015, the revenue targets had not been met therefore no contingent consideration is payable related to this transaction. On July 1, 2013 we acquired certain assets of Blue Leaf Medical CC, (“Blue Leaf”) for a total purchase price of $0.6 million. The assets acquired relate to certain vascular product lines in South Africa, Namibia, Botswana, Mozambique and Zambia. The purchase price consisted of a cash payment at closing of $0.4 million, $0.1 million for the purchase of inventory on hand at closing and $0.1 million which was held back to provide security for potential indemnification claims. The hold back payment was paid to the sellers in September 2014. On March 7, 2013 we acquired certain assets of Vasyli Medical Asia/Pacific Pty Ltd, (“Vasyli”) for a total purchase price of $2.2 million. The assets acquired relate to the distribution of certain vascular product lines in Australia and New Zealand. The purchase price consisted of a cash payment at closing of $1.3 million, $0.5 million for the purchase of inventory on hand at closing and $0.4 million which was held back to provide security for potential indemnification claims. The hold back payment was paid to the sellers in March 2014. Additionally, there was $0.3 million of contingent consideration payable one year from the acquisition date if certain revenue targets were met by December 31, 2013; however, these targets were not achieved and therefore no payment was made. Our primary reason for the 2014 and 2013 acquisitions was to move from an indirect sales model (i.e., sales to distributors at a discount) to a direct sales model, resulting in increased gross profit and operating income. All goodwill associated with these acquisitions is allocated to our International reporting segment. The purchase price for each of these acquisitions was allocated to the fair values of the net tangible and intangible assets acquired as follows (in thousands): (in thousands): Zimmer Biomet Speetec Blue Leaf Vasyli Cash $ — $ 489 $ — $ — Accounts receivable — 608 — — Inventory 2,477 2,766 59 542 Other current assets — 154 — 31 Property and equipment — 379 — 12 Other non-current assets — — — — Liabilities assumed — (1,642 ) — — Deferred tax liabilities — (1,003 ) — — Identifiable intangible assets (1): Customer relationships 1,800 2,861 90 308 Technology 15,000 — — — Non-compete — 569 111 930 Trademarks and trade names 2,900 320 — — Goodwill (2) 1,823 2,383 322 363 Total purchase price $ 24,000 $ 7,884 $ 582 $ 2,186 (1) The fair value of customer relationships was assigned to relationships with major customers existing on the acquisition date based upon an estimate of the future discounted cash flows that would be derived from those customers, after deducting contributory asset charges. The fair value of technology was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the patents and technology acquired. The fair value of non-compete agreements relate to non-compete agreements entered into with certain members of senior management. The values were determined by estimating the present value of the cash flows associated with having these agreements in place, less the present value of the cash flows assuming the non-compete agreements were not in place. The fair value of trademarks and trade names was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the trade names and trademarks acquired. The useful lives of the intangible assets acquired were estimated based on the underlying agreements and/or the future economic benefit expected to be received from the assets. (2) Goodwill represents the excess purchase price over the fair value of the identifiable net assets acquired. Among the factors which resulted in the recognition of goodwill for the Speetec acquisition was the opportunity to expand our direct presences in the German market with our surgical products. Among the factors which resulted in goodwill for the acquisition was the opportunity to increase our revenue and expand our presence in the surgical implant market through the use of the acquired technology and customer relationships. Among the factors which resulted in the recognition of goodwill for the Blue Leaf and Vasyli assets was the opportunity to expand our direct presence in the local markets with our vascular products. Discontinued Operations For disposal transactions that occur on or after that January 1, 2015, a component of an entity is reported in discontinued operations after meeting the criteria for held-for-sale classification, is disposed of by sale or is disposed of other than by sale (e.g. abandonment) if the disposition represents a strategic shift that has (or will have) a major effect on the entity’s operations and financial results. The Company has evaluated the quantitative and qualitative factors related to the disposal of the Empi business and concluded that those conditions for discontinued operations presentation have been met. For financial statement purposes, the Empi business financial results are reported within discontinued operations in the Consolidated Financial Statements. Income (loss) from discontinued operations, net of taxes, is comprised of the following (in thousands): Year ended December 31, 2015 2014 2013 Net sales $ 95,342 $ 141,637 $ 154,673 Costs and operating expenses: Cost of sales 35,834 33,397 36,957 Selling, general and administrative 50,729 59,333 68,798 Research and development 249 465 245 Amortization of intangible assets 6,874 9,127 9,127 Impairment of goodwill 117,298 — 52,500 Impairment of intangible and long lived assets 52,150 — 4,500 Other income 86 37 18 (Loss) income from discontinued operations before income taxes $ (167,706 ) $ 39,352 $ (17,436 ) Income tax benefit (provision) 10,126 (17,610 ) 4,335 Net (loss) income from discontinued operations $ (157,580 ) $ 21,742 $ (13,101 ) Net assets for discontinued operations are as follows: Year ended December 31, 2015 2014 Accounts receivable, net $ 2,743 $ 18,852 Inventories, net — 6,410 Other current assets 135 380 Property and equipment, net 22 3,631 Intangible and other non-current assets 7 159,440 Total assets 2,907 188,713 Accounts payable and other liabilities 13,371 8,681 Net (liabilities) assets $ (10,464 ) $ 180,032 |
ACCOUNTS RECEIVABLE RESERVES
ACCOUNTS RECEIVABLE RESERVES | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | ||
ACCOUNTS RECEIVABLE RESERVES | 3. ACCOUNTS RECEIVABLE RESERVES A summary of activity in our accounts receivable reserves for doubtful accounts is presented below (in thousands): Six Months Ended July 1, 2016 June 27, 2015 Balance, beginning of period $ 32,893 $ 23,585 Provision for doubtful accounts 11,861 12,014 Write-offs, net of recoveries (11,495 ) (6,714 ) Balance, end of period $ 33,259 $ 28,885 Our allowance for sales returns balance was $3.1 million and $3.7 million as of July 1, 2016 and June 27, 2015, respectively. | 4. ACCOUNTS RECEIVABLE RESERVES A summary of activity in our accounts receivable allowance for doubtful accounts is presented below (in thousands): Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 23,585 $ 16,458 $ 12,304 Provision for doubtful accounts 26,160 26,083 13,311 Write-offs, net of recoveries (16,852 ) (18,956 ) (9,157 ) Balance, end of year $ 32,893 $ 23,585 $ 16,458 Our allowance for sales returns balance was $4.1 million, $3.6 million, and $3.9 million, as of December 31, 2015, 2014 and 2013, respectively. |
INVENTORIES
INVENTORIES | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | ||
INVENTORIES | 4. INVENTORIES Inventories consist of the following (in thousands): July 1, 2016 December 31, 2015 Components and raw materials $ 61,949 $ 57,372 Work in process 9,908 10,330 Finished goods 94,810 99,167 Inventory held on consignment 33,721 29,746 200,388 196,615 Inventory reserves (22,840 ) (22,042 ) $ 177,548 $ 174,573 A summary of the activity in our reserves for estimated slow moving, excess, obsolete and otherwise impaired inventory is presented below (in thousands): Six Months Ended July 1, 2016 June 27, 2015 Balance, beginning of period $ 22,042 $ 22,094 Provision charged to costs of sales 4,922 2,714 Write-offs, net of recoveries (4,124 ) (1,288 ) Balance, end of period $ 22,840 $ 23,520 The write-offs to the reserve were principally related to the disposition of fully reserved inventory. | 5. INVENTORIES Inventories consist of the following (in thousands): December 31, 2015 December 31, 2014 Components and raw materials $ 57,372 $ 57,513 Work in process 10,330 5,321 Finished goods 99,167 101,309 Inventory held on consignment 29,746 26,881 196,615 191,024 Inventory reserves (22,042 ) (22,094 ) $ 174,573 $ 168,930 A summary of the activity in our inventory reserves is presented below (in thousands): Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 22,094 $ 21,523 $ 15,192 Provision charged to costs of sales 5,699 6,800 7,905 Write-offs, net of recoveries (5,751 ) (6,229 ) (1,574 ) Balance, end of year $ 22,042 $ 22,094 $ 21,523 The write-offs to the reserve were principally related to the disposition of fully reserved inventory. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 6. PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following (in thousands): December 31, 2015 December 31, 2014 Depreciable lives (years) Land $ 266 $ 266 Indefinite Buildings and improvements 26,187 25,741 3 to 25 Equipment 128,352 121,502 2 to 7 Software 42,495 33,780 3 to 10 Furniture and fixtures 12,065 11,596 3 to 8 Surgical implant instrumentation 97,489 78,275 5 Construction in progress 3,885 11,913 N/A 310,739 283,073 Accumulated depreciation and amortization (193,466 ) (166,597 ) Property and equipment, net $ 117,273 $ 116,476 Depreciation and amortization expense relating to property and equipment was $37.5 million, $35.2 million, and $32.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
LONG-LIVED ASSETS
LONG-LIVED ASSETS | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
LONG-LIVED ASSETS | 5. LONG-LIVED ASSETS Goodwill Changes in the carrying amount of goodwill for the six months ended July 1, 2016 are presented in the table below (in thousands): Bracing & Vascular Recovery Sciences Surgical Implant International Total Balance, beginning of period Goodwill $ 483,258 $ 249,601 $ 49,229 $ 333,022 $ 1,115,110 Accumulated impairment losses — (49,600 ) (47,406 ) — (97,006 ) Goodwill, net of accumulated impairment losses at December 31, 2015 483,258 200,001 1,823 333,022 1,018,104 Current Year Activity: Foreign currency translation — — — 1,082 1,082 Balance, end of period Goodwill 483,258 249,601 49,229 334,104 1,116,192 Accumulated impairment losses — (49,600 ) (47,406 ) — (97,006 ) Goodwill, net of accumulated impairment losses at July 1, 2016 $ 483,258 $ 200,001 $ 1,823 $ 334,104 $ 1,019,186 Intangible Assets Identifiable intangible assets consisted of the following (in thousands): July 1, 2016 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Definite-lived intangible assets: Customer relationships $ 476,460 $ (343,667 ) $ 132,793 Patents and technology 446,840 (260,982 ) 185,858 Trademarks and trade names 29,756 (14,155 ) 15,601 Distributor contracts and relationships 4,772 (4,230 ) 542 Non-compete agreements 6,655 (6,085 ) 570 $ 964,483 $ (629,119 ) 335,364 Indefinite-lived intangible assets: Trademarks and trade names 375,185 Net identifiable intangible assets $ 710,549 December 31, 2015 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Definite-lived intangible assets: Customer relationships $ 475,776 $ (320,991 ) $ 154,785 Patents and technology 446,854 (246,509 ) 200,345 Trademarks and trade names 29,737 (12,695 ) 17,042 Distributor contracts and relationships 4,693 (3,875 ) 818 Non-compete agreements 6,607 (5,714 ) 893 $ 963,667 $ (589,784 ) $ 373,883 Indefinite-lived intangible assets: Trademarks and trade names 375,162 Net identifiable intangible assets $ 749,045 Our definite lived intangible assets are being amortized using the straight line method over their remaining weighted average useful lives of 4.3 years for customer relationships, 7.4 years for patents and technology, 1.4 years for distributor contracts and relationships, 6.3 years for trademarks and trade names, and 1.5 years for non-compete agreements. Based on our amortizable intangible asset balance as of April 1, 2016, we estimate that amortization expense will be as follows for the next five years and thereafter (in thousands): 2016 $ 37,857 2017 66,124 2018 57,905 2019 53,041 2020 37,070 Thereafter 83,367 $ 335,364 | 7. LONG-LIVED ASSETS Goodwill Changes in the carrying amount of goodwill for the year ended December 31, 2015 are presented in the table below (in thousands): Bracing & Vascular Recovery Sciences Surgical Implant International Total Balance, beginning of period Goodwill $ 483,258 $ 249,601 $ 47,406 $ 340,631 $ 1,120,896 Accumulated impairment losses — (49,600 ) (47,406 ) — (97,006 ) Goodwill, net of accumulated impairment losses at December 31, 2014 483,258 200,001 — 340,631 1,023,890 Current Year Activity: Acquisitions — — 1,823 — 1,823 Foreign currency translation — — — (7,609 ) (7,609 ) Balance, end of period Goodwill 483,258 249,601 49,229 333,022 1,115,110 Accumulated impairment losses — (49,600 ) (47,406 ) — (97,006 ) Goodwill, net of accumulated impairment losses at December 31, 2015 $ 483,258 $ 200,001 $ 1,823 $ 333,022 $ 1,018,104 Intangible Assets Identifiable intangible assets consisted of the following (in thousands): December 31, 2015 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Definite-lived intangible assets: Customer relationships $ 475,776 $ (320,991 ) $ 154,785 Patents and technology 446,854 (246,509 ) 200,345 Trademarks and trade names 29,737 (12,695 ) 17,042 Distributor contracts and relationships 4,693 (3,875 ) 818 Non-compete agreements 6,607 (5,714 ) 893 $ 963,667 $ (589,784 ) 373,883 Indefinite-lived intangible assets: Trademarks and trade names 375,162 Net identifiable intangible assets $ 749,045 December 31, 2014 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Definite-lived intangible assets: Customer relationships $ 477,359 $ (279,008 ) $ 198,351 Patents and technology 431,979 (215,915 ) 216,064 Trademarks and trade names 25,970 (9,902 ) 16,068 Distributor contracts and relationships 4,771 (3,401 ) 1,370 Non-compete agreements 6,824 (4,723 ) 2,101 $ 946,903 $ (512,949 ) 433,954 Indefinite-lived intangible assets: Trademarks and trade names 391,951 Net identifiable intangible assets $ 825,905 In performing our 2015 goodwill impairment test, we estimated the fair values of our reporting units using the income approach which includes the discounted cash flow method and the market approach which includes the use of market multiples. These fair value measurements are categorized within Level 3 of the fair value hierarchy. The discounted cash flows for each reporting unit were based on discrete financial forecasts developed by management for planning purposes, and required significant judgment with respect to forecasted sales, gross margin, selling, general and administrative expenses, depreciation, income taxes, capital expenditures, working capital requirements and the selection and use of an appropriate discount rate. For purposes of calculating the discounted cash flows of our reporting units, we used estimated revenue growth rates averaging between 1% and 15% for the discrete forecast period. Cash flows beyond the discrete forecasts were estimated using a terminal value calculation, which incorporated historical and forecasted financial trends for each identified reporting unit and considered long-term earnings growth rates for publicly traded peer companies. Future cash flows were then discounted to present value at discount rates ranging from 8.9% to 10.6%, and terminal value growth rates ranging from 1.0% to 3.0%. Publicly available information regarding comparable market capitalization was also considered in assessing the reasonableness of the cumulative fair values of our reporting units estimated using the discounted cash flow methodology. We determined that the fair value of the six reporting units with goodwill assigned to them exceeds their carrying value and no reporting unit was at risk of failing the test. The percentage by which the fair value of the six reporting units exceeded their carrying value ranged from 31.4% to 133.5%. As such, we determined that the goodwill of our reporting units was not impaired. In the fourth quarter of 2015 we tested our indefinite lived trade name intangible assets for impairment. This test work compares the fair value of the asset with its carrying amount. To determine the fair value we applied the relief from royalty (RFR) method. Under the RFR method, the value of the trade name is determined by calculating the present value of the after-tax cost savings associated with owning the asset and therefore not being required to pay royalties for its use during the asset’s indefinite life. Significant judgments inherent in this analysis include the selection of appropriate discount rates, estimating future cash flows and the identification of appropriate terminal growth rate assumptions. Discount rate assumptions are based on an assessment of the risk inherent in the projected future cash generated by the respective intangible assets. Future cash flows were discounted to present value at discount rates ranging from 8.9% to 10.6%, and terminal value growth rates ranging from 1.0% to 3.0%. Also subject to judgment are assumptions about royalty rates, which are based on the estimated rates at which similar brands and trademarks are being licensed in the marketplace. We used market average royalty rates ranging from 0.5% to 5.0%. These fair value measurements are categorized within Level 3 of the fair value hierarchy. We determined that that the fair value of these trade names exceed their carrying value. The percentage by which the fair value of these trade names exceeded their carrying value ranged from 24.0% to 160.1%. As such, we determined that these indefinite lived intangible assets are not impaired. This fair value measurement is categorized within Level 3 of the fair value hierarchy. Our definite lived intangible assets are being amortized using the straight line method over their remaining weighted average useful lives of 4.6 years for customer relationships, 7.8 years for patents and technology, 1.8 years for distributor contracts and relationships, 6.7 years for trademarks and trade names, and 1.7 years for non-compete agreements. Based on our amortizable intangible asset balance as of December 31, 2015 we estimate that amortization expense will be as follows for the next five years and thereafter (in thousands): 2016 76,460 2017 66,104 2018 57,887 2019 53,037 2020 37,066 Thereafter 83,329 $ 373,883 Our goodwill and intangible assets by segment are as follows (in thousands): December 31, 2015 Goodwill Intangible Assets, Net Bracing and Vascular $ 483,258 $ 449,893 Recovery Sciences 200,001 138,732 International 333,022 131,019 Surgical Implant 1,823 29,401 $ 1,018,104 $ 749,045 December 31, 2014 Goodwill Intangible Assets, Net Bracing and Vascular $ 483,258 $ 487,122 Recovery Sciences 200,001 176,134 International 340,631 150,128 Surgical Implant — 12,521 $ 1,023,890 $ 825,905 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | ||
OTHER CURRENT LIABILITIES | 6. OTHER CURRENT LIABILITIES Other current liabilities consist of the following (in thousands): July 1, 2016 December 31, 2015 Accrued wages and related expenses $ 26,690 $ 29,031 Accrued commissions 16,069 20,479 Accrued rebates 10,106 13,433 Accrued other taxes 3,485 4,196 Accrued professional expenses 5,577 3,164 Income taxes payable 988 1,612 Deferred tax liability 165 163 Other accrued liabilities 29,088 30,095 $ 92,168 $ 102,173 | 8. OTHER CURRENT LIABILITIES Other current liabilities consist of the following (in thousands): December 31, 2015 December 31, 2014 Accrued wages and related expenses $ 29,031 $ 29,650 Accrued commissions 20,479 15,237 Accrued rebates 13,433 12,981 Accrued other taxes 4,196 4,983 Accrued professional expenses 3,164 2,682 Income taxes payable 1,612 2,477 Deferred tax liability 163 343 Other accrued liabilities 30,095 25,825 $ 102,173 $ 94,178 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | 9. EMPLOYEE BENEFIT PLANS We have multiple qualified defined contribution plans, which allow for voluntary pre-tax contributions by employees. We pay all general and administrative expenses of the plans and make matching and may make certain discretionary contributions to the plans. Based on 100% of the first 1% and 50% of the next 5% of compensation deferred by employees (subject to IRS limits and non-discrimination testing), we made matching contributions of $4.2 million, $4.1 million, and $4.2 million, to the plans for the years ended December 31, 2015, 2014 and 2013, respectively. The plans provide for discretionary contributions by us, as approved by the Board of Directors. There have been no such discretionary contributions through December 31, 2015. In addition, we made contributions to our international pension plans of $1.7 million, $1.7 million, and $1.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
DERIVATIVE INSTRUMENTS | 7. DERIVATIVE INSTRUMENTS From time to time, we use derivative financial instruments to manage interest rate risk related to our variable rate credit facilities and risk related to foreign currency exchange rates. Our objective is to reduce the risk to earnings and cash flows associated with changes in interest rates and changes in foreign currency exchange rates. Before acquiring a derivative instrument to hedge a specific risk, we evaluate potential natural hedges. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, and the availability, effectiveness and cost of derivative instruments. We do not use derivative instruments for speculative or trading purposes. All derivatives, whether designated as hedging relationships or not, are recorded on the balance sheet at fair value. The fair value of our derivatives is determined through the use of models that consider various assumptions, including time value, yield curves and other relevant economic measures which are inputs that are classified as Level 2 in the fair value hierarchy. The classification of gains and losses resulting from changes in the fair values of derivatives is dependent on the intended use of the derivative and its resulting designation. Our interest rate cap agreements were designated as cash flow hedges, and accordingly, effective portions of changes in the fair value of the derivatives were recorded in accumulated other comprehensive income (loss) and subsequently reclassified into our Consolidated Statement of Operations when the hedged forecasted transaction affects income (loss). Ineffective portions of changes in the fair value of cash flow hedges are recognized in income (loss). Our foreign exchange contracts have not been designated as hedges, and accordingly, changes in the fair value of the derivatives are recorded in income (loss). Interest Rate Cap Agreements Foreign Exchange Rate Contracts The following table summarizes the fair value of derivative instruments in our Unaudited Condensed Consolidated Balance Sheets (in thousands): Balance Sheet July 1, 2016 December 31, 2015 Derivative Assets: Interest rate cap agreements designated as cash flow hedges Other long-term assets $ — $ 1,313 Derivative Liabilities: Interest rate cap agreements designated as cash flow hedges Other current $ 1,074 $ 282 Interest rate cap agreements designated as cash flow hedges Other long-term 5,879 — The following table summarizes the effect our derivative instruments have on our Unaudited Condensed Consolidated Statements of Operations (in thousands): Three Months Ended Six Months Ended Location of gain (loss) July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Interest rate cap agreements designated as cash flow hedges Interest expense, net $ 65 $ — $ 75 $ — Foreign exchange forward contracts not designated as hedges Other income, net $ — $ (4 ) $ — $ (4 ) The pre-tax loss on derivative instruments designated as cash flow hedges recognized in other comprehensive income (loss) is presented below (in thousands): Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Interest rate cap agreements designated as cash flow hedges $ (2,651 ) $ — $ (8,042 ) $ — | 10. DERIVATIVE INSTRUMENTS From time to time, we use derivative financial instruments to manage interest rate risk related to our variable rate credit facilities and risk related to foreign currency exchange rates. Our objective is to reduce the risk to earnings and cash flows associated with changes in interest rates and changes in foreign currency exchange rates. Before acquiring a derivative instrument to hedge a specific risk, we evaluate potential natural hedges. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, and the availability, effectiveness and cost of derivative instruments. We do not use derivative instruments for speculative or trading purposes. All derivatives, whether designated as hedging relationships or not, are recorded on the balance sheet at fair value. The fair value of our derivatives is determined through the use of models that consider various assumptions, including time value, yield curves and other relevant economic measures which are inputs that are classified as Level 2 in the fair value hierarchy. The classification of gains and losses resulting from changes in the fair values of derivatives is dependent on the intended use of the derivative and its resulting designation. Our interest rate cap agreements were designated as cash flow hedges, and accordingly, effective portions of changes in the fair value of the derivatives were recorded in accumulated other comprehensive income (loss) and subsequently reclassified into our Consolidated Statement of Operations when the hedged forecasted transaction affects income (loss). Ineffective portions of changes in the fair value of cash flow hedges are recognized in income (loss). Our foreign exchange contracts have not been designated as hedges, and accordingly, changes in the fair value of the derivatives are recorded in income (loss). Interest Rate Cap Agreements Foreign Exchange Rate Contracts Information regarding the notional amounts of our foreign exchange forward contracts is presented in the table below (in thousands): Notional Amount (MXN) Notional Amount (USD) December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014 Foreign exchange contracts not designated as hedges — 7,682 $ — $ 526 The following table summarizes the fair value of derivative instruments in our Consolidated Balance Sheets (in thousands): Balance Sheet Location December 31, 2015 December 31, 2014 Derivative Assets: Interest rate cap agreements designated as cash flow hedges Other long term assets $ 1,313 $ 0 Derivative Liabilities: Interest rate cap agreements designated as cash flow hedges Other current liabilities $ 282 $ — Foreign exchange forward contracts not designated as hedges Other current liabilities — 4 The following table summarizes the effect our derivative instruments have on our Consolidated Statements of Operations (in thousands): Year Ended December 31, Location of gain (loss) 2015 2014 2013 Interest rate cap agreements designated as cash flow hedges Interest expense (1) $ — $ — $ — Foreign exchange forward contracts not designated as hedges Other income (expense), net $ (4 ) 40 (821 ) $ (4 ) $ 40 $ (821 ) The pre-tax loss on derivative instruments designated as cash flow hedges recognized in other comprehensive income (loss) is presented below (in thousands): Year Ended December 31, 2015 2014 2013 Interest rate cap agreements designated as cash flow hedges $ 985 $ — $ — |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
FAIR VALUE MEASUREMENTS | 8. FAIR VALUE MEASUREMENTS Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis (in thousands): As of July 1, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recorded Balance Liabilities: Interest rate cap agreements designated as cash flow hedges $ — $ 6,953 $ — $ 6,953 As of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recorded Balance Assets: Interest rate cap agreements designated as cash flow hedges $ — $ 1,313 $ — $ 1,313 Liabilities: Interest rate cap agreements designated as cash flow hedges $ — $ 282 $ — $ 282 | 11. FAIR VALUE MEASUREMENTS Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. During the year ended December 31, 2014, we remeasured the fair value of contingent consideration related to our January 2014 acquisition of Speetec. We initially valued the contingent consideration at $1.6 million which equaled approximately 25% of the total potential contingent consideration of $7.3 million. The valuation was based on the probability weighted average estimate of achievement of revenue targets for 2014 and 2015. The fair value of the expected payment was then calculated using a 9.9% discount rate as the contingent consideration is 50% payable in March 2015 and March 2016, respectively, if earned. Our remeasurement of the fair value based on the probability of achieving the Speetec revenue targets and the discounted present value of the current estimate of the future contingent payments reduced the net fair value of the contingent consideration to zero. The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis (in thousands): As of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recorded Balance Assets: Interest rate cap agreements designated as cash flow hedges $ — $ 1,313 $ — $ 1,313 Liabilities: Interest rate cap agreements designated as cash flow hedges $ — $ 282 $ — $ 282 As of December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recorded Balance Liabilities: Foreign exchange forward contracts not designated as hedges $ — $ 4 $ — $ 4 |
DEBT
DEBT | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | ||
DEBT | 9. DEBT Debt obligations consist of the following (in thousands): July 1, 2016 December 31, 2015 Credit facilities: Revolving credit facility, net of unamortized debt issuance costs of $1.9 million and $2.1 million as of July 1, 2016 and December 31, 2015, respectively $ 80,125 $ 27,886 Term loan: $1,044.5 million Term Loan, net of unamortized debt issuance costs and original issuance discount of $13.6 million and $15.3 million as of July 1, 2016 and December 31, 2015, respectively 1,030,815 1,037,117 Notes: $1,015.0 million 8.125% Second Lien notes, net of unamortized debt issuance costs and original issuance discount of $15.6 million and $16.9 million as of July 1, 2016 and December 31, 2015, respectively 999,367 998,137 $298.5 million 10.75% Third Lien notes, net of unamortized debt issuance costs and original issuance discount of $7.3 million and $8.1 million as of July 1, 2016 and December 31, 2015, respectively 291,178 290,443 9.75% Senior subordinated notes 1,529 1,529 Total debt 2,403,014 2,355,112 Current maturities (10,550 ) (10,550 ) Long-term debt $ 2,392,464 $ 2,344,562 Credit Facilities On May 7, 2015, we entered into (i) a $1,055.0 million new term loan facility (the “Term Loan”) and (ii) a $150.0 million new asset-based revolving credit facility (the “ABL Facility” and together with the Term Loan, the “Credit Facilities”). The Term Loan provides for a $150.0 million incremental facility, subject to customary borrowing conditions and the ABL Facility provides for a $50.0 million facility increase, subject to customary borrowing conditions. A portion of the proceeds from the Credit Facilities was used to repay in full all amounts due and owing under the revolving credit facility and Tranche B term loans, originally entered into on November 20, 2007. As of July 1, 2016, the market values of our Term Loan and drawings under the ABL Facility were $1,000.1 million and $82.0 million, respectively. We determine market value using trading prices for the senior secured credit facilities on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. Term Loan Interest Rates. Principal Payments. Prepayments. • 50% (which percentage will be reduced to 25% and 0% upon attaining certain total net leverage ratios) of annual excess cash flow, as defined in the Term Loan agreement; • 100% of the net cash proceeds above (i) $30.0 million in any single transaction or series of related transactions or (ii) an annual amount of $100.0 million of all non-ordinary course asset sales or other dispositions, if we do not reinvest the net cash proceeds in assets to be used in our business, generally within 12 months of the receipt of such net cash proceeds; and • 100% of the net cash proceeds from issuances of debt by us and our restricted subsidiaries, other than proceeds from debt permitted to be incurred under the Credit Facilities. We may voluntarily repay outstanding loans under the Credit Facilities at any time without premium or penalty, subject to payment of (i) customary breakage costs applicable to prepayments of Eurodollar loans made on a date other than the last day of an interest period applicable thereto and (ii) a prepayment premium of 1% applicable to prepayments made within 6 months from the date of the closing of the Term Loan. Guarantee and Security. Certain Covenants and Events of Default. • incur additional indebtedness and make guarantees; • create liens on assets; • enter into sale and leaseback transactions; • engage in mergers or consolidations; • sell assets; • pay dividends and other restricted payments; • make investments, loans or advances, including acquisitions; • repay subordinated indebtedness or amend material agreements governing our subordinated indebtedness; • engage in certain transactions with affiliates; and • change our lines of business. In addition, the Term Loan requires us to maintain a maximum first lien net leverage ratio, as defined, of Credit Facilities debt, net of cash, to Adjusted EBITDA of no greater than 5.35:1 for a trailing twelve month period commencing with the period ending September 30, 2015. As of July 1, 2016, our actual first lien net leverage ratio was 4.33:1, and we were in compliance with all other applicable covenants. Asset-Based Revolving Credit Facility Interest Rate. Fees. Guarantee and Security. Certain Covenants and Events of Default. In addition, we are required to maintain a minimum fixed charge coverage ratio, as defined in the agreement, of 1.0 to 1.0 if the unutilized facility is less than the greater of $9.0 million or 10% of the lesser of (1) $150.0 million and (2) the aggregate borrowing base. This coverage ratio requirement remains in place until the 30 th Notes: 8.125% Second Lien Notes On May 7, 2015 we issued $1,015.0 million aggregate principal amount of 8.125% Second Lien Notes (8.125% Notes), which mature on June 15, 2021. The 8.125% Notes are fully and unconditionally guaranteed on a senior secured basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantees any of DJOFL’s indebtedness or any indebtedness of DJOFL’s domestic subsidiaries. The net proceeds from the issuance of the 8.125% Notes were used, together with borrowings under the Credit Facilities and cash on hand, to repay our prior notes (see below), repay prior credit facilities and pay all related fees and expenses. The 8.125% Notes and related guarantees are secured by second-priority liens on the Term Loan Collateral and third-priority liens on the ABL Collateral, in each case subject to permitted liens. As of July 1, 2016, the market value of the 8.125% Notes was $872.9 million. We determined market value using trading prices for the 8.125% Notes on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. Optional Redemption. 10.75% Third Lien Notes On May 7, 2015, we issued $298.5 million aggregate principal amount of 10.75% Third Lien Notes (10.75% Notes) which mature on April 15, 2020. The 10.75% Notes are fully and unconditionally guaranteed on a secured basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantees any of DJOFL’s indebtedness or any indebtedness of DJOFL’s domestic subsidiaries. The 10.75% Notes were issued in connection with our (i) offer (Exchange Offer) to exchange our 9.75% Senior Subordinated Notes due 2017 (9.75% Notes) for the 10.75% Notes and cash and (ii) solicitation of consents from registered holders of the 9.75% Notes to certain proposed amendments to the indenture for the 9.75% Notes. The 10.75% Notes and related guarantees are secured by third-priority liens on the Term Loan Collateral and fourth-priority liens on the ABL Collateral, in each case subject to permitted liens. As of July 1, 2016, the market value of the 10.75% Notes was $241.8 million. We determined market value using trading prices for the 10.75% Notes on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. Optional Redemption. 9.75% Senior Subordinated Notes On October 18, 2010, we issued $300.0 million aggregate principal amount of 9.75% Senior Subordinated Notes (9.75% Notes and, collectively with the 10.75% Notes and the 8.125% Notes, the “Notes”) maturing on October 15, 2017. The 9.75% Notes are guaranteed fully and unconditionally on an unsecured senior basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantee any of DJOFL’s indebtedness, or any indebtedness of DJOFL’s domestic subsidiaries. On May 13, 2015, a total of $298.5 million aggregate principal of outstanding 9.75% Notes were validly tendered as part of the Exchange Offer. As of July 1, 2016, $1.5 million aggregate principal of the 9.75% Notes remains outstanding. Optional Redemption. Amendments. Change of Control Upon the occurrence of a change of control, DJOFL must give holders of the Notes an opportunity to sell to DJOFL some or all of their 8.125% Notes and 10.75% Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the repurchase date. Covenants The indentures for the 8.125% Notes and the 10.75% Notes each contain covenants limiting, among other things, our ability to (i) incur additional indebtedness or issue certain preferred and convertible shares, pay dividends on, redeem, repurchase or make distributions in respect of the capital stock of DJO or make other restricted payments, (ii) make certain investments, (iii) sell certain assets, (iv) create liens on certain assets to secure debt, (v) consolidate, merge, sell or otherwise dispose of all or substantially all of our assets, (vi) enter into certain transactions with affiliates, and (vii) designate our subsidiaries as unrestricted subsidiaries. As of July 1, 2016, we were in compliance with all applicable covenants. Our ability to continue to meet the covenants related to our indebtedness specified above in future periods will depend, in part, on events beyond our control, and we may not continue to meet those covenants. A breach of any of these covenants in the future could result in a default under the credit facilities or the Notes, at which time the lenders could elect to declare all amounts outstanding under the senior secured credit facilities to be immediately due and payable. Any such acceleration would also result in a default under the Indentures. Loss on Modification and Extinguishment of Debt During the six months ended June 27, 2015, we recognized loss on modification and extinguishment of debt of $68.0 million. The loss consists of $47.8 million in premiums related to the redemption of our 8.75% Notes, 9.875% Notes, and 7.75% Notes, $11.9 million related to the non-cash write off of unamortized debt issuance costs and original issue discount associated with the portion of our debt that was extinguished and $8.3 million of arrangement and amendment fees and other fees and expenses incurred in connection with the refinancing. Debt Issuance Costs As of July 1, 2016 and December 31, 2015, we had $13.1 million and $14.5 million, respectively, of unamortized debt issuance costs, which are reflected as a direct deduction from the debt liability included in Long-term debt obligations in our Consolidated Balance Sheets. For the three and six months ended July 1, 2016, amortization of debt issuance costs was $0.7 million and $1.4 million, respectively. For the three and six months ended June 27, 2015, amortization of debt issuance costs was $1.2 million and $3.3 million, respectively. Amortization of debt issuance costs was included in Interest expense in our Consolidated Statements of Operations for each of the periods presented. | 12. DEBT Debt obligations consist of the following (in thousands): December 31, 2015 December 31, 2014 Credit facilities: Revolving credit facility, net of unamortized debt issuance costs of $2.1 million and $1.0 million as of December 31, 2015 and 2014, respectively $ 27,886 $ 16,031 Term loan: $1,052.4 million Term Loan, net of unamortized debt issuance costs and original issuance discount of $15.3 million as of December 31, 2015 1,037,117 — $884.6 million Tranche B term loans, net of unamortized debt issuance costs and original issuance discount $13.2 million as of December 31, 2014 — 871,373 Notes: $1,015.0 million 8.125% Second Lien notes, net of unamortized debt issuance costs and original issuance discount of $16.9 million 998,137 — $330.0 million 8.75% Second Priority Senior Secured notes, net of unamortized debt issuance costs, including unamortized original issue premium of $1.0 million as of December 31, 2014 — 329,031 $440.0 million 9.875% Senior Unsecured notes, net of unamortized debt issuance costs of $6.7 million as of December 31, 2014 — 433,309 $300.0 million 7.75% Senior Unsecured notes, net of unamortized debt issuance costs of $4.1 million as of December 31, 2014 — 295,810 $298.5 million 10.75% Third Lien notes, net of unamortized debt issuance costs and original issuance discount of $8.1 million 290,443 — $300.0 million 9.75% Senior Subordinated notes, net of unamortized debt issuance costs of $3.3 million as of December 31, 2014 1,529 296,667 Other — 63 Total debt 2,355,112 2,242,284 Current maturities (10,550 ) (8,975 ) Long-term debt $ 2,344,562 $ 2,233,309 Credit Facilities On May 7, 2015, we entered into (i) a $1,055.0 million new term loan facility (the “Term Loan”) and (ii) a $150.0 million new asset-based revolving credit facility (the “ABL Facility” and together with the Term Loan, the “Credit Facilities”). In addition, the Term Loan provides for a $150.0 million incremental facility, subject to customary borrowing conditions and the ABL Facility provides for a $50.0 million facility increase, subject to customary borrowing conditions. A portion of the proceeds from the Credit Facilities was used to repay in full all amounts due and owing under the revolving credit facility and Tranche B term loans, dated as of November 20, 2007, as subsequently amended and restated, and further amended from time to time, by and among DJO Finance LLC (the “Company”), DJO Holdings LLC (“DJO Holdings”), Credit Suisse AG, as administrative agent, and the lenders party thereto. As of December 31, 2015, the market values of our Term Loan and drawings under the ABL Facility were $1,020.8 million and $30.0 million, respectively. We determine market value using trading prices for the senior secured credit facilities on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. Term Loan Interest Rates. Principal Payments. Prepayments. • 50% (which percentage will be reduced to 25% and 0% upon attaining certain total net leverage ratios) of annual excess cash flow, as defined in the Term Loan agreement; • 100% of the net cash proceeds above (i) $30.0 million in any single transaction or series of related transactions or (ii) an annual amount of $100.0 million of all non-ordinary course asset sales or other dispositions, if we do not reinvest the net cash proceeds in assets to be used in our business, generally within 12 months of the receipt of such net cash proceeds; and • 100% of the net cash proceeds from issuances of debt by us and our restricted subsidiaries, other than proceeds from debt permitted to be incurred under the Credit Facilities. We may voluntarily repay outstanding loans under the Credit Facilities at any time without premium or penalty, subject to payment of (i) customary breakage costs applicable to prepayments of Eurodollar loans made on a date other than the last day of an interest period applicable thereto and (ii) a prepayment premium of 1% applicable to prepayments made within 6 months from the date of the closing of the Term Loan. Guarantee and Security. Certain Covenants and Events of Default. • incur additional indebtedness and make guarantees; • create liens on assets; • enter into sale and leaseback transactions; • engage in mergers or consolidations; • sell assets; • pay dividends and other restricted payments; • make investments, loans or advances, including acquisitions; • repay subordinated indebtedness or amend material agreements governing our subordinated indebtedness; • engage in certain transactions with affiliates; and • change our lines of business. In addition, the Term Loan requires us to maintain a maximum first lien net leverage ratio, as defined, of Credit Facilities debt, net of cash, to Adjusted EBITDA of no greater than 5.35:1 for a trailing twelve month period commencing with the period ending September 30, 2015. As of December 31, 2015, our actual senior secured first lien net leverage ratio was 4.15:1, and we were in compliance with all other applicable covenants. Asset-Based Revolving Credit Facility Interest Rate. Fees. Guarantee and Security. Certain Covenants and Events of Default. In addition, we are required to maintain a minimum fixed charge coverage ratio, as defined in the agreement, of 1.0 to 1.0 if the unutilized facility is less than the greater of $9.0 million or 10% of the lesser of (1) $150.0 million and (2) the aggregate borrowing base. This coverage ratio requirement remains in place until the 30 th Prior Credit Facility Prior to May 7, 2015, our credit facilities consisted of term loans and a $100.0 million revolving credit facility, originally entered into on November 20, 2007 and subsequently amended and restated on March 20, 2012 and further amended from time to time. Effective April 8, 2014, the interest rate margins applicable to borrowings under the old revolving credit facilities were, at our option, either (a) the Eurodollar rate, plus 325 basis points or (b) a base rate determined by reference to the highest of (1) the prime rate, (2) the federal funds rate, plus 0.50% and (3) the Eurodollar rate for a one-month interest period, plus in each case 325 basis points. The interest rate margins applicable to the Tranche B term loans were, at our option, either (a) the Eurodollar rate plus 325 basis points or (b) a base rate plus 325 basis points. There was a minimum LIBOR rate applicable to the Eurodollar component of interest rates on Tranche B term loans of 1.00%. The applicable margin for borrowings under the old senior secured revolving credit facilities could have been reduced, subject to our attaining certain leverage ratios. Notes: 8.125% Second Lien Notes On May 7, 2015 we issued $1,015.0 million aggregate principal amount of 8.125% Second Lien Notes (8.125% Notes), which mature on June 15, 2021. The 8.125% Notes are fully and unconditionally guaranteed on a senior secured basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantees any of DJOFL’s indebtedness or any indebtedness of DJOFL’s domestic subsidiaries. The net proceeds from the issuance of the 8.125% Notes were used, together with borrowings under the First Lien Credit Facilities and cash on hand, to repay our prior notes (see below), repay prior credit facilities and pay all related fees and expenses. The 8.125% Notes and related guarantees are secured by second-priority liens on the Term Loan Collateral and third-priority liens on the ABL Collateral, in each case subject to permitted liens. As of December 31, 2015, the market value of the 8.125% Notes was $903.4 million. We determined market value using trading prices for the 8.125% Notes on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. Optional Redemption. 10.75% Third Lien Notes On May 7, 2015, we issued $298.5 million aggregate principal amount of 10.75% Third Lien Notes (10.75% Notes) which mature on April 15, 2020. The 10.75% Notes are fully and unconditionally guaranteed on a secured basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantees any of DJOFL’s indebtedness or any indebtedness of DJOFL’s domestic subsidiaries. The 10.75% Notes were issued in connection with our (i) offer (Exchange Offer) to exchange our 9.75% Senior Subordinated Notes due 2017 (9.75% Notes) for the 10.75% Notes and cash and (ii) solicitation of consents from registered holders of the 9.75% Notes to certain proposed amendments to the indenture for the 9.75% Notes. The 10.75% Notes and related guarantees are secured by third-priority liens on the Term Loan Collateral and fourth-priority liens on the ABL Collateral, in each case subject to permitted liens. As of December 31, 2015, the market value of the 10.75% Notes was $265.6 million. We determined market value using trading prices for the 10.75% Notes on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. Optional Redemption. 9.75% Senior Subordinated Notes On October 18, 2010, we issued $300.0 million aggregate principal amount of 9.75% Senior Subordinated Notes (9.75% Notes) maturing on October 15, 2017. The 9.75% Notes are guaranteed fully and unconditionally on an unsecured senior basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantee any of DJOFL’s indebtedness, or any indebtedness of DJOFL’s domestic subsidiaries. On May 13, 2015, a total of $298.5 million aggregate principal of outstanding 9.75% Notes were validly tendered as part of the Exchange Offer. As of December 31, 2015, $1.5 million aggregate principal of the 9.75% Notes remains outstanding. Optional Redemption. Amendments. Change of Control Upon the occurrence of a change of control, DJOFL must give holders of the Notes an opportunity to sell to DJOFL some or all of their 8.125% Notes and 10.75% Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the repurchase date. Covenants The indentures for the 8.125% Notes and the 10.75% Notes each contain covenants limiting, among other things, our ability to (i) incur additional indebtedness or issue certain preferred and convertible shares, pay dividends on, redeem, repurchase or make distributions in respect of the capital stock of DJO or make other restricted payments, (ii) make certain investments, (iii) sell certain assets, (iv) create liens on certain assets to secure debt, (v) consolidate, merge, sell or otherwise dispose of all or substantially all of our assets, (vi) enter into certain transactions with affiliates, or (vii) designate our subsidiaries as unrestricted subsidiaries. As of December 31, 2015, we were in compliance with all applicable covenants. Our ability to continue to meet the covenants related to our indebtedness specified above in future periods will depend, in part, on events beyond our control, and we may not continue to meet those covenants. A breach of any of these covenants in the future could result in a default under the credit facilities or the Notes, at which time the lenders could elect to declare all amounts outstanding under the senior secured credit facilities to be immediately due and payable. Any such acceleration would also result in a default under the Indentures. At December 31, 2015, the aggregate amounts of principal maturities of long-term debt for the next five years and thereafter are as follows (in thousands): 2016 10,550 2017 12,079 2018 10,550 2019 10,550 2020 1,338,634 Thereafter 1,015,000 $ 2,397,363 Prior Notes: 8.75% Second Priority Senior Secured Notes On March 20, 2012 and October 1, 2012, we issued $330.0 million aggregate principal amount of 8.75% Second Priority Senior Secured Notes (8.75% Notes) maturing on March 15, 2018. The 8.75% Notes were guaranteed jointly and severally and on a senior secured basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantee any of DJOFL’s indebtedness, or any indebtedness of DJOFL’s domestic subsidiaries. On May 16, 2015, we redeemed the full principal amount outstanding under the 8.75% Notes, plus accrued interest, at a redemption price of 104.375%. 9.875% Senior Notes On October 1, 2012, we issued $440.0 million aggregate principal amount of 9.875% Senior Notes (9.875% Notes) maturing on April 15, 2018. The 9.875% Notes were guaranteed jointly and severally and on an unsecured senior basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantee any of DJOFL’s indebtedness or any indebtedness of DJOFL’s domestic subsidiaries. On May 16, 2015, we redeemed the full principal amount outstanding under the 9.87% Notes, plus accrued interest, at a redemption price of 104.938%. 7.75% Senior Unsecured Notes On April 7, 2011, we issued $300.0 million aggregate principal amount of 7.75% Senior Notes (7.75% Notes) maturing on April 15, 2018. The 7.75% Notes were guaranteed jointly and severally and on a senior unsecured basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantee any of DJOFL’s indebtedness, or any indebtedness of DJOFL’s domestic subsidiaries. On May 16, 2015, we redeemed the full principal amount outstanding of the 7.75% Notes, plus accrued interest, at a redemption price of 103.875%. Loss on Modification and Extinguishment of Debt During year ended December 31, 2015, we recognized loss on modification and extinguishment of debt of $68.5 million. The loss consists of $47.8 million in premiums related to the redemption of our 8.75% Notes, 9.875% Notes, and 7.75% Notes, $11.9 million related to the non-cash write off of unamortized debt issuance costs and original issue discount associated with the portion of our debt that was extinguished and $8.8 million of arrangement and amendment fees and other fees and expenses incurred in connection with the refinancing. During the year ended December 31, 2014, we recognized a loss on modification and extinguishment of debt of $0.9 million. The loss consists of $0.3 million of arrangement and amendment fees and other fees and expenses incurred in connection with the amendment of our senior secured credit facilities and $0.6 million related to the non-cash write off of unamortized debt issuance costs and original issue discount associated with the portion of our original term loans which were extinguished. Debt Issuance Costs As of December 31, 2015 and December 31, 2014, we had $14.5 million and $28.6 million, respectively, of unamortized debt issuance costs. In April 2015, the FASB issued an accounting standards update related to the presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The Company has early adopted this update and the impact is reflected in the current and prior periods presented. Therefore, debt issuance costs are reflected as direct deduction from the debt liability included in Long-term debt obligations in our Consolidated Balance Sheets. For the year ended December 31, 2015, we capitalized $5.9 million of debt issuance costs incurred in connection with our debt refinancing. For the year ended December 31, 2014, we capitalized $1.5 million of debt issuance costs incurred in connection with the amendment of our prior credit facilities. For the years ended December 31, 2015, 2014 and 2013, amortization of debt issuance costs was $4.7 million, $8.1 million and $7.3 million, respectively. Amortization of debt issuance costs was included in Interest expense in our Consolidated Statements of Operations for each of the periods presented. |
MEMBERSHIP DEFICIT
MEMBERSHIP DEFICIT | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | ||
MEMBERSHIP DEFICIT | 12. MEMBERSHIP DEFICIT During the six months ended July 1, 2016, DJO issued 43,086 shares of its common stock upon the net exercise of vested stock options that had been granted to current and former employees in 2006 in exchange for options that had previously been granted in the predecessor company to DJO (“Rollover Options”). Our stock incentive plan permits participants to exercise stock options using a net exercise method. In a net exercise, we withhold from the total number of shares that otherwise would be issued to a participant upon exercise of the stock option such number of shares having a fair market value at the time of exercise equal to the aggregate option exercise price and applicable income tax withholdings, and remit the remaining shares to the participant. The current and former employees exercised these Rollover Options for a total of 312,925 shares of DJO’s common stock, from which we withheld 269,839 shares to cover $4.4 million of aggregate option exercise price and income tax withholdings and issued the remaining 43,086 shares. | 13. MEMBERSHIP DEFICIT During the year ended December 31, 2015, DJO issued 8,848 shares of its common stock upon the net exercise of vested stock options that had been granted to an employee in 2006 in exchange for options that had previously been granted in the predecessor company to DJO (Rollover Options). Our stock incentive plan permits participants to exercise stock options using a net exercise method. In a net exercise, we withhold from the total number of shares that otherwise would be issued to a participant upon exercise of the stock option such number of shares having a fair market value at the time of exercise equal to the aggregate option exercise price and applicable income tax withholdings, and remit the remaining shares to the participant. The employee exercised these Rollover Options for a total of 30,529 shares of DJO’s common stock, from which we withheld 21,681 shares to cover $0.4 million of aggregate option exercise price and income tax withholdings and issued the remaining 8,848 shares. Additionally, during the year ended December 31, 2015, DJO issued 667 shares of its common stock upon the exercise of stock options. Net proceeds from the share sales were contributed by DJO to us, and are included in Member capital in our Consolidated Balance Sheet as of December 31, 2015. During the year ended December 31, 2014, DJO issued 115,693 shares of its common stock upon the net exercise of vested stock options that had been granted to two former members of DJO’s Board of Directors in 2006 and to employees in 2007 in exchange for options that had previously been granted in the predecessor company to DJO (“Rollover Options”). Our stock incentive plan permits participants to exercise stock options using a net exercise method. In a net exercise, we withhold from the total number of shares that otherwise would be issued to a participant upon exercise of the stock option such number of shares having a fair market value at the time of exercise equal to the aggregate option exercise price and applicable income tax withholdings, and remit the remaining shares to the participant. The two former directors and employees exercised these Rollover Options for a total of 507,088 shares of DJO’s common stock, from which we withheld 391,395 shares to cover $6.5 million of aggregate option exercise price and income tax withholdings and issued the remaining 115,693 shares. Additionally, during the year ended December 31, 2014, DJO issued 6,447 shares of its common stock upon the exercise of stock options. Net proceeds from the share sales were contributed by DJO to us, and are included in Member capital in our Consolidated Balance Sheet as of December 31, 2014. During the year ended December 31, 2013, DJO issued 72,151 shares of common stock upon the net exercise of Rollover Options. During the year ended December 31, 2013, the net exercise method was employed by the participants to exercise Rollover Options to acquire 221,057 shares of our common stock; we withheld 148,906 of the shares subject to the Rollover Options to cover $2.5 million of aggregate option exercise price and income tax withholdings and issued the remaining 72,151 shares to the participants. Additionally, during the year ended December 31, 2013, we entered into an agreement to repurchase Rollover Options from our former chief financial officer, upon her departure, which cancelled vested Rollover Options for 313,681 shares of common stock held by her. The $2.0 million amount to be paid represents the excess of the fair market value of the shares over the exercise price of the options. This amount is included as a reduction to Member capital in our Consolidated Balance Sheet as of December 31, 2013. The proceeds from the DJO sales of shares were used for working capital purposes. All such sales were subject to execution of a stockholder agreement including certain rights and restrictions (See Note 17). |
STOCK OPTION PLANS AND STOCK-BA
STOCK OPTION PLANS AND STOCK-BASED COMPENSATION | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
STOCK OPTION PLANS AND STOCK-BASED COMPENSATION | 11. STOCK OPTION PLANS AND STOCK-BASED COMPENSATION Stock Option Plan We have one active equity compensation plan, the DJO 2007 Incentive Stock Plan (2007 Plan) under which we are authorized to grant awards of restricted and unrestricted stock, options, and other stock-based awards based on the shares of common stock of our indirect parent, DJO, subject to adjustment in certain events. The total number of shares available to grant under the 2007 Plan is 10,575,529. Options issued under the 2007 Plan can be either incentive stock options or non-qualified stock options. The exercise price of stock options granted will not be less than 100% of the fair market value of the underlying shares on the date of grant and the options will expire no more than ten years from the date of grant. In September 2015, all outstanding options granted to employees between 2008 and 2011 were amended to modify the vesting terms of the portion of the options which vest on achievement of a minimum multiple of invested capital (MOIC) from a MOIC of 2.25 for one-third of the options and a MOIC of 2.5 for an additional one-third of the options to a single MOIC vesting component covering two-thirds of the options with the terms described below. As amended, the options granted between 2008 and 2011 vest as follows: (i) one-third of each stock option grant vests over a specified period of time contingent solely upon the option holder’s continued employment or service with us (Time-Based Options); and, (ii) two-thirds of each stock option grant will vest upon achieving MOIC with respect to Blackstone’s aggregate investment in DJO’s capital stock, to be achieved by Blackstone following a liquidation of all or a portion of its investment in DJO’s capital stock (Market Return Options). The Market Return Options provide for vesting within a range of achievement of a MOIC multiple between 1.5 and 2.25. If Blackstone sells all or a portion of its equity interests in DJO while the options are outstanding, then the unvested Market Return Options will vest and become exercisable as follows: 1) 25% of the options will vest and become exercisable if Blackstone realizes a MOIC of 1.5 times its equity investment in DJO; 2) 100% of the options will vest and become exercisable if Blackstone realizes a MOIC of at least 2.25 times its equity investment in DJO; and 3) if Blackstone realizes a MOIC of greater than 1.5 times its equity investment but less than 2.25 times its equity investment, then 25% of the options will vest and become exercisable and a percentage of the remaining unvested options will vest and become exercisable with such percentage equal to a fraction, the numerator of which is the actual MOIC realized by Blackstone, less 1.5 and the denominator of which is 0.75. In July 2015, all outstanding options granted to employees in 2012 and later years were amended to modify the MOIC vesting provision as described below. These options vest in four equal installments beginning with the year of grant and for each of the three calendar years following the year of grant, with each such installment vesting only if the final reported financial results for such year show that the Adjusted EBITDA for such year equaled or exceeded the Adjusted EBITDA amount in the financial plan approved by DJO’s Board of Directors for such year (Performance Options). In the event that the Adjusted EBITDA in any of such four years falls short of the amount of Adjusted EBITDA in the financial plan for that year, the installment that did not therefore vest at the end of such year shall be eligible for subsequent vesting at the end of the four year vesting period if the cumulative Adjusted EBITDA for such four years equals or exceeds the cumulative Adjusted EBITDA in the financial plans for such four years and the Adjusted EBITDA in the fourth vesting year equals or exceeds the Adjusted EBITDA in the financial plan for such year. In addition, as amended in July 2015, such options also provide that in the event Blackstone achieves the same MOIC requirement described above for the Market Return Options, any unvested installments from prior years and all installments for future years shall thereupon vest. In February 2013, 310,000 options previously granted to new employees in 2012 were amended to convert one-third of such options into Time-Based Options, with the remaining two-thirds continuing to be Performance Options. Additionally, all 2012 Performance Options were amended to allow for vesting of the 2012 Adjusted EBITDA tranche if the 2013 Adjusted EBITDA results equal or exceed an enhanced amount of Adjusted EBITDA over the amount reflected in the 2013 financial plan. The 2013 Adjusted EBITDA results were not met. In February 2014, all 2012 and 2013 Performance Options were amended to allow for vesting of the 2012 and 2013 Adjusted EBITDA tranches if the 2014 Adjusted EBITDA results equaled or exceeded an enhanced amount of Adjusted EBITDA reflected in the 2014 financial plan. Because the required 2014 Adjusted EBITDA results were not achieved, those tranches did not vest. Options granted in 2013 and 2014 to existing employees had the same terms as the Performance Options described above and options granted to new employees in 2013 and 2014 had the same terms as the options amended in February 2013. In 2013, 2014, 2015 and 2016, options were granted to employees following the net exercise of the options they received in 2007 in exchange for options that had previously been granted in DJO’s predecessor company (Rollover Options), which were scheduled to expire in 2013, 2014, 2015 and 2016, respectively. These new options were fully vested on the date of grant and have a term of ten years (Vested Options). Except for options granted to the Chairman of the Board and two other board members as described below, options are typically granted annually to members of our Board of Directors who are not affiliates of Blackstone (referred to as Director Service Options). The Director Service Options vest in increments of 33 1/3% per year on each of the first through third anniversary dates of the grant date, contingent upon the optionee’s continued service as a director. The options granted to the Chairman of the Board and the two other board members vest as follows: one-third of the stock option grant vests in increments of 33 1/3% per year on each of the first through third anniversary dates from the grant date contingent upon the optionee’s continued service as a director; and, as amended in July 2015, two-thirds of the stock option grant will vest in the same manner as the Market Return Options. Stock-Based Compensation During the six months ended July 1, 2016, the compensation committee granted 667,818 options to employees, of which 426,998 were Market Return Options, 66,002 were Time-Based Options and 174,818 were Vested Options. Additionally, the compensation committee granted 13,800 Director Service Options to members of the Board of Directors. The weighted average grant date fair value of the Time-Based Options, Director Service Options and Vested Options granted during the six months ended July 1, 2016 was $5.99, $5.99, and $5.25 respectively. During the six months ended June 27, 2015, the compensation committee granted 593,621 options to employees, of which 444,169 were Performance Options, 128,331 were Time-Based Options and 21,121 were Vested Options. Additionally, the compensation committee granted 23,000 Director Service Options to members of the Board of Directors. The weighted average grant date fair values of the Time-Based Options, the Vested Options, and the Director Service Options, granted during the six months ended June 27, 2015 were $6.07, $5.27, and $6.92, respectively. The fair value of each option award is estimated on the date of grant, or modification, using the Black-Scholes option pricing model for service based awards, and a binomial model for market based awards. In estimating fair value for options issued under the 2007 Plan, expected volatility was based on historical volatility of comparable publicly-traded companies. As our historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term, we used the simplified method. Expected life is calculated in two tranches based on the employment level defined as executive or employee. The risk-free rate used in calculating fair value of stock options for periods within the expected term of the option is based on the U.S. Treasury yield bond curve in effect on the date of grant. The following table summarizes certain assumptions we used to estimate the fair value of the Time-Based Options, the Vested Options and the Director Service Options granted: Three Months Ended Six Months Ended July 1, June 27, 2015 July 1, June 27, Expected volatility 33.3 % 33.3 % 33.3 % 33.3 % Risk-free interest rate 1.2%-1.5 % 1.8 % 1.2%-1.6 % 1.5%-2.0 % Expected years until exercise 5.2-6.6 6.5 5.2-6.6 5.1-8.3 Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % We recorded non-cash stock-based compensation expense during the periods presented as follows (in thousands): Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Cost of sales $ 31 $ 31 $ 61 $ 61 Operating expenses: Selling, general and administrative 1,146 506 1,318 1,085 Research and development 139 2 142 6 $ 1,316 $ 539 $ 1,521 $ 1,152 We have determined that it is not probable that we will meet the Adjusted EBITDA targets related to the Performance Options granted. As such, we did not recognize expense for any of the options which had the potential to vest in 2016. Additionally, we have not recognized expense for any of the options which have the potential to vest based on Adjusted EBITDA for 2017, and 2018 as some of these targets have not yet been established and we are unable to assess the probability of achieving such targets. Accordingly, during each of the periods presented above we recognized stock-based compensation expense only for the Time-Based Options, the Vested Options and the Director Service Options. In each of the periods presented above, we recognized stock-based compensation expense only for Time-Based Options granted to employees, as the performance components of the Market Return Options are not deemed probable at this time. Stock based compensation expense for options granted to non-employees was not significant to the Company for all periods presented, and was included in Selling, general and administrative expense in our Unaudited Condensed Consolidated Statements of Operations. | 14. STOCK OPTION PLANS AND STOCK-BASED COMPENSATION Stock Option Plan We have one active equity compensation plan, the DJO 2007 Incentive Stock Plan (2007 Plan) under which we are authorized to grant awards of restricted and unrestricted stock, options, and other stock-based awards based on the shares of common stock of our indirect parent, DJO, subject to adjustment in certain events. The total number of shares available to grant under the 2007 Plan is 10,575,529. Options issued under the 2007 Plan can be either incentive stock options or non-qualified stock options. The exercise price of stock options granted will not be less than 100% of the fair market value of the underlying shares on the date of grant and will expire no more than ten years from the date of grant. In September 2015, all outstanding options granted to employees between 2008 and 2011 were amended to modify the vesting terms of the portion of the options which vest on achievement of a minimum multiple of invested capital (MOIC) from a MOIC of 2.25 for one-third of the options and a MOIC of 2.5 for an additional one-third of the options to a single MOIC vesting component covering two-thirds of the options with the terms described below. As amended, the options granted between 2008 and 2011 vest as follows: (i) one-third of each stock option grant vests over a specified period of time contingent solely upon the option holder’s continued employment or service with us (Time-Based Options); and, (ii) two-thirds of each stock option grant will vest upon achieving MOIC with respect to Blackstone’s aggregate investment in DJO’s capital stock, to be achieved by Blackstone following a liquidation of all or a portion of its investment in DJO’s capital stock (Market Return Options). The Market Return Options provide for vesting within a range of achievement of a MOIC multiple between 1.5 and 2.25. If Blackstone sells all or a portion of its equity interests in DJO while the options are outstanding, then the unvested Market Return Options will vest and become exercisable as follows: 1) 25% of the options will vest and become exercisable if Blackstone realizes a MOIC of 1.5 times its equity investment in DJO; 2) 100% of the options will vest and become exercisable if Blackstone realizes a MOIC of at least 2.25 times its equity investment in DJO; and 3) if Blackstone realizes a MOIC of greater than 1.5 times its equity investment but less than 2.25 times its equity investment, then 25% of the options will vest and become exercisable and a percentage of the remaining unvested options will vest and become exercisable with such percentage equal to a fraction, the numerator of which is the actual MOIC realized by Blackstone, less 1.5 and the denominator of which is 0.75. In July 2015, all outstanding options granted to employees in 2012 and later years were amended to modify the MOIC vesting provision as described below. Options granted to employees in 2012 vest in four equal installments beginning in 2012 and for each of the three calendar years following 2012, with each such installment vesting only if the final reported financial results for such year show that the Adjusted EBITDA for such year equaled or exceeded the Adjusted EBITDA amount in the financial plan approved by DJO’s Board of Directors for such year (Performance Options). In the event that the Adjusted EBITDA in any of such four years falls short of the amount of Adjusted EBITDA in the financial plan for that year, the installment that did not therefore vest at the end of such year shall be eligible for subsequent vesting at the end of the four year vesting period if the cumulative Adjusted EBITDA for such four years equals or exceeds the cumulative Adjusted EBITDA in the financial plans for such four years and the Adjusted EBITDA in the fourth vesting year equals or exceeds the Adjusted EBITDA in the financial plan for such year. In addition, as amended in July 2015, such options also provide that in the event Blackstone achieves the same MOIC requirement described above for the Market Return Options, any unvested installments from prior years and all installments for future years shall thereupon vest. In February 2013, 310,000 options previously granted to new employees in 2012 were amended to convert one-third of such options into Time-Based Options, with the remaining two-thirds continuing to be Performance Options. Additionally, all 2012 Performance Options were amended to allow for vesting of the 2012 Adjusted EBITDA tranche if the 2013 Adjusted EBITDA results equal or exceed an enhanced amount of Adjusted EBITDA over the amount reflected in the 2013 financial plan. The 2013 Adjusted EBITDA results were not met. In February 2014, all 2012 and 2013 Performance Options were amended to allow for vesting of the 2012 and 2013 Adjusted EBITDA tranches if the 2014 Adjusted EBITDA results equaled or exceeded an enhanced amount of Adjusted EBITDA reflected in the 2014 financial plan. Because the required 2014 Adjusted EBITDA results were not achieved, those tranches did not vest. Options granted in 2013 and 2014 to existing employees had the same terms as the Performance Options described above and options granted to new employees in 2013 and 2014 had the same terms as the options amended in February 2013. In 2014 and 2015, options were granted to employees following the net exercise of their Rollover Options which were scheduled to expire in 2014 and 2015, respectively. These new options were fully vested on the date of grant and have a term of ten years (Vested Options). Except for options granted to the Chairman of the Board and two other board members as described below, options are typically granted annually to members of our Board of Directors who are not affiliates of Blackstone (referred to as Director Service Options). The Director Service Options vest in increments of 33 1/3% per year on each of the first through third anniversary dates of the grant date, contingent upon the optionee’s continued service as a director. The options granted to the Chairman of the Board and the two other board members vest as follows: one-third of the stock option grant vests in increments of 33 1/3% per year on each of the first through third anniversary dates from the grant date contingent upon the optionee’s continued service as a director; and, as amended in July 2015, two-thirds of the stock option grant will vest in the same manner as the Market Return Options. Stock-Based Compensation During the year ended December 31, 2015, the compensation committee granted 1,343,621 options to employees, of which 1,065,002 were Performance Options, 257,498 were Time-Based Options and 21,121 were Vested Options. Additionally, the compensation committee granted 23,000 Director Performance Options to members of the Board of Directors. The weighted average grant date fair values of the Time-Based Options, Vested Options and Director Options granted during the year ended December 31, 2015 were $6.09, $5.27 and $6.92, respectively During the year ended December 31, 2014, the compensation committee granted 1,747,268 options to employees, of which 1,221,162 were Performance Options, 498,338 were Time-Based Options and 27,768 were Vested Options. The weighted average grant date fair values of the Time-Based Options and the Vested Options granted during the year ended December 31, 2014 were $6.05 and $5.28, respectively. During the year ended December 31, 2013, the compensation committee granted 1,082,397 options to employees, of which 768,677 were Performance Options, 243,323 were Time-Based Options and 70,397 were 2013 Vested Options. Additionally, the compensation committee granted 100,000 options to one board member and 13,800 Director Service Options to certain members of the Board of Directors. The weighted average grant date fair values of the Time-Based Options, the 2013 Vested Options and the Director Service Options granted during the year ended December 31, 2013 were $5.99, $5.23 and $6.02, respectively. The fair value of each option award is estimated on the date of grant, or modification, using the Black-Scholes option pricing model for service based awards, and a binomial model for market based awards. In estimating fair value for options issued under the 2007 Plan, expected volatility was based on historical volatility of comparable publicly-traded companies. As our historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term, we used the simplified method. Expected life is calculated in two tranches based on the employment level defined as executive or employee. The risk-free rate used in calculating fair value of stock options for periods within the expected term of the option is based on the U.S. Treasury yield bond curve in effect on the date of grant. The following table summarizes certain assumptions we used to estimate the fair value of the Time-Based Options, the Vested Options and the Director Service Options of stock options granted during the years ended December 31, 2015, 2014, and 2013: Year Ended December 31, 2015 2014 2013 Expected volatility 33 % 31.7-33.4 % 33.4-35.1 % Risk-free interest rate 1.5-2.0 % 1.7-2.2 % 0.7-2.0 % Expected term until exercise 5.1-8.3 5.0-6.4 5.0-6.3 Expected dividend yield 0.0 % 0.0 % 0.0 % We recorded non-cash stock-based compensation expense during the periods presented as follows (in thousands): Year Ended December 31, 2015 2014 2013 Cost of goods sold $ 90 $ 82 $ 52 Operating expenses: Selling, general and administrative 1,696 1,782 2,049 Research and development 19 5 54 $ 1,805 $ 1,869 $ 2,155 We have determined that it is not probable that we will meet the Adjusted EBITDA targets related to the Performance Options granted. As such, we did not recognize expense for any of the options which had the potential to vest in 2015. Additionally, we have not recognized expense for any of the options which have the potential to vest based on Adjusted EBITDA for 2016, 2017 and 2018, as some of these targets have not yet been established and we are unable to assess the probability of achieving such targets. Accordingly, we recognized stock-based compensation expense only for the Time-Based Options, the Vested Options and the Director Service Options granted in 2013 or 2014. Stock based compensation expense for options granted to non-employees was not significant to the Company for all periods presented, and was included in Selling, general and administrative expense in our Consolidated Statements of Operations. A summary of option activity under the 2007 Plan is presented below: Number of Shares Weighted- Average Exercise Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2014 9,239,166 $ 16.11 6.3 $ 3,197,576 Granted 1,377,121 $ 16.46 Exercised (31,196 ) $ 9.00 Forfeited or expired (1,656,232 ) $ 16.46 Outstanding at December 31, 2015 8,928,859 $ 16.13 5.9 $ 2,964,949 Vested or expected to vest at December 31, 2015 5,154,858 $ 15.88 4.9 $ 2,964,949 Exercisable at December 31, 2015 2,865,982 $ 15.43 3.2 $ 2,964,949 The Company’s stock incentive plan permits optionees to exercise stock options using a net exercise method. In a net exercise, the Company withholds from the total number of shares that otherwise would be issued to an optionee upon exercise of the stock option such number of shares having a fair market value at the time of exercise equal to the option exercise price and applicable income tax withholdings and remits the remaining shares to the optionee. The following table provides information regarding the use of the net exercise method during the periods presented: Year Ended December 31, 2015 2014 Options exercised 30,529 507,088 Shares withheld 21,681 391,395 Shares issued 8,848 115,693 Average market value per share withheld $ 16.46 $ 16.46 Aggregate market value of shares withheld (in thousands) $ 357 $ 6,442 As of December 31, 2015, total unrecognized stock-based compensation expense related to unvested stock options granted under the 2007 Plan, excluding options subject to the performance components of the Market Return Options, was $1.8 million, net of expected forfeitures. We anticipate this expense to be recognized over a weighted-average period of approximately three years. Compensation expense associated with the Market Return and Enhanced Market Return Options granted under the 2007 Plan, with the exception of those that were issued in connection with a modification, will be recognized only to the extent achievement of the performance components are deemed probable. |
INCOME TAXES
INCOME TAXES | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
INCOME TAXES | 10. INCOME TAXES Income taxes for the interim periods presented have been included in our Unaudited Condensed Consolidated Financial Statements on the basis of an estimated annual effective tax rate, adjusted for discrete items. The income tax expense for these periods differed from the amounts which would have been recorded using the U.S. statutory rate due primarily to certain valuation allowances provided against deferred tax assets, the impact of nondeductible expenses, foreign taxes, deferred taxes on the assumed repatriation of foreign earnings and tax amortization of goodwill and indefinite-lived intangibles. For the three and six months ended July 1, 2016, we recorded income tax provision of $3.6 million and $9.0 million on pre-tax losses of $20.4 million and $52.9 million, resulting in negative effective tax rates of 17.5% and 17.0%, respectively. For the three and six months ended June 27, 2015, we recorded income tax provision of approximately $5.9 million and $7.9 million on pre-tax losses of $86.8 million and $124.0 million, resulting in negative effective tax rates of 6.8% and 6.3%, respectively. Our tax rates are at times negative because our U.S. federal tax losses, and certain state tax losses, are unavailable to offset income taxes arising in other states and in the foreign jurisdictions where we are subject to tax. We record net deferred tax assets to the extent we conclude that it is more likely than not that the related deferred tax assets will be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. At this time, we cannot conclude that it is more likely than not that the benefit from certain U.S. federal and state net operating loss carryforwards will be available to offset future taxable income. Accordingly, we have provided a valuation allowance of $11.4 million and $26.1 million on the deferred tax assets related to the net operating loss carry forwards generated in the three and six months ended July 1, 2016. If our assumptions change and we determine that it is more likely than not that we will be able to realize the deferred tax assets related to these net operating losses, reversal of the valuation allowances we have recorded against those deferred tax assets will be recognized as a reduction of income tax expense. The establishment of valuation allowances does not preclude us from utilizing our loss carryforwards or other deferred tax assets in the future and does not impact our cash resources. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years before 2011. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward and make adjustments up to the amount of the net operating loss or credit carryforward amount. At July 1, 2016, our gross unrecognized tax benefits were $16.0 million reflecting an increase of $1.1 million from the unrecognized amount of $14.9 million at December 31, 2015. As of July 1, 2016, we have $3.1 million accrued for interest and penalties related to these unrecognized tax benefits. To the extent all or a portion of our gross unrecognized tax benefits are recognized in the future, no U.S. federal tax benefit for related state income tax deductions would result due to the existence of the U.S. federal valuation allowance. We anticipate that approximately $0.9 million aggregate of unrecognized tax benefits, each of which are individually immaterial, will decrease in the next twelve months due to the expiration of statutes of limitation. As of July 1, 2016, we have unrecognized various foreign and U.S. state tax benefits of approximately $6.1 million, which, if recognized, would impact our effective tax rate in future periods. | 15. INCOME TAXES The components of loss from continuing operations before income tax provision consist of the following (in thousands): Year Ended December 31, 2015 2014 2013 U.S. operations $ (184,524 ) $ (133,463 ) $ (189,333 ) Foreign operations 14,273 17,439 17,323 $ (170,251 ) $ (116,024 ) $ (172,010 ) The income tax provision from continuing operations consists of the following (in thousands): Year Ended December 31, 2015 2014 2013 Current income taxes: U.S. federal $ 597 $ (309 ) $ 840 U.S. state 1,042 310 429 Foreign 4,677 5,989 6,373 Total current income taxes 6,316 5,990 7,642 Deferred income taxes: U.S. federal 6,095 (6,579 ) 9,610 U.S. state 919 (2,120 ) 767 Foreign (1,074 ) (2,011 ) (568 ) Total deferred income taxes 5,940 (10,710 ) 9,809 Total income tax provision (benefit) $ 12,256 $ (4,720 ) $ 17,451 The difference between the income tax provision (benefit) derived by applying the U.S. federal statutory income tax rate of 35% and the recognized income tax provision is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Income tax provision (benefit) derived by applying the U.S. federal statutory income tax rate to loss before income taxes $ (59,586 ) $ (40,595 ) $ (60,217 ) Add (deduct) the effect of: State tax benefit, net (4,996 ) (2,564 ) (3,494 ) Change in state effective tax rates (604 ) (803 ) (687 ) Foreign earnings repatriation (622 ) (1,646 ) 2,678 Unrecognized tax benefits 1,678 949 2,767 Goodwill impairment — — 16,644 Valuation allowance 72,655 35,503 64,547 Research tax credit (758 ) (647 ) (1,249 ) Equity compensation benefit — — (2,864 ) Permanent differences and other, net (2,726 ) 4,912 (456 ) Foreign rate differential 5,875 — — Other 1,340 171 (218 ) $ 12,256 $ (4,720 ) $ 17,451 The components of deferred income tax assets and liabilities are as follows (in thousands): December 31, 2015 December 31, 2014 Deferred tax assets: Net operating loss carryforwards $ 264,343 $ 214,319 Receivables reserve 19,654 26,709 Other 43,722 39,284 Gross deferred tax assets 327,719 280,312 Valuation allowance (223,385 ) (137,520 ) Net deferred tax assets 104,334 142,792 Deferred tax liabilities: Intangible assets (303,993 ) (343,370 ) Foreign earnings repatriation (11,730 ) (13,012 ) Other (1,225 ) (3,987 ) Gross deferred tax liabilities (316,948 ) (360,369 ) Net deferred tax liabilities $ (212,614 ) $ (217,577 ) At December 31, 2015, we maintain federal and state net operating loss carryforwards of $695.1 million and $448.8 million respectively, which expire over a period of 1 to 20 years. Our foreign net operating loss carryforwards of $11.5 million will begin to expire in 2022. At December 31, 2015 and 2014 we had gross deferred tax assets of $327.7 million and $280.3 million, respectively, which we reduced by valuation allowances of $223.4 million and $137.5 million, respectively. We do not intend to permanently reinvest the earnings of foreign operations. Accordingly, we recorded a deferred tax (income) expense of $(0.6) million, $(0.6) million, and $1.8 million for the years ended December 31, 2015, 2014 and 2013, respectively, for unrepatriated foreign earnings in those years. The Company qualifies for a tax holiday in Tunisia. Without the tax holiday, the Company would have tax expense of $0.3 million in Tunisia in 2015. The tax incentive will last at least through 2018. We file income tax returns in U.S. federal, state and foreign jurisdictions. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years before 2010. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of the net operating loss or credit carryforward amount. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 13,905 $ 14,469 $ 12,342 Additions based on tax positions related to current year 922 1,502 1,531 Additions for tax positions related to prior years 194 354 975 Reduction due to lapse of statute of limitations (120 ) (709 ) (379 ) Reductions for settlements of tax positions — (1,711 ) — Balance, end of year $ 14,901 $ 13,905 $ 14,469 To the extent all or a portion of our gross unrecognized tax benefits are recognized in the future, no U.S. federal tax benefit for related state income tax deductions would result due to the existence of a U.S. federal valuation allowance. We anticipate that approximately $0.4 million of uncertain tax positions, each of which are individually immaterial, will decrease in the next twelve months due to the expiration of the statutes of limitations. We have various unrecognized tax benefits totaling approximately $5.9 million, which, if recognized, would impact our effective tax rate in future periods. We recognized interest and penalties of $0.4 million, $0.4 million, and $0.5 million in the years ended December 31, 2015, 2014 and 2013, respectively, which was included as a component of income tax benefit in our Consolidated Statements of Operations. As of December 31, 2015 and 2014, we have $2.7 million and $2.3 million, respectively, accrued for interest and penalties. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES California Qui Tam Action On October 11, 2013, we were served with a summons and complaint related to a qui tam action filed in U.S. District Court in Los Angeles, California in August 2012 and amended in December 2012 that names us as a defendant along with each of the other companies that manufactures and sells external bone growth stimulators for spinal applications. The case is captioned United States of America, et al.ex re. Doris Modglin and Russ Milko, v. DJO Global, Inc., DJO, LLC, DJO Finance LLC, Orthofix, Inc., Biomet, Inc., and EBI, LP., Case No. CV12-7152-MMM (JCGx) (C.D. Cal.). The plaintiffs, or relators, allege that the defendants have violated federal and state false claim acts by seeking reimbursement for bone growth stimulators for uses outside of the FDA approved indications for use for such products. The plaintiffs are seeking treble damages alleged to have been sustained by the United States and the states, penalties and attorney’s fees and costs. The federal government and all of the named states have declined to intervene in this case. We filed a motion to dismiss the second amended complaint, which motion was granted with leave to amend. Relators then filed a third amended complaint and we filed a motion to dismiss the third amended complaint and that motion has been granted without leave to amend as to the federal false claim act allegations. The Court declined jurisdiction over the remaining state claims. Relators have appealed the decision to the US Court of Appeals for the Ninth Circuit. Empi Investigation Our subsidiary, Empi, Inc., was served with a federal administrative subpoena dated May 11, 2015, issued by the Office of Inspector General for the U.S. Department of Defense (“OIG”) seeking a variety of documents primarily relating to the supply of home electrotherapy units and supplies by Empi to beneficiaries covered under medical insurance programs sponsored or administered by TRICARE, the Defense Health Agency and the Department of Defense. The subpoena sought discovery of documents for the period January 2010 through May 2015. The Company is cooperating with the U.S. Attorney’s Office in Minnesota (USAO), which is handling the investigation of issues related to the subpoena. We have produced responsive documents to the USAO and are fully cooperating in the investigation. We may need to devote significant time and resources to this inquiry and can give no assurances as to its final outcome, nor can the Company estimate a range of potential loss or whether the outcome will have a material adverse effect on our reputation, business, prospects, financial condition and results of operations. New Jersey Orthotics Investigation In July 2013 we were served with a subpoena under the Health Insurance Portability and Accountability Act seeking documents relating to the fitting of custom-fabricated or custom-fitted orthoses in the states of New Jersey, Washington and Texas. The subpoena was issued by the United States Attorney’s Office for the District of New Jersey in connection with an investigation of compliance with professional licensing statutes in those states relating to the practice of orthotics. We have supplied the documents requested under the subpoena. We cannot provide any assurance as to the outcome of the investigation or that any consequences will not have a material adverse effect on our reputation, business, prospects, financial condition and results of operations. | 16. COMMITMENTS AND CONTINGENCIES Operating Leases. Years Ending December 31, 2016 28,687 2017 17,947 2018 8,871 2019 6,577 2020 5,710 Thereafter 4,453 $ 72,245 Rental expense under operating leases totaled $18.0 million, $17.4 million, and $17.6 million, for the years ended December 31, 2015, 2014, and 2013, respectively. Scheduled increases in rent expense are amortized on a straight line basis over the life of the lease. Pain Pump Litigation Over the past 9 years, we were named in numerous product liability lawsuits in the U.S. involving our prior distribution of a disposable drug infusion pump product (pain pump) manufactured by two third-party manufacturers that was distributed through our Bracing and Vascular segment. We currently are a defendant in one U.S. case and a lawsuit in Canada which has been granted class action status for a class of approximately 45 claimants. We discontinued our sale of these products in the second quarter of 2009. These cases have been brought against the manufacturers and certain distributors of these pumps. All of these lawsuits allege that the use of these pumps with certain anesthetics for prolonged periods after certain shoulder surgeries or, less commonly, knee surgeries, has resulted in cartilage damage to the plaintiffs. Except for the payment by the Company of policy deductibles or self-insured retentions, our products liability carriers in three policy periods have paid the defense costs and settlements related to these claims, subject to reservation of rights to deny coverage for customary matters, including punitive damages and off-label promotion. We have engaged in settlement discussions with the Canadian plaintiffs and have reached an agreement in principal to settle these claims with a payment in the first quarter of 2017 in an amount that is covered in part by the remaining limits under the insurance policy for the applicable reporting period, with the balance to be paid by the Company, which amount is not material to the Company’s financial position or the results of its operations. BGS Qui Tam Action We are a defendant in a qui tam action filed in Federal Court in Boston, Massachusetts, captioned United States, ex rel. Bierman v. Orthofix International, N.V. et al., in which the relator, or whistleblower, names us and each other company engaged in the external bone growth stimulator industry as defendants. The case was filed under seal in March 2005 and unsealed in March 2009, during which time the government investigated the claims made by relator and decided not to intervene in the case. The government continued its investigation of DJO for several years following the unsealing of the case but did not ultimately bring any criminal or civil charges against us relating to the investigation. The relator alleges that from 1993 to the present, the defendants have engaged in Medicare fraud and violated federal and state false claims acts by seeking reimbursement for bone growth stimulation devices as purchased items rather than rental items. The relator also alleges that the defendants are engaged in other marketing practices constituting violations of the federal and various state false claim and anti-kickback statutes. Orthofix International, N.V. has settled with the relator and we understand that the other three defendants have reached settlements. The case continues against us. While we believe the case against us has no merit, we can make no assurances as to the final outcome of the case. California Qui Tam Action On October 11, 2013, we were served with a summons and complaint related to a qui tam action filed in U.S. District Court in Los Angeles, California in August 2012 and amended in December 2012 that names us as a defendant along with each of the other companies that manufactures and sells external bone growth stimulators for spinal applications. The case is captioned United States of America, et al.ex re. Doris Modglin and Russ Milko, v. DJO Global, Inc., DJO, LLC, DJO Finance LLC, Orthofix, Inc., Biomet, Inc., and EBI, LP., Case No. CV12-7152-MMM (JCGx) (C.D. Cal.). The plaintiffs, or relators, allege that the defendants have violated federal and state false claim acts by seeking reimbursement for bone growth stimulators for uses outside of the FDA approved indications for use for such products. The plaintiffs are seeking treble damages alleged to have been sustained by the U.S. and the states, penalties and attorney’s fees and costs. The federal government and all of the named states have declined to intervene in this case. We filed a motion to dismiss the second amended complaint, which motion was granted with leave to amend. Relators then filed a third amended complaint and we filed a motion to dismiss the third amended complaint and that motion has been granted without leave to amend as to the federal false claim act allegations. The Court declined jurisdiction over the remaining state claims. Relators have appealed the decision to the US Court of Appeals for the 9 th Empi Investigation Our subsidiary, Empi, Inc., was served with a subpoena dated May 11, 2015, issued by the Office of Inspector General (OIG) for the U.S. Department of Defense seeking a variety of documents primarily relating to the supply of home electrotherapy units and supplies by Empi to beneficiaries covered under medical insurance programs sponsored or administered by TRICARE, the Defense Health Agency and the Department of Defense. The relevant time period for these documents is from January 1, 2010 to the date of the subpoena. We are in the process of collecting and producing responsive documents to the OIG. We have also commenced discussions with the OIG regarding possible settlement of this investigation, but the potential range of loss is yet to be determined. We are in the process of collecting and producing responsive documents to the OIG. We have also commenced discussions with the OIG regarding possible settlement of this investigation, but the potential range of loss is yet to be determined. We cannot provide any assurance as to the outcome of the investigation by the OIG or that any consequences will not have a material adverse effect on our reputation, business, prospects, financial condition and results of operations. New Jersey Orthotics Investigation In July 2013 we were served with a subpoena under HIPAA seeking documents relating to the fitting of custom-fabricated or custom-fitted orthoses in the States of New Jersey, Washington and Texas. The subpoena was issued by the United States Attorney’s Office for the District of New Jersey in connection with an investigation of compliance with professional licensing statutes in those states relating to the practice of orthotics. We have supplied the documents requested under the subpoena. We cannot provide any assurance as to the outcome of the investigation or that any consequences will not have a material adverse effect on our reputation, business, prospects, financial condition and results of operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS Blackstone Management Partners LLC (BMP) has agreed to provide certain monitoring, advisory and consulting services to us for an annual monitoring fee equal to the greater of $7.0 million or 2% of consolidated EBITDA as defined in the Transaction and Monitoring Fee Agreement, payable in the first quarter of each year. The monitoring fee agreement will continue until the earlier of November 2019, or such date as DJO and BMP may mutually determine. DJO has agreed to indemnify BMP and its affiliates, directors, officers, employees, agents and representatives from and against all liabilities relating to the services contemplated by the Transaction and Monitoring Fee Agreement and the engagement of BMP pursuant to, and the performance of BMP and its affiliates of the services contemplated by, the Transaction and Monitoring Fee Agreement. At any time in connection with or in anticipation of a change of control of DJO, a sale of all or substantially all of DJO’s assets or an initial public offering of common stock of DJO, BMP may elect to receive, in lieu of remaining annual monitoring fee payments, a single lump sum cash payment equal to the then-present value of all then-current and future annual monitoring fees payable under the Transaction and Monitoring Fee Agreement, assuming a hypothetical termination date of the agreement to be November 2019. For each of the three and six month periods presented, we expensed $1.75 million and $3.5 million, respectively, related to the annual monitoring fee, which is recorded as a component of Selling, general and administrative expense in the Consolidated Statements of Operations. | 17. RELATED PARTY TRANSACTIONS Blackstone Management Partners LLC (BMP) has agreed to provide certain monitoring, advisory and consulting services to us for an annual monitoring fee equal to the greater of $7.0 million or 2% of consolidated EBITDA as defined in the Transaction and Monitoring Fee Agreement, payable in the first quarter of each year. The monitoring fee agreement will continue until the earlier of November 2019, or such date as DJO and BMP may mutually determine. DJO has agreed to indemnify BMP and its affiliates, directors, officers, employees, agents and representatives from and against all liabilities relating to the services contemplated by the Transaction and Monitoring Fee Agreement and the engagement of BMP pursuant to, and the performance of BMP and its affiliates of the services contemplated by, the Transaction and Monitoring Fee Agreement. At any time in connection with or in anticipation of a change of control of DJO, a sale of all or substantially all of DJO’s assets or an initial public offering of common stock of DJO, BMP may elect to receive, in lieu of remaining annual monitoring fee payments, a single lump sum cash payment equal to the then-present value of all then-current and future annual monitoring fees payable under the Transaction and Monitoring Fee Agreement, assuming a hypothetical termination date of the agreement to be November 2019. For each of the years presented, we expensed $7.0 million related to the annual monitoring fee, which is recorded as a component of Selling, general and administrative expense in the Consolidated Statements of Operations. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | ||
SEGMENT AND GEOGRAPHIC INFORMATION | 15. SEGMENT AND GEOGRAPHIC INFORMATION For the periods ended July 1, 2016 and June 27, 2015, we reported our business in four operating segments: Bracing and Vascular; Recovery Sciences; Surgical Implant and International. Bracing and Vascular Segment Our Bracing and Vascular segment, which generates its revenues in the United States, offers our rigid knee bracing products, orthopedic soft goods, cold therapy products, vascular systems, therapeutic shoes and inserts and compression therapy products, primarily under the DonJoy, ProCare, Aircast, Dr. Comfort, Bell-Horn and Exos brands. This segment also includes our OfficeCare channel, through which we maintain an inventory of soft goods and other products at healthcare facilities, primarily orthopedic practices, for immediate distribution to patients. The Bracing and Vascular segment primarily sells its products to orthopedic and sports medicine professionals, hospitals, podiatry practices, orthotic and prosthetic centers, home medical equipment providers and independent pharmacies. In 2014 we expanded our consumer channel to focus on marketing, selling and distributing our products, including bracing and vascular products, to professional and consumer retail customers and online. The bracing and vascular products sold through this channel are principally sold under the DonJoy Performance, Bell-Horn and Dr. Comfort brands. Recovery Sciences Segment Our Recovery Sciences segment, which generates its revenues in the United States, is divided into three main channels: • CMF • Chattanooga • Consumer Surgical Implant Segment Our Surgical Implant segment, which generates its revenues in the United States, develops, manufactures and markets a wide variety of knee, hip and shoulder implant products that serve the orthopedic reconstructive joint implant market. International Segment Our International segment, which generates most of its revenues in Europe, sells all of our products and certain third-party products through a combination of direct sales representatives and independent distributors. Information regarding our reportable business segments is presented below (in thousands). Segment results exclude the impact of amortization and impairment of goodwill and intangible assets, certain general corporate expenses, and charges related to various integration activities, as defined by management. The accounting policies of the reportable segments are the same as the accounting policies of the Company. We allocate resources and evaluate the performance of segments based on net sales, gross profit, operating income and other non-GAAP measures, as defined in our Credit Facilities. We do not allocate assets to reportable segments because a significant portion of our assets are shared by the segments. Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Net sales: Bracing and Vascular $ 131,751 $ 136,179 $ 255,967 $ 250,083 Recovery Sciences 38,449 40,102 75,024 74,627 Surgical Implant 42,575 28,071 85,625 54,997 International 80,077 75,550 155,142 147,706 $ 292,852 $ 279,902 $ 571,758 $ 527,413 Operating income: Bracing and Vascular $ 29,072 $ 31,497 $ 49,606 $ 52,393 Recovery Sciences 8,056 7,472 14,501 11,402 Surgical Implant 6,053 4,392 13,282 8,712 International 14,653 13,312 23,642 25,697 Expenses not allocated to segments and eliminations (36,290 ) (31,659 ) (70,025 ) (63,440 ) $ 21,544 $ 25,014 $ 31,006 $ 34,764 Geographic Area Following are our net sales by geographic area (in thousands): Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Net sales: United States $ 212,775 $ 204,352 $ 416,616 $ 379,707 Other Europe, Middle East and Africa 38,057 35,863 74,516 69,557 Germany 21,960 20,838 42,963 41,872 Australia and Asia Pacific 11,400 10,500 21,402 20,391 Canada 6,697 6,381 12,434 11,733 Latin America 1,963 1,968 3,827 4,153 $ 292,852 $ 279,902 $ 571,758 $ 527,413 | 18. SEGMENT AND GEOGRAPHIC INFORMATION For the years ended December 31, 2015, 2014 and 2013, we reported our business in four operating segments: Bracing and Vascular; Recovery Sciences; Surgical Implant and International. Bracing and Vascular Segment Our Bracing and Vascular segment, which generates its revenues in the United States, offers our rigid knee bracing products, orthopedic soft goods, cold therapy products, vascular systems, therapeutic shoes and inserts and compression therapy products, primarily under the DonJoy, ProCare, Aircast, Dr. Comfort, Bell-Horn and Exos brands. This segment also includes our OfficeCare channel, through which we maintain an inventory of soft goods and other products at healthcare facilities, primarily orthopedic practices, for immediate distribution to patients. The Bracing and Vascular segment primarily sells its products to orthopedic and sports medicine professionals, hospitals, podiatry practices, orthotic and prosthetic centers, home medical equipment providers and independent pharmacies. In 2014 we expanded our consumer channel to focus on marketing, selling and distributing our products, including bracing and vascular products, to professional and consumer retail customers and on-line. The bracing and vascular products sold through the channel will principally be sold under the DonJoy Performance, Bell-Horn and Doctor Comfort brands. Recovery Sciences Segment Our Recovery Sciences segment, which generates its revenues in the United States, is divided into three main channels: • CMF • Chattanooga • Consumer Surgical Implant Segment Our Surgical Implant segment, which generates its revenues in the United States, develops, manufactures and markets a wide variety of knee, hip and shoulder implant products that serve the orthopedic reconstructive joint implant market. International Segment Our International segment, which generates most of its revenues in Europe, sells all of our products and certain third party products through a combination of direct sales representatives and independent distributors. Information regarding our reportable business segments is presented below (in thousands). Segment results exclude the impact of amortization and impairment of goodwill and intangible assets, certain general corporate expenses, and charges related to various integration activities, as defined by management. The accounting policies of the reportable segments are the same as the accounting policies of the Company. We allocate resources and evaluate the performance of segments based on net sales, gross profit, operating income and other non-GAAP measures, as defined in the senior secured credit facilities. We do not allocate assets to reportable segments because a significant portion of our assets are shared by the segments. Year Ended December 31, 2015 2014 2013 Net sales: Bracing and Vascular $ 526,295 $ 504,590 $ 476,492 Recovery Sciences 156,194 157,485 158,110 Surgical Implant 134,843 100,139 87,088 International 296,295 325,315 299,094 $ 1,113,627 $ 1,087,529 $ 1,020,784 Operating income (loss): Bracing and Vascular $ 115,791 $ 102,933 $ 86,447 Recovery Sciences 29,035 33,863 37,689 Surgical Implant 25,531 12,712 8,669 International 48,578 62,304 57,515 Expenses not allocated to segments and eliminations (141,120 ) (147,376 ) (182,424 ) $ 77,815 $ 64,436 $ 7,896 Geographic Area Following are our net sales by geographic area (in thousands): Year Ended December 31, 2015 2014 2013 United States $ 817,332 $ 762,214 $ 721,690 Other Europe, Middle East, and Africa 141,638 156,339 139,252 Germany 80,982 91,754 88,236 Australia and Asia Pacific 40,717 39,990 35,025 Canada 23,966 26,481 27,035 Latin America 8,992 10,751 9,546 $ 1,113,627 $ 1,087,529 $ 1,020,784 Net sales are attributed to countries based on location of customer. In each of the years ended December 31, 2015, 2014 and 2013, no individual customer or distributor accounted for 10% or more of total annual net sales. Following are our long-lived assets by geographic area (in thousands): December 31, 2015 December 31, 2014 United States $ 106,058 $ 104,211 International 16,389 16,470 $ 122,447 $ 120,681 |
UNAUDITED QUARTERLY CONSOLIDATE
UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA | 19. UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA We operate our business on a manufacturing calendar, with our fiscal year always ending on December 31. Each quarter is 13 weeks, consisting of two four-week periods and one five-week period. Our first and fourth quarters may have more or fewer shipping days from year to year based on the days of the week on which holidays and December 31 fall. The following table presents our unaudited quarterly consolidated financial data (in thousands): Three months ended March 28, 2015 June 27, 2015 September 26, 2015 December 31, 2015 Net sales $ 247,511 $ 279,902 $ 278,263 $ 307,951 Operating income 9,750 25,014 22,480 20,571 Net loss from continuing operations (39,217 ) (92,685 ) (25,162 ) (25,443 ) Net loss attributable to DJOFL (35,526 ) (77,977 ) (177,838 ) (49,586 ) Three months ended March 29, 2014 June 28, 2014 September 27, 2014 December 31, 2014 Net sales $ 248,651 $ 278,289 $ 270,407 $ 290,182 Operating income (loss) 4,286 15,426 16,979 27,745 Net loss from continuing operations (38,415 ) (26,342 ) (28,516 ) (18,031 ) Net loss attributable to DJOFL (36,522 ) (25,434 ) (21,206 ) (7,372 ) |
SUPPLEMENTAL GUARANTOR CONDENSE
SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | 16. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS DJOFL and its direct wholly-owned subsidiary, DJO Finance Corp. (DJO Finco), jointly issued the 8.125% Notes, 10.75% Notes and 9.75% Notes. DJO Finco was formed solely to act as a co-issuer of the notes, has only nominal assets and does not conduct any operations. The indentures generally prohibit DJO Finco from holding any assets, becoming liable for any obligations or engaging in any business activity. The 8.125% Notes are jointly and severally, fully and unconditionally guaranteed, on a senior secured basis by all of DJOFL’s domestic subsidiaries (other than the co-issuer) that are 100% owned, directly or indirectly, by DJOFL (the Guarantors). The 10.75% Notes are jointly and severally, fully and unconditionally guaranteed, on a secured basis by the Guarantors. The 9.75% Notes are jointly and severally, fully and unconditionally guaranteed, on an unsecured senior subordinated basis by the Guarantors. Our foreign subsidiaries (the Non-Guarantors) do not guarantee the notes. The following tables present the financial position, results of operations and cash flows of DJOFL, the Guarantors, the Non-Guarantors and certain eliminations for the periods presented. DJO Finance LLC Unaudited Condensed Consolidating Balance Sheets As of July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 17,436 $ 1,370 $ 22,893 $ — $ 41,699 Accounts receivable, net — 128,643 48,485 — 177,128 Inventories, net — 143,880 46,402 (12,734 ) 177,548 Prepaid expenses and other current assets 103 15,210 6,996 — 22,309 Total current assets 17,539 289,103 124,776 (12,734 ) 418,684 Property and equipment, net — 117,527 13,381 (63 ) 130,845 Goodwill — 951,005 99,277 (31,096 ) 1,019,186 Intangible assets, net — 700,017 10,532 — 710,549 Investment in subsidiaries 1,297,699 1,679,465 51,573 (3,028,737 ) — Intercompany receivables 566,198 — — (566,198 ) — Other non-current assets — 2,568 4,031 — 6,599 Total assets $ 1,881,436 $ 3,739,685 $ 303,570 $ (3,638,828 ) $ 2,285,863 Liabilities and (Deficit) Equity Current liabilities: Accounts payable $ — $ 64,547 $ 9,421 $ — $ 73,968 Current portion of debt obligations 10,550 — — — 10,550 Other current liabilities 12,123 64,057 27,050 — 103,230 Current liabilities of discontinued operations 946 946 Total current liabilities 22,673 129,550 36,471 — 188,694 Long-term debt obligations 2,392,464 — — — 2,392,464 Deferred tax liabilities, net — 214,178 5,752 — 219,930 Intercompany payables, net — 362,861 137,313 (500,174 ) — Other long-term liabilities 5,879 14,811 629 — 21,319 Total liabilities 2,421,016 721,400 180,165 (500,174 ) 2,822,407 Noncontrolling interests — — 3,036 — 3,036 Total membership (deficit) equity (539,580 ) 3,018,285 120,369 (3,138,654 ) (539,580 ) Total liabilities and (deficit) equity $ 1,881,436 $ 3,739,685 $ 303,570 $ (3,638,828 ) $ 2,285,863 DJO Finance LLC Unaudited Condensed Consolidating Statements of Operations For the Three Months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 252,212 $ 83,178 $ (42,538 ) $ 292,852 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $7,080) — 94,465 74,317 (48,308 ) 120,474 Selling, general and administrative — 97,827 23,800 — 121,627 Research and development — 9,228 894 — 10,122 Amortization of intangible assets — 18,699 386 — 19,085 — 220,219 99,397 (48,308 ) 271,308 Operating income (loss) — 31,993 (16,219 ) 5,770 21,544 Other (expense) income: Interest (expense) income, net (42,448 ) 51 1 — (42,396 ) Other (expense) income, net (8 ) (8,553 ) 9,029 — 468 Intercompany (expense) income, net — (15,147 ) 14,634 513 — Equity in income (loss) of subsidiaries, net 19,181 — — (19,181 ) — (23,275 ) (23,649 ) 23,664 (18,668 ) (41,928 ) (Loss) income before income taxes (23,275 ) 8,344 7,445 (12,898 ) (20,384 ) Income tax provision — (1,671 ) (1,906 ) — (3,577 ) Net (loss) income from continuing operations (23,275 ) 6,673 5,539 (12,898 ) (23,961 ) Net income from discontinued operations — 855 — — 855 Net (loss) income (23,275 ) 7,528 5,539 (12,898 ) (23,106 ) Net income attributable to noncontrolling interests — — (169 ) — (169 ) Net (loss) income attributable to DJOFL $ (23,275 ) $ 7,528 $ 5,370 $ (12,898 ) $ (23,275 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Operations For the Six Months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 495,872 $ 158,673 $ (82,787 ) $ 571,758 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $14,487) — 189,306 138,711 (89,460 ) 238,557 Selling, general and administrative — 195,637 47,919 — 243,556 Research and development — 18,109 1,867 — 19,976 Amortization of intangible assets — 37,846 817 — 38,663 — 440,898 189,314 (89,460 ) 540,752 Operating income (loss) — 54,974 (30,641 ) 6,673 31,006 Other (expense) income: Interest (expense) income, net (84,731 ) 71 (6 ) — (84,666 ) Other (expense) income, net (8 ) (16,573 ) 17,333 — 752 Intercompany (expense) income , net — (14,784 ) 14,752 32 — Equity in income (loss) of subsidiaries, net 23,143 — — (23,143 ) — (61,596 ) (31,286 ) 32,079 (23,111 ) (83,914 ) (Loss) income before income taxes (61,596 ) 23,688 1,438 (16,438 ) (52,908 ) Income tax provision — (6,078 ) (2,912 ) — (8,990 ) Net (loss) income from continuing operations (61,596 ) 17,610 (1,474 ) (16,438 ) (61,898 ) Net income from discontinued operations — 665 — — 665 Net (loss) income (61,596 ) 18,275 (1,474 ) (16,438 ) (61,233 ) Net income attributable to noncontrolling interests — — (362 ) — (362 ) Net (loss) income attributable to DJOFL $ (61,596 ) $ 18,275 $ (1,836 ) $ (16,438 ) $ (61,595 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Comprehensive Loss For the Three Months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (23,275 ) $ 7,528 $ 5,539 $ (12,898 ) $ (23,106 ) Other comprehensive loss, net of taxes: Foreign currency translation adjustments, net of tax benefit of $111 — — (8,458 ) — (8,458 ) Unrealized loss on cash flow hedges, net of tax provision of zero (2,651 ) (2,651 ) Other comprehensive loss (2,651 ) — (8,458 ) — (11,109 ) Comprehensive (loss) income (25,926 ) 10,747 (1,513 ) (3,540 ) (34,215 ) Comprehensive income attributable to noncontrolling interests — — (101 ) — (101 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (25,926 ) $ 10,747 $ (1,614 ) $ (3,540 ) $ (34,316 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Comprehensive Loss For the Six Months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (61,596 ) $ 18,275 $ (1,474 ) $ (16,438 ) $ (61,233 ) Other comprehensive loss, net of taxes: Foreign currency translation adjustments, net of tax provision of $166 — — (2,850 ) — (2,850 ) Unrealized loss on cash flow hedges, net of tax provision of zero (8,042 ) — — — (8,042 ) Other comprehensive loss (8,042 ) — (2,850 ) — (10,892 ) Comprehensive (loss) income (69,638 ) 18,275 (4,324 ) (16,438 ) (72,125 ) Comprehensive income attributable to noncontrolling interests — — (402 ) — (402 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (69,638 ) $ 18,275 $ (4,726 ) $ (16,438 ) $ (72,527 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Cash Flows For the Six months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows From Operating Activities: Net (loss) income $ (61,596 ) $ 18,275 $ (1,474 ) $ (16,438 ) $ (61,233 ) Net loss from discontinued operations (665 ) $ (665 ) Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 18,055 2,486 (28 ) 20,513 Amortization of intangible assets — 37,846 817 — 38,663 Amortization of debt issuance costs and non-cash interest expense 3,815 — — — 3,815 Stock-based compensation expense — 1,521 — — 1,521 Gain on disposal of assets, net — 471 55 4 530 Deferred income tax expense (benefit) — 4,133 (321 ) — 3,812 Equity in (loss) income of subsidiaries, net (23,143 ) — — 23,143 — Changes in operating assets and liabilities, net of acquired assets and liabilities: Accounts receivable — (559 ) (3,650 ) — (4,209 ) Inventories — (1,244 ) 2,793 (7,199 ) (5,650 ) Prepaid expenses and other assets 1,251 (2,763 ) (252 ) 1,127 (637 ) Accounts payable and other current liabilities (7,721 ) 2,522 (69 ) (3,258 ) (8,526 ) Net cash (used in) provided by continuing operating activities (87,394 ) 77,592 385 (2,649 ) (12,066 ) Net cash (used in) discontinued operations — (8,853 ) — — (8,853 ) Net cash (used in) provided by operating activities (87,394 ) 68,739 385 (2,649 ) (20,919 ) Cash Flows From Investing Activities: Purchases of property and equipment — (29,238 ) (2,261 ) (1 ) (31,500 ) Proceeds from disposition of assets — 700 — — 700 Net cash used in investing activities from continuing operations — (28,538 ) (2,261 ) (1 ) (30,800 ) Cash Flows From Financing Activities: Intercompany 31,070 (38,991 ) 5,271 2,650 — Proceeds from issuance of debt 63,000 — — — 63,000 Repayments of debt obligations (18,913 ) — — — (18,913 ) Net cash provided by (used in) financing activities 75,157 (38,991 ) 5,271 2,650 44,087 Effect of exchange rate changes on cash and cash equivalents — — 388 — 388 Net (decrease) increase in cash and cash equivalents (12,237 ) 1,210 3,783 — (7,244 ) Cash and cash equivalents, beginning of year 29,673 160 19,110 — 48,943 Cash and cash equivalents, end of year $ 17,436 $ 1,370 $ 22,893 $ — $ 41,699 DJO Finance LLC Condensed Consolidating Balance Sheets As of December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 29,673 $ 160 $ 19,110 $ — $ 48,943 Accounts receivable, net — 128,085 44,275 — 172,360 Inventories, net — 142,033 31,803 737 174,573 Prepaid expenses and other current assets 42 13,301 7,836 — 21,179 Current assets of discontinued operations 2,878 — — 2,878 Total current assets 29,715 286,457 103,024 737 419,933 Property and equipment, net — 103,637 13,721 (85 ) 117,273 Goodwill — 951,005 98,309 (31,210 ) 1,018,104 Intangible assets, net — 737,798 11,247 — 749,045 Investment in subsidiaries 1,297,699 1,687,724 50,741 (3,036,164 ) — Intercompany receivables 575,483 — — (575,483 ) — Other non-current assets 1,313 1,193 2,668 — 5,174 Non current assets of discontinued operations — 29 — — 29 Total assets $ 1,904,210 $ 3,767,843 $ 279,710 $ (3,642,205 ) $ 2,309,558 Liabilities and (Deficit) Equity Current liabilities: Accounts payable $ — $ 49,394 $ 9,098 $ — $ 58,492 Current portion of debt obligations 10,550 — — — 10,550 Other current liabilities 17,268 73,260 28,643 — 119,171 Current liabilities of discontinued operations — 13,371 — — 13,371 Total current liabilities 27,818 136,025 37,741 — 201,584 Long-term debt obligations 2,344,562 — — — 2,344,562 Deferred tax liabilities, net — 209,179 4,677 — 213,856 Intercompany payables, net — 400,216 131,138 (531,354 ) — Other long-term liabilities — 14,441 651 — 15,092 Total liabilities 2,372,380 759,861 174,207 (531,354 ) 2,775,094 Noncontrolling interests — — 2,634 — 2,634 Total membership (deficit) equity (468,170 ) 3,007,982 102,869 (3,110,851 ) (468,170 ) Total liabilities and (deficit) equity $ 1,904,210 $ 3,767,843 $ 279,710 $ (3,642,205 ) $ 2,309,558 DJO Finance LLC Unaudited Condensed Consolidating Statements of Operations For the Three Months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 243,371 $ 75,498 $ (38,967 ) $ 279,902 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $7,535) — 102,629 57,651 (42,510 ) 117,770 Selling, general and administrative — 86,789 21,823 — 108,612 Research and development — 8,102 586 — 8,688 Amortization of intangible assets — 19,197 621 — 19,818 — 216,717 80,681 (42,510 ) 254,888 Operating income (loss) — 26,654 (5,183 ) 3,543 25,014 Other (expense) income: Interest (expense) income, net (44,567 ) 11 (8 ) — (44,564 ) Loss on modification and extinguishment of debt (67,967 ) — — — (67,967 ) Other expense, net — (84 ) 827 — 743 Intercompany (expense) income, net — (8,573 ) 8,267 306 — Equity in income of subsidiaries, net 34,558 — — (34,558 ) — (77,976 ) (8,646 ) 9,086 (34,252 ) (111,788 ) (Loss) income before income taxes (77,976 ) 18,008 3,903 (30,709 ) (86,774 ) Income tax provision — (4,889 ) (1,022 ) — (5,911 ) Net (loss) income from continuing operations (77,976 ) 13,119 2,881 (30,709 ) (92,685 ) Net income from discontinued operations — 14,873 — — 14,873 Net (loss) income (77,976 ) 27,992 2,881 (30,709 ) (77,812 ) Net income attributable to noncontrolling interests — — (165 ) — (165 ) Net (loss) income attributable to DJOFL $ (77,976 ) $ 27,992 $ 2,716 $ (30,709 ) $ (77,977 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Operations For the Six Months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 461,763 $ 146,034 $ (80,384 ) $ 527,413 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $15,070) — 193,550 110,985 (84,881 ) 219,654 Selling, general and administrative — 171,127 44,670 — 215,797 Research and development — 15,984 1,568 — 17,552 Amortization of intangible assets — 38,395 1,251 — 39,646 — 419,056 158,474 (84,881 ) 492,649 Operating income (loss) — 42,707 (12,440 ) 4,497 34,764 Other (expense) income: Interest (expense) income, net (87,438 ) 23 (15 ) — (87,430 ) Loss on modification and extinguishment of debt (67,967 ) — — — (67,967 ) Other expense, net — (609 ) (2,804 ) — (3,413 ) Intercompany income (expense), net — (8,254 ) 8,292 (38 ) — Equity in income of subsidiaries, net 41,902 — — (41,902 ) — (113,503 ) (8,840 ) 5,473 (41,940 ) (158,810 ) (Loss) income before income taxes (113,503 ) 33,867 (6,967 ) (37,443 ) (124,046 ) Income tax provision — (6,492 ) (1,364 ) — (7,856 ) Net (loss) income from continuing operations (113,503 ) 27,375 (8,331 ) (37,443 ) (131,902 ) Net income from discontinued operations — 18,865 — — 18,865 Net (loss) income (113,503 ) 46,240 (8,331 ) (37,443 ) (113,037 ) Net income attributable to noncontrolling interests — — (466 ) — (466 ) Net (loss) income attributable to DJOFL $ (113,503 ) $ 46,240 $ (8,797 ) $ (37,443 ) $ (113,503 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Comprehensive Loss For the Three Months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (77,976 ) $ 27,992 $ 2,881 $ (30,709 ) $ (77,812 ) Other comprehensive loss, net of taxes: Foreign currency translation adjustments, net of tax provision of $152 — — 4,137 — 4,137 Other comprehensive loss — — 4,137 — 4,137 Comprehensive (loss) income (77,976 ) 27,992 7,018 (30,709 ) (73,675 ) Comprehensive income attributable to noncontrolling interests — — (243 ) — (243 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (77,976 ) $ 27,992 $ 6,775 $ (30,709 ) $ (73,918 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Comprehensive Loss For the Six Months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (113,503 ) $ 46,240 $ (8,331 ) $ (37,443 ) $ (113,037 ) Other comprehensive loss, net of taxes: Foreign currency translation adjustments, net of tax benefit of $340 — — (5,305 ) — (5,305 ) Other comprehensive loss — — (5,305 ) — (5,305 ) Comprehensive (loss) income (113,503 ) 46,240 (13,636 ) (37,443 ) (118,342 ) Comprehensive loss attributable to noncontrolling interests — — (260 ) — (260 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (113,503 ) $ 46,240 $ (13,896 ) $ (37,443 ) $ (118,602 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Cash Flows For the Six months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows from Operating Activities: Net (loss) income $ (113,503 ) $ 46,240 $ (8,331 ) $ (37,443 ) $ (113,037 ) Net income from discontinued operations — (18,865 ) — — (18,865 ) Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 14,509 2,377 (49 ) 16,837 Amortization of intangible assets — 38,395 1,251 — 39,646 Amortization of debt issuance costs and non-cash interest expense 4,235 — — — 4,235 Stock-based compensation expense — 1,152 — — 1,152 Loss on modification and extinguishment of debt 67,967 67,967 Gain on disposal of assets, net — 139 127 (8 ) 258 Deferred income tax expense (benefit) — 3,351 384 — 3,735 Equity in (loss) income of subsidiaries, net (41,902 ) — — 41,902 — Changes in operating assets and liabilities: Accounts receivable — (3,545 ) (2,404 ) — (5,949 ) Inventories — 11 (1,603 ) (7,159 ) (8,751 ) Prepaid expenses and other assets (17 ) (1,196 ) (892 ) 73 (2,032 ) Accounts payable and other current liabilities (5,422 ) (3,042 ) (3,322 ) 4,421 (7,365 ) Net cash (used in) provided by continuing operating activities (88,642 ) 77,149 (12,413 ) 1,737 (22,169 ) Net cash provided by discontinued operations — 29,397 — — 29,397 Net cash (used in) provided by operating activities (88,642 ) 106,546 (12,413 ) 1,737 7,228 Cash Flows from Investing Activities: Purchases of property and equipment — (13,677 ) (2,942 ) 11 (16,608 ) Net cash (used in) provided by investing activities from continuing operations — (13,677 ) (2,942 ) 11 (16,608 ) Net cash provided by investing activities from discontinued operations — (451 ) — — (451 ) Net cash (used in) provided by investing activities — (14,128 ) (2,942 ) 11 (17,059 ) Cash Flows from Financing Activities: Intercompany 73,474 (89,888 ) 18,162 (1,748 ) — Proceeds from issuance of debt 2,445,826 — — — 2,445,826 Repayments of debt (2,356,073 ) — (48 ) — (2,356,121 ) Payment of debt issuance, modification and extinguishment costs (61,662 ) — — — (61,662 ) Net cash provided by (used in) financing activities 101,565 (89,888 ) 18,114 (1,748 ) 28,043 Effect of exchange rate changes on cash and cash equivalents — — (971 ) — (971 ) Net increase (decrease) in cash and cash equivalents 12,923 2,530 1,788 — 17,241 Cash and cash equivalents at beginning of period 12,958 3 18,183 — 31,144 Cash and cash equivalents at end of period $ 25,881 $ 2,533 $ 19,971 $ — $ 48,385 | 20. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS DJOFL and its direct wholly-owned subsidiary, DJO Finco Inc. (DJO Finco), jointly issued the 8.125% Notes, 10.75% Notes and 9.75% Notes. DJO Finco was formed solely to act as a co-issuer of the notes, has only nominal assets and does not conduct any operations. The Indentures generally prohibit DJO Finco from holding any assets, becoming liable for any obligations or engaging in any business activity. The 8.125% Notes are jointly and severally, fully and unconditionally guaranteed, on a senior secured basis by all of DJOFL’s domestic subsidiaries (other than the co-issuer) that are 100% owned, directly or indirectly, by DJOFL (the Guarantors). The 10.75% Notes are jointly and severally, fully and unconditionally guaranteed, on a secured basis by the Guarantors. The 9.75% Notes are jointly and severally, fully and unconditionally guaranteed, on an unsecured senior subordinated basis by the Guarantors. Our foreign subsidiaries (the Non-Guarantors) do not guarantee the notes. DJO Finance LLC Condensed Consolidating Balance Sheets As of December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 29,673 $ 160 $ 19,110 $ — $ 48,943 Accounts receivable, net — 128,085 44,275 — 172,360 Inventories, net — 142,033 31,803 737 174,573 Prepaid expenses and other current assets 42 13,301 7,836 — 21,179 Current assets of discontinued operations 2,878 — — 2,878 Total current assets 29,715 286,457 103,024 737 419,933 Property and equipment, net — 103,637 13,721 (85 ) 117,273 Goodwill — 951,005 98,309 (31,210 ) 1,018,104 Intangible assets, net — 737,798 11,247 — 749,045 Investment in subsidiaries 1,297,699 1,687,724 50,741 (3,036,164 ) — Intercompany receivables 575,483 — — (575,483 ) — Other non-current assets 1,313 1,193 2,668 — 5,174 Non current assets of discontinued operations — 29 — — 29 Total assets $ 1,904,210 $ 3,767,843 $ 279,710 $ (3,642,205 ) $ 2,309,558 Liabilities and (Deficit) Equity Current liabilities: Accounts payable $ — $ 49,394 $ 9,098 — $ 58,492 Current portion of debt obligations 10,550 — — — 10,550 Other current liabilities 17,268 73,260 28,643 — 119,171 Current liabilities of discontinued operations — 13,371 — — 13,371 Total current liabilities 27,818 136,025 37,741 — 201,584 Long-term debt obligations 2,344,562 — — — 2,344,562 Deferred tax liabilities, net — 209,179 4,677 — 213,856 Intercompany payables, net — 400,216 131,138 (531,354 ) — Other long-term liabilities — 14,441 651 — 15,092 Total liabilities 2,372,380 759,861 174,207 (531,354 ) 2,775,094 Noncontrolling interests — — 2,634 — 2,634 Total membership (deficit) equity (468,170 ) 3,007,982 102,869 (3,110,851 ) (468,170 ) Total liabilities and (deficit) equity $ 1,904,210 $ 3,767,843 $ 279,710 $ (3,642,205 ) $ 2,309,558 DJO Finance LLC Condensed Consolidating Statements of Operations For the Year Ended December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 976,412 $ 293,899 $ (156,684 ) $ 1,113,627 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $30,719) — 408,987 227,635 (170,603 ) 466,019 Selling, general and administrative — 364,305 90,419 — 454,724 Research and development — 31,456 3,649 — 35,105 Amortization of intangible assets — 77,569 2,395 — 79,964 — 882,317 324,098 (170,603 ) 1,035,812 Operating (loss) income — 94,095 (30,199 ) 13,919 77,815 Other (expense) income: Interest (expense) income, net (172,237 ) 42 (95 ) — (172,290 ) Loss on modification of debt (68,473 ) — — — (68,473 ) Other expense, net — (960 ) (6,343 ) — (7,303 ) Intercompany (expense) income, net — (21,994 ) 34,167 (12,173 ) — Equity in loss of subsidiaries, net (100,217 ) — — 100,217 — (340,927 ) (22,912 ) 27,729 88,044 (248,066 ) (Loss) income before income taxes (340,927 ) 71,183 (2,470 ) 101,963 (170,251 ) Income tax provision — 10,027 2,229 — 12,256 Net (loss) income from continuing operations (340,927 ) 61,156 (4,699 ) 101,963 (182,507 ) Net loss from discontinued operations — (157,580 ) — — (157,580 ) Net income attributable to noncontrolling interests — — (840 ) — (840 ) Net (loss) income attributable to DJOFL $ (340,927 ) $ (96,424 ) $ (5,539 ) $ 101,963 $ (340,927 ) DJO Finance LLC Condensed Consolidating Statements of Comprehensive Loss For the Year Ended December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (340,927 ) $ (96,424 ) $ (4,699 ) $ 101,963 $ (340,087 ) Other comprehensive income, net of taxes: Foreign currency translation adjustments, net of tax benefit of $540 — — (5,630 ) — (5,630 ) Unrealized gain on cash flow hedges, net of tax provision of $375 for the year ended December 31, 2015 609 — — — 609 Other comprehensive income (loss) 609 — (5,630 ) — (5,021 ) Comprehensive (loss) income (340,318 ) (96,424 ) (10,329 ) 101,963 (345,108 ) Comprehensive income attributable to noncontrolling interests — — (557 ) — (557 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (340,318 ) $ (96,424 ) $ (10,886 ) $ 101,963 $ (345,665 ) DJO Finance LLC Condensed Consolidating Statements of Cash Flows For the Year Ended December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows From Operating Activities: Net (loss) income $ (340,927 ) $ (96,424 ) $ (4,699 ) $ 101,963 $ (340,087 ) Net loss from discontinued operations — 157,580 — — 157,580 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 32,495 5,096 (100 ) 37,491 Amortization of intangible assets — 77,569 2,395 — 79,964 Amortization of debt issuance costs and non-cash interest expense 7,850 — — — 7,850 Loss on modification and extinguishment of debt 68,473 — — — 68,473 Stock-based compensation expense — 1,805 — — 1,805 Loss (gain) on disposal of assets, net — 1,380 75 (8 ) 1,447 Deferred income tax expense (benefit) — 6,901 (961 ) — 5,940 Equity in loss of subsidiaries, net 100,217 — — (100,217 ) — Changes in operating assets and liabilities, net of acquired assets and liabilities: Accounts receivable — (6,156 ) (1,908 ) — (8,064 ) Inventories — (535 ) 11,885 (19,456 ) (8,106 ) Prepaid expenses and other assets (1,195 ) (3,924 ) (1,775 ) (622 ) (7,516 ) Accounts payable and other (11,506 ) 16,569 805 7,020 12,888 Net cash (used in) provided by continuing operating activities (177,088 ) 187,260 10,913 (11,420 ) 9,665 Net cash provided by discontinued operations — 39,861 — — 39,861 Net cash (used in) provided by operating activities (177,088 ) 227,121 10,913 (11,420 ) 49,526 Cash Flows From Investing Activities: Cash paid in connection with acquisitions, net of cash acquired — (24,000 ) — — (24,000 ) Purchases of property and equipment — (38,095 ) (6,111 ) 117 (44,089 ) Other investing activities, net — 27 — — 27 Net cash (used in) provided by investing activities from continuing operations — (62,068 ) (6,111 ) 117 (68,062 ) Net cash used in investing activities from discontinued operations — (575 ) — — (575 ) Net cash (used in) provided by investing activities — (62,643 ) (6,111 ) 117 (68,637 ) Cash Flows From Financing Activities: Intercompany 157,053 (164,321 ) (4,035 ) 11,303 — Proceeds from issuance of debt 2,515,827 — 2,206 — 2,518,033 Repayments of debt obligations (2,416,713 ) — (2,314 ) — (2,419,027 ) Payment of debt issuance, modification and extinguishment costs (62,375 ) — — — (62,375 ) Exercise of stock options 11 — — — 11 Dividend paid by subsidiary to owners of noncontrolling interests — — (541 ) — (541 ) Net cash provided by (used in) financing activities 193,803 (164,321 ) (4,684 ) 11,303 36,101 Effect of exchange rate changes on cash and cash equivalents — — 809 — 809 Net increase in cash and cash equivalents 16,715 157 927 — 17,799 Cash and cash equivalents, beginning of year 12,958 3 18,183 — 31,144 Cash and cash equivalents, end of year $ 29,673 $ 160 $ 19,110 — $ 48,943 DJO Finance LLC Condensed Consolidating Balance Sheets As of December 31, 2014 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 12,958 $ 3 $ 18,183 $ — $ 31,144 Accounts receivable, net — 121,929 47,278 — 169,207 Inventories, net — 138,636 31,134 (840 ) 168,930 Deferred tax assets, net — 24,351 247 — 24,598 Prepaid expenses and other current assets 160 11,085 5,548 — 16,793 Current assets of discontinued operations 0 25,642 — — 25,642 Total current assets 13,118 321,646 102,390 (840 ) 436,314 Property and equipment, net — 102,560 14,071 (155 ) 116,476 Goodwill — 949,181 109,260 (34,551 ) 1,023,890 Intangible assets, net — 810,897 15,008 — 825,905 Investment in subsidiaries 1,297,699 1,686,557 56,572 (3,040,828 ) — Intercompany receivables 836,759 — — (836,759 ) — Other non-current assets — 1,806 2,399 — 4,205 Non current assets of discontinued operations — 163,071 — — 163,071 Total assets $ 2,147,576 $ 4,035,718 $ 299,700 $ (3,913,133 ) $ 2,569,861 Liabilities and (Deficit) Equity Current liabilities: Accounts payable $ — $ 46,875 $ 12,370 $ — $ 59,245 Current portion of debt obligations 8,912 — 63 — 8,975 Other current liabilities 29,589 65,106 29,083 — 123,778 Current liabilities of discontinued operations — 8,681 — — 8,681 Total current liabilities 38,501 120,662 41,516 — 200,679 Long-term debt obligations 2,233,309 — — — 2,233,309 Deferred tax liabilities, net — 237,813 5,310 — 243,123 Intercompany payables, net — 552,612 135,833 (688,445 ) — Other long-term liabilities — 12,244 2,122 — 14,366 Total liabilities 2,271,810 923,331 184,781 (688,445 ) 2,691,477 Noncontrolling interests — — 2,618 — 2,618 Total membership (deficit) equity (124,234 ) 3,112,387 112,301 (3,224,688 ) (124,234 ) Total liabilities and (deficit) equity $ 2,147,576 $ 4,035,718 $ 299,700 $ (3,913,133 ) $ 2,569,861 DJO Finance LLC Condensed Consolidating Statements of Operations For the Year Ended December 31, 2014 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 917,604 $ 318,849 $ (148,924 ) $ 1,087,529 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $32,962) — 400,295 230,721 (169,016 ) 462,000 Selling, general and administrative — 339,158 100,714 — 439,872 Research and development — 33,060 4,245 (28 ) 37,277 Amortization of intangible assets — 80,045 3,899 — 83,944 — 852,558 339,579 (169,044 ) 1,023,093 Operating income (loss) — 65,046 (20,730 ) 20,120 64,436 Other (expense) income: Interest (expense) income, net (174,309 ) 94 (110 ) — (174,325 ) Loss on modification of debt (938 ) — — — (938 ) Other expense, net — (280 ) (4,917 ) — (5,197 ) Intercompany (expense) income, net — (14,848 ) 24,037 (9,189 ) — Equity in loss of subsidiaries, net 84,713 — — (84,713 ) — (90,534 ) (15,034 ) 19,010 (93,902 ) (180,460 ) (Loss) income before income taxes (90,534 ) 50,012 (1,720 ) (73,782 ) (116,024 ) Income tax (benefit) provision — (8,972 ) 4,252 — (4,720 ) Net (loss) income from continuing operations (90,534 ) 58,984 (5,972 ) (73,782 ) (111,304 ) Net income from discontinued operations — 21,742 — — 21,742 Net income attributable to noncontrolling interests — — (972 ) — (972 ) Net (loss) income attributable to DJOFL $ (90,534 ) $ 80,726 $ (6,944 ) $ (73,782 ) $ (90,534 ) DJO Finance LLC Condensed Consolidating Statements of Comprehensive Loss For the Year Ended December 31, 2014 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (90,534 ) $ 80,726 $ (5,972 ) $ (73,782 ) $ (89,562 ) Other comprehensive (loss) income, net of taxes: Foreign currency translation adjustments, net of tax benefit of $3,871 — — (13,167 ) — (13,167 ) Other comprehensive loss — — (13,167 ) — (13,167 ) Comprehensive (loss) income (90,534 ) 80,726 (19,139 ) (73,782 ) (102,729 ) Comprehensive income attributable to noncontrolling interests — — (591 ) — (591 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (90,534 ) $ 80,726 $ (19,730 ) $ (73,782 ) $ (103,320 ) DJO Finance LLC Condensed Consolidating Statements of Cash Flows For the Year Ended December 31, 2014 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows From Operating Activities: Net loss) income $ (90,534 ) $ 80,726 $ (5,972 ) $ (73,782 ) $ (89,562 ) Net income from discontinued operations — (21,742 ) $ — — (21,742 ) Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 29,127 6,265 (179 ) 35,213 Amortization of intangible assets — 80,045 3,899 — 83,944 Amortization of debt issuance costs and non-cash interest expense 8,692 — — — 8,692 Loss on modification and extinguishment of debt 938 — — — 938 Stock-based compensation expense — 1,869 — — 1,869 (Gain) loss on disposal of assets, net — (1,223 ) 105 — (1,118 ) Deferred income tax benefit — (8,618 ) (1,104 ) (988 ) (10,710 ) Equity in loss of subsidiaries, net (84,713 ) — — 84,713 — Changes in operating assets and liabilities, net of acquired assets and liabilities: Accounts receivable — (6,851 ) (7,609 ) — (14,460 ) Inventories — (12,178 ) 12,746 (20,065 ) (19,497 ) Prepaid expenses and other assets — 6,864 4,851 (291 ) 11,424 Accounts payable and other (83 ) 4,057 1,618 2,052 7,644 Net cash (used in) provided by continuing operating activities (165,700 ) 152,076 14,799 (8,540 ) (7,365 ) Net cash provided by discontinued operations — 53,852 — — 53,852 Net cash (used in) provided by operating activities (165,700 ) 205,928 14,799 (8,540 ) 46,487 Cash Flows From Investing Activities: Cash paid in connection with acquisitions, net of cash acquired — — (4,587 ) — (4,587 ) Purchases of property and equipment — (46,269 ) (6,597 ) 125 (52,741 ) Other investing activities, net — (676 ) (362 ) — (1,038 ) Net cash (used in) provided by investing activities from continuing operations — (46,945 ) (11,546 ) 125 (58,366 ) Net cash used in investing activities from discontinued operations — (52 ) — — (52 ) Net cash (used in) provided by investing activities — (46,997 ) (11,546 ) 125 (58,418 ) Cash Flows From Financing Activities: Intercompany 149,870 (153,596 ) (4,687 ) 8,413 — Proceeds from issuance of debt 1,000,294 — — — 1,000,294 Repayments of debt obligations (990,085 ) — (134 ) — (990,219 ) Payment of debt issuance, modification and extinguishment costs (1,812 ) — — — (1,812 ) Investment by parent 22 — — — 22 Payment of contingent consideration — (5,690 ) — — (5,690 ) Cancellation of vested options (2,001 ) — — — (2,001 ) Dividend paid by subsidiary to owners of noncontrolling interests — — (617 ) — (617 ) Net cash provided by (used in) financing activities 156,288 (159,286 ) (5,438 ) 8,413 (23 ) Effect of exchange rate changes on cash and cash equivalents — — (480 ) — (480 ) Net decrease in cash and cash equivalents (9,412 ) (355 ) (2,665 ) (2 ) (12,434 ) Cash and cash equivalents, beginning of year 22,370 358 20,848 2 43,578 Cash and cash equivalents, end of year $ 12,958 $ 3 $ 18,183 $ — $ 31,144 DJO Finance LLC Condensed Consolidating Statements of Operations For the Year Ended December 31, 2013 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 871,576 $ 282,317 $ (133,109 ) $ 1,020,784 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $33,719) — 389,932 191,135 (146,359 ) 434,708 Selling, general and administrative — 315,163 94,022 7 409,192 Research and development — 29,376 3,577 23 32,976 Amortization of intangible assets — 81,043 5,369 — 86,412 Impairment of goodwill — 49,600 — — 49,600 — 865,114 294,103 (146,329 ) 1,012,888 Operating income (loss) — 6,462 (11,786 ) 13,220 7,896 Other (expense) income: Interest (expense) income, net (177,570 ) 81 (81 ) — (177,570 ) Loss on modification and extinguishment of debt (1,059 ) — — — (1,059 ) Other (expense) income, net — (305 ) (10,684 ) 9,712 (1,277 ) Intercompany income (expense), net — 4,379 17,799 (22,178 ) — Equity in (loss) income of subsidiaries, net (24,823 ) — — 24,823 — (203,452 ) 4,155 7,034 12,357 (179,906 ) (Loss) income before income taxes (203,452 ) 10,617 (4,752 ) 25,577 (172,010 ) Income tax (benefit) provision — 12,163 5,288 — 17,451 Net loss from continuing operations (203,452 ) (1,546 ) (10,040 ) 25,577 (189,461 ) Net loss from discontinued operations (13,101 ) (13,101 ) Net income attributable to noncontrolling interests — — (890 ) — (890 ) Net (loss) income attributable to DJOFL $ (203,452 ) $ (14,647 ) $ (10,930 ) $ 25,577 $ (203,452 ) DJO Finance LLC Condensed Consolidating Statements of Comprehensive Loss For the Year Ended December 31, 2013 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (203,452 ) $ (14,647 ) $ (10,040 ) $ 25,577 $ (202,562 ) Other comprehensive income, net of taxes: Foreign currency translation adjustments, net of tax provision of $1,212 — — 19 — 19 Other comprehensive income — — 19 — 19 Comprehensive (loss) income (203,452 ) (14,647 ) (10,021 ) 25,577 (202,543 ) Comprehensive income attributable to noncontrolling interests — — (1,010 ) — (1,010 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (203,452 ) $ (14,647 ) $ (11,031 ) $ 25,577 $ (203,553 ) DJO Finance LLC Condensed Consolidating Statements of Cash Flows For the Year Ended December 31, 2013 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows from Operating Activities: Net (loss) income $ (203,452 ) $ (14,647 ) $ (10,040 ) $ 25,577 $ (202,562 ) Net loss from discontinued operations 13,101 13,101 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 27,382 5,383 (258 ) 32,507 Amortization of intangible assets — 81,043 5,369 — 86,412 Amortization of debt issuance costs and non-cash interest expense 8,012 — — — 8,012 Loss on modification and extinguishment of debt 1,059 — — — 1,059 Stock-based compensation expense — 2,155 — — 2,155 Impairment of goodwill — 49,600 — — 49,600 Impairment of intangible assets — — — — — (Gain) loss on disposal of assets, net — (1,696 ) 684 — (1,012 ) Deferred income tax expense (benefit) — 10,895 (1,233 ) 147 9,809 Equity in income of subsidiaries, net 24,823 — — (24,823 ) — Changes in operating assets and liabilities: Accounts receivable — (13,127 ) (6,332 ) — (19,459 ) Inventories — 4,565 7,738 (9,064 ) 3,239 Prepaid expenses and other assets — (990 ) (7,368 ) (311 ) (8,669 ) Accounts payable and other (1,839 ) (3,175 ) 7,597 (744 ) 1,839 Net cash (used in) provided by operating activities (171,397 ) 155,106 1,798 (9,476 ) (23,969 ) Net cash provided by discontinued operations — 53,749 — — 53,749 Net cash (used in) provided by operating activities (171,397 ) 208,855 1,798 (9,476 ) 29,780 Cash Flows from Investing Activities: Cash paid in connection with acquisitions, net of cash acquired — (192 ) (1,761 ) — (1,953 ) Purchases of property and equipment — (29,158 ) (8,310 ) (16 ) (37,484 ) Other investing activities, net — (1,239 ) (387 ) — (1,626 ) Net cash used in investing activities from continuing operations — (30,589 ) (10,458 ) (16 ) (41,063 ) Net cash provided by investing activities from discontinued operations — — — — Net cash (used in) provided by investing activities — (30,589 ) (10,458 ) (16 ) (41,063 ) Cash Flows from Financing Activities: Intercompany 156,598 (181,030 ) 14,944 9,488 — Proceeds from issuance of debt 549,417 — — — 549,417 Repayments of debt obligations (523,037 ) — — — (523,037 ) Payment of debt issuance costs (2,387 ) — — — (2,387 ) Dividend paid by subsidiary to owners of noncontrolling interest — — (684 ) — (684 ) Net cash provided by (used in) financing activities 180,591 (181,030 ) 14,260 9,488 23,309 Effect of exchange rate changes on cash and cash equivalents — — 329 — 329 Net increase (decrease) in cash and cash equivalents 9,194 (2,764 ) 5,929 (4 ) 12,355 Cash and cash equivalents at beginning of period 13,176 3,122 14,919 6 31,223 Cash and cash equivalents at end of period $ 22,370 $ 358 $ 20,848 $ 2 $ 43,578 |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 6 Months Ended |
Jul. 01, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | DJO FINANCE LLC SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (in thousands) Allowance for Balance as of December 31, 2012 $ 29,102 Provision 53,590 Write-offs, net of recoveries (43,112 ) Balance as of December 31, 2013 39,580 Provision 61,598 Write-offs, net of recoveries (61,923 ) Balance as of December 31, 2014 39,255 Provision 72,723 Write-offs, net of recoveries (68,630 ) Balance as of December 31, 2015 $ 43,348 |
ORGANIZATION AND BASIS OF PRE30
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Infrequent Events | Infrequent Events In September 2013, a fire occurred at our factory in Tunisia. As a result of the fire, certain inventory and fixed assets were destroyed and the leased facility became inoperable. Estimated losses of $5.0 million related to destroyed inventory and fixed assets, excess expenses incurred and building reconstruction costs were recorded for the year ended December 31, 2013. Additionally, we recorded $1.3 million in revenue from business interruption insurance proceeds for the year ended December 31, 2013. Final claims were settled against the policies in September 2014. As a result, estimated losses were adjusted to $3.3 million, and additional $2.3 million in revenue from business interruption insurance proceeds was recorded for the year ended December 31, 2014. The activity in the corresponding insurance receivable was follows (in thousands): Year Ended Balance, beginning of period $ 6,261 Change in estimated losses (1,617 ) Business interruption 2,274 Claim payments (6,918 ) Balance, end of period $ — | |
Segment Reporting | Segment Reporting We market and distribute our products through four operating segments: Bracing and Vascular; Recovery Sciences; Surgical Implant; and International. Our Bracing and Vascular, Recovery Sciences, and Surgical Implant segments generate their revenues within the United States. Our Bracing and Vascular segment offers rigid knee braces, orthopedic soft goods, cold therapy products, vascular systems, compression therapy products and therapeutic footwear for the diabetes care market. Our Recovery Sciences segment offers home electrotherapy, iontophoresis, home traction products, bone growth stimulation products and clinical physical therapy equipment. Our Surgical Implant segment offers a comprehensive suite of reconstructive joint products for the knee, hip and shoulder. Our International segment offers all of our products to customers outside the United States. See Note 15 for additional information about our reportable segments. During the fourth quarter of 2015, we ceased manufacturing, selling and distributing products of our Empi business and the related insurance billing operations domestically. The Empi business primarily manufactured and sold transcutaneous electrical nerve stimulation (TENS) devices for pain relief, other electrotherapy and orthopedic products and the related supplies. Empi was facing a challenging regulatory and compliance environment, decreasing reimbursement rates and remained below the level needed to reach adequate profitability within an economically justified period of time. Empi was part of our Recovery Sciences operating segment. For financial statement purposes, the results of the Empi business are reported within discontinued operations. | Segment Reporting We market and distribute our products through four operating segments: Bracing and Vascular; Recovery Sciences; Surgical Implant; and International. Our Bracing and Vascular, Recovery Sciences, and Surgical Implant segments generate their revenues within the United States. Our Bracing and Vascular segment offers rigid knee braces, orthopedic soft goods, cold therapy products, vascular systems, compression therapy products and therapeutic footwear for the diabetes care market. Our Recovery Sciences segment offers home electrotherapy, iontophoresis, home traction products, bone growth stimulation products and clinical physical therapy equipment. Our Surgical Implant segment offers a comprehensive suite of reconstructive joint products for the knee, hip and shoulder. Our International segment offers all of our products to customers outside the United States. See Note 18 for additional information about our reportable segments. During the fourth quarter of 2015, we ceased manufacturing, selling and distributing products of our Empi business and the related insurance billing operations domestically. The Empi business primarily manufactured and sold TENS devices for pain relief, other electrotherapy and orthopedic products and the related supplies. Empi was facing a challenging regulatory and compliance environment, decreasing reimbursement rates and remained below the level needed to reach adequate profitability within an economically justified period of time. Empi was part of our Recovery Sciences operating segment. For financial statement purposes, the results of the Empi business are reported within discontinued operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are used in accounting for, among other things, contractual allowances, rebates, product returns, warranty obligations, allowances for doubtful accounts, valuation of inventories, self-insurance reserves, income taxes, loss contingencies, fair values of derivative instruments, fair values of long-lived assets and any related impairments, capitalization of costs associated with internally developed software and stock-based compensation. Actual results could differ from those estimates. | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are used in accounting for, among other things, contractual allowances, rebates, product returns, warranty obligations, allowances for doubtful accounts, valuation of inventories, self-insurance reserves, income taxes, loss contingencies, fair values of derivative instruments, fair values of long-lived assets and any related impairments, capitalization of costs associated with internally developed software and stock-based compensation. Actual results could differ from those estimates. |
Basis of Presentation | Basis of Presentation We consolidate the results of operations of our 50% owned subsidiary, Medireha GmbH (Medireha), and reflect the 50% share of results not owned by us as non-controlling interests in our Consolidated Statements of Operations. We maintain control of Medireha through certain rights that enable us to prohibit certain business activities that are not consistent with our plans for the business and provide us with exclusive distribution rights for products manufactured by Medireha. | Basis of Presentation The Consolidated Financial Statements include the Company and its controlled subsidiaries. Intercompany transactions are eliminated. We consolidate the results of operations of our 50% owned subsidiary, Medireha GmbH (Medireha), and reflect the 50% share of results not owned by us as noncontrolling interests in our Consolidated Statements of Operations. We maintain control of Medireha through certain rights that enable us to prohibit certain business activities that are not consistent with our plans for the business and provide us with exclusive distribution rights for products manufactured by Medireha. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The reclassifications were not material to the Consolidated Financial Statements. | |
Cash and Cash Equivalents | Cash and Cash Equivalents. | |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts. | |
Sales Returns and Allowances | Sales Returns and Allowances. | |
Inventories | Inventories. | |
Property and Equipment | Property and Equipment. | |
Software Developed For Internal Use | Software Developed For Internal Use. As of December 31, 2015 and 2014, we had $6.8 million and $8.5 million respectively, of unamortized internally developed software costs included within property and equipment in our Consolidated Balance Sheets. | |
Intangible Assets and Amortization | Intangible Assets and Amortization. We evaluate the carrying value of goodwill and indefinite life intangible assets annually on the first day of the fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. We evaluate the carrying value of finite life intangible assets whenever events or circumstances indicate the carrying value may not be recoverable. Significant assumptions are required to estimate the fair value of goodwill and intangible assets, most notably estimated future cash flows generated by these assets. As such, these fair valuation measurements use significant unobservable inputs, which are inputs that are classified as Level 3 in the fair value hierarchy. Changes to these assumptions could require us to record impairment charges on these assets. | |
Self Insurance | Self Insurance. | |
Revenue Recognition | Revenue Recognition. We recognize revenue, both rental and purchase, for products sold directly to patients or their third party insurance payors, when our product has been dispensed or shipped to the patient and the patient’s insurance has been verified. We record revenues from sales or our surgical implant products when the products are used in a surgical procedure (implanted in a patient). We reduce revenue by estimates of potential future product returns and other allowances. Revenues are also reduced by rebates related to sales transacted through distribution agreements that provide the distributors with a right to return inventory or take certain pricing adjustments based on sales mix or volume. Provisions for product returns and other allowances are recorded as a reduction to revenue in the period sales are recognized. | |
Cost of Sales | Cost of Sales. We provide expressed warranties on certain products for periods typically ranging from one to three years. We estimate our warranty obligations at the time of sale based upon historical experiences and known product issues, if any. A summary of the activity in our warranty reserves is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 1,942 $ 1,847 $ 1,488 Amount charged to expense for estimated warranty costs 1,517 1,788 1,138 Deductions for actual costs incurred (1,765 ) (1,693 ) (779 ) Balance, end of year $ 1,694 $ 1,942 $ 1,847 | |
Selling General and Administrative Expense | Selling, General and Administrative Expense | |
Research and Development | Research and Development. | |
Other Expense, Net | Other Expense, Net. | |
Stock Based Compensation | Stock Based Compensation. | |
Income Taxes | Income Taxes. | |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions. Transactions denominated in currencies other than our or our subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in our Consolidated Balance Sheets related to such transactions result in transaction gains and losses that are reflected in our Consolidated Statements of Operations as either unrealized (based on the applicable period end translation) or realized (upon settlement of the transactions). For the years ended December 31, 2015, 2014 and 2013, foreign transaction (losses) gains were $(7.3) million, $(5.3) million, and $(1.5) million, respectively. | |
Derivative Financial Instruments | Derivative Financial Instruments. We make use of debt financing as a source of funds and are therefore exposed to interest rate fluctuations in the normal course of business. Our credit facilities are subject to floating interest rates. We manage the risk of unfavorable movements in interest rates by hedging interest rate on a portion of the outstanding loan balance, thereby locking in a fixed rate on a portion of the principal, reducing the effect of possible rising interest rates and making interest expense more predictable. We have designated these interest rate cap agreements as cash flow hedges for accounting purposes. Therefore, changes in the fair values of the derivative are recorded in accumulated other comprehensive income (loss) and are subsequently recognized in earnings when the hedged item affects earnings. We use foreign exchange forward contracts to hedge expense commitments that are denominated in currencies other than the U.S. dollar. The purpose of our foreign currency hedging activities is to fix the dollar value of specific commitments and payments to foreign vendors. Before acquiring a derivative instrument to hedge a specific risk, potential natural hedges are evaluated. While our foreign exchange contracts act as economic hedges, we have not designated such instruments as hedges for accounting purposes. Therefore, gains and losses resulting from changes in the fair values of these derivative instruments are recorded in other income (expense), net, in our Consolidated Statements of Operations. The fair value of our derivative instruments has been determined through the use of models that consider various assumptions, including time value and other relevant economic measures, which are inputs that are classified as Level 2 in the fair value hierarchy (see Notes 10 and 11). | |
Comprehensive Income (Loss) | Comprehensive Income (Loss). | |
Concentration of Credit Risk | Concentration of Credit Risk. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. | |
Recent Accounting Standards | Recent Accounting Standards In May 2014, the FASB issued an accounting standards update related to revenue from contracts with customers. The new standard provides a five-step approach to be applied to all contracts with customers. The accounting standards update also requires expanded disclosures about revenue recognition. On July 9, 2015, the FASB decided to defer the effective date of the standard. The guidance is now effective for fiscal years beginning after December 15, 2017 and interim periods within that reporting period. Early adoption is permitted as early as the original effective date of December 15, 2016. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In April 2015, the FASB issued an accounting standards update related to the presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The guidance is effective for annual and interim periods beginning after December 15, 2015. Early application is permitted. The Company has early adopted this update and the impact is reflected in the current and prior periods presented. In April 2015, the FASB issued an accounting standards update related to internal-use software. The standard provides guidance to clarify the customer’s accounting for fees paid in a cloud computing arrangement. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company adopted this ASU with prospective application in the first quarter of 2016. Adoption of this new guidance did not have a material effect on the Company’s financial statements. In July 2015, the FASB issued an accounting standards update which requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance does not apply to inventory that is measured using last-in, first-out (LIFO). The guidance is effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In September 2015, the FASB issued an accounting standards update which eliminates the requirement for an acquirer in a business combination to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The new guidance also sets forth new disclosure requirements related to the adjustments. The guidance is effective for annual and interim periods beginning after December 15, 2015. Early adoption is permitted. Adoption of this new guidance did not have a material effect on the Company’s financial statements. In November 2015, the FASB issued an accounting standards update which requires all deferred income taxes be presented on the balance sheet as noncurrent. The new guidance is intended to simplify financial reporting by eliminating the requirement to classify deferred taxes between current and noncurrent. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company has early adopted this update and the impact is reflected prospectively in the Company’s financial statements. In January 2016, the FASB issued an accounting standards update which affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This guidance retains the current accounting for classifying and measuring investments in debt securities and loans but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient permitted by the guidance to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. The guidance is effective for annual periods beginning after December 15, 2017. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In February 2016, the FASB issued an accounting standards update which affects the accounting for leases. The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The amendment also will require qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are still assessing the impact of adoption on our consolidated financial statements. In March 2016, the FASB issued an accounting standards update which affects the accounting for employee share-based payments. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The guidance is effective for interim and annual reporting periods beginning after beginning after December 15, 2016. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. | Recent Accounting Standards. In May 2014, the FASB issued an accounting standards update related to revenue from contracts with customers. The new standard provides a five-step approach to be applied to all contracts with customers. The accounting standards update also requires expanded disclosures about revenue recognition. On July 9, 2015, the FASB decided to defer the effective date of the standard. The guidance is now effective for fiscal years beginning after December 15, 2017 and interim periods within that reporting period. Early adoption is permitted as early as the original effective date of December 15, 2016. The Company is currently evaluating the new guidance to determine the impact it may have to its consolidated financial statements. In April 2015, the FASB issued an accounting standards update related to the presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The guidance is effective for annual and interim periods beginning after December 15, 2015. Early application is permitted. The Company has early adopted this update and the impact is reflected in the current and prior periods presented. In April 2015, the FASB issued an accounting standards update related to internal-use software. The standard provides guidance to clarify the customer’s accounting for fees paid in a cloud computing arrangement. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In July 2015, the FASB issued an accounting standards update which requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance does not apply to inventory that is measured using last-in, first-out (LIFO). The guidance is effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In September 2015, the FASB issued an accounting standards update which eliminates the requirement for an acquirer in a business combination to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The new guidance also sets forth new disclosure requirements related to the adjustments. The guidance is effective for annual and interim periods beginning after December 15, 2015. Early adoption is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In November 2015, the FASB issued an accounting standards update which requires all deferred income taxes be presented on the balance sheet as noncurrent. The new guidance is intended to simplify financial reporting by eliminating the requirement to classify deferred taxes between current and noncurrent. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company has early adopted this update and the impact is reflected prospectively in the Company’s financial statements. In January 2016, the FASB issued an accounting standards update which affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient permitted by the guidance to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. The guidance is effective for annual periods beginning after December 15, 2017. Early application is permitted. Adoption of this new guidance is not expected to have a material effect on the Company’s financial statements. In February 2016, the FASB issued an accounting standards update which affects the accounting for leases. The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The amendment also will require qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are still assessing the impact of adoption on our consolidated financial statements. |
Interim Reporting | Interim Reporting The accompanying Unaudited Condensed Consolidated Financial Statements include our accounts and all voting interest entities where we exercise a controlling financial interest through the ownership of a direct or indirect majority voting interest. All significant intercompany accounts and transactions have been eliminated in consolidation. Our Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP and with the instructions to Form 10–Q and Article 10 of Regulation S–X for interim financial information. Accordingly, these financial statements do not include all of the information required by GAAP or Securities and Exchange Commission (SEC) rules and regulations for complete annual financial statements. In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. The Company operates on a manufacturing calendar. Each quarter consists of thirteen weeks, two four week and one five week period. Our first quarters may have more or fewer shipping days from year to year based on the days of week holidays fall. The first half of 2016 had more shipping days than in the first half of 2015. |
ORGANIZATION AND BASIS OF PRE31
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Insurance Receivables Against Property and Business Interruption Insurance Policies | The activity in the corresponding insurance receivable was follows (in thousands): Year Ended Balance, beginning of period $ 6,261 Change in estimated losses (1,617 ) Business interruption 2,274 Claim payments (6,918 ) Balance, end of period $ — |
SIGNIFICANT ACCOUNTING POLICI32
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Activity in our Warranty Reserves | A summary of the activity in our warranty reserves is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 1,942 $ 1,847 $ 1,488 Amount charged to expense for estimated warranty costs 1,517 1,788 1,138 Deductions for actual costs incurred (1,765 ) (1,693 ) (779 ) Balance, end of year $ 1,694 $ 1,942 $ 1,847 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
Purchase Price for Acquisition Allocated to Fair Values of Net Tangible and Intangible Assets Acquired | The purchase price for each of these acquisitions was allocated to the fair values of the net tangible and intangible assets acquired as follows (in thousands): (in thousands): Zimmer Biomet Speetec Blue Leaf Vasyli Cash $ — $ 489 $ — $ — Accounts receivable — 608 — — Inventory 2,477 2,766 59 542 Other current assets — 154 — 31 Property and equipment — 379 — 12 Other non-current assets — — — — Liabilities assumed — (1,642 ) — — Deferred tax liabilities — (1,003 ) — — Identifiable intangible assets (1): Customer relationships 1,800 2,861 90 308 Technology 15,000 — — — Non-compete — 569 111 930 Trademarks and trade names 2,900 320 — — Goodwill (2) 1,823 2,383 322 363 Total purchase price $ 24,000 $ 7,884 $ 582 $ 2,186 (1) The fair value of customer relationships was assigned to relationships with major customers existing on the acquisition date based upon an estimate of the future discounted cash flows that would be derived from those customers, after deducting contributory asset charges. The fair value of technology was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the patents and technology acquired. The fair value of non-compete agreements relate to non-compete agreements entered into with certain members of senior management. The values were determined by estimating the present value of the cash flows associated with having these agreements in place, less the present value of the cash flows assuming the non-compete agreements were not in place. The fair value of trademarks and trade names was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the trade names and trademarks acquired. The useful lives of the intangible assets acquired were estimated based on the underlying agreements and/or the future economic benefit expected to be received from the assets. (2) Goodwill represents the excess purchase price over the fair value of the identifiable net assets acquired. Among the factors which resulted in the recognition of goodwill for the Speetec acquisition was the opportunity to expand our direct presences in the German market with our surgical products. Among the factors which resulted in goodwill for the acquisition was the opportunity to increase our revenue and expand our presence in the surgical implant market through the use of the acquired technology and customer relationships. Among the factors which resulted in the recognition of goodwill for the Blue Leaf and Vasyli assets was the opportunity to expand our direct presence in the local markets with our vascular products. | |
Schedule of Discontinued Operations | Income (loss) from discontinued operations, net of taxes, is comprised of the following (in thousands): Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Net sales $ — $ 30,941 $ — $ 63,531 Costs and operating expenses: Cost of sales — 7,766 — 15,124 Selling, general and administrative — 10,412 — 22,999 Research and development — 51 — 87 Amortization of intangible assets — 2,281 — 4,563 Impairment of intangible assets 4,500 4,500 Other income 855 24 665 74 Income from discontinued operations before income taxes $ 855 $ 5,955 $ 665 $ 16,332 Income tax benefit — 8,918 — 2,533 Net income from discontinued operations $ 855 $ 14,873 $ 665 $ 18,865 Net liabilities for discontinued operations are as follows (in thousands): July 1, 2016 December 31, 2015 Accounts receivable, net $ — $ 2,743 Other current assets — 135 Property and equipment, net — 22 Intangible and other non-current assets — 7 Total assets — 2,907 Accounts payable and other liabilities 946 13,371 Net liabilities $ (946 ) $ (10,464 ) | Income (loss) from discontinued operations, net of taxes, is comprised of the following (in thousands): Year ended December 31, 2015 2014 2013 Net sales $ 95,342 $ 141,637 $ 154,673 Costs and operating expenses: Cost of sales 35,834 33,397 36,957 Selling, general and administrative 50,729 59,333 68,798 Research and development 249 465 245 Amortization of intangible assets 6,874 9,127 9,127 Impairment of goodwill 117,298 — 52,500 Impairment of intangible and long lived assets 52,150 — 4,500 Other income 86 37 18 (Loss) income from discontinued operations before income taxes $ (167,706 ) $ 39,352 $ (17,436 ) Income tax benefit (provision) 10,126 (17,610 ) 4,335 Net (loss) income from discontinued operations $ (157,580 ) $ 21,742 $ (13,101 ) Net assets for discontinued operations are as follows: Year ended December 31, 2015 2014 Accounts receivable, net $ 2,743 $ 18,852 Inventories, net — 6,410 Other current assets 135 380 Property and equipment, net 22 3,631 Intangible and other non-current assets 7 159,440 Total assets 2,907 188,713 Accounts payable and other liabilities 13,371 8,681 Net (liabilities) assets $ (10,464 ) $ 180,032 |
ACCOUNTS RECEIVABLE RESERVES (T
ACCOUNTS RECEIVABLE RESERVES (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | ||
Summary of Activity in Accounts Receivable Allowance for Doubtful Accounts and Sales Returns | A summary of activity in our accounts receivable reserves for doubtful accounts is presented below (in thousands): Six Months Ended July 1, 2016 June 27, 2015 Balance, beginning of period $ 32,893 $ 23,585 Provision for doubtful accounts 11,861 12,014 Write-offs, net of recoveries (11,495 ) (6,714 ) Balance, end of period $ 33,259 $ 28,885 | A summary of activity in our accounts receivable allowance for doubtful accounts is presented below (in thousands): Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 23,585 $ 16,458 $ 12,304 Provision for doubtful accounts 26,160 26,083 13,311 Write-offs, net of recoveries (16,852 ) (18,956 ) (9,157 ) Balance, end of year $ 32,893 $ 23,585 $ 16,458 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | ||
Summary of Inventories | Inventories consist of the following (in thousands): July 1, 2016 December 31, 2015 Components and raw materials $ 61,949 $ 57,372 Work in process 9,908 10,330 Finished goods 94,810 99,167 Inventory held on consignment 33,721 29,746 200,388 196,615 Inventory reserves (22,840 ) (22,042 ) $ 177,548 $ 174,573 | Inventories consist of the following (in thousands): December 31, 2015 December 31, 2014 Components and raw materials $ 57,372 $ 57,513 Work in process 10,330 5,321 Finished goods 99,167 101,309 Inventory held on consignment 29,746 26,881 196,615 191,024 Inventory reserves (22,042 ) (22,094 ) $ 174,573 $ 168,930 |
Summary of Activity in Inventory Reserves | A summary of the activity in our reserves for estimated slow moving, excess, obsolete and otherwise impaired inventory is presented below (in thousands): Six Months Ended July 1, 2016 June 27, 2015 Balance, beginning of period $ 22,042 $ 22,094 Provision charged to costs of sales 4,922 2,714 Write-offs, net of recoveries (4,124 ) (1,288 ) Balance, end of period $ 22,840 $ 23,520 | A summary of the activity in our inventory reserves is presented below (in thousands): Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 22,094 $ 21,523 $ 15,192 Provision charged to costs of sales 5,699 6,800 7,905 Write-offs, net of recoveries (5,751 ) (6,229 ) (1,574 ) Balance, end of year $ 22,042 $ 22,094 $ 21,523 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consists of the following (in thousands): December 31, 2015 December 31, 2014 Depreciable lives (years) Land $ 266 $ 266 Indefinite Buildings and improvements 26,187 25,741 3 to 25 Equipment 128,352 121,502 2 to 7 Software 42,495 33,780 3 to 10 Furniture and fixtures 12,065 11,596 3 to 8 Surgical implant instrumentation 97,489 78,275 5 Construction in progress 3,885 11,913 N/A 310,739 283,073 Accumulated depreciation and amortization (193,466 ) (166,597 ) Property and equipment, net $ 117,273 $ 116,476 |
LONG-LIVED ASSETS (Tables)
LONG-LIVED ASSETS (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill for the six months ended July 1, 2016 are presented in the table below (in thousands): Bracing & Vascular Recovery Sciences Surgical Implant International Total Balance, beginning of period Goodwill $ 483,258 $ 249,601 $ 49,229 $ 333,022 $ 1,115,110 Accumulated impairment losses — (49,600 ) (47,406 ) — (97,006 ) Goodwill, net of accumulated impairment losses at December 31, 2015 483,258 200,001 1,823 333,022 1,018,104 Current Year Activity: Foreign currency translation — — — 1,082 1,082 Balance, end of period Goodwill 483,258 249,601 49,229 334,104 1,116,192 Accumulated impairment losses — (49,600 ) (47,406 ) — (97,006 ) Goodwill, net of accumulated impairment losses at July 1, 2016 $ 483,258 $ 200,001 $ 1,823 $ 334,104 $ 1,019,186 | Changes in the carrying amount of goodwill for the year ended December 31, 2015 are presented in the table below (in thousands): Bracing & Vascular Recovery Sciences Surgical Implant International Total Balance, beginning of period Goodwill $ 483,258 $ 249,601 $ 47,406 $ 340,631 $ 1,120,896 Accumulated impairment losses — (49,600 ) (47,406 ) — (97,006 ) Goodwill, net of accumulated impairment losses at December 31, 2014 483,258 200,001 — 340,631 1,023,890 Current Year Activity: Acquisitions — — 1,823 — 1,823 Foreign currency translation — — — (7,609 ) (7,609 ) Balance, end of period Goodwill 483,258 249,601 49,229 333,022 1,115,110 Accumulated impairment losses — (49,600 ) (47,406 ) — (97,006 ) Goodwill, net of accumulated impairment losses at December 31, 2015 $ 483,258 $ 200,001 $ 1,823 $ 333,022 $ 1,018,104 |
Summary of Identifiable Intangible Assets | Identifiable intangible assets consisted of the following (in thousands): July 1, 2016 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Definite-lived intangible assets: Customer relationships $ 476,460 $ (343,667 ) $ 132,793 Patents and technology 446,840 (260,982 ) 185,858 Trademarks and trade names 29,756 (14,155 ) 15,601 Distributor contracts and relationships 4,772 (4,230 ) 542 Non-compete agreements 6,655 (6,085 ) 570 $ 964,483 $ (629,119 ) 335,364 Indefinite-lived intangible assets: Trademarks and trade names 375,185 Net identifiable intangible assets $ 710,549 December 31, 2015 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Definite-lived intangible assets: Customer relationships $ 475,776 $ (320,991 ) $ 154,785 Patents and technology 446,854 (246,509 ) 200,345 Trademarks and trade names 29,737 (12,695 ) 17,042 Distributor contracts and relationships 4,693 (3,875 ) 818 Non-compete agreements 6,607 (5,714 ) 893 $ 963,667 $ (589,784 ) $ 373,883 Indefinite-lived intangible assets: Trademarks and trade names 375,162 Net identifiable intangible assets $ 749,045 | Identifiable intangible assets consisted of the following (in thousands): December 31, 2015 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Definite-lived intangible assets: Customer relationships $ 475,776 $ (320,991 ) $ 154,785 Patents and technology 446,854 (246,509 ) 200,345 Trademarks and trade names 29,737 (12,695 ) 17,042 Distributor contracts and relationships 4,693 (3,875 ) 818 Non-compete agreements 6,607 (5,714 ) 893 $ 963,667 $ (589,784 ) 373,883 Indefinite-lived intangible assets: Trademarks and trade names 375,162 Net identifiable intangible assets $ 749,045 December 31, 2014 Gross Carrying Amount Accumulated Amortization Intangible Assets, Net Definite-lived intangible assets: Customer relationships $ 477,359 $ (279,008 ) $ 198,351 Patents and technology 431,979 (215,915 ) 216,064 Trademarks and trade names 25,970 (9,902 ) 16,068 Distributor contracts and relationships 4,771 (3,401 ) 1,370 Non-compete agreements 6,824 (4,723 ) 2,101 $ 946,903 $ (512,949 ) 433,954 Indefinite-lived intangible assets: Trademarks and trade names 391,951 Net identifiable intangible assets $ 825,905 |
Schedule of Estimated Amortization Expense | Based on our amortizable intangible asset balance as of April 1, 2016, we estimate that amortization expense will be as follows for the next five years and thereafter (in thousands): 2016 $ 37,857 2017 66,124 2018 57,905 2019 53,041 2020 37,070 Thereafter 83,367 $ 335,364 | Based on our amortizable intangible asset balance as of December 31, 2015 we estimate that amortization expense will be as follows for the next five years and thereafter (in thousands): 2016 76,460 2017 66,104 2018 57,887 2019 53,037 2020 37,066 Thereafter 83,329 $ 373,883 |
Goodwill and Intangible Assets by Segments | Our goodwill and intangible assets by segment are as follows (in thousands): December 31, 2015 Goodwill Intangible Assets, Net Bracing and Vascular $ 483,258 $ 449,893 Recovery Sciences 200,001 138,732 International 333,022 131,019 Surgical Implant 1,823 29,401 $ 1,018,104 $ 749,045 December 31, 2014 Goodwill Intangible Assets, Net Bracing and Vascular $ 483,258 $ 487,122 Recovery Sciences 200,001 176,134 International 340,631 150,128 Surgical Implant — 12,521 $ 1,023,890 $ 825,905 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | ||
Schedule of Other Current Liabilities | Other current liabilities consist of the following (in thousands): July 1, 2016 December 31, 2015 Accrued wages and related expenses $ 26,690 $ 29,031 Accrued commissions 16,069 20,479 Accrued rebates 10,106 13,433 Accrued other taxes 3,485 4,196 Accrued professional expenses 5,577 3,164 Income taxes payable 988 1,612 Deferred tax liability 165 163 Other accrued liabilities 29,088 30,095 $ 92,168 $ 102,173 | Other current liabilities consist of the following (in thousands): December 31, 2015 December 31, 2014 Accrued wages and related expenses $ 29,031 $ 29,650 Accrued commissions 20,479 15,237 Accrued rebates 13,433 12,981 Accrued other taxes 4,196 4,983 Accrued professional expenses 3,164 2,682 Income taxes payable 1,612 2,477 Deferred tax liability 163 343 Other accrued liabilities 30,095 25,825 $ 102,173 $ 94,178 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Schedule of Information Regarding Notional Amounts of Foreign Exchange Forward Contracts | Information regarding the notional amounts of our foreign exchange forward contracts is presented in the table below (in thousands): Notional Amount (MXN) Notional Amount (USD) December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014 Foreign exchange contracts not designated as hedges — 7,682 $ — $ 526 | |
Summary of Location and Fair Value of Derivative Instruments in Condensed Consolidated Balance Sheets | The following table summarizes the fair value of derivative instruments in our Unaudited Condensed Consolidated Balance Sheets (in thousands): Balance Sheet July 1, 2016 December 31, 2015 Derivative Assets: Interest rate cap agreements designated as cash flow hedges Other long-term assets $ — $ 1,313 Derivative Liabilities: Interest rate cap agreements designated as cash flow hedges Other current $ 1,074 $ 282 Interest rate cap agreements designated as cash flow hedges Other long-term 5,879 — | The following table summarizes the fair value of derivative instruments in our Consolidated Balance Sheets (in thousands): Balance Sheet Location December 31, 2015 December 31, 2014 Derivative Assets: Interest rate cap agreements designated as cash flow hedges Other long term assets $ 1,313 $ 0 Derivative Liabilities: Interest rate cap agreements designated as cash flow hedges Other current liabilities $ 282 $ — Foreign exchange forward contracts not designated as hedges Other current liabilities — 4 |
Summary of Effect of Derivative Instruments on Condensed Consolidated Statements of Operations | The following table summarizes the effect our derivative instruments have on our Unaudited Condensed Consolidated Statements of Operations (in thousands): Three Months Ended Six Months Ended Location of gain (loss) July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Interest rate cap agreements designated as cash flow hedges Interest expense, net $ 65 $ — $ 75 $ — Foreign exchange forward contracts not designated as hedges Other income, net $ — $ (4 ) $ — $ (4 ) | The following table summarizes the effect our derivative instruments have on our Consolidated Statements of Operations (in thousands): Year Ended December 31, Location of gain (loss) 2015 2014 2013 Interest rate cap agreements designated as cash flow hedges Interest expense (1) $ — $ — $ — Foreign exchange forward contracts not designated as hedges Other income (expense), net $ (4 ) 40 (821 ) $ (4 ) $ 40 $ (821 ) |
Summary of Pre-tax Loss on Derivative Instruments Designated as Cash Flow Hedges Recognized in Other Comprehensive Income (Loss) | The pre-tax loss on derivative instruments designated as cash flow hedges recognized in other comprehensive income (loss) is presented below (in thousands): Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Interest rate cap agreements designated as cash flow hedges $ (2,651 ) $ — $ (8,042 ) $ — | The pre-tax loss on derivative instruments designated as cash flow hedges recognized in other comprehensive income (loss) is presented below (in thousands): Year Ended December 31, 2015 2014 2013 Interest rate cap agreements designated as cash flow hedges $ 985 $ — $ — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis (in thousands): As of July 1, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recorded Balance Liabilities: Interest rate cap agreements designated as cash flow hedges $ — $ 6,953 $ — $ 6,953 As of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recorded Balance Assets: Interest rate cap agreements designated as cash flow hedges $ — $ 1,313 $ — $ 1,313 Liabilities: Interest rate cap agreements designated as cash flow hedges $ — $ 282 $ — $ 282 | The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis (in thousands): As of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recorded Balance Assets: Interest rate cap agreements designated as cash flow hedges $ — $ 1,313 $ — $ 1,313 Liabilities: Interest rate cap agreements designated as cash flow hedges $ — $ 282 $ — $ 282 As of December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recorded Balance Liabilities: Foreign exchange forward contracts not designated as hedges $ — $ 4 $ — $ 4 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | ||
Schedule of Debt Obligations | Debt obligations consist of the following (in thousands): July 1, 2016 December 31, 2015 Credit facilities: Revolving credit facility, net of unamortized debt issuance costs of $1.9 million and $2.1 million as of July 1, 2016 and December 31, 2015, respectively $ 80,125 $ 27,886 Term loan: $1,044.5 million Term Loan, net of unamortized debt issuance costs and original issuance discount of $13.6 million and $15.3 million as of July 1, 2016 and December 31, 2015, respectively 1,030,815 1,037,117 Notes: $1,015.0 million 8.125% Second Lien notes, net of unamortized debt issuance costs and original issuance discount of $15.6 million and $16.9 million as of July 1, 2016 and December 31, 2015, respectively 999,367 998,137 $298.5 million 10.75% Third Lien notes, net of unamortized debt issuance costs and original issuance discount of $7.3 million and $8.1 million as of July 1, 2016 and December 31, 2015, respectively 291,178 290,443 9.75% Senior subordinated notes 1,529 1,529 Total debt 2,403,014 2,355,112 Current maturities (10,550 ) (10,550 ) Long-term debt $ 2,392,464 $ 2,344,562 | Debt obligations consist of the following (in thousands): December 31, 2015 December 31, 2014 Credit facilities: Revolving credit facility, net of unamortized debt issuance costs of $2.1 million and $1.0 million as of December 31, 2015 and 2014, respectively $ 27,886 $ 16,031 Term loan: $1,052.4 million Term Loan, net of unamortized debt issuance costs and original issuance discount of $15.3 million as of December 31, 2015 1,037,117 — $884.6 million Tranche B term loans, net of unamortized debt issuance costs and original issuance discount $13.2 million as of December 31, 2014 — 871,373 Notes: $1,015.0 million 8.125% Second Lien notes, net of unamortized debt issuance costs and original issuance discount of $16.9 million 998,137 — $330.0 million 8.75% Second Priority Senior Secured notes, net of unamortized debt issuance costs, including unamortized original issue premium of $1.0 million as of December 31, 2014 — 329,031 $440.0 million 9.875% Senior Unsecured notes, net of unamortized debt issuance costs of $6.7 million as of December 31, 2014 — 433,309 $300.0 million 7.75% Senior Unsecured notes, net of unamortized debt issuance costs of $4.1 million as of December 31, 2014 — 295,810 $298.5 million 10.75% Third Lien notes, net of unamortized debt issuance costs and original issuance discount of $8.1 million 290,443 — $300.0 million 9.75% Senior Subordinated notes, net of unamortized debt issuance costs of $3.3 million as of December 31, 2014 1,529 296,667 Other — 63 Total debt 2,355,112 2,242,284 Current maturities (10,550 ) (8,975 ) Long-term debt $ 2,344,562 $ 2,233,309 |
Aggregate Amounts of Principal Maturities of Long-term Debt | At December 31, 2015, the aggregate amounts of principal maturities of long-term debt for the next five years and thereafter are as follows (in thousands): 2016 10,550 2017 12,079 2018 10,550 2019 10,550 2020 1,338,634 Thereafter 1,015,000 $ 2,397,363 |
STOCK OPTION PLANS AND STOCK-42
STOCK OPTION PLANS AND STOCK-BASED COMPENSATION (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Summary of Assumptions Used to Estimate Fair Value of Time-Based Options, Vested Options and Director Service Options of Stock Options Granted | The following table summarizes certain assumptions we used to estimate the fair value of the Time-Based Options, the Vested Options and the Director Service Options granted: Three Months Ended Six Months Ended July 1, June 27, 2015 July 1, June 27, Expected volatility 33.3 % 33.3 % 33.3 % 33.3 % Risk-free interest rate 1.2%-1.5 % 1.8 % 1.2%-1.6 % 1.5%-2.0 % Expected years until exercise 5.2-6.6 6.5 5.2-6.6 5.1-8.3 Expected dividend yield 0.0 % 0.0 % 0.0 % 0.0 % | The following table summarizes certain assumptions we used to estimate the fair value of the Time-Based Options, the Vested Options and the Director Service Options of stock options granted during the years ended December 31, 2015, 2014, and 2013: Year Ended December 31, 2015 2014 2013 Expected volatility 33 % 31.7-33.4 % 33.4-35.1 % Risk-free interest rate 1.5-2.0 % 1.7-2.2 % 0.7-2.0 % Expected term until exercise 5.1-8.3 5.0-6.4 5.0-6.3 Expected dividend yield 0.0 % 0.0 % 0.0 % |
Schedule of Recorded Non-cash Stock-based Compensation Expense | We recorded non-cash stock-based compensation expense during the periods presented as follows (in thousands): Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Cost of sales $ 31 $ 31 $ 61 $ 61 Operating expenses: Selling, general and administrative 1,146 506 1,318 1,085 Research and development 139 2 142 6 $ 1,316 $ 539 $ 1,521 $ 1,152 | We recorded non-cash stock-based compensation expense during the periods presented as follows (in thousands): Year Ended December 31, 2015 2014 2013 Cost of goods sold $ 90 $ 82 $ 52 Operating expenses: Selling, general and administrative 1,696 1,782 2,049 Research and development 19 5 54 $ 1,805 $ 1,869 $ 2,155 |
Summary of Option Activity | A summary of option activity under the 2007 Plan is presented below: Number of Shares Weighted- Average Exercise Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2014 9,239,166 $ 16.11 6.3 $ 3,197,576 Granted 1,377,121 $ 16.46 Exercised (31,196 ) $ 9.00 Forfeited or expired (1,656,232 ) $ 16.46 Outstanding at December 31, 2015 8,928,859 $ 16.13 5.9 $ 2,964,949 Vested or expected to vest at December 31, 2015 5,154,858 $ 15.88 4.9 $ 2,964,949 Exercisable at December 31, 2015 2,865,982 $ 15.43 3.2 $ 2,964,949 | |
Exercise of Stock Options Using Net Exercise Method | The following table provides information regarding the use of the net exercise method during the periods presented: Year Ended December 31, 2015 2014 Options exercised 30,529 507,088 Shares withheld 21,681 391,395 Shares issued 8,848 115,693 Average market value per share withheld $ 16.46 $ 16.46 Aggregate market value of shares withheld (in thousands) $ 357 $ 6,442 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Loss from Continuing Operations Before Income Tax Provision | The components of loss from continuing operations before income tax provision consist of the following (in thousands): Year Ended December 31, 2015 2014 2013 U.S. operations $ (184,524 ) $ (133,463 ) $ (189,333 ) Foreign operations 14,273 17,439 17,323 $ (170,251 ) $ (116,024 ) $ (172,010 ) |
Components of Income Tax Provision from Continuing Operations | The income tax provision from continuing operations consists of the following (in thousands): Year Ended December 31, 2015 2014 2013 Current income taxes: U.S. federal $ 597 $ (309 ) $ 840 U.S. state 1,042 310 429 Foreign 4,677 5,989 6,373 Total current income taxes 6,316 5,990 7,642 Deferred income taxes: U.S. federal 6,095 (6,579 ) 9,610 U.S. state 919 (2,120 ) 767 Foreign (1,074 ) (2,011 ) (568 ) Total deferred income taxes 5,940 (10,710 ) 9,809 Total income tax provision (benefit) $ 12,256 $ (4,720 ) $ 17,451 |
Difference Between Income Tax Provision Derived by Applying U.S. Federal Statutory Income Tax Rate and Recognized Income Tax Provision | The difference between the income tax provision (benefit) derived by applying the U.S. federal statutory income tax rate of 35% and the recognized income tax provision is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Income tax provision (benefit) derived by applying the U.S. federal statutory income tax rate to loss before income taxes $ (59,586 ) $ (40,595 ) $ (60,217 ) Add (deduct) the effect of: State tax benefit, net (4,996 ) (2,564 ) (3,494 ) Change in state effective tax rates (604 ) (803 ) (687 ) Foreign earnings repatriation (622 ) (1,646 ) 2,678 Unrecognized tax benefits 1,678 949 2,767 Goodwill impairment — — 16,644 Valuation allowance 72,655 35,503 64,547 Research tax credit (758 ) (647 ) (1,249 ) Equity compensation benefit — — (2,864 ) Permanent differences and other, net (2,726 ) 4,912 (456 ) Foreign rate differential 5,875 — — Other 1,340 171 (218 ) $ 12,256 $ (4,720 ) $ 17,451 |
Components of Deferred Income Tax Assets and Liabilities | The components of deferred income tax assets and liabilities are as follows (in thousands): December 31, 2015 December 31, 2014 Deferred tax assets: Net operating loss carryforwards $ 264,343 $ 214,319 Receivables reserve 19,654 26,709 Other 43,722 39,284 Gross deferred tax assets 327,719 280,312 Valuation allowance (223,385 ) (137,520 ) Net deferred tax assets 104,334 142,792 Deferred tax liabilities: Intangible assets (303,993 ) (343,370 ) Foreign earnings repatriation (11,730 ) (13,012 ) Other (1,225 ) (3,987 ) Gross deferred tax liabilities (316,948 ) (360,369 ) Net deferred tax liabilities $ (212,614 ) $ (217,577 ) |
Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 13,905 $ 14,469 $ 12,342 Additions based on tax positions related to current year 922 1,502 1,531 Additions for tax positions related to prior years 194 354 975 Reduction due to lapse of statute of limitations (120 ) (709 ) (379 ) Reductions for settlements of tax positions — (1,711 ) — Balance, end of year $ 14,901 $ 13,905 $ 14,469 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Aggregate Minimum Rental Commitments Under Non-Cancelable Leases | The aggregate minimum rental commitments under non-cancelable leases for the next five years and thereafter, as of December 31, 2015, are as follows (in thousands): Years Ending December 31, 2016 28,687 2017 17,947 2018 8,871 2019 6,577 2020 5,710 Thereafter 4,453 $ 72,245 |
SEGMENT AND GEOGRAPHIC INFORM45
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | ||
Information Regarding Reportable Business Segments | Information regarding our reportable business segments is presented below (in thousands). Segment results exclude the impact of amortization and impairment of goodwill and intangible assets, certain general corporate expenses, and charges related to various integration activities, as defined by management. The accounting policies of the reportable segments are the same as the accounting policies of the Company. We allocate resources and evaluate the performance of segments based on net sales, gross profit, operating income and other non-GAAP measures, as defined in our Credit Facilities. We do not allocate assets to reportable segments because a significant portion of our assets are shared by the segments. Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Net sales: Bracing and Vascular $ 131,751 $ 136,179 $ 255,967 $ 250,083 Recovery Sciences 38,449 40,102 75,024 74,627 Surgical Implant 42,575 28,071 85,625 54,997 International 80,077 75,550 155,142 147,706 $ 292,852 $ 279,902 $ 571,758 $ 527,413 Operating income: Bracing and Vascular $ 29,072 $ 31,497 $ 49,606 $ 52,393 Recovery Sciences 8,056 7,472 14,501 11,402 Surgical Implant 6,053 4,392 13,282 8,712 International 14,653 13,312 23,642 25,697 Expenses not allocated to segments and eliminations (36,290 ) (31,659 ) (70,025 ) (63,440 ) $ 21,544 $ 25,014 $ 31,006 $ 34,764 | Information regarding our reportable business segments is presented below (in thousands). Segment results exclude the impact of amortization and impairment of goodwill and intangible assets, certain general corporate expenses, and charges related to various integration activities, as defined by management. The accounting policies of the reportable segments are the same as the accounting policies of the Company. We allocate resources and evaluate the performance of segments based on net sales, gross profit, operating income and other non-GAAP measures, as defined in the senior secured credit facilities. We do not allocate assets to reportable segments because a significant portion of our assets are shared by the segments. Year Ended December 31, 2015 2014 2013 Net sales: Bracing and Vascular $ 526,295 $ 504,590 $ 476,492 Recovery Sciences 156,194 157,485 158,110 Surgical Implant 134,843 100,139 87,088 International 296,295 325,315 299,094 $ 1,113,627 $ 1,087,529 $ 1,020,784 Operating income (loss): Bracing and Vascular $ 115,791 $ 102,933 $ 86,447 Recovery Sciences 29,035 33,863 37,689 Surgical Implant 25,531 12,712 8,669 International 48,578 62,304 57,515 Expenses not allocated to segments and eliminations (141,120 ) (147,376 ) (182,424 ) $ 77,815 $ 64,436 $ 7,896 |
Net Sales by Geographic Area | Following are our net sales by geographic area (in thousands): Three Months Ended Six Months Ended July 1, 2016 June 27, 2015 July 1, 2016 June 27, 2015 Net sales: United States $ 212,775 $ 204,352 $ 416,616 $ 379,707 Other Europe, Middle East and Africa 38,057 35,863 74,516 69,557 Germany 21,960 20,838 42,963 41,872 Australia and Asia Pacific 11,400 10,500 21,402 20,391 Canada 6,697 6,381 12,434 11,733 Latin America 1,963 1,968 3,827 4,153 $ 292,852 $ 279,902 $ 571,758 $ 527,413 | Following are our net sales by geographic area (in thousands): Year Ended December 31, 2015 2014 2013 United States $ 817,332 $ 762,214 $ 721,690 Other Europe, Middle East, and Africa 141,638 156,339 139,252 Germany 80,982 91,754 88,236 Australia and Asia Pacific 40,717 39,990 35,025 Canada 23,966 26,481 27,035 Latin America 8,992 10,751 9,546 $ 1,113,627 $ 1,087,529 $ 1,020,784 |
Long-lived Assets by Geographic Area | Following are our long-lived assets by geographic area (in thousands): December 31, 2015 December 31, 2014 United States $ 106,058 $ 104,211 International 16,389 16,470 $ 122,447 $ 120,681 |
UNAUDITED QUARTERLY CONSOLIDA46
UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Consolidated Financial Data | The following table presents our unaudited quarterly consolidated financial data (in thousands): Three months ended March 28, 2015 June 27, 2015 September 26, 2015 December 31, 2015 Net sales $ 247,511 $ 279,902 $ 278,263 $ 307,951 Operating income 9,750 25,014 22,480 20,571 Net loss from continuing operations (39,217 ) (92,685 ) (25,162 ) (25,443 ) Net loss attributable to DJOFL (35,526 ) (77,977 ) (177,838 ) (49,586 ) Three months ended March 29, 2014 June 28, 2014 September 27, 2014 December 31, 2014 Net sales $ 248,651 $ 278,289 $ 270,407 $ 290,182 Operating income (loss) 4,286 15,426 16,979 27,745 Net loss from continuing operations (38,415 ) (26,342 ) (28,516 ) (18,031 ) Net loss attributable to DJOFL (36,522 ) (25,434 ) (21,206 ) (7,372 ) |
SUPPLEMENTAL GUARANTOR CONDEN47
SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Schedule of Condensed Consolidating Balance Sheets | DJO Finance LLC Unaudited Condensed Consolidating Balance Sheets As of July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 17,436 $ 1,370 $ 22,893 $ — $ 41,699 Accounts receivable, net — 128,643 48,485 — 177,128 Inventories, net — 143,880 46,402 (12,734 ) 177,548 Prepaid expenses and other current assets 103 15,210 6,996 — 22,309 Total current assets 17,539 289,103 124,776 (12,734 ) 418,684 Property and equipment, net — 117,527 13,381 (63 ) 130,845 Goodwill — 951,005 99,277 (31,096 ) 1,019,186 Intangible assets, net — 700,017 10,532 — 710,549 Investment in subsidiaries 1,297,699 1,679,465 51,573 (3,028,737 ) — Intercompany receivables 566,198 — — (566,198 ) — Other non-current assets — 2,568 4,031 — 6,599 Total assets $ 1,881,436 $ 3,739,685 $ 303,570 $ (3,638,828 ) $ 2,285,863 Liabilities and (Deficit) Equity Current liabilities: Accounts payable $ — $ 64,547 $ 9,421 $ — $ 73,968 Current portion of debt obligations 10,550 — — — 10,550 Other current liabilities 12,123 64,057 27,050 — 103,230 Current liabilities of discontinued operations 946 946 Total current liabilities 22,673 129,550 36,471 — 188,694 Long-term debt obligations 2,392,464 — — — 2,392,464 Deferred tax liabilities, net — 214,178 5,752 — 219,930 Intercompany payables, net — 362,861 137,313 (500,174 ) — Other long-term liabilities 5,879 14,811 629 — 21,319 Total liabilities 2,421,016 721,400 180,165 (500,174 ) 2,822,407 Noncontrolling interests — — 3,036 — 3,036 Total membership (deficit) equity (539,580 ) 3,018,285 120,369 (3,138,654 ) (539,580 ) Total liabilities and (deficit) equity $ 1,881,436 $ 3,739,685 $ 303,570 $ (3,638,828 ) $ 2,285,863 DJO Finance LLC Condensed Consolidating Balance Sheets As of December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 29,673 $ 160 $ 19,110 $ — $ 48,943 Accounts receivable, net — 128,085 44,275 — 172,360 Inventories, net — 142,033 31,803 737 174,573 Prepaid expenses and other current assets 42 13,301 7,836 — 21,179 Current assets of discontinued operations 2,878 — — 2,878 Total current assets 29,715 286,457 103,024 737 419,933 Property and equipment, net — 103,637 13,721 (85 ) 117,273 Goodwill — 951,005 98,309 (31,210 ) 1,018,104 Intangible assets, net — 737,798 11,247 — 749,045 Investment in subsidiaries 1,297,699 1,687,724 50,741 (3,036,164 ) — Intercompany receivables 575,483 — — (575,483 ) — Other non-current assets 1,313 1,193 2,668 — 5,174 Non current assets of discontinued operations — 29 — — 29 Total assets $ 1,904,210 $ 3,767,843 $ 279,710 $ (3,642,205 ) $ 2,309,558 Liabilities and (Deficit) Equity Current liabilities: Accounts payable $ — $ 49,394 $ 9,098 $ — $ 58,492 Current portion of debt obligations 10,550 — — — 10,550 Other current liabilities 17,268 73,260 28,643 — 119,171 Current liabilities of discontinued operations — 13,371 — — 13,371 Total current liabilities 27,818 136,025 37,741 — 201,584 Long-term debt obligations 2,344,562 — — — 2,344,562 Deferred tax liabilities, net — 209,179 4,677 — 213,856 Intercompany payables, net — 400,216 131,138 (531,354 ) — Other long-term liabilities — 14,441 651 — 15,092 Total liabilities 2,372,380 759,861 174,207 (531,354 ) 2,775,094 Noncontrolling interests — — 2,634 — 2,634 Total membership (deficit) equity (468,170 ) 3,007,982 102,869 (3,110,851 ) (468,170 ) Total liabilities and (deficit) equity $ 1,904,210 $ 3,767,843 $ 279,710 $ (3,642,205 ) $ 2,309,558 | DJO Finance LLC Condensed Consolidating Balance Sheets As of December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 29,673 $ 160 $ 19,110 $ — $ 48,943 Accounts receivable, net — 128,085 44,275 — 172,360 Inventories, net — 142,033 31,803 737 174,573 Prepaid expenses and other current assets 42 13,301 7,836 — 21,179 Current assets of discontinued operations 2,878 — — 2,878 Total current assets 29,715 286,457 103,024 737 419,933 Property and equipment, net — 103,637 13,721 (85 ) 117,273 Goodwill — 951,005 98,309 (31,210 ) 1,018,104 Intangible assets, net — 737,798 11,247 — 749,045 Investment in subsidiaries 1,297,699 1,687,724 50,741 (3,036,164 ) — Intercompany receivables 575,483 — — (575,483 ) — Other non-current assets 1,313 1,193 2,668 — 5,174 Non current assets of discontinued operations — 29 — — 29 Total assets $ 1,904,210 $ 3,767,843 $ 279,710 $ (3,642,205 ) $ 2,309,558 Liabilities and (Deficit) Equity Current liabilities: Accounts payable $ — $ 49,394 $ 9,098 — $ 58,492 Current portion of debt obligations 10,550 — — — 10,550 Other current liabilities 17,268 73,260 28,643 — 119,171 Current liabilities of discontinued operations — 13,371 — — 13,371 Total current liabilities 27,818 136,025 37,741 — 201,584 Long-term debt obligations 2,344,562 — — — 2,344,562 Deferred tax liabilities, net — 209,179 4,677 — 213,856 Intercompany payables, net — 400,216 131,138 (531,354 ) — Other long-term liabilities — 14,441 651 — 15,092 Total liabilities 2,372,380 759,861 174,207 (531,354 ) 2,775,094 Noncontrolling interests — — 2,634 — 2,634 Total membership (deficit) equity (468,170 ) 3,007,982 102,869 (3,110,851 ) (468,170 ) Total liabilities and (deficit) equity $ 1,904,210 $ 3,767,843 $ 279,710 $ (3,642,205 ) $ 2,309,558 DJO Finance LLC Condensed Consolidating Balance Sheets As of December 31, 2014 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 12,958 $ 3 $ 18,183 $ — $ 31,144 Accounts receivable, net — 121,929 47,278 — 169,207 Inventories, net — 138,636 31,134 (840 ) 168,930 Deferred tax assets, net — 24,351 247 — 24,598 Prepaid expenses and other current assets 160 11,085 5,548 — 16,793 Current assets of discontinued operations 0 25,642 — — 25,642 Total current assets 13,118 321,646 102,390 (840 ) 436,314 Property and equipment, net — 102,560 14,071 (155 ) 116,476 Goodwill — 949,181 109,260 (34,551 ) 1,023,890 Intangible assets, net — 810,897 15,008 — 825,905 Investment in subsidiaries 1,297,699 1,686,557 56,572 (3,040,828 ) — Intercompany receivables 836,759 — — (836,759 ) — Other non-current assets — 1,806 2,399 — 4,205 Non current assets of discontinued operations — 163,071 — — 163,071 Total assets $ 2,147,576 $ 4,035,718 $ 299,700 $ (3,913,133 ) $ 2,569,861 Liabilities and (Deficit) Equity Current liabilities: Accounts payable $ — $ 46,875 $ 12,370 $ — $ 59,245 Current portion of debt obligations 8,912 — 63 — 8,975 Other current liabilities 29,589 65,106 29,083 — 123,778 Current liabilities of discontinued operations — 8,681 — — 8,681 Total current liabilities 38,501 120,662 41,516 — 200,679 Long-term debt obligations 2,233,309 — — — 2,233,309 Deferred tax liabilities, net — 237,813 5,310 — 243,123 Intercompany payables, net — 552,612 135,833 (688,445 ) — Other long-term liabilities — 12,244 2,122 — 14,366 Total liabilities 2,271,810 923,331 184,781 (688,445 ) 2,691,477 Noncontrolling interests — — 2,618 — 2,618 Total membership (deficit) equity (124,234 ) 3,112,387 112,301 (3,224,688 ) (124,234 ) Total liabilities and (deficit) equity $ 2,147,576 $ 4,035,718 $ 299,700 $ (3,913,133 ) $ 2,569,861 |
Schedule of Condensed Consolidating Statements of Operations | DJO Finance LLC Unaudited Condensed Consolidating Statements of Operations For the Three Months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 252,212 $ 83,178 $ (42,538 ) $ 292,852 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $7,080) — 94,465 74,317 (48,308 ) 120,474 Selling, general and administrative — 97,827 23,800 — 121,627 Research and development — 9,228 894 — 10,122 Amortization of intangible assets — 18,699 386 — 19,085 — 220,219 99,397 (48,308 ) 271,308 Operating income (loss) — 31,993 (16,219 ) 5,770 21,544 Other (expense) income: Interest (expense) income, net (42,448 ) 51 1 — (42,396 ) Other (expense) income, net (8 ) (8,553 ) 9,029 — 468 Intercompany (expense) income, net — (15,147 ) 14,634 513 — Equity in income (loss) of subsidiaries, net 19,181 — — (19,181 ) — (23,275 ) (23,649 ) 23,664 (18,668 ) (41,928 ) (Loss) income before income taxes (23,275 ) 8,344 7,445 (12,898 ) (20,384 ) Income tax provision — (1,671 ) (1,906 ) — (3,577 ) Net (loss) income from continuing operations (23,275 ) 6,673 5,539 (12,898 ) (23,961 ) Net income from discontinued operations — 855 — — 855 Net (loss) income (23,275 ) 7,528 5,539 (12,898 ) (23,106 ) Net income attributable to noncontrolling interests — — (169 ) — (169 ) Net (loss) income attributable to DJOFL $ (23,275 ) $ 7,528 $ 5,370 $ (12,898 ) $ (23,275 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Operations For the Six Months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 495,872 $ 158,673 $ (82,787 ) $ 571,758 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $14,487) — 189,306 138,711 (89,460 ) 238,557 Selling, general and administrative — 195,637 47,919 — 243,556 Research and development — 18,109 1,867 — 19,976 Amortization of intangible assets — 37,846 817 — 38,663 — 440,898 189,314 (89,460 ) 540,752 Operating income (loss) — 54,974 (30,641 ) 6,673 31,006 Other (expense) income: Interest (expense) income, net (84,731 ) 71 (6 ) — (84,666 ) Other (expense) income, net (8 ) (16,573 ) 17,333 — 752 Intercompany (expense) income , net — (14,784 ) 14,752 32 — Equity in income (loss) of subsidiaries, net 23,143 — — (23,143 ) — (61,596 ) (31,286 ) 32,079 (23,111 ) (83,914 ) (Loss) income before income taxes (61,596 ) 23,688 1,438 (16,438 ) (52,908 ) Income tax provision — (6,078 ) (2,912 ) — (8,990 ) Net (loss) income from continuing operations (61,596 ) 17,610 (1,474 ) (16,438 ) (61,898 ) Net income from discontinued operations — 665 — — 665 Net (loss) income (61,596 ) 18,275 (1,474 ) (16,438 ) (61,233 ) Net income attributable to noncontrolling interests — — (362 ) — (362 ) Net (loss) income attributable to DJOFL $ (61,596 ) $ 18,275 $ (1,836 ) $ (16,438 ) $ (61,595 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Operations For the Three Months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 243,371 $ 75,498 $ (38,967 ) $ 279,902 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $7,535) — 102,629 57,651 (42,510 ) 117,770 Selling, general and administrative — 86,789 21,823 — 108,612 Research and development — 8,102 586 — 8,688 Amortization of intangible assets — 19,197 621 — 19,818 — 216,717 80,681 (42,510 ) 254,888 Operating income (loss) — 26,654 (5,183 ) 3,543 25,014 Other (expense) income: Interest (expense) income, net (44,567 ) 11 (8 ) — (44,564 ) Loss on modification and extinguishment of debt (67,967 ) — — — (67,967 ) Other expense, net — (84 ) 827 — 743 Intercompany (expense) income, net — (8,573 ) 8,267 306 — Equity in income of subsidiaries, net 34,558 — — (34,558 ) — (77,976 ) (8,646 ) 9,086 (34,252 ) (111,788 ) (Loss) income before income taxes (77,976 ) 18,008 3,903 (30,709 ) (86,774 ) Income tax provision — (4,889 ) (1,022 ) — (5,911 ) Net (loss) income from continuing operations (77,976 ) 13,119 2,881 (30,709 ) (92,685 ) Net income from discontinued operations — 14,873 — — 14,873 Net (loss) income (77,976 ) 27,992 2,881 (30,709 ) (77,812 ) Net income attributable to noncontrolling interests — — (165 ) — (165 ) Net (loss) income attributable to DJOFL $ (77,976 ) $ 27,992 $ 2,716 $ (30,709 ) $ (77,977 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Operations For the Six Months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 461,763 $ 146,034 $ (80,384 ) $ 527,413 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $15,070) — 193,550 110,985 (84,881 ) 219,654 Selling, general and administrative — 171,127 44,670 — 215,797 Research and development — 15,984 1,568 — 17,552 Amortization of intangible assets — 38,395 1,251 — 39,646 — 419,056 158,474 (84,881 ) 492,649 Operating income (loss) — 42,707 (12,440 ) 4,497 34,764 Other (expense) income: Interest (expense) income, net (87,438 ) 23 (15 ) — (87,430 ) Loss on modification and extinguishment of debt (67,967 ) — — — (67,967 ) Other expense, net — (609 ) (2,804 ) — (3,413 ) Intercompany income (expense), net — (8,254 ) 8,292 (38 ) — Equity in income of subsidiaries, net 41,902 — — (41,902 ) — (113,503 ) (8,840 ) 5,473 (41,940 ) (158,810 ) (Loss) income before income taxes (113,503 ) 33,867 (6,967 ) (37,443 ) (124,046 ) Income tax provision — (6,492 ) (1,364 ) — (7,856 ) Net (loss) income from continuing operations (113,503 ) 27,375 (8,331 ) (37,443 ) (131,902 ) Net income from discontinued operations — 18,865 — — 18,865 Net (loss) income (113,503 ) 46,240 (8,331 ) (37,443 ) (113,037 ) Net income attributable to noncontrolling interests — — (466 ) — (466 ) Net (loss) income attributable to DJOFL $ (113,503 ) $ 46,240 $ (8,797 ) $ (37,443 ) $ (113,503 ) | DJO Finance LLC Condensed Consolidating Statements of Operations For the Year Ended December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 976,412 $ 293,899 $ (156,684 ) $ 1,113,627 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $30,719) — 408,987 227,635 (170,603 ) 466,019 Selling, general and administrative — 364,305 90,419 — 454,724 Research and development — 31,456 3,649 — 35,105 Amortization of intangible assets — 77,569 2,395 — 79,964 — 882,317 324,098 (170,603 ) 1,035,812 Operating (loss) income — 94,095 (30,199 ) 13,919 77,815 Other (expense) income: Interest (expense) income, net (172,237 ) 42 (95 ) — (172,290 ) Loss on modification of debt (68,473 ) — — — (68,473 ) Other expense, net — (960 ) (6,343 ) — (7,303 ) Intercompany (expense) income, net — (21,994 ) 34,167 (12,173 ) — Equity in loss of subsidiaries, net (100,217 ) — — 100,217 — (340,927 ) (22,912 ) 27,729 88,044 (248,066 ) (Loss) income before income taxes (340,927 ) 71,183 (2,470 ) 101,963 (170,251 ) Income tax provision — 10,027 2,229 — 12,256 Net (loss) income from continuing operations (340,927 ) 61,156 (4,699 ) 101,963 (182,507 ) Net loss from discontinued operations — (157,580 ) — — (157,580 ) Net income attributable to noncontrolling interests — — (840 ) — (840 ) Net (loss) income attributable to DJOFL $ (340,927 ) $ (96,424 ) $ (5,539 ) $ 101,963 $ (340,927 ) DJO Finance LLC Condensed Consolidating Statements of Operations For the Year Ended December 31, 2014 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 917,604 $ 318,849 $ (148,924 ) $ 1,087,529 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $32,962) — 400,295 230,721 (169,016 ) 462,000 Selling, general and administrative — 339,158 100,714 — 439,872 Research and development — 33,060 4,245 (28 ) 37,277 Amortization of intangible assets — 80,045 3,899 — 83,944 — 852,558 339,579 (169,044 ) 1,023,093 Operating income (loss) — 65,046 (20,730 ) 20,120 64,436 Other (expense) income: Interest (expense) income, net (174,309 ) 94 (110 ) — (174,325 ) Loss on modification of debt (938 ) — — — (938 ) Other expense, net — (280 ) (4,917 ) — (5,197 ) Intercompany (expense) income, net — (14,848 ) 24,037 (9,189 ) — Equity in loss of subsidiaries, net 84,713 — — (84,713 ) — (90,534 ) (15,034 ) 19,010 (93,902 ) (180,460 ) (Loss) income before income taxes (90,534 ) 50,012 (1,720 ) (73,782 ) (116,024 ) Income tax (benefit) provision — (8,972 ) 4,252 — (4,720 ) Net (loss) income from continuing operations (90,534 ) 58,984 (5,972 ) (73,782 ) (111,304 ) Net income from discontinued operations — 21,742 — — 21,742 Net income attributable to noncontrolling interests — — (972 ) — (972 ) Net (loss) income attributable to DJOFL $ (90,534 ) $ 80,726 $ (6,944 ) $ (73,782 ) $ (90,534 ) DJO Finance LLC Condensed Consolidating Statements of Operations For the Year Ended December 31, 2013 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net sales $ — $ 871,576 $ 282,317 $ (133,109 ) $ 1,020,784 Costs and operating expenses: Cost of sales (exclusive of amortization of intangible assets of $33,719) — 389,932 191,135 (146,359 ) 434,708 Selling, general and administrative — 315,163 94,022 7 409,192 Research and development — 29,376 3,577 23 32,976 Amortization of intangible assets — 81,043 5,369 — 86,412 Impairment of goodwill — 49,600 — — 49,600 — 865,114 294,103 (146,329 ) 1,012,888 Operating income (loss) — 6,462 (11,786 ) 13,220 7,896 Other (expense) income: Interest (expense) income, net (177,570 ) 81 (81 ) — (177,570 ) Loss on modification and extinguishment of debt (1,059 ) — — — (1,059 ) Other (expense) income, net — (305 ) (10,684 ) 9,712 (1,277 ) Intercompany income (expense), net — 4,379 17,799 (22,178 ) — Equity in (loss) income of subsidiaries, net (24,823 ) — — 24,823 — (203,452 ) 4,155 7,034 12,357 (179,906 ) (Loss) income before income taxes (203,452 ) 10,617 (4,752 ) 25,577 (172,010 ) Income tax (benefit) provision — 12,163 5,288 — 17,451 Net loss from continuing operations (203,452 ) (1,546 ) (10,040 ) 25,577 (189,461 ) Net loss from discontinued operations (13,101 ) (13,101 ) Net income attributable to noncontrolling interests — — (890 ) — (890 ) Net (loss) income attributable to DJOFL $ (203,452 ) $ (14,647 ) $ (10,930 ) $ 25,577 $ (203,452 ) |
Schedule of Condensed Consolidating Statements of Comprehensive Loss | DJO Finance LLC Unaudited Condensed Consolidating Statements of Comprehensive Loss For the Three Months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (23,275 ) $ 7,528 $ 5,539 $ (12,898 ) $ (23,106 ) Other comprehensive loss, net of taxes: Foreign currency translation adjustments, net of tax benefit of $111 — — (8,458 ) — (8,458 ) Unrealized loss on cash flow hedges, net of tax provision of zero (2,651 ) (2,651 ) Other comprehensive loss (2,651 ) — (8,458 ) — (11,109 ) Comprehensive (loss) income (25,926 ) 10,747 (1,513 ) (3,540 ) (34,215 ) Comprehensive income attributable to noncontrolling interests — — (101 ) — (101 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (25,926 ) $ 10,747 $ (1,614 ) $ (3,540 ) $ (34,316 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Comprehensive Loss For the Six Months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (61,596 ) $ 18,275 $ (1,474 ) $ (16,438 ) $ (61,233 ) Other comprehensive loss, net of taxes: Foreign currency translation adjustments, net of tax provision of $166 — — (2,850 ) — (2,850 ) Unrealized loss on cash flow hedges, net of tax provision of zero (8,042 ) — — — (8,042 ) Other comprehensive loss (8,042 ) — (2,850 ) — (10,892 ) Comprehensive (loss) income (69,638 ) 18,275 (4,324 ) (16,438 ) (72,125 ) Comprehensive income attributable to noncontrolling interests — — (402 ) — (402 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (69,638 ) $ 18,275 $ (4,726 ) $ (16,438 ) $ (72,527 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Comprehensive Loss For the Three Months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (77,976 ) $ 27,992 $ 2,881 $ (30,709 ) $ (77,812 ) Other comprehensive loss, net of taxes: Foreign currency translation adjustments, net of tax provision of $152 — — 4,137 — 4,137 Other comprehensive loss — — 4,137 — 4,137 Comprehensive (loss) income (77,976 ) 27,992 7,018 (30,709 ) (73,675 ) Comprehensive income attributable to noncontrolling interests — — (243 ) — (243 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (77,976 ) $ 27,992 $ 6,775 $ (30,709 ) $ (73,918 ) DJO Finance LLC Unaudited Condensed Consolidating Statements of Comprehensive Loss For the Six Months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (113,503 ) $ 46,240 $ (8,331 ) $ (37,443 ) $ (113,037 ) Other comprehensive loss, net of taxes: Foreign currency translation adjustments, net of tax benefit of $340 — — (5,305 ) — (5,305 ) Other comprehensive loss — — (5,305 ) — (5,305 ) Comprehensive (loss) income (113,503 ) 46,240 (13,636 ) (37,443 ) (118,342 ) Comprehensive loss attributable to noncontrolling interests — — (260 ) — (260 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (113,503 ) $ 46,240 $ (13,896 ) $ (37,443 ) $ (118,602 ) | DJO Finance LLC Condensed Consolidating Statements of Comprehensive Loss For the Year Ended December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (340,927 ) $ (96,424 ) $ (4,699 ) $ 101,963 $ (340,087 ) Other comprehensive income, net of taxes: Foreign currency translation adjustments, net of tax benefit of $540 — — (5,630 ) — (5,630 ) Unrealized gain on cash flow hedges, net of tax provision of $375 for the year ended December 31, 2015 609 — — — 609 Other comprehensive income (loss) 609 — (5,630 ) — (5,021 ) Comprehensive (loss) income (340,318 ) (96,424 ) (10,329 ) 101,963 (345,108 ) Comprehensive income attributable to noncontrolling interests — — (557 ) — (557 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (340,318 ) $ (96,424 ) $ (10,886 ) $ 101,963 $ (345,665 ) DJO Finance LLC Condensed Consolidating Statements of Comprehensive Loss For the Year Ended December 31, 2014 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (90,534 ) $ 80,726 $ (5,972 ) $ (73,782 ) $ (89,562 ) Other comprehensive (loss) income, net of taxes: Foreign currency translation adjustments, net of tax benefit of $3,871 — — (13,167 ) — (13,167 ) Other comprehensive loss — — (13,167 ) — (13,167 ) Comprehensive (loss) income (90,534 ) 80,726 (19,139 ) (73,782 ) (102,729 ) Comprehensive income attributable to noncontrolling interests — — (591 ) — (591 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (90,534 ) $ 80,726 $ (19,730 ) $ (73,782 ) $ (103,320 ) DJO Finance LLC Condensed Consolidating Statements of Comprehensive Loss For the Year Ended December 31, 2013 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Net (loss) income $ (203,452 ) $ (14,647 ) $ (10,040 ) $ 25,577 $ (202,562 ) Other comprehensive income, net of taxes: Foreign currency translation adjustments, net of tax provision of $1,212 — — 19 — 19 Other comprehensive income — — 19 — 19 Comprehensive (loss) income (203,452 ) (14,647 ) (10,021 ) 25,577 (202,543 ) Comprehensive income attributable to noncontrolling interests — — (1,010 ) — (1,010 ) Comprehensive (loss) income attributable to DJO Finance LLC $ (203,452 ) $ (14,647 ) $ (11,031 ) $ 25,577 $ (203,553 ) |
Schedule of Condensed Consolidating Statements of Cash Flows | Unaudited Condensed Consolidating Statements of Cash Flows For the Six months Ended July 1, 2016 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows From Operating Activities: Net (loss) income $ (61,596 ) $ 18,275 $ (1,474 ) $ (16,438 ) $ (61,233 ) Net loss from discontinued operations (665 ) $ (665 ) Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 18,055 2,486 (28 ) 20,513 Amortization of intangible assets — 37,846 817 — 38,663 Amortization of debt issuance costs and non-cash interest expense 3,815 — — — 3,815 Stock-based compensation expense — 1,521 — — 1,521 Gain on disposal of assets, net — 471 55 4 530 Deferred income tax expense (benefit) — 4,133 (321 ) — 3,812 Equity in (loss) income of subsidiaries, net (23,143 ) — — 23,143 — Changes in operating assets and liabilities, net of acquired assets and liabilities: Accounts receivable — (559 ) (3,650 ) — (4,209 ) Inventories — (1,244 ) 2,793 (7,199 ) (5,650 ) Prepaid expenses and other assets 1,251 (2,763 ) (252 ) 1,127 (637 ) Accounts payable and other current liabilities (7,721 ) 2,522 (69 ) (3,258 ) (8,526 ) Net cash (used in) provided by continuing operating activities (87,394 ) 77,592 385 (2,649 ) (12,066 ) Net cash (used in) discontinued operations — (8,853 ) — — (8,853 ) Net cash (used in) provided by operating activities (87,394 ) 68,739 385 (2,649 ) (20,919 ) Cash Flows From Investing Activities: Purchases of property and equipment — (29,238 ) (2,261 ) (1 ) (31,500 ) Proceeds from disposition of assets — 700 — — 700 Net cash used in investing activities from continuing operations — (28,538 ) (2,261 ) (1 ) (30,800 ) Cash Flows From Financing Activities: Intercompany 31,070 (38,991 ) 5,271 2,650 — Proceeds from issuance of debt 63,000 — — — 63,000 Repayments of debt obligations (18,913 ) — — — (18,913 ) Net cash provided by (used in) financing activities 75,157 (38,991 ) 5,271 2,650 44,087 Effect of exchange rate changes on cash and cash equivalents — — 388 — 388 Net (decrease) increase in cash and cash equivalents (12,237 ) 1,210 3,783 — (7,244 ) Cash and cash equivalents, beginning of year 29,673 160 19,110 — 48,943 Cash and cash equivalents, end of year $ 17,436 $ 1,370 $ 22,893 $ — $ 41,699 DJO Finance LLC Unaudited Condensed Consolidating Statements of Cash Flows For the Six months Ended June 27, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows from Operating Activities: Net (loss) income $ (113,503 ) $ 46,240 $ (8,331 ) $ (37,443 ) $ (113,037 ) Net income from discontinued operations — (18,865 ) — — (18,865 ) Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 14,509 2,377 (49 ) 16,837 Amortization of intangible assets — 38,395 1,251 — 39,646 Amortization of debt issuance costs and non-cash interest expense 4,235 — — — 4,235 Stock-based compensation expense — 1,152 — — 1,152 Loss on modification and extinguishment of debt 67,967 67,967 Gain on disposal of assets, net — 139 127 (8 ) 258 Deferred income tax expense (benefit) — 3,351 384 — 3,735 Equity in (loss) income of subsidiaries, net (41,902 ) — — 41,902 — Changes in operating assets and liabilities: Accounts receivable — (3,545 ) (2,404 ) — (5,949 ) Inventories — 11 (1,603 ) (7,159 ) (8,751 ) Prepaid expenses and other assets (17 ) (1,196 ) (892 ) 73 (2,032 ) Accounts payable and other current liabilities (5,422 ) (3,042 ) (3,322 ) 4,421 (7,365 ) Net cash (used in) provided by continuing operating activities (88,642 ) 77,149 (12,413 ) 1,737 (22,169 ) Net cash provided by discontinued operations — 29,397 — — 29,397 Net cash (used in) provided by operating activities (88,642 ) 106,546 (12,413 ) 1,737 7,228 Cash Flows from Investing Activities: Purchases of property and equipment — (13,677 ) (2,942 ) 11 (16,608 ) Net cash (used in) provided by investing activities from continuing operations — (13,677 ) (2,942 ) 11 (16,608 ) Net cash provided by investing activities from discontinued operations — (451 ) — — (451 ) Net cash (used in) provided by investing activities — (14,128 ) (2,942 ) 11 (17,059 ) Cash Flows from Financing Activities: Intercompany 73,474 (89,888 ) 18,162 (1,748 ) — Proceeds from issuance of debt 2,445,826 — — — 2,445,826 Repayments of debt (2,356,073 ) — (48 ) — (2,356,121 ) Payment of debt issuance, modification and extinguishment costs (61,662 ) — — — (61,662 ) Net cash provided by (used in) financing activities 101,565 (89,888 ) 18,114 (1,748 ) 28,043 Effect of exchange rate changes on cash and cash equivalents — — (971 ) — (971 ) Net increase (decrease) in cash and cash equivalents 12,923 2,530 1,788 — 17,241 Cash and cash equivalents at beginning of period 12,958 3 18,183 — 31,144 Cash and cash equivalents at end of period $ 25,881 $ 2,533 $ 19,971 $ — $ 48,385 | DJO Finance LLC Condensed Consolidating Statements of Cash Flows For the Year Ended December 31, 2015 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows From Operating Activities: Net (loss) income $ (340,927 ) $ (96,424 ) $ (4,699 ) $ 101,963 $ (340,087 ) Net loss from discontinued operations — 157,580 — — 157,580 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 32,495 5,096 (100 ) 37,491 Amortization of intangible assets — 77,569 2,395 — 79,964 Amortization of debt issuance costs and non-cash interest expense 7,850 — — — 7,850 Loss on modification and extinguishment of debt 68,473 — — — 68,473 Stock-based compensation expense — 1,805 — — 1,805 Loss (gain) on disposal of assets, net — 1,380 75 (8 ) 1,447 Deferred income tax expense (benefit) — 6,901 (961 ) — 5,940 Equity in loss of subsidiaries, net 100,217 — — (100,217 ) — Changes in operating assets and liabilities, net of acquired assets and liabilities: Accounts receivable — (6,156 ) (1,908 ) — (8,064 ) Inventories — (535 ) 11,885 (19,456 ) (8,106 ) Prepaid expenses and other assets (1,195 ) (3,924 ) (1,775 ) (622 ) (7,516 ) Accounts payable and other (11,506 ) 16,569 805 7,020 12,888 Net cash (used in) provided by continuing operating activities (177,088 ) 187,260 10,913 (11,420 ) 9,665 Net cash provided by discontinued operations — 39,861 — — 39,861 Net cash (used in) provided by operating activities (177,088 ) 227,121 10,913 (11,420 ) 49,526 Cash Flows From Investing Activities: Cash paid in connection with acquisitions, net of cash acquired — (24,000 ) — — (24,000 ) Purchases of property and equipment — (38,095 ) (6,111 ) 117 (44,089 ) Other investing activities, net — 27 — — 27 Net cash (used in) provided by investing activities from continuing operations — (62,068 ) (6,111 ) 117 (68,062 ) Net cash used in investing activities from discontinued operations — (575 ) — — (575 ) Net cash (used in) provided by investing activities — (62,643 ) (6,111 ) 117 (68,637 ) Cash Flows From Financing Activities: Intercompany 157,053 (164,321 ) (4,035 ) 11,303 — Proceeds from issuance of debt 2,515,827 — 2,206 — 2,518,033 Repayments of debt obligations (2,416,713 ) — (2,314 ) — (2,419,027 ) Payment of debt issuance, modification and extinguishment costs (62,375 ) — — — (62,375 ) Exercise of stock options 11 — — — 11 Dividend paid by subsidiary to owners of noncontrolling interests — — (541 ) — (541 ) Net cash provided by (used in) financing activities 193,803 (164,321 ) (4,684 ) 11,303 36,101 Effect of exchange rate changes on cash and cash equivalents — — 809 — 809 Net increase in cash and cash equivalents 16,715 157 927 — 17,799 Cash and cash equivalents, beginning of year 12,958 3 18,183 — 31,144 Cash and cash equivalents, end of year $ 29,673 $ 160 $ 19,110 — $ 48,943 DJO Finance LLC Condensed Consolidating Statements of Cash Flows For the Year Ended December 31, 2014 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows From Operating Activities: Net loss) income $ (90,534 ) $ 80,726 $ (5,972 ) $ (73,782 ) $ (89,562 ) Net income from discontinued operations — (21,742 ) $ — — (21,742 ) Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 29,127 6,265 (179 ) 35,213 Amortization of intangible assets — 80,045 3,899 — 83,944 Amortization of debt issuance costs and non-cash interest expense 8,692 — — — 8,692 Loss on modification and extinguishment of debt 938 — — — 938 Stock-based compensation expense — 1,869 — — 1,869 (Gain) loss on disposal of assets, net — (1,223 ) 105 — (1,118 ) Deferred income tax benefit — (8,618 ) (1,104 ) (988 ) (10,710 ) Equity in loss of subsidiaries, net (84,713 ) — — 84,713 — Changes in operating assets and liabilities, net of acquired assets and liabilities: Accounts receivable — (6,851 ) (7,609 ) — (14,460 ) Inventories — (12,178 ) 12,746 (20,065 ) (19,497 ) Prepaid expenses and other assets — 6,864 4,851 (291 ) 11,424 Accounts payable and other (83 ) 4,057 1,618 2,052 7,644 Net cash (used in) provided by continuing operating activities (165,700 ) 152,076 14,799 (8,540 ) (7,365 ) Net cash provided by discontinued operations — 53,852 — — 53,852 Net cash (used in) provided by operating activities (165,700 ) 205,928 14,799 (8,540 ) 46,487 Cash Flows From Investing Activities: Cash paid in connection with acquisitions, net of cash acquired — — (4,587 ) — (4,587 ) Purchases of property and equipment — (46,269 ) (6,597 ) 125 (52,741 ) Other investing activities, net — (676 ) (362 ) — (1,038 ) Net cash (used in) provided by investing activities from continuing operations — (46,945 ) (11,546 ) 125 (58,366 ) Net cash used in investing activities from discontinued operations — (52 ) — — (52 ) Net cash (used in) provided by investing activities — (46,997 ) (11,546 ) 125 (58,418 ) Cash Flows From Financing Activities: Intercompany 149,870 (153,596 ) (4,687 ) 8,413 — Proceeds from issuance of debt 1,000,294 — — — 1,000,294 Repayments of debt obligations (990,085 ) — (134 ) — (990,219 ) Payment of debt issuance, modification and extinguishment costs (1,812 ) — — — (1,812 ) Investment by parent 22 — — — 22 Payment of contingent consideration — (5,690 ) — — (5,690 ) Cancellation of vested options (2,001 ) — — — (2,001 ) Dividend paid by subsidiary to owners of noncontrolling interests — — (617 ) — (617 ) Net cash provided by (used in) financing activities 156,288 (159,286 ) (5,438 ) 8,413 (23 ) Effect of exchange rate changes on cash and cash equivalents — — (480 ) — (480 ) Net decrease in cash and cash equivalents (9,412 ) (355 ) (2,665 ) (2 ) (12,434 ) Cash and cash equivalents, beginning of year 22,370 358 20,848 2 43,578 Cash and cash equivalents, end of year $ 12,958 $ 3 $ 18,183 $ — $ 31,144 DJO Finance LLC Condensed Consolidating Statements of Cash Flows For the Year Ended December 31, 2013 (in thousands) DJOFL Guarantors Non- Guarantors Eliminations Consolidated Cash Flows from Operating Activities: Net (loss) income $ (203,452 ) $ (14,647 ) $ (10,040 ) $ 25,577 $ (202,562 ) Net loss from discontinued operations 13,101 13,101 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation — 27,382 5,383 (258 ) 32,507 Amortization of intangible assets — 81,043 5,369 — 86,412 Amortization of debt issuance costs and non-cash interest expense 8,012 — — — 8,012 Loss on modification and extinguishment of debt 1,059 — — — 1,059 Stock-based compensation expense — 2,155 — — 2,155 Impairment of goodwill — 49,600 — — 49,600 Impairment of intangible assets — — — — — (Gain) loss on disposal of assets, net — (1,696 ) 684 — (1,012 ) Deferred income tax expense (benefit) — 10,895 (1,233 ) 147 9,809 Equity in income of subsidiaries, net 24,823 — — (24,823 ) — Changes in operating assets and liabilities: Accounts receivable — (13,127 ) (6,332 ) — (19,459 ) Inventories — 4,565 7,738 (9,064 ) 3,239 Prepaid expenses and other assets — (990 ) (7,368 ) (311 ) (8,669 ) Accounts payable and other (1,839 ) (3,175 ) 7,597 (744 ) 1,839 Net cash (used in) provided by operating activities (171,397 ) 155,106 1,798 (9,476 ) (23,969 ) Net cash provided by discontinued operations — 53,749 — — 53,749 Net cash (used in) provided by operating activities (171,397 ) 208,855 1,798 (9,476 ) 29,780 Cash Flows from Investing Activities: Cash paid in connection with acquisitions, net of cash acquired — (192 ) (1,761 ) — (1,953 ) Purchases of property and equipment — (29,158 ) (8,310 ) (16 ) (37,484 ) Other investing activities, net — (1,239 ) (387 ) — (1,626 ) Net cash used in investing activities from continuing operations — (30,589 ) (10,458 ) (16 ) (41,063 ) Net cash provided by investing activities from discontinued operations — — — — Net cash (used in) provided by investing activities — (30,589 ) (10,458 ) (16 ) (41,063 ) Cash Flows from Financing Activities: Intercompany 156,598 (181,030 ) 14,944 9,488 — Proceeds from issuance of debt 549,417 — — — 549,417 Repayments of debt obligations (523,037 ) — — — (523,037 ) Payment of debt issuance costs (2,387 ) — — — (2,387 ) Dividend paid by subsidiary to owners of noncontrolling interest — — (684 ) — (684 ) Net cash provided by (used in) financing activities 180,591 (181,030 ) 14,260 9,488 23,309 Effect of exchange rate changes on cash and cash equivalents — — 329 — 329 Net increase (decrease) in cash and cash equivalents 9,194 (2,764 ) 5,929 (4 ) 12,355 Cash and cash equivalents at beginning of period 13,176 3,122 14,919 6 31,223 Cash and cash equivalents at end of period $ 22,370 $ 358 $ 20,848 $ 2 $ 43,578 |
Organization and Basis of Pre48
Organization and Basis of Presentation - Additional Information (Detail) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jul. 01, 2016Segment | Jun. 27, 2015Segment | Dec. 31, 2015Segment | Dec. 31, 2014USD ($)Segment | Dec. 31, 2013USD ($)Segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||
Number of operating segments | Segment | 4 | 4 | 4 | 4 | 4 |
Percentage of ownership interest in subsidiary Medireha GmbH | 50.00% | 50.00% | |||
Tunisia | |||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||
Description of infrequent event | In September 2013, a fire occurred at our factory in Tunisia. As a result of the fire, certain inventory and fixed assets were destroyed and the leased facility became inoperable. | ||||
Estimated losses for destroyed inventory and fixed assets, excess expenses incurred and building reconstruction | $ 3,300 | $ 5,000 | |||
Revenue from business interruption insurance proceeds | $ 2,274 | $ 1,300 |
Schedule of Insurance Receivabl
Schedule of Insurance Receivables Against Property and Business Interruption Insurance Policies (Detail) - Tunisia - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Unusual or Infrequent Item [Line Items] | ||
Balance, beginning of period | $ 6,261 | |
Change in estimated losses | (1,617) | |
Business interruption | 2,274 | $ 1,300 |
Claim payments | $ (6,918) | |
Balance, end of period | $ 6,261 |
Significant Accounting Polici50
Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016USD ($) | Jun. 27, 2015USD ($) | Jul. 01, 2016USD ($)Customer | Jun. 27, 2015USD ($)Customer | Dec. 31, 2015USD ($)Customer | Dec. 31, 2014USD ($)Customer | Dec. 31, 2013USD ($)Customer | |
Accounting Policies [Line Items] | |||||||
Amortization expense | $ 19,085 | $ 19,818 | $ 38,663 | $ 39,646 | $ 79,964 | $ 83,944 | $ 86,412 |
Unamortized internally developed software costs | $ 6,800 | 8,500 | |||||
Product warranty, description | We provide expressed warranties on certain products for periods typically ranging from one to three years. We estimate our warranty obligations at the time of sale based upon historical experiences and known product issues, if any. | ||||||
Advertising cost | $ 3,900 | 4,700 | 6,400 | ||||
Foreign transaction (losses) gains | $ (7,300) | $ (5,300) | $ (1,500) | ||||
Disclosure of major customers | Customer | 0 | 0 | 0 | 0 | 0 | ||
Geographic Concentration Risk | Sales Revenue, Net | International | |||||||
Accounting Policies [Line Items] | |||||||
Percentage of net sales | 26.60% | 29.90% | 29.30% | ||||
Software Developed For Internal Use | |||||||
Accounting Policies [Line Items] | |||||||
Amortization expense | $ 1,700 | $ 2,000 | $ 1,900 | ||||
Minimum | |||||||
Accounting Policies [Line Items] | |||||||
Estimated useful lives of property and equipment | 3 years | ||||||
Product warranty period | 1 year | ||||||
Minimum | Software Developed For Internal Use | |||||||
Accounting Policies [Line Items] | |||||||
Estimated useful lives | 3 years | ||||||
Maximum | |||||||
Accounting Policies [Line Items] | |||||||
Estimated useful lives of property and equipment | 25 years | ||||||
Product warranty period | 3 years | ||||||
Maximum | Software Developed For Internal Use | |||||||
Accounting Policies [Line Items] | |||||||
Estimated useful lives | 10 years |
Summary of Activity in Warranty
Summary of Activity in Warranty Reserves (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Balance, beginning of year | $ 1,942 | $ 1,847 | $ 1,488 |
Amount charged to expense for estimated warranty costs | 1,517 | 1,788 | 1,138 |
Deductions for actual costs incurred | (1,765) | (1,693) | (779) |
Balance, end of year | $ 1,694 | $ 1,942 | $ 1,847 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Detail) - USD ($) | Jan. 23, 2014 | Jul. 01, 2013 | Mar. 07, 2013 | Jun. 30, 2015 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||||
Business acquisition, contingent consideration fair value | $ 0 | ||||
Indemnification Asset | The indemnity holdback accrues interest at the Euribor rate plus 100 basis points and is 50% payable in March 2015 and March 2016, respectively, if not used for indemnification claims | ||||
Period 1 | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Payment Date of Contingent Consideration | 2015-03 | ||||
Period 2 | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Payment Date of Contingent Consideration | 2016-03 | ||||
Zimmer Biomet Holdings Inc | |||||
Business Acquisition [Line Items] | |||||
Purchase price, cash payment | $ 24,000,000 | ||||
Business acquisition, financing facilities | 20,000,000 | ||||
Additional acquisition related costs | 3,400,000 | ||||
Business acquisition, total purchase price | 24,000,000 | ||||
Business acquisition, inventory payment | $ 2,477,000 | ||||
Speetec | |||||
Business Acquisition [Line Items] | |||||
Purchase price, cash payment | $ 5,000,000 | ||||
Business acquisition, consideration held for potential indemnity claims | 1,300,000 | ||||
Business acquisition, contingent consideration fair value | $ 1,600,000 | ||||
Business acquisition, Contingent consideration percentage | 25.00% | ||||
Business acquisition, contingent consideration amount total | $ 7,300,000 | ||||
Business acquisition, total purchase price | 7,884,000 | ||||
Business acquisition, inventory payment | $ 2,766,000 | ||||
Blue Leaf | |||||
Business Acquisition [Line Items] | |||||
Purchase price, cash payment | $ 400,000 | ||||
Business acquisition, consideration held for potential indemnity claims | 100,000 | ||||
Business acquisition, total purchase price | 582,000 | ||||
Business acquisition, inventory payment | $ 59,000 | ||||
Vasyli | |||||
Business Acquisition [Line Items] | |||||
Purchase price, cash payment | $ 1,300,000 | ||||
Business acquisition, consideration held for potential indemnity claims | 400,000 | ||||
Business acquisition, contingent consideration fair value | 300,000 | ||||
Business acquisition, total purchase price | 2,186,000 | ||||
Business acquisition, inventory payment | $ 542,000 |
Purchase Price for Acquisition
Purchase Price for Acquisition Allocated to Fair Values of Net Tangible and Intangible Assets Acquired (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Jan. 23, 2014 | Jul. 01, 2013 | Mar. 07, 2013 | |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 1,019,186 | $ 1,018,104 | $ 1,023,890 | |||||
Zimmer Biomet Holdings Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Inventory | $ 2,477 | |||||||
Other non-current assets | 0 | |||||||
Goodwill | [1] | 1,823 | ||||||
Total purchase price | 24,000 | |||||||
Speetec | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash | $ 489 | |||||||
Accounts receivable | 608 | |||||||
Inventory | 2,766 | |||||||
Other current assets | 154 | |||||||
Property and equipment | 379 | |||||||
Other non-current assets | 0 | |||||||
Liabilities assumed | (1,642) | |||||||
Deferred tax liabilities | (1,003) | |||||||
Goodwill | [1] | 2,383 | ||||||
Total purchase price | 7,884 | |||||||
Blue Leaf | ||||||||
Business Acquisition [Line Items] | ||||||||
Inventory | $ 59 | |||||||
Other non-current assets | 0 | |||||||
Goodwill | [1] | 322 | ||||||
Total purchase price | 582 | |||||||
Vasyli | ||||||||
Business Acquisition [Line Items] | ||||||||
Inventory | $ 542 | |||||||
Other current assets | 31 | |||||||
Property and equipment | 12 | |||||||
Other non-current assets | 0 | |||||||
Goodwill | [1] | 363 | ||||||
Total purchase price | 2,186 | |||||||
Customer Relationships | Zimmer Biomet Holdings Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | 1,800 | ||||||
Customer Relationships | Speetec | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | 2,861 | ||||||
Customer Relationships | Blue Leaf | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | 90 | ||||||
Customer Relationships | Vasyli | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | 308 | ||||||
Technology Based Intangible Assets | Zimmer Biomet Holdings Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | 15,000 | ||||||
Non-compete | Speetec | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | 569 | ||||||
Non-compete | Blue Leaf | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | $ 111 | ||||||
Non-compete | Vasyli | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | $ 930 | ||||||
Trademarks and Trade Names | Zimmer Biomet Holdings Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | $ 2,900 | ||||||
Trademarks and Trade Names | Speetec | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | [2] | $ 320 | ||||||
[1] | Goodwill represents the excess purchase price over the fair value of the identifiable net assets acquired. Among the factors which resulted in the recognition of goodwill for the Speetec acquisition was the opportunity to expand our direct presences in the German market with our surgical products. Among the factors which resulted in goodwill for the acquisition was the opportunity to increase our revenue and expand our presence in the surgical implant market through the use of the acquired technology and customer relationships. Among the factors which resulted in the recognition of goodwill for the Blue Leaf and Vasyli assets was the opportunity to expand our direct presence in the local markets with our vascular products. | |||||||
[2] | The fair value of customer relationships was assigned to relationships with major customers existing on the acquisition date based upon an estimate of the future discounted cash flows that would be derived from those customers, after deducting contributory asset charges. The fair value of technology was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the patents and technology acquired. The fair value of non-compete agreements relate to non-compete agreements entered into with certain members of senior management. The values were determined by estimating the present value of the cash flows associated with having these agreements in place, less the present value of the cash flows assuming the non-compete agreements were not in place. The fair value of trademarks and trade names was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the trade names and trademarks acquired. The useful lives of the intangible assets acquired were estimated based on the underlying agreements and/or the future economic benefit expected to be received from the assets. |
Acquisitions and Divestitures54
Acquisitions and Divestitures - Schedule of Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Costs and operating expenses: | |||||||
Net (loss) income from discontinued operations | $ 855 | $ 14,873 | $ 665 | $ 18,865 | $ (157,580) | $ 21,742 | $ (13,101) |
Empi | |||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||||
Net sales | 30,941 | 63,531 | 95,342 | 141,637 | 154,673 | ||
Costs and operating expenses: | |||||||
Cost of sales | 7,766 | 15,124 | 35,834 | 33,397 | 36,957 | ||
Selling, general and administrative | 10,412 | 22,999 | 50,729 | 59,333 | 68,798 | ||
Research and development | 51 | 87 | 249 | 465 | 245 | ||
Amortization of intangible assets | 2,281 | 4,563 | 6,874 | 9,127 | 9,127 | ||
Impairment of goodwill | 117,298 | 52,500 | |||||
Impairment of intangible assets | 4,500 | 4,500 | |||||
Impairment of intangible and long lived assets | 52,150 | 4,500 | |||||
Other income | 855 | 24 | 665 | 74 | 86 | 37 | 18 |
(Loss) income from discontinued operations before income taxes | 855 | 5,955 | 665 | 16,332 | (167,706) | 39,352 | (17,436) |
Income tax benefit (provision) | 8,918 | 2,533 | 10,126 | (17,610) | 4,335 | ||
Net (loss) income from discontinued operations | 855 | $ 14,873 | 665 | $ 18,865 | (157,580) | 21,742 | $ (13,101) |
Accounts receivable, net | 2,743 | 18,852 | |||||
Inventories, net | 6,410 | ||||||
Other current assets | 135 | 380 | |||||
Property and equipment, net | 22 | 3,631 | |||||
Intangible and other non-current assets | 7 | 159,440 | |||||
Total assets | 2,907 | 188,713 | |||||
Accounts payable and other liabilities | 946 | 946 | 13,371 | 8,681 | |||
Net (liabilities) assets | $ (946) | $ (946) | $ (10,464) | $ 180,032 |
Summary of Activity in Accounts
Summary of Activity in Accounts Receivable Allowance for Doubtful Accounts and Sales Returns (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Receivables [Abstract] | |||||
Balance, beginning of period | $ 32,893 | $ 23,585 | $ 23,585 | $ 16,458 | $ 12,304 |
Provision for doubtful accounts | 11,861 | 12,014 | 26,160 | 26,083 | 13,311 |
Write-offs, net of recoveries | (11,495) | (6,714) | (16,852) | (18,956) | (9,157) |
Balance, end of period | $ 33,259 | $ 28,885 | $ 32,893 | $ 23,585 | $ 16,458 |
Accounts Receivable Reserves -
Accounts Receivable Reserves - Additional Information (Detail) - USD ($) $ in Millions | Jul. 01, 2016 | Dec. 31, 2015 | Jul. 27, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Receivables [Abstract] | |||||
Provision for sales returns | $ 3.1 | $ 4.1 | $ 3.7 | $ 3.6 | $ 3.9 |
Summary of Inventories (Detail)
Summary of Inventories (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | Jun. 27, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Inventory Disclosure [Abstract] | ||||||
Components and raw materials | $ 61,949 | $ 57,372 | $ 57,513 | |||
Work in process | 9,908 | 10,330 | 5,321 | |||
Finished goods | 94,810 | 99,167 | 101,309 | |||
Inventory held on consignment | 33,721 | 29,746 | 26,881 | |||
Inventory, Gross, Total | 200,388 | 196,615 | 191,024 | |||
Inventory reserves | (22,840) | (22,042) | $ (23,520) | (22,094) | $ (21,523) | $ (15,192) |
Inventories, net | $ 177,548 | $ 174,573 | $ 168,930 |
Summary of Activity in Inventor
Summary of Activity in Inventory Reserves (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Inventory Disclosure [Abstract] | |||||
Balance, beginning of period | $ 22,042 | $ 22,094 | $ 22,094 | $ 21,523 | $ 15,192 |
Provision charged to costs of sales | 4,922 | 2,714 | 5,699 | 6,800 | 7,905 |
Write-offs, net of recoveries | (4,124) | (1,288) | (5,751) | (6,229) | (1,574) |
Balance, end of period | $ 22,840 | $ 23,520 | $ 22,042 | $ 22,094 | $ 21,523 |
Components of Property and Equi
Components of Property and Equipment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Jul. 01, 2016 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 310,739 | $ 283,073 | |
Accumulated depreciation and amortization | (193,466) | (166,597) | |
Property and equipment, net | $ 117,273 | $ 130,845 | 116,476 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 25 years | ||
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 266 | 266 | |
Property, Plant and Equipment useful life | Indefinite | ||
Building and Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 26,187 | 25,741 | |
Building and Improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 3 years | ||
Building and Improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 25 years | ||
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 128,352 | 121,502 | |
Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 2 years | ||
Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 7 years | ||
Software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 42,495 | 33,780 | |
Software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 3 years | ||
Software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 10 years | ||
Furniture and Fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 12,065 | 11,596 | |
Furniture and Fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 3 years | ||
Furniture and Fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment useful life | 8 years | ||
Surgical Implant Instrumentation | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 97,489 | 78,275 | |
Property, Plant and Equipment useful life | 5 years | ||
Construction in Progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,885 | $ 11,913 | |
Property, Plant and Equipment useful life | N/A |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 37.5 | $ 35.2 | $ 32.5 |
Schedule of Changes in Carrying
Schedule of Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | ||
Goodwill, balance, beginning of period | $ 1,115,110 | $ 1,120,896 |
Accumulated impairment losses, balance, beginning of period | (97,006) | (97,006) |
Goodwill, net of accumulated impairment losses, beginning of period | 1,018,104 | 1,023,890 |
Acquisitions | 1,823 | |
Foreign currency translation | 1,082 | (7,609) |
Goodwill, balance, end of period | 1,116,192 | 1,115,110 |
Accumulated impairment losses, balance, end of period | (97,006) | (97,006) |
Goodwill, net of accumulated impairment losses, end of period | 1,019,186 | 1,018,104 |
Bracing and Vascular | ||
Goodwill [Line Items] | ||
Goodwill, balance, beginning of period | 483,258 | 483,258 |
Goodwill, net of accumulated impairment losses, beginning of period | 483,258 | 483,258 |
Goodwill, balance, end of period | 483,258 | 483,258 |
Goodwill, net of accumulated impairment losses, end of period | 483,258 | 483,258 |
Recovery Sciences | ||
Goodwill [Line Items] | ||
Goodwill, balance, beginning of period | 249,601 | 249,601 |
Accumulated impairment losses, balance, beginning of period | (49,600) | (49,600) |
Goodwill, net of accumulated impairment losses, beginning of period | 200,001 | 200,001 |
Goodwill, balance, end of period | 249,601 | 249,601 |
Accumulated impairment losses, balance, end of period | (49,600) | (49,600) |
Goodwill, net of accumulated impairment losses, end of period | 200,001 | 200,001 |
Surgical Implant | ||
Goodwill [Line Items] | ||
Goodwill, balance, beginning of period | 49,229 | 47,406 |
Accumulated impairment losses, balance, beginning of period | (47,406) | (47,406) |
Goodwill, net of accumulated impairment losses, beginning of period | 1,823 | |
Acquisitions | 1,823 | |
Goodwill, balance, end of period | 49,229 | 49,229 |
Accumulated impairment losses, balance, end of period | (47,406) | (47,406) |
Goodwill, net of accumulated impairment losses, end of period | 1,823 | 1,823 |
International | ||
Goodwill [Line Items] | ||
Goodwill, balance, beginning of period | 333,022 | 340,631 |
Goodwill, net of accumulated impairment losses, beginning of period | 333,022 | 340,631 |
Foreign currency translation | 1,082 | (7,609) |
Goodwill, balance, end of period | 334,104 | 333,022 |
Goodwill, net of accumulated impairment losses, end of period | $ 334,104 | $ 333,022 |
Summary of Identifiable Intangi
Summary of Identifiable Intangible Assets (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Apr. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Finite Lived Intangible Assets [Line Items] | ||||
Finite lived, gross carrying amount | $ 964,483 | $ 963,667 | $ 946,903 | |
Finite lived, accumulated amortization | (629,119) | (589,784) | (512,949) | |
Finite lived, intangible assets, net | 335,364 | $ 335,364 | 373,883 | 433,954 |
Intangible assets, net | 710,549 | 749,045 | 825,905 | |
Customer Relationships | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Finite lived, gross carrying amount | 476,460 | 475,776 | 477,359 | |
Finite lived, accumulated amortization | (343,667) | (320,991) | (279,008) | |
Finite lived, intangible assets, net | 132,793 | 154,785 | 198,351 | |
Patents and Technology | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Finite lived, gross carrying amount | 446,840 | 446,854 | 431,979 | |
Finite lived, accumulated amortization | (260,982) | (246,509) | (215,915) | |
Finite lived, intangible assets, net | 185,858 | 200,345 | 216,064 | |
Trademarks and Trade Names | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Finite lived, gross carrying amount | 29,756 | 29,737 | 25,970 | |
Finite lived, accumulated amortization | (14,155) | (12,695) | (9,902) | |
Finite lived, intangible assets, net | 15,601 | 17,042 | 16,068 | |
Indefinite lived intangible assets | 375,185 | 375,162 | 391,951 | |
Distributor Contracts And Relationships | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Finite lived, gross carrying amount | 4,772 | 4,693 | 4,771 | |
Finite lived, accumulated amortization | (4,230) | (3,875) | (3,401) | |
Finite lived, intangible assets, net | 542 | 818 | 1,370 | |
Non-compete | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Finite lived, gross carrying amount | 6,655 | 6,607 | 6,824 | |
Finite lived, accumulated amortization | (6,085) | (5,714) | (4,723) | |
Finite lived, intangible assets, net | $ 570 | $ 893 | $ 2,101 |
Long Lived Assets - Additional
Long Lived Assets - Additional Information (Detail) - Segment | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Jul. 01, 2016 | Dec. 31, 2015 | |
Acquired Finite Lived Intangible Assets [Line Items] | |||
Number of reporting units without impairment | 6 | 6 | |
Customer Relationships | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Definite-lived intangible assets, weighted average useful lives | 4 years 3 months 18 days | 4 years 7 months 6 days | |
Patents and Technology | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Definite-lived intangible assets, weighted average useful lives | 7 years 4 months 24 days | 7 years 9 months 18 days | |
Distributor Contracts And Relationships | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Definite-lived intangible assets, weighted average useful lives | 1 year 4 months 24 days | 1 year 9 months 18 days | |
Trademarks and Trade Names | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Definite-lived intangible assets, weighted average useful lives | 6 years 3 months 18 days | 6 years 8 months 12 days | |
Non-compete | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Definite-lived intangible assets, weighted average useful lives | 1 year 6 months | 1 year 8 months 12 days | |
Minimum | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Percentage by which the fair value exceeds the carrying value | 31.40% | 31.40% | |
Minimum | Trade Names | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Discount rates | 8.90% | ||
Terminal value growth rate | 1.00% | ||
Percentage by which the fair value exceeds the carrying value | 24.00% | 24.00% | |
Market average royalty rates | 0.50% | ||
Maximum | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Percentage by which the fair value exceeds the carrying value | 133.50% | 133.50% | |
Maximum | Trade Names | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Discount rates | 10.60% | ||
Terminal value growth rate | 3.00% | ||
Percentage by which the fair value exceeds the carrying value | 160.10% | 160.10% | |
Market average royalty rates | 5.00% | ||
Significant Unobservable Inputs (Level 3) | Minimum | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Estimated revenue growth rate | 1.00% | ||
Discount rates | 8.90% | ||
Terminal value growth rate | 1.00% | ||
Significant Unobservable Inputs (Level 3) | Maximum | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Estimated revenue growth rate | 15.00% | ||
Discount rates | 10.60% | ||
Terminal value growth rate | 3.00% |
Schedule of Estimated Amortizat
Schedule of Estimated Amortization Expense (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Apr. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
2,016 | $ 76,460 | |||
2,016 | $ 37,857 | |||
2,017 | 66,124 | 66,104 | ||
2,018 | 57,905 | 57,887 | ||
2,019 | 53,041 | 53,037 | ||
2,020 | 37,070 | 37,066 | ||
Thereafter | 83,367 | 83,329 | ||
Finite lived, intangible assets, net | $ 335,364 | $ 335,364 | $ 373,883 | $ 433,954 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets by Segment (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill And Intangible Assets [Line Items] | |||
Goodwill | $ 1,019,186 | $ 1,018,104 | $ 1,023,890 |
Intangible assets, net | 710,549 | 749,045 | 825,905 |
Bracing and Vascular | |||
Goodwill And Intangible Assets [Line Items] | |||
Goodwill | 483,258 | 483,258 | 483,258 |
Intangible assets, net | 449,893 | 487,122 | |
Recovery Sciences | |||
Goodwill And Intangible Assets [Line Items] | |||
Goodwill | 200,001 | 200,001 | 200,001 |
Intangible assets, net | 138,732 | 176,134 | |
International | |||
Goodwill And Intangible Assets [Line Items] | |||
Goodwill | 334,104 | 333,022 | 340,631 |
Intangible assets, net | 131,019 | 150,128 | |
Surgical Implant | |||
Goodwill And Intangible Assets [Line Items] | |||
Goodwill | $ 1,823 | 1,823 | |
Intangible assets, net | $ 29,401 | $ 12,521 |
Schedule of Other Current Liabi
Schedule of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Other Liabilities Disclosure [Abstract] | |||
Accrued wages and related expenses | $ 26,690 | $ 29,031 | $ 29,650 |
Accrued commissions | 16,069 | 20,479 | 15,237 |
Accrued rebates | 10,106 | 13,433 | 12,981 |
Accrued other taxes | 3,485 | 4,196 | 4,983 |
Accrued professional expenses | 5,577 | 3,164 | 2,682 |
Income taxes payable | 988 | 1,612 | 2,477 |
Deferred tax liability | 165 | 163 | 343 |
Other accrued liabilities | 29,088 | 30,095 | 25,825 |
Other current liabilities | $ 92,168 | $ 102,173 | $ 94,178 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Benefit And Retirement Plans [Line Items] | |||
Contributions made according to the plans | $ 4.2 | $ 4.1 | $ 4.2 |
Contributions towards international contribution plans | $ 1.7 | $ 1.7 | $ 1.1 |
The first 1% | |||
Employee Benefit And Retirement Plans [Line Items] | |||
Matching contributions made as a percentage of employee contribution | 100.00% | 100.00% | 100.00% |
The next 5% | |||
Employee Benefit And Retirement Plans [Line Items] | |||
Matching contributions made as a percentage of employee contribution | 50.00% | 50.00% | 50.00% |
Schedule of Information Regardi
Schedule of Information Regarding Notional Amounts of Foreign Exchange Forward Contracts (Foreign Exchange Contract, Not Designated as Hedging Instrument) (Detail) - Dec. 31, 2014 | USD ($) | MXN |
Foreign Exchange Contract | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange contracts not designated as hedges | $ 526,000 | MXN 7,682,000 |
Summary of Location and Fair Va
Summary of Location and Fair Value of Derivative Instruments in Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | |||
Derivative Assets | $ 1,313 | ||
Derivative Liabilities | $ 6,953 | 282 | |
Designated as Hedging Instrument | Interest Rate Cap | Other Long Term Assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Assets | 1,313 | $ 0 | |
Designated as Hedging Instrument | Interest Rate Cap | Other Current Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | 1,074 | $ 282 | |
Designated as Hedging Instrument | Interest Rate Cap | Other Long-Term Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | $ 5,879 | ||
Not Designated as Hedging Instrument | Foreign Exchange Forward | Other Current Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liabilities | $ 4 |
Summary of Effect of Derivative
Summary of Effect of Derivative Instruments on Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Effect of derivative instruments | $ (4) | $ 40 | $ (821) | ||||
Interest Rate Cap | Interest Expense, net | Designated as Hedging Instrument | Cash Flow Hedge | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Effect of derivative instruments | $ 65 | $ 75 | |||||
Foreign Exchange Forward | Other income (expense), net | Not Designated as Hedging Instrument | |||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Effect of derivative instruments | $ (4) | $ (4) | $ (4) | $ 40 | $ (821) |
Summary of Pre-Tax Loss On Deri
Summary of Pre-Tax Loss On Derivative Instruments Designated As Cash Flow Hedges In Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Jul. 01, 2016 | Dec. 31, 2015 | |
Designated as Hedging Instrument | Interest Rate Cap | Cash Flow Hedge | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Pre-tax loss on derivative instruments | $ (2,651) | $ (8,042) | $ 985 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jan. 23, 2014 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Contingent consideration | $ 0 | ||
Period 1 | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Business Acquisition, Payment Date of Contingent Consideration | 2015-03 | ||
Period 2 | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Business Acquisition, Payment Date of Contingent Consideration | 2016-03 | ||
Speetec | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Contingent consideration | $ 1,600,000 | ||
Business acquisition, Contingent consideration percentage | 25.00% | ||
Speetec | Significant Unobservable Inputs (Level 3) | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Contingent consideration | $ 0 | ||
Business acquisition, Contingent consideration percentage | 25.00% | ||
Business acquisition, contingent consideration amount total | $ 7,300,000 | ||
Business acquisition, contingent consideration expected discount rate | 9.90% | ||
Contingent consideration payable percentage | 50.00% | ||
Speetec | Significant Unobservable Inputs (Level 3) | Period 1 | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Business Acquisition, Payment Date of Contingent Consideration | 2015-03 | ||
Speetec | Significant Unobservable Inputs (Level 3) | Period 2 | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Business Acquisition, Payment Date of Contingent Consideration | 2016-03 |
Schedule of Assets and Liabilit
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cap agreements designated as cash flow hedges, assets | $ 1,313 | ||
Interest rate cap agreements designated as cash flow hedges, liabilities | $ 6,953 | 282 | |
Foreign exchange forward contracts not designated as hedges | $ 4 | ||
Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cap agreements designated as cash flow hedges, assets | 1,313 | ||
Interest rate cap agreements designated as cash flow hedges, liabilities | $ 6,953 | $ 282 | |
Foreign exchange forward contracts not designated as hedges | $ 4 |
Schedule of Debt Obligations (D
Schedule of Debt Obligations (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||
Other | $ 63 | ||
Debt | $ 2,403,014 | $ 2,355,112 | 2,242,284 |
Current maturities | (10,550) | (10,550) | (8,975) |
Long-term debt | 2,392,464 | 2,344,562 | 2,233,309 |
Credit Facilities | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt | 80,125 | 27,886 | 16,031 |
Term Loan | |||
Debt Instrument [Line Items] | |||
Debt | 1,030,815 | 1,037,117 | |
8.125% Second Lien Notes | |||
Debt Instrument [Line Items] | |||
Debt | 999,367 | 998,137 | |
8.75% Second Priority Senior Secured Notes | |||
Debt Instrument [Line Items] | |||
Debt | 329,031 | ||
9.875% Senior Unsecured Notes | |||
Debt Instrument [Line Items] | |||
Debt | 433,309 | ||
7.75% Senior Unsecured Notes | |||
Debt Instrument [Line Items] | |||
Debt | 295,810 | ||
10.75% Third Lien Notes | |||
Debt Instrument [Line Items] | |||
Debt | 291,178 | 290,443 | |
9.75% Senior Subordinated notes | |||
Debt Instrument [Line Items] | |||
Debt | $ 1,529 | $ 1,529 | 296,667 |
Tranche B Term Loan | Term Loan | |||
Debt Instrument [Line Items] | |||
Debt | $ 871,373 |
Schedule of Debt Obligations (P
Schedule of Debt Obligations (Parenthetical) (Detail) - USD ($) $ in Millions | Jul. 01, 2016 | Dec. 31, 2015 | Jun. 27, 2015 | May 13, 2015 | May 07, 2015 | Dec. 31, 2014 | Oct. 01, 2012 | Mar. 20, 2012 | Apr. 07, 2011 | Oct. 18, 2010 |
Debt Instrument [Line Items] | ||||||||||
Unamortized debt issuance costs | $ 13.1 | $ 14.5 | $ 28.6 | |||||||
Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | 1,044.5 | 1,052.4 | $ 1,055 | |||||||
Unamortized debt issuance costs and original issue discount | 13.6 | 15.3 | ||||||||
Term Loan | Tranche B Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | 884.6 | |||||||||
Unamortized debt issuance costs and original issue discount | 13.2 | |||||||||
8.125% Second Lien Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | 1,015 | 1,015 | $ 1,015 | |||||||
Unamortized debt issuance costs and original issue discount | $ 15.6 | $ 16.9 | ||||||||
Debt instrument, stated percentage rate | 8.125% | 8.125% | 8.125% | |||||||
8.75% Second Priority Senior Secured Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | 330 | $ 330 | $ 330 | |||||||
Unamortized debt issuance costs and original issue discount | $ 1 | |||||||||
Debt instrument, stated percentage rate | 8.75% | 8.75% | 8.75% | 8.75% | 8.75% | |||||
9.875% Senior Unsecured Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 440 | $ 440 | ||||||||
Debt instrument, stated percentage rate | 9.875% | 9.875% | 9.875% | |||||||
Unamortized debt issuance costs | $ 6.7 | |||||||||
7.75% Senior Unsecured Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 300 | $ 300 | ||||||||
Debt instrument, stated percentage rate | 7.75% | 7.75% | 7.75% | |||||||
Unamortized debt issuance costs | $ 4.1 | |||||||||
10.75% Third Lien Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 298.5 | $ 298.5 | $ 298.5 | |||||||
Unamortized debt issuance costs and original issue discount | $ 7.3 | $ 8.1 | ||||||||
Debt instrument, stated percentage rate | 10.75% | 10.75% | 10.75% | |||||||
9.75% Senior Subordinated notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 1.5 | $ 298.5 | $ 300 | $ 300 | ||||||
Debt instrument, stated percentage rate | 9.75% | 9.75% | 9.75% | |||||||
Unamortized debt issuance costs | $ 3.3 | |||||||||
Revolving Credit Facility | Credit Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized debt issuance costs | $ 1.9 | $ 2.1 | $ 1 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | May 07, 2015 | Dec. 31, 2014 | Nov. 20, 2007 | |
Debt Instrument [Line Items] | ||||||
Leverage ratio of consolidated senior secured first lien to adjusted EBITDA | 535.00% | |||||
Debt instrument, minimum fixed charge coverage ratio | 100.00% | 100.00% | ||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit percentage of maximum availability | 10.00% | 10.00% | ||||
Cash collection, number of business days | 30 days | 30 days | ||||
Revolving Credit Facility | Greater Than 50% of Utilization Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Commitment Fees Rate | 0.25% | 0.25% | ||||
Revolving Credit Facility | Less Than 50% of Utilization Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Commitment Fees Rate | 0.375% | 0.375% | ||||
Base Rate Borrowings | Tranche B Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 3.25% | |||||
Eurodollar Rate Plus | Tranche B Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 3.25% | |||||
LIBOR | Tranche B Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 1.00% | |||||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Unutilized revolving credit facility | $ 9,000,000 | $ 9,000,000 | ||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | 1,044,500,000 | 1,052,400,000 | $ 1,055,000,000 | |||
Loan increment | 150,000,000 | |||||
Debt instrument, market value | $ 1,000,100,000 | $ 1,020,800,000 | ||||
Percentage of annual payments quarterly installments | 0.25% | 0.25% | ||||
Percentage of prepay outstanding term loans of annual excess cash flow | 50.00% | 50.00% | ||||
Percentage of prepay outstanding term loans of non-ordinary course asset sales | 100.00% | 100.00% | ||||
Annual amount from non-ordinary course asset sales | $ 100,000,000 | $ 100,000,000 | ||||
Proceeds from single or series of transaction | $ 30,000,000 | $ 30,000,000 | ||||
Percentage of cash proceeds from issuance of debt | 100.00% | 100.00% | ||||
Term loan prepayment premium | 1.00% | 1.00% | ||||
Leverage ratio of consolidated senior secured first lien to adjusted EBITDA | 433.00% | 415.00% | ||||
Term Loan | Tranche B Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 884,600,000 | |||||
Term Loan | Base Rate Borrowings | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 2.25% | 2.25% | ||||
Term Loan | Federal Funds Rate Plus | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 0.50% | 0.50% | ||||
Term Loan | One Month Eurodollar Rate | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 1.00% | 1.00% | ||||
Term Loan | Eurodollar Rate Plus | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 3.25% | 3.25% | ||||
Term Loan | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 1.00% | 1.00% | ||||
Percentage of prepay outstanding term loans of annual excess cash flow | 25.00% | 25.00% | ||||
Term Loan | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of prepay outstanding term loans of annual excess cash flow | 0.00% | 0.00% | ||||
ABL Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit Facility, face amount | 150,000,000 | |||||
Credit Facility, increment | $ 50,000,000 | |||||
Debt instrument, market value | $ 82,000,000 | $ 30,000,000 | ||||
ABL Facility | Base Rate Borrowings | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 1.25% | 1.25% | ||||
ABL Facility | Federal Funds Rate Plus | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 0.50% | 0.50% | ||||
ABL Facility | One Month Eurodollar Rate | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 1.00% | 1.00% | ||||
ABL Facility | Eurodollar Rate Plus | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 2.25% | 2.25% | ||||
Senior Secured Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Weighted Average Interest Rate | 4.10% | 4.19% | ||||
Credit Facilities | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit Facility, face amount | $ 100,000,000 | |||||
Credit Facilities | Federal Funds Rate Plus | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 0.50% | |||||
Credit Facilities | One Month Eurodollar Rate | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 3.25% | |||||
Credit Facilities | Eurodollar Rate Plus | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Facility, percentage points added to the reference rate | 3.25% |
Debt (Senior Notes, Debt Issuan
Debt (Senior Notes, Debt Issuance Costs and Loss on Modification and Extinguishment of Debt) - Additional Information (Detail) - USD ($) $ in Thousands | May 16, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May 13, 2015 | May 07, 2015 | Oct. 01, 2012 | Mar. 20, 2012 | Apr. 07, 2011 | Oct. 18, 2010 |
Debt Instrument [Line Items] | ||||||||||||||
Loss on extinguishment of debt | $ (67,967) | $ (67,967) | $ (68,473) | $ (938) | $ (1,059) | |||||||||
Premium related to debt redemption | 47,800 | 47,800 | 47,800 | |||||||||||
Non-cash write off of unamortized debt issuance costs | 11,900 | 11,900 | 600 | |||||||||||
Arrangement, amendment and other fees of debt | 8,300 | 8,800 | 300 | |||||||||||
Unamortized debt issuance costs | $ 13,100 | $ 13,100 | 14,500 | 28,600 | ||||||||||
Amortization of debt issuance costs | 700 | $ 1,200 | 1,400 | $ 3,300 | 4,700 | 8,100 | $ 7,300 | |||||||
Debt | 2,403,014 | 2,403,014 | 2,355,112 | 2,242,284 | ||||||||||
Amended Senior Secured Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Capitalized debt issuance costs | 5,900 | 1,500 | ||||||||||||
8.125% Second Lien Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 1,015,000 | $ 1,015,000 | $ 1,015,000 | $ 1,015,000 | ||||||||||
Debt instrument, stated percentage rate | 8.125% | 8.125% | 8.125% | 8.125% | ||||||||||
Debt instrument maturity date | Jun. 15, 2021 | Jun. 15, 2021 | ||||||||||||
Repurchase price percentage | 101.00% | 101.00% | ||||||||||||
Debt | $ 999,367 | $ 999,367 | $ 998,137 | |||||||||||
8.125% Second Lien Notes | First Lien Credit Facilities | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, stated percentage rate | 8.125% | 8.125% | 8.125% | |||||||||||
8.125% Second Lien Notes | Prior to June 15, 2018 - Option One | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption price | 100.00% | 100.00% | ||||||||||||
8.125% Second Lien Notes | prior to June 15, 2019 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption price | 103.00% | 103.00% | ||||||||||||
Percentage of debt redeemed | 15.00% | 15.00% | ||||||||||||
8.125% Second Lien Notes | Prior to June 15, 2018 - Option Two | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption price | 108.125% | 108.125% | ||||||||||||
Percentage of aggregate principal amount of notes to be outstanding | 35.00% | 35.00% | ||||||||||||
8.125% Second Lien Notes | Significant Other Observable Inputs (Level 2) | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, stated percentage rate | 8.125% | 8.125% | 8.125% | |||||||||||
Debt instrument, market value | $ 872,900 | $ 872,900 | $ 903,400 | |||||||||||
10.75% Third Lien Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 298,500 | $ 298,500 | $ 298,500 | $ 298,500 | ||||||||||
Debt instrument, stated percentage rate | 10.75% | 10.75% | 10.75% | 10.75% | ||||||||||
Debt instrument maturity date | Apr. 15, 2020 | Apr. 15, 2020 | ||||||||||||
Repurchase price percentage | 101.00% | 101.00% | ||||||||||||
Debt | $ 291,178 | $ 291,178 | $ 290,443 | |||||||||||
10.75% Third Lien Notes | Significant Other Observable Inputs (Level 2) | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, stated percentage rate | 10.75% | 10.75% | 10.75% | |||||||||||
Debt instrument, market value | $ 241,800 | $ 241,800 | $ 265,600 | |||||||||||
9.75% Senior Subordinated notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 1,500 | $ 300,000 | $ 298,500 | $ 300,000 | ||||||||||
Debt instrument, stated percentage rate | 9.75% | 9.75% | 9.75% | 9.75% | ||||||||||
Debt instrument maturity date | Oct. 15, 2017 | Oct. 15, 2017 | ||||||||||||
Unamortized debt issuance costs | $ 3,300 | |||||||||||||
Debt | $ 1,529 | $ 1,529 | $ 1,529 | 296,667 | ||||||||||
9.75% Senior Subordinated notes | Optional Redemption On October 15, 2015 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption price | 102.438% | 102.438% | ||||||||||||
9.75% Senior Subordinated notes | Optional Redemption On October 15, 2016 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption price | 100.00% | 100.00% | ||||||||||||
8.75% Second Priority Senior Secured Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 330,000 | $ 330,000 | $ 330,000 | |||||||||||
Debt instrument, stated percentage rate | 8.75% | 8.75% | 8.75% | 8.75% | 8.75% | 8.75% | ||||||||
Debt instrument maturity date | Mar. 15, 2018 | |||||||||||||
Redemption price | 104.375% | |||||||||||||
Debt | $ 329,031 | |||||||||||||
9.875% Senior Unsecured Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 440,000 | $ 440,000 | ||||||||||||
Debt instrument, stated percentage rate | 9.875% | 9.875% | 9.875% | 9.875% | ||||||||||
Debt instrument maturity date | Apr. 15, 2018 | |||||||||||||
Redemption price | 104.938% | |||||||||||||
Unamortized debt issuance costs | $ 6,700 | |||||||||||||
Debt | 433,309 | |||||||||||||
7.75% Senior Unsecured Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, face amount | $ 300,000 | $ 300,000 | ||||||||||||
Debt instrument, stated percentage rate | 7.75% | 7.75% | 7.75% | 7.75% | ||||||||||
Debt instrument maturity date | Apr. 15, 2018 | |||||||||||||
Redemption price | 103.875% | |||||||||||||
Unamortized debt issuance costs | $ 4,100 | |||||||||||||
Debt | $ 295,810 |
Aggregate Amounts of Principal
Aggregate Amounts of Principal Maturities of Long-Term Debt (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Debt and Capital Lease Obligations [Abstract] | |
2,016 | $ 10,550 |
2,017 | 12,079 |
2,018 | 10,550 |
2,019 | 10,550 |
2,020 | 1,338,634 |
Thereafter | 1,015,000 |
Long-term Debt, Gross, Total | $ 2,397,363 |
Membership Deficit - Additional
Membership Deficit - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jul. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | ||||
Shares issued | 43,086 | 8,848 | 115,693 | 72,151 |
Options exercised | 312,925 | 30,529 | 507,088 | 221,057 |
Shares withheld | 269,839 | 21,681 | 391,395 | 148,906 |
Aggregate market value of shares withheld | $ 4.4 | $ 0.4 | $ 6.5 | $ 2.5 |
Remaining common stock issued, shares | 43,086 | 8,848 | 115,693 | 72,151 |
Common stock issued, shares | 667 | 6,447 | ||
Cash paid upon retirement to former chief executive officer | $ 2 | |||
Rollover Options | ||||
Class of Stock [Line Items] | ||||
Shares of vested rollover options canceled | 313,681 |
Stock Option Plans and Stock-80
Stock Option Plans and Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015 | Feb. 28, 2013 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares available to grant | 10,575,529 | 10,575,529 | ||||||
Share based compensation shares authorized under stock option plans description | If Blackstone realizes a MOIC of greater than 1.5 times its equity investment but less than 2.25 times its equity investment, then 25% of the options will vest and become exercisable and a percentage of the remaining unvested options will vest and become exercisable with such percentage equal to a fraction, the numerator of which is the actual MOIC realized by Blackstone, less 1.5 and the denominator of which is 0.75. | If Blackstone sells all or a portion of its equity interests in DJO while the options are outstanding, then the unvested Market Return Options will vest and become exercisable as follows: 1) 25% of the options will vest and become exercisable if Blackstone realizes a MOIC of 1.5 times its equity investment in DJO; 2) 100% of the options will vest and become exercisable if Blackstone realizes a MOIC of at least 2.25 times its equity investment in DJO; and 3) if Blackstone realizes a MOIC of greater than 1.5 times its equity investment but less than 2.25 times its equity investment, then 25% of the options will vest and become exercisable and a percentage of the remaining unvested options will vest and become exercisable with such percentage equal to a fraction, the numerator of which is the actual MOIC realized by Blackstone, less 1.5 and the denominator of which is 0.75. | ||||||
Unrecognized stock-based compensation expense, weighted-average period | 3 years | |||||||
Granted stock options | 1,377,121 | |||||||
Stock options granted, total unrecognized stock-based compensation expense | $ 1.8 | |||||||
Employee Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted stock options modified | 310,000 | |||||||
Granted stock options | 667,818 | 593,621 | 1,343,621 | 1,747,268 | 1,082,397 | |||
2013 Vested Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted shares expiration period | 10 years | |||||||
Granted stock options | 70,397 | |||||||
Option granted, weighted average grant date fair value | $ 5.23 | |||||||
2014 Vested Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted shares expiration period | 10 years | |||||||
Granted stock options | 27,768 | |||||||
Option granted, weighted average grant date fair value | $ 5.28 | |||||||
Twenty Fifteen Vested Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted shares expiration period | 10 years | |||||||
Granted stock options | 21,121 | 21,121 | ||||||
Option granted, weighted average grant date fair value | $ 5.27 | $ 5.27 | ||||||
2016 Vested Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted shares expiration period | 10 years | |||||||
Granted stock options | 174,818 | |||||||
Option granted, weighted average grant date fair value | $ 5.25 | |||||||
Market Return Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted stock options | 426,998 | |||||||
Time-Based Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted stock options | 66,002 | 128,331 | 257,498 | 498,338 | 243,323 | |||
Option granted, weighted average grant date fair value | $ 5.99 | $ 6.07 | $ 6.09 | $ 6.05 | $ 5.99 | |||
Director Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted stock options | 13,800 | 23,000 | 23,000 | |||||
Option granted, weighted average grant date fair value | $ 5.99 | $ 6.92 | $ 6.92 | |||||
Performance Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted stock options | 444,169 | 1,065,002 | 1,221,162 | 768,677 | ||||
Share Based Compensation Award Tranche One | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock option vest | 33.33% | 33.33% | 33.33% | 33.33% | ||||
Share Based Compensation Award Tranche Two | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock option vest | 66.67% | 33.33% | 33.33% | 66.67% | ||||
Share Based Compensation Award Tranche Three | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock option vest | 33.33% | 33.33% | ||||||
Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price as a percentage of the fair market value of underlying shares on the date of grant | 100.00% | 100.00% | ||||||
Money on invested capital multiple | 225.00% | 150.00% | ||||||
Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted shares expiration period | 10 years | 10 years | ||||||
Money on invested capital multiple | 250.00% | 225.00% | ||||||
Board member | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted stock options | 100,000 | |||||||
Director | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted stock options | 13,800 | |||||||
Option granted, weighted average grant date fair value | $ 6.02 |
Summary of Assumptions Used to
Summary of Assumptions Used to Estimate Fair Value of Time-Based Options, Vested Options and Director Service Options of Stock Options Granted (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected volatility | 33.30% | 33.30% | 33.30% | 33.30% | 33.00% | ||
Expected volatility, minimum | 31.70% | 33.40% | |||||
Risk-free interest rate | 1.80% | ||||||
Expected volatility, maximum | 33.40% | 35.10% | |||||
Risk-free interest rate, minimum | 1.20% | 1.20% | 1.50% | 1.50% | 1.70% | 0.70% | |
Risk-free interest rate, maximum | 1.50% | 1.60% | 2.00% | 2.00% | 2.20% | 2.00% | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Expected years until exercise | 6 years 6 months | ||||||
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected years until exercise | 5 years 2 months 12 days | 5 years 2 months 12 days | 5 years 1 month 6 days | 5 years 1 month 6 days | 5 years | 5 years | |
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected years until exercise | 6 years 7 months 6 days | 6 years 7 months 6 days | 8 years 3 months 18 days | 8 years 3 months 18 days | 6 years 4 months 24 days | 6 years 3 months 18 days |
Schedule of Recorded Non-cash S
Schedule of Recorded Non-cash Stock-based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
Non-cash stock-based compensation expense | $ 1,316 | $ 539 | $ 1,521 | $ 1,152 | $ 1,805 | $ 1,869 | $ 2,155 |
Cost of Sales | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
Non-cash stock-based compensation expense | 31 | 31 | 61 | 61 | 90 | 82 | 52 |
Selling, General and Administrative Expenses | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
Non-cash stock-based compensation expense | 1,146 | 506 | 1,318 | 1,085 | 1,696 | 1,782 | 2,049 |
Research and Development Expense | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||||
Non-cash stock-based compensation expense | $ 139 | $ 2 | $ 142 | $ 6 | $ 19 | $ 5 | $ 54 |
Summary of Option Activity (Det
Summary of Option Activity (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | ||
Outstanding at beginning of period | 9,239,166 | |
Granted | 1,377,121 | |
Exercised | (31,196) | |
Forfeited or expired | (1,656,232) | |
Outstanding at end of period | 8,928,859 | 9,239,166 |
Vested or expected to vest at end of period | 5,154,858 | |
Exercisable at end of period | 2,865,982 | |
Weighted-Average Exercise Price per Share | ||
Outstanding at beginning of period | $ 16.11 | |
Granted | 16.46 | $ 16.46 |
Exercised | 9 | |
Forfeited or expired | 16.46 | |
Outstanding at end of period | 16.13 | $ 16.11 |
Vested or expected to vest at end of period | 15.88 | |
Exercisable at end of period | $ 15.43 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding at end of period | 5 years 10 months 24 days | 6 years 3 months 18 days |
Vested or expected to vest at end of period | 4 years 10 months 24 days | |
Exercisable at end of period | 3 years 2 months 12 days | |
Aggregate Intrinsic Value | ||
Outstanding at beginning of period | $ 3,197,576 | |
Outstanding at end of period | 2,964,949 | $ 3,197,576 |
Vested or expected to vest at end of period | 2,964,949 | |
Exercisable at end of period | $ 2,964,949 |
Exercise of Stock Option Using
Exercise of Stock Option Using Net Exercise Method (Detail) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jul. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Options exercised | 312,925 | 30,529 | 507,088 | 221,057 |
Shares withheld | 269,839 | 21,681 | 391,395 | 148,906 |
Shares issued | 43,086 | 8,848 | 115,693 | 72,151 |
Average market value per share withheld | $ 16.46 | $ 16.46 | ||
Aggregate market value of shares withheld (in thousands) | $ 357 | $ 6,442 |
Components of Loss from Continu
Components of Loss from Continuing Operations Before Income Tax Provision (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||||||
U.S. operations | $ (184,524) | $ (133,463) | $ (189,333) | ||||
Foreign operations | 14,273 | 17,439 | 17,323 | ||||
Loss before income taxes | $ (20,384) | $ (86,774) | $ (52,908) | $ (124,046) | $ (170,251) | $ (116,024) | $ (172,010) |
Components of Income Tax Provis
Components of Income Tax Provision from Continuing Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current income taxes: | |||||||
U.S. federal | $ 597 | $ (309) | $ 840 | ||||
U.S. state | 1,042 | 310 | 429 | ||||
Foreign | 4,677 | 5,989 | 6,373 | ||||
Total current income taxes | 6,316 | 5,990 | 7,642 | ||||
Deferred income taxes: | |||||||
U.S. federal | 6,095 | (6,579) | 9,610 | ||||
U.S. state | 919 | (2,120) | 767 | ||||
Foreign | (1,074) | (2,011) | (568) | ||||
Total deferred income taxes | $ 3,812 | $ 3,735 | 5,940 | (10,710) | 9,809 | ||
Total income tax provision (benefit) | $ 3,577 | $ 5,911 | $ 8,990 | $ 7,856 | $ 12,256 | $ (4,720) | $ 17,451 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ||||||||
Gross deferred tax assets | $ 327,719 | $ 280,312 | ||||||
Valuation allowances | 223,385 | 137,520 | ||||||
Deferred tax (income) expense for unrepatriated foreign earnings | (600) | (600) | $ 1,800 | |||||
Expected decrease in unrecognized tax benefits in the next twelve months | 400 | |||||||
Unrecognized tax benefits resulting from foreign and U.S. state tax positions | $ 6,100 | $ 6,100 | 5,900 | |||||
Interest and penalties included as a component of income tax benefit | 400 | 400 | 500 | |||||
Accrued interest and penalties | 3,100 | 3,100 | 2,700 | 2,300 | ||||
Income tax provision | (3,577) | $ (5,911) | (8,990) | $ (7,856) | (12,256) | 4,720 | (17,451) | |
Loss before income taxes | $ (20,384) | $ (86,774) | $ (52,908) | $ (124,046) | (170,251) | (116,024) | (172,010) | |
Effective tax rate | 17.50% | 6.80% | 17.00% | 6.30% | ||||
Valuation allowance, deferred tax assets | $ 11,400 | $ 26,100 | ||||||
Gross unrecognized tax benefits | $ 16,000 | 16,000 | 14,901 | 13,905 | 14,469 | $ 12,342 | ||
Change in unrecognized tax benefits | 1,100 | |||||||
Expected decrease in unrecognized tax benefits | $ 900 | 120 | $ 709 | $ 379 | ||||
Federal | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
Net operating loss carryforwards | 695,100 | |||||||
State | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
Net operating loss carryforwards | $ 448,800 | |||||||
United States | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
Federal statutory income tax rate | 35.00% | |||||||
Foreign | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
Net operating loss carryforwards | $ 11,500 | |||||||
Operating loss carryforwards, expiration year | 2,022 | |||||||
Minimum | United States | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
Operating loss carryforwards, expiration dates | 1 year | |||||||
Maximum | United States | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
Operating loss carryforwards, expiration dates | 20 years |
Difference Between Income Tax P
Difference Between Income Tax Provision Derived by Applying U.S. Federal Statutory Income Tax Rate and Recognized Income Tax Provision (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||||||
Income tax provision (benefit) derived by applying the U.S. federal statutory income tax rate to loss before income taxes | $ (59,586) | $ (40,595) | $ (60,217) | ||||
State tax benefit, net | (4,996) | (2,564) | (3,494) | ||||
Change in state effective tax rates | (604) | (803) | (687) | ||||
Foreign earnings repatriation | (622) | (1,646) | 2,678 | ||||
Unrecognized tax benefits | 1,678 | 949 | 2,767 | ||||
Goodwill impairment | 16,644 | ||||||
Valuation allowance | 72,655 | 35,503 | 64,547 | ||||
Research tax credit | (758) | (647) | (1,249) | ||||
Equity compensation benefit | (2,864) | ||||||
Permanent differences and other, net | (2,726) | 4,912 | (456) | ||||
Foreign rate differential | 5,875 | ||||||
Other | 1,340 | 171 | (218) | ||||
Total income tax provision (benefit) | $ 3,577 | $ 5,911 | $ 8,990 | $ 7,856 | $ 12,256 | $ (4,720) | $ 17,451 |
Component of Deferred Tax Asset
Component of Deferred Tax Asset and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 264,343 | $ 214,319 |
Receivables reserve | 19,654 | 26,709 |
Other | 43,722 | 39,284 |
Gross deferred tax assets | 327,719 | 280,312 |
Valuation allowance | (223,385) | (137,520) |
Net deferred tax assets | 104,334 | 142,792 |
Deferred tax liabilities: | ||
Intangible assets | (303,993) | (343,370) |
Foreign earnings repatriation | (11,730) | (13,012) |
Other | (1,225) | (3,987) |
Gross deferred tax liabilities | (316,948) | (360,369) |
Net deferred tax liabilities | $ (212,614) | $ (217,577) |
Reconciliation of Beginning and
Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jul. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||||
Balance, beginning of period | $ 14,901 | $ 13,905 | $ 14,469 | $ 12,342 |
Additions based on tax positions related to current year | 922 | 1,502 | 1,531 | |
Additions for tax positions related to prior years | 194 | 354 | 975 | |
Reduction due to lapse of statute of limitations | (900) | (120) | (709) | (379) |
Reductions for settlements of tax positions | (1,711) | |||
Balance, end of period | $ 16,000 | $ 14,901 | $ 13,905 | $ 14,469 |
Aggregate Minimum Rental Commit
Aggregate Minimum Rental Commitments Under Non-Cancelable Leases (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Years Ending December 31, | |
2,016 | $ 28,687 |
2,017 | 17,947 |
2,018 | 8,871 |
2,019 | 6,577 |
2,020 | 5,710 |
Thereafter | 4,453 |
Operating Leases, Future Minimum Payments Due, Total | $ 72,245 |
Commitments And Contingencies -
Commitments And Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)LegalMatterPlaintiff | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | |||
Rental expense under operating leases | $ | $ 18 | $ 17.4 | $ 17.6 |
Number of pending cases | LegalMatter | 1 | ||
Canada | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Number of plaintiffs | Plaintiff | 45 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - Blackstone Management Partners LLC - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Jul. 01, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Maximum annual monitoring fee under advisory and consulting services | $ 7,000 | $ 7,000 | |
Annual monitoring fee maximum under advisory and consulting services, percentage | 2.00% | 2.00% | |
Annual monitoring fee recorded as component of selling, general and administrative expense | $ 1,750 | $ 3,500 | $ 7,000 |
Segment and Geographic Inform94
Segment and Geographic Information - Additional Information (Detail) | 6 Months Ended | 12 Months Ended | |||
Jul. 01, 2016SegmentCustomer | Jun. 27, 2015SegmentCustomer | Dec. 31, 2015SegmentCustomer | Dec. 31, 2014SegmentCustomer | Dec. 31, 2013SegmentCustomer | |
Segment Reporting [Abstract] | |||||
Number of operating segments | Segment | 4 | 4 | 4 | 4 | 4 |
Number of individual customer or distributor accounted for 10% or more of total annual net sales | Customer | 0 | 0 | 0 | 0 | 0 |
Information Regarding Reportabl
Information Regarding Reportable Business Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jul. 01, 2016 | Dec. 31, 2015 | Sep. 26, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Dec. 31, 2014 | Sep. 27, 2014 | Jun. 28, 2014 | Mar. 29, 2014 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net sales: | ||||||||||||||
Net sales | $ 292,852 | $ 307,951 | $ 278,263 | $ 279,902 | $ 247,511 | $ 290,182 | $ 270,407 | $ 278,289 | $ 248,651 | $ 571,758 | $ 527,413 | $ 1,113,627 | $ 1,087,529 | $ 1,020,784 |
Operating income (loss): | ||||||||||||||
Operating income (loss) | 21,544 | $ 20,571 | $ 22,480 | 25,014 | $ 9,750 | $ 27,745 | $ 16,979 | $ 15,426 | $ 4,286 | 31,006 | 34,764 | 77,815 | 64,436 | 7,896 |
Operating Segments | Bracing and Vascular | ||||||||||||||
Net sales: | ||||||||||||||
Net sales | 131,751 | 136,179 | 255,967 | 250,083 | 526,295 | 504,590 | 476,492 | |||||||
Operating income (loss): | ||||||||||||||
Operating income (loss) | 29,072 | 31,497 | 49,606 | 52,393 | 115,791 | 102,933 | 86,447 | |||||||
Operating Segments | Recovery Sciences | ||||||||||||||
Net sales: | ||||||||||||||
Net sales | 38,449 | 40,102 | 75,024 | 74,627 | 156,194 | 157,485 | 158,110 | |||||||
Operating income (loss): | ||||||||||||||
Operating income (loss) | 8,056 | 7,472 | 14,501 | 11,402 | 29,035 | 33,863 | 37,689 | |||||||
Operating Segments | Surgical Implant | ||||||||||||||
Net sales: | ||||||||||||||
Net sales | 42,575 | 28,071 | 85,625 | 54,997 | 134,843 | 100,139 | 87,088 | |||||||
Operating income (loss): | ||||||||||||||
Operating income (loss) | 6,053 | 4,392 | 13,282 | 8,712 | 25,531 | 12,712 | 8,669 | |||||||
Operating Segments | International | ||||||||||||||
Net sales: | ||||||||||||||
Net sales | 80,077 | 75,550 | 155,142 | 147,706 | 296,295 | 325,315 | 299,094 | |||||||
Operating income (loss): | ||||||||||||||
Operating income (loss) | 14,653 | 13,312 | 23,642 | 25,697 | 48,578 | 62,304 | 57,515 | |||||||
Expenses not allocated to segments and eliminations | ||||||||||||||
Operating income (loss): | ||||||||||||||
Operating income (loss) | $ (36,290) | $ (31,659) | $ (70,025) | $ (63,440) | $ (141,120) | $ (147,376) | $ (182,424) |
Net Sales by Geographic Area (D
Net Sales by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jul. 01, 2016 | Dec. 31, 2015 | Sep. 26, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Dec. 31, 2014 | Sep. 27, 2014 | Jun. 28, 2014 | Mar. 29, 2014 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net sales: | ||||||||||||||
Sales revenue goods net | $ 292,852 | $ 307,951 | $ 278,263 | $ 279,902 | $ 247,511 | $ 290,182 | $ 270,407 | $ 278,289 | $ 248,651 | $ 571,758 | $ 527,413 | $ 1,113,627 | $ 1,087,529 | $ 1,020,784 |
United States | ||||||||||||||
Net sales: | ||||||||||||||
Sales revenue goods net | 212,775 | 204,352 | 416,616 | 379,707 | 817,332 | 762,214 | 721,690 | |||||||
Other Europe, Middle East, and Africa | ||||||||||||||
Net sales: | ||||||||||||||
Sales revenue goods net | 38,057 | 35,863 | 74,516 | 69,557 | 141,638 | 156,339 | 139,252 | |||||||
Germany | ||||||||||||||
Net sales: | ||||||||||||||
Sales revenue goods net | 21,960 | 20,838 | 42,963 | 41,872 | 80,982 | 91,754 | 88,236 | |||||||
Australia And Asia Pacific | ||||||||||||||
Net sales: | ||||||||||||||
Sales revenue goods net | 11,400 | 10,500 | 21,402 | 20,391 | 40,717 | 39,990 | 35,025 | |||||||
Canada | ||||||||||||||
Net sales: | ||||||||||||||
Sales revenue goods net | 6,697 | 6,381 | 12,434 | 11,733 | 23,966 | 26,481 | 27,035 | |||||||
Latin America | ||||||||||||||
Net sales: | ||||||||||||||
Sales revenue goods net | $ 1,963 | $ 1,968 | $ 3,827 | $ 4,153 | $ 8,992 | $ 10,751 | $ 9,546 |
Long-Lived Assets by Geographic
Long-Lived Assets by Geographic Area (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Long-Lived Assets by Geographic Area: | ||
Long-lived assets | $ 122,447 | $ 120,681 |
United States | ||
Long-Lived Assets by Geographic Area: | ||
Long-lived assets | 106,058 | 104,211 |
International | ||
Long-Lived Assets by Geographic Area: | ||
Long-lived assets | $ 16,389 | $ 16,470 |
Unaudited Quarterly Consolida98
Unaudited Quarterly Consolidated Financial Data (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jul. 01, 2016 | Dec. 31, 2015 | Sep. 26, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Dec. 31, 2014 | Sep. 27, 2014 | Jun. 28, 2014 | Mar. 29, 2014 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Unaudited Quarterly Consolidated Financial Data: | ||||||||||||||
Net sales | $ 292,852 | $ 307,951 | $ 278,263 | $ 279,902 | $ 247,511 | $ 290,182 | $ 270,407 | $ 278,289 | $ 248,651 | $ 571,758 | $ 527,413 | $ 1,113,627 | $ 1,087,529 | $ 1,020,784 |
Operating income (loss) | 21,544 | 20,571 | 22,480 | 25,014 | 9,750 | 27,745 | 16,979 | 15,426 | 4,286 | 31,006 | 34,764 | 77,815 | 64,436 | 7,896 |
Net loss from continuing operations | (23,961) | (25,443) | (25,162) | (92,685) | (39,217) | (18,031) | (28,516) | (26,342) | (38,415) | (61,898) | (131,902) | (182,507) | (111,304) | (189,461) |
Net loss attributable to DJOFL | $ (23,275) | $ (49,586) | $ (177,838) | $ (77,977) | $ (35,526) | $ (7,372) | $ (21,206) | $ (25,434) | $ (36,522) | $ (61,595) | $ (113,503) | $ (340,927) | $ (90,534) | $ (203,452) |
Supplemental Guarantor Conden99
Supplemental Guarantor Condensed Consolidating Financial Statements - Additional Information (Detail) - DJO Finco | Jul. 01, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Subsidiaries owned | 100.00% | 100.00% |
8.125% Second Lien Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated percentage rate | 8.125% | 8.125% |
10.75% Third Lien Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated percentage rate | 10.75% | 10.75% |
9.75% Senior Subordinated notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, stated percentage rate | 9.75% | 9.75% |
Schedule of Condensed Consolida
Schedule of Condensed Consolidating Balance Sheets (Detail) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | Jun. 27, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ||||||
Cash and cash equivalents | $ 41,699 | $ 48,943 | $ 48,385 | $ 31,144 | $ 43,578 | $ 31,223 |
Accounts receivable, net | 177,128 | 172,360 | 169,207 | |||
Inventories, net | 177,548 | 174,573 | 168,930 | |||
Deferred tax assets, net | 24,598 | |||||
Prepaid expenses and other current assets | 22,309 | 21,179 | 16,793 | |||
Current assets of discontinued operations | 2,878 | 25,642 | ||||
Total current assets | 418,684 | 419,933 | 436,314 | |||
Property and equipment, net | 130,845 | 117,273 | 116,476 | |||
Goodwill | 1,019,186 | 1,018,104 | 1,023,890 | |||
Intangible assets, net | 710,549 | 749,045 | 825,905 | |||
Other non-current assets | 6,599 | 5,174 | 4,205 | |||
Non-current assets of discontinued operations | 29 | 163,071 | ||||
Total assets | 2,285,863 | 2,309,558 | 2,569,861 | |||
Current liabilities: | ||||||
Accounts payable | 73,968 | 58,492 | 59,245 | |||
Current portion of debt obligations | 10,550 | 10,550 | 8,975 | |||
Other current liabilities | 103,230 | 119,171 | 123,778 | |||
Current liabilities of discontinued operations | 946 | 13,371 | 8,681 | |||
Total current liabilities | 188,694 | 201,584 | 200,679 | |||
Long-term debt obligations | 2,392,464 | 2,344,562 | 2,233,309 | |||
Deferred tax liabilities, net | 219,930 | 213,856 | 243,123 | |||
Other long-term liabilities | 21,319 | 15,092 | 14,366 | |||
Total liabilities | 2,822,407 | 2,775,094 | 2,691,477 | |||
Noncontrolling interests | 3,036 | 2,634 | 2,618 | |||
Total membership (deficit) equity | (539,580) | (468,170) | (124,234) | |||
Total liabilities and deficit | 2,285,863 | 2,309,558 | 2,569,861 | |||
Reportable Legal Entities | DJOFL | ||||||
Current assets: | ||||||
Cash and cash equivalents | 17,436 | 29,673 | 25,881 | 12,958 | 22,370 | 13,176 |
Prepaid expenses and other current assets | 103 | 42 | 160 | |||
Current assets of discontinued operations | 0 | |||||
Total current assets | 17,539 | 29,715 | 13,118 | |||
Investment in subsidiaries | 1,297,699 | 1,297,699 | 1,297,699 | |||
Intercompany receivables | 566,198 | 575,483 | 836,759 | |||
Other non-current assets | 1,313 | |||||
Total assets | 1,881,436 | 1,904,210 | 2,147,576 | |||
Current liabilities: | ||||||
Current portion of debt obligations | 10,550 | 10,550 | 8,912 | |||
Other current liabilities | 12,123 | 17,268 | 29,589 | |||
Total current liabilities | 22,673 | 27,818 | 38,501 | |||
Long-term debt obligations | 2,392,464 | 2,344,562 | 2,233,309 | |||
Other long-term liabilities | 5,879 | |||||
Total liabilities | 2,421,016 | 2,372,380 | 2,271,810 | |||
Total membership (deficit) equity | (539,580) | (468,170) | (124,234) | |||
Total liabilities and deficit | 1,881,436 | 1,904,210 | 2,147,576 | |||
Reportable Legal Entities | Guarantors | ||||||
Current assets: | ||||||
Cash and cash equivalents | 1,370 | 160 | 2,533 | 3 | 358 | 3,122 |
Accounts receivable, net | 128,643 | 128,085 | 121,929 | |||
Inventories, net | 143,880 | 142,033 | 138,636 | |||
Deferred tax assets, net | 24,351 | |||||
Prepaid expenses and other current assets | 15,210 | 13,301 | 11,085 | |||
Current assets of discontinued operations | 2,878 | 25,642 | ||||
Total current assets | 289,103 | 286,457 | 321,646 | |||
Property and equipment, net | 117,527 | 103,637 | 102,560 | |||
Goodwill | 951,005 | 951,005 | 949,181 | |||
Intangible assets, net | 700,017 | 737,798 | 810,897 | |||
Investment in subsidiaries | 1,679,465 | 1,687,724 | 1,686,557 | |||
Other non-current assets | 2,568 | 1,193 | 1,806 | |||
Non-current assets of discontinued operations | 29 | 163,071 | ||||
Total assets | 3,739,685 | 3,767,843 | 4,035,718 | |||
Current liabilities: | ||||||
Accounts payable | 64,547 | 49,394 | 46,875 | |||
Other current liabilities | 64,057 | 73,260 | 65,106 | |||
Current liabilities of discontinued operations | 946 | 13,371 | 8,681 | |||
Total current liabilities | 129,550 | 136,025 | 120,662 | |||
Deferred tax liabilities, net | 214,178 | 209,179 | 237,813 | |||
Intercompany payables, net | 362,861 | 400,216 | 552,612 | |||
Other long-term liabilities | 14,811 | 14,441 | 12,244 | |||
Total liabilities | 721,400 | 759,861 | 923,331 | |||
Total membership (deficit) equity | 3,018,285 | 3,007,982 | 3,112,387 | |||
Total liabilities and deficit | 3,739,685 | 3,767,843 | 4,035,718 | |||
Reportable Legal Entities | Non-Guarantors | ||||||
Current assets: | ||||||
Cash and cash equivalents | 22,893 | 19,110 | $ 19,971 | 18,183 | 20,848 | 14,919 |
Accounts receivable, net | 48,485 | 44,275 | 47,278 | |||
Inventories, net | 46,402 | 31,803 | 31,134 | |||
Deferred tax assets, net | 247 | |||||
Prepaid expenses and other current assets | 6,996 | 7,836 | 5,548 | |||
Total current assets | 124,776 | 103,024 | 102,390 | |||
Property and equipment, net | 13,381 | 13,721 | 14,071 | |||
Goodwill | 99,277 | 98,309 | 109,260 | |||
Intangible assets, net | 10,532 | 11,247 | 15,008 | |||
Investment in subsidiaries | 51,573 | 50,741 | 56,572 | |||
Other non-current assets | 4,031 | 2,668 | 2,399 | |||
Total assets | 303,570 | 279,710 | 299,700 | |||
Current liabilities: | ||||||
Accounts payable | 9,421 | 9,098 | 12,370 | |||
Current portion of debt obligations | 63 | |||||
Other current liabilities | 27,050 | 28,643 | 29,083 | |||
Total current liabilities | 36,471 | 37,741 | 41,516 | |||
Deferred tax liabilities, net | 5,752 | 4,677 | 5,310 | |||
Intercompany payables, net | 137,313 | 131,138 | 135,833 | |||
Other long-term liabilities | 629 | 651 | 2,122 | |||
Total liabilities | 180,165 | 174,207 | 184,781 | |||
Noncontrolling interests | 3,036 | 2,634 | 2,618 | |||
Total membership (deficit) equity | 120,369 | 102,869 | 112,301 | |||
Total liabilities and deficit | 303,570 | 279,710 | 299,700 | |||
Eliminations | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 2 | $ 6 | ||||
Inventories, net | (12,734) | 737 | (840) | |||
Total current assets | (12,734) | 737 | (840) | |||
Property and equipment, net | (63) | (85) | (155) | |||
Goodwill | (31,096) | (31,210) | (34,551) | |||
Investment in subsidiaries | (3,028,737) | (3,036,164) | (3,040,828) | |||
Intercompany receivables | (566,198) | (575,483) | (836,759) | |||
Total assets | (3,638,828) | (3,642,205) | (3,913,133) | |||
Current liabilities: | ||||||
Intercompany payables, net | (500,174) | (531,354) | (688,445) | |||
Total liabilities | (500,174) | (531,354) | (688,445) | |||
Total membership (deficit) equity | (3,138,654) | (3,110,851) | (3,224,688) | |||
Total liabilities and deficit | $ (3,638,828) | $ (3,642,205) | $ (3,913,133) |
Schedule of Condensed Consol101
Schedule of Condensed Consolidating Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jul. 01, 2016 | Dec. 31, 2015 | Sep. 26, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Dec. 31, 2014 | Sep. 27, 2014 | Jun. 28, 2014 | Mar. 29, 2014 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net sales | $ 292,852 | $ 307,951 | $ 278,263 | $ 279,902 | $ 247,511 | $ 290,182 | $ 270,407 | $ 278,289 | $ 248,651 | $ 571,758 | $ 527,413 | $ 1,113,627 | $ 1,087,529 | $ 1,020,784 |
Costs and operating expenses: | ||||||||||||||
Cost of sales | 120,474 | 117,770 | 238,557 | 219,654 | 466,019 | 462,000 | 434,708 | |||||||
Selling, general and administrative | 121,627 | 108,612 | 243,556 | 215,797 | 454,724 | 439,872 | 409,192 | |||||||
Research and development | 10,122 | 8,688 | 19,976 | 17,552 | 35,105 | 37,277 | 32,976 | |||||||
Amortization of intangible assets | 19,085 | 19,818 | 38,663 | 39,646 | 79,964 | 83,944 | 86,412 | |||||||
Impairment of goodwill | 49,600 | |||||||||||||
Costs and Expenses, Total | 271,308 | 254,888 | 540,752 | 492,649 | 1,035,812 | 1,023,093 | 1,012,888 | |||||||
Operating (loss) income | 21,544 | 20,571 | 22,480 | 25,014 | 9,750 | 27,745 | 16,979 | 15,426 | 4,286 | 31,006 | 34,764 | 77,815 | 64,436 | 7,896 |
Other (expense) income: | ||||||||||||||
Interest (expense) income, net | (42,396) | (44,564) | (84,666) | (87,430) | (172,290) | (174,325) | (177,570) | |||||||
Loss on extinguishment of debt | (67,967) | (67,967) | (68,473) | (938) | (1,059) | |||||||||
Other (expense) income, net | 468 | 743 | 752 | (3,413) | (7,303) | (5,197) | (1,277) | |||||||
Nonoperating Income (Expense), Total | (41,928) | (111,788) | (83,914) | (158,810) | (248,066) | (180,460) | (179,906) | |||||||
(Loss) income before income taxes | (20,384) | (86,774) | (52,908) | (124,046) | (170,251) | (116,024) | (172,010) | |||||||
Income tax (benefit) provision | 3,577 | 5,911 | 8,990 | 7,856 | 12,256 | (4,720) | 17,451 | |||||||
Net (loss) income from continuing operations | (23,961) | (25,443) | (25,162) | (92,685) | (39,217) | (18,031) | (28,516) | (26,342) | (38,415) | (61,898) | (131,902) | (182,507) | (111,304) | (189,461) |
Net income from discontinued operations | 855 | 14,873 | 665 | 18,865 | (157,580) | 21,742 | (13,101) | |||||||
Net (loss) income | (23,106) | (77,812) | (61,233) | (113,037) | (340,087) | (89,562) | (202,562) | |||||||
Net income attributable to noncontrolling interests | (169) | (165) | (362) | (466) | (840) | (972) | (890) | |||||||
Net loss attributable to DJO Finance LLC | (23,275) | $ (49,586) | $ (177,838) | (77,977) | $ (35,526) | $ (7,372) | $ (21,206) | $ (25,434) | $ (36,522) | (61,595) | (113,503) | (340,927) | (90,534) | (203,452) |
Reportable Legal Entities | DJOFL | ||||||||||||||
Other (expense) income: | ||||||||||||||
Interest (expense) income, net | (42,448) | (44,567) | (84,731) | (87,438) | (172,237) | (174,309) | (177,570) | |||||||
Loss on extinguishment of debt | (67,967) | (67,967) | (68,473) | (938) | (1,059) | |||||||||
Other (expense) income, net | (8) | (8) | ||||||||||||
Equity in (loss) income of subsidiaries, net | 19,181 | 34,558 | 23,143 | 41,902 | (100,217) | 84,713 | (24,823) | |||||||
Nonoperating Income (Expense), Total | (23,275) | (77,976) | (61,596) | (113,503) | (340,927) | (90,534) | (203,452) | |||||||
(Loss) income before income taxes | (23,275) | (77,976) | (61,596) | (113,503) | (340,927) | (90,534) | (203,452) | |||||||
Net (loss) income from continuing operations | (23,275) | (77,976) | (61,596) | (113,503) | (340,927) | (90,534) | (203,452) | |||||||
Net (loss) income | (23,275) | (77,976) | (61,596) | (113,503) | (340,927) | (90,534) | (203,452) | |||||||
Net loss attributable to DJO Finance LLC | (23,275) | (77,976) | (61,596) | (113,503) | (340,927) | (90,534) | (203,452) | |||||||
Reportable Legal Entities | Guarantors | ||||||||||||||
Net sales | 252,212 | 243,371 | 495,872 | 461,763 | 976,412 | 917,604 | 871,576 | |||||||
Costs and operating expenses: | ||||||||||||||
Cost of sales | 94,465 | 102,629 | 189,306 | 193,550 | 408,987 | 400,295 | 389,932 | |||||||
Selling, general and administrative | 97,827 | 86,789 | 195,637 | 171,127 | 364,305 | 339,158 | 315,163 | |||||||
Research and development | 9,228 | 8,102 | 18,109 | 15,984 | 31,456 | 33,060 | 29,376 | |||||||
Amortization of intangible assets | 18,699 | 19,197 | 37,846 | 38,395 | 77,569 | 80,045 | 81,043 | |||||||
Impairment of goodwill | 49,600 | |||||||||||||
Costs and Expenses, Total | 220,219 | 216,717 | 440,898 | 419,056 | 882,317 | 852,558 | 865,114 | |||||||
Operating (loss) income | 31,993 | 26,654 | 54,974 | 42,707 | 94,095 | 65,046 | 6,462 | |||||||
Other (expense) income: | ||||||||||||||
Interest (expense) income, net | 51 | 11 | 71 | 23 | 42 | 94 | 81 | |||||||
Other (expense) income, net | (8,553) | (84) | (16,573) | (609) | (960) | (280) | (305) | |||||||
Intercompany (expense) income , net | (15,147) | (8,573) | (14,784) | (8,254) | (21,994) | (14,848) | 4,379 | |||||||
Nonoperating Income (Expense), Total | (23,649) | (8,646) | (31,286) | (8,840) | (22,912) | (15,034) | 4,155 | |||||||
(Loss) income before income taxes | 8,344 | 18,008 | 23,688 | 33,867 | 71,183 | 50,012 | 10,617 | |||||||
Income tax (benefit) provision | 1,671 | 4,889 | 6,078 | 6,492 | 10,027 | (8,972) | 12,163 | |||||||
Net (loss) income from continuing operations | 6,673 | 13,119 | 17,610 | 27,375 | 61,156 | 58,984 | (1,546) | |||||||
Net income from discontinued operations | 855 | 14,873 | 665 | 18,865 | (157,580) | 21,742 | (13,101) | |||||||
Net (loss) income | 7,528 | 27,992 | 18,275 | 46,240 | (96,424) | 80,726 | (14,647) | |||||||
Net loss attributable to DJO Finance LLC | 7,528 | 27,992 | 18,275 | 46,240 | (96,424) | 80,726 | (14,647) | |||||||
Reportable Legal Entities | Non-Guarantors | ||||||||||||||
Net sales | 83,178 | 75,498 | 158,673 | 146,034 | 293,899 | 318,849 | 282,317 | |||||||
Costs and operating expenses: | ||||||||||||||
Cost of sales | 74,317 | 57,651 | 138,711 | 110,985 | 227,635 | 230,721 | 191,135 | |||||||
Selling, general and administrative | 23,800 | 21,823 | 47,919 | 44,670 | 90,419 | 100,714 | 94,022 | |||||||
Research and development | 894 | 586 | 1,867 | 1,568 | 3,649 | 4,245 | 3,577 | |||||||
Amortization of intangible assets | 386 | 621 | 817 | 1,251 | 2,395 | 3,899 | 5,369 | |||||||
Costs and Expenses, Total | 99,397 | 80,681 | 189,314 | 158,474 | 324,098 | 339,579 | 294,103 | |||||||
Operating (loss) income | (16,219) | (5,183) | (30,641) | (12,440) | (30,199) | (20,730) | (11,786) | |||||||
Other (expense) income: | ||||||||||||||
Interest (expense) income, net | 1 | (8) | (6) | (15) | (95) | (110) | (81) | |||||||
Other (expense) income, net | 9,029 | 827 | 17,333 | (2,804) | (6,343) | (4,917) | (10,684) | |||||||
Intercompany (expense) income , net | 14,634 | 8,267 | 14,752 | 8,292 | 34,167 | 24,037 | 17,799 | |||||||
Nonoperating Income (Expense), Total | 23,664 | 9,086 | 32,079 | 5,473 | 27,729 | 19,010 | 7,034 | |||||||
(Loss) income before income taxes | 7,445 | 3,903 | 1,438 | (6,967) | (2,470) | (1,720) | (4,752) | |||||||
Income tax (benefit) provision | 1,906 | 1,022 | 2,912 | 1,364 | 2,229 | 4,252 | 5,288 | |||||||
Net (loss) income from continuing operations | 5,539 | 2,881 | (1,474) | (8,331) | (4,699) | (5,972) | (10,040) | |||||||
Net (loss) income | 5,539 | 2,881 | (1,474) | (8,331) | (4,699) | (5,972) | (10,040) | |||||||
Net income attributable to noncontrolling interests | (169) | (165) | (362) | (466) | (840) | (972) | (890) | |||||||
Net loss attributable to DJO Finance LLC | 5,370 | 2,716 | (1,836) | (8,797) | (5,539) | (6,944) | (10,930) | |||||||
Eliminations | ||||||||||||||
Net sales | (42,538) | (38,967) | (82,787) | (80,384) | (156,684) | (148,924) | (133,109) | |||||||
Costs and operating expenses: | ||||||||||||||
Cost of sales | (48,308) | (42,510) | (89,460) | (84,881) | (170,603) | (169,016) | (146,359) | |||||||
Selling, general and administrative | 7 | |||||||||||||
Research and development | (28) | 23 | ||||||||||||
Costs and Expenses, Total | (48,308) | (42,510) | (89,460) | (84,881) | (170,603) | (169,044) | (146,329) | |||||||
Operating (loss) income | 5,770 | 3,543 | 6,673 | 4,497 | 13,919 | 20,120 | 13,220 | |||||||
Other (expense) income: | ||||||||||||||
Other (expense) income, net | 9,712 | |||||||||||||
Intercompany (expense) income , net | 513 | 306 | 32 | (38) | (12,173) | (9,189) | (22,178) | |||||||
Equity in (loss) income of subsidiaries, net | (19,181) | (34,558) | (23,143) | (41,902) | 100,217 | (84,713) | 24,823 | |||||||
Nonoperating Income (Expense), Total | (18,668) | (34,252) | (23,111) | (41,940) | 88,044 | (93,902) | 12,357 | |||||||
(Loss) income before income taxes | (12,898) | (30,709) | (16,438) | (37,443) | 101,963 | (73,782) | 25,577 | |||||||
Net (loss) income from continuing operations | (12,898) | (30,709) | (16,438) | (37,443) | 101,963 | (73,782) | 25,577 | |||||||
Net (loss) income | (12,898) | (30,709) | (16,438) | (37,443) | 101,963 | (73,782) | 25,577 | |||||||
Net loss attributable to DJO Finance LLC | $ (12,898) | $ (30,709) | $ (16,438) | $ (37,443) | $ 101,963 | $ (73,782) | $ 25,577 |
Schedule of Condensed Consol102
Schedule of Condensed Consolidating Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||||||
Cost of sales, amortization of intangible assets | $ 7,080 | $ 7,535 | $ 14,487 | $ 15,070 | $ 30,719 | $ 32,962 | $ 33,719 |
Schedule of Condensed Consol103
Schedule of Condensed Consolidating Statements of Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net (loss) income | $ (23,106) | $ (77,812) | $ (61,233) | $ (113,037) | $ (340,087) | $ (89,562) | $ (202,562) |
Other comprehensive (loss) income, net of taxes: | |||||||
Foreign currency translation adjustments, net of tax benefit (provision) | (8,458) | 4,137 | (2,850) | (5,305) | (5,630) | (13,167) | 19 |
Unrealized gain on cash flow hedges, net of tax provision | (2,651) | (8,042) | 609 | ||||
Other comprehensive (loss) income | (11,109) | 4,137 | (10,892) | (5,305) | (5,021) | (13,167) | 19 |
Comprehensive (loss) income | (34,215) | (73,675) | (72,125) | (118,342) | (345,108) | (102,729) | (202,543) |
Comprehensive income attributable to noncontrolling interests | (101) | (243) | (402) | (260) | (557) | (591) | (1,010) |
Comprehensive (loss) income attributable to DJO Finance LLC | (34,316) | (73,918) | (72,527) | (118,602) | (345,665) | (103,320) | (203,553) |
Reportable Legal Entities | DJOFL | |||||||
Net (loss) income | (23,275) | (77,976) | (61,596) | (113,503) | (340,927) | (90,534) | (203,452) |
Other comprehensive (loss) income, net of taxes: | |||||||
Unrealized gain on cash flow hedges, net of tax provision | (2,651) | (8,042) | 609 | ||||
Other comprehensive (loss) income | (2,651) | (8,042) | 609 | ||||
Comprehensive (loss) income | (25,926) | (77,976) | (69,638) | (113,503) | (340,318) | (90,534) | (203,452) |
Comprehensive (loss) income attributable to DJO Finance LLC | (25,926) | (77,976) | (69,638) | (113,503) | (340,318) | (90,534) | (203,452) |
Reportable Legal Entities | Guarantors | |||||||
Net (loss) income | 7,528 | 27,992 | 18,275 | 46,240 | (96,424) | 80,726 | (14,647) |
Other comprehensive (loss) income, net of taxes: | |||||||
Comprehensive (loss) income | 10,747 | 27,992 | 18,275 | 46,240 | (96,424) | 80,726 | (14,647) |
Comprehensive (loss) income attributable to DJO Finance LLC | 10,747 | 27,992 | 18,275 | 46,240 | (96,424) | 80,726 | (14,647) |
Reportable Legal Entities | Non-Guarantors | |||||||
Net (loss) income | 5,539 | 2,881 | (1,474) | (8,331) | (4,699) | (5,972) | (10,040) |
Other comprehensive (loss) income, net of taxes: | |||||||
Foreign currency translation adjustments, net of tax benefit (provision) | (8,458) | 4,137 | (2,850) | (5,305) | (5,630) | (13,167) | 19 |
Other comprehensive (loss) income | (8,458) | 4,137 | (2,850) | (5,305) | (5,630) | (13,167) | 19 |
Comprehensive (loss) income | (1,513) | 7,018 | (4,324) | (13,636) | (10,329) | (19,139) | (10,021) |
Comprehensive income attributable to noncontrolling interests | (101) | (243) | (402) | (260) | (557) | (591) | (1,010) |
Comprehensive (loss) income attributable to DJO Finance LLC | (1,614) | 6,775 | (4,726) | (13,896) | (10,886) | (19,730) | (11,031) |
Eliminations | |||||||
Net (loss) income | (12,898) | (30,709) | (16,438) | (37,443) | 101,963 | (73,782) | 25,577 |
Other comprehensive (loss) income, net of taxes: | |||||||
Comprehensive (loss) income | (3,540) | (30,709) | (16,438) | (37,443) | 101,963 | (73,782) | 25,577 |
Comprehensive (loss) income attributable to DJO Finance LLC | $ (3,540) | $ (30,709) | $ (16,438) | $ (37,443) | $ 101,963 | $ (73,782) | $ 25,577 |
Schedule of Condensed Consol104
Schedule of Condensed Consolidating Statements of Comprehensive Loss (Parenthetical) (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||||||
Foreign currency translation adjustment, tax benefit (provision) | $ 111,000 | $ (152,000) | $ (166,000) | $ 340,000 | $ 540,000 | $ 3,871,000 | $ (1,212,000) |
Unrealized gain on cash flow hedges, tax provision | $ 0 | $ 0 | $ 375,000 |
Schedule of Condensed Consol105
Schedule of Condensed Consolidating Statements of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 01, 2016 | Jun. 27, 2015 | Jul. 01, 2016 | Jun. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities: | |||||||
Net (loss) income | $ (23,106) | $ (77,812) | $ (61,233) | $ (113,037) | $ (340,087) | $ (89,562) | $ (202,562) |
Net income from discontinued operations | (855) | (14,873) | (665) | (18,865) | 157,580 | (21,742) | 13,101 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||
Depreciation | 20,513 | 16,837 | 37,491 | 35,213 | 32,507 | ||
Amortization of intangible assets | 19,085 | 19,818 | 38,663 | 39,646 | 79,964 | 83,944 | 86,412 |
Amortization of debt issuance costs and non-cash interest expense | 3,815 | 4,235 | 7,850 | 8,692 | 8,012 | ||
Loss on modification and extinguishment of debt | 67,967 | 67,967 | 68,473 | 938 | 1,059 | ||
Stock-based compensation expense | 1,316 | 539 | 1,521 | 1,152 | 1,805 | 1,869 | 2,155 |
Impairment of goodwill | 49,600 | ||||||
(Gain) loss on disposal of assets, net | 530 | 258 | 1,447 | (1,118) | (1,012) | ||
Deferred income tax expense (benefit) | 3,812 | 3,735 | 5,940 | (10,710) | 9,809 | ||
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||
Accounts receivable | (4,209) | (5,949) | (8,064) | (14,460) | (19,459) | ||
Inventories | (5,650) | (8,751) | (8,106) | (19,497) | 3,239 | ||
Prepaid expenses and other assets | (637) | (2,032) | (7,516) | 11,424 | (8,669) | ||
Accounts payable and other | 12,888 | 7,644 | 1,839 | ||||
Accounts payable and other current liabilities | (8,526) | (7,365) | |||||
Net cash (used in) provided by continuing operating activities | (12,066) | (22,169) | 9,665 | (7,365) | (23,969) | ||
Net cash (used in) discontinued operations | (8,853) | 29,397 | 39,861 | 53,852 | 53,749 | ||
Net cash (used in) provided by operating activities | (20,919) | 7,228 | 49,526 | 46,487 | 29,780 | ||
Cash Flows From Investing Activities: | |||||||
Cash paid in connection with acquisitions, net of cash acquired | (24,000) | (4,587) | (1,953) | ||||
Purchases of property and equipment | (31,500) | (16,608) | (44,089) | (52,741) | (37,484) | ||
Other investing activities, net | 27 | (1,038) | (1,626) | ||||
Proceeds from disposition of assets | 700 | ||||||
Net cash (used in) provided by investing activities from continuing operations | (30,800) | (16,608) | (68,062) | (58,366) | (41,063) | ||
Net cash provided by investing activities from discontinued operations | (451) | (575) | (52) | ||||
Net cash (used in) provided by investing activities | (30,800) | (17,059) | (68,637) | (58,418) | (41,063) | ||
Cash Flows from Financing Activities: | |||||||
Proceeds from issuance of debt | 63,000 | 2,445,826 | 2,518,033 | 1,000,294 | 549,417 | ||
Repayments of debt obligations | (18,913) | (2,356,121) | (2,419,027) | (990,219) | (523,037) | ||
Payment of debt issuance, modification and extinguishment costs | (61,662) | (62,375) | (1,812) | (2,387) | |||
Exercise of stock options | 11 | 22 | 0 | ||||
Payment of contingent consideration | (5,690) | ||||||
Cancellation of vested options | (2,001) | ||||||
Dividend paid by subsidiary to owners of noncontrolling interest | (541) | (617) | (684) | ||||
Net cash provided by (used in) financing activities | 44,087 | 28,043 | 36,101 | (23) | 23,309 | ||
Effect of exchange rate changes on cash and cash equivalents | 388 | (971) | 809 | (480) | 329 | ||
Net (decrease) increase in cash and cash equivalents | (7,244) | 17,241 | 17,799 | (12,434) | 12,355 | ||
Cash and cash equivalents at the beginning of the period | 48,943 | 31,144 | 31,144 | 43,578 | 31,223 | ||
Cash and cash equivalents at the end of the period | 41,699 | 48,385 | 41,699 | 48,385 | 48,943 | 31,144 | 43,578 |
Reportable Legal Entities | DJOFL | |||||||
Cash Flows from Operating Activities: | |||||||
Net (loss) income | (23,275) | (77,976) | (61,596) | (113,503) | (340,927) | (90,534) | (203,452) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||
Amortization of debt issuance costs and non-cash interest expense | 3,815 | 4,235 | 7,850 | 8,692 | 8,012 | ||
Loss on modification and extinguishment of debt | 67,967 | 67,967 | 68,473 | 938 | 1,059 | ||
Equity in (loss) income of subsidiaries, net | (19,181) | (34,558) | (23,143) | (41,902) | 100,217 | (84,713) | 24,823 |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||
Prepaid expenses and other assets | 1,251 | (17) | (1,195) | ||||
Accounts payable and other | (11,506) | (83) | (1,839) | ||||
Accounts payable and other current liabilities | (7,721) | (5,422) | |||||
Net cash (used in) provided by continuing operating activities | (87,394) | (88,642) | (177,088) | (165,700) | (171,397) | ||
Net cash (used in) provided by operating activities | (87,394) | (88,642) | (177,088) | (165,700) | (171,397) | ||
Cash Flows from Financing Activities: | |||||||
Intercompany | 31,070 | 73,474 | 157,053 | 149,870 | 156,598 | ||
Proceeds from issuance of debt | 63,000 | 2,445,826 | 2,515,827 | 1,000,294 | 549,417 | ||
Repayments of debt obligations | (18,913) | (2,356,073) | (2,416,713) | (990,085) | (523,037) | ||
Payment of debt issuance, modification and extinguishment costs | (61,662) | (62,375) | (1,812) | (2,387) | |||
Exercise of stock options | 11 | 22 | |||||
Cancellation of vested options | (2,001) | ||||||
Net cash provided by (used in) financing activities | 75,157 | 101,565 | 193,803 | 156,288 | 180,591 | ||
Net (decrease) increase in cash and cash equivalents | (12,237) | 12,923 | 16,715 | (9,412) | 9,194 | ||
Cash and cash equivalents at the beginning of the period | 29,673 | 12,958 | 12,958 | 22,370 | 13,176 | ||
Cash and cash equivalents at the end of the period | 17,436 | 25,881 | 17,436 | 25,881 | 29,673 | 12,958 | 22,370 |
Reportable Legal Entities | Guarantors | |||||||
Cash Flows from Operating Activities: | |||||||
Net (loss) income | 7,528 | 27,992 | 18,275 | 46,240 | (96,424) | 80,726 | (14,647) |
Net income from discontinued operations | (855) | (14,873) | (665) | (18,865) | 157,580 | (21,742) | 13,101 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||
Depreciation | 18,055 | 14,509 | 32,495 | 29,127 | 27,382 | ||
Amortization of intangible assets | 18,699 | 19,197 | 37,846 | 38,395 | 77,569 | 80,045 | 81,043 |
Stock-based compensation expense | 1,521 | 1,152 | 1,805 | 1,869 | 2,155 | ||
Impairment of goodwill | 49,600 | ||||||
(Gain) loss on disposal of assets, net | 471 | 139 | 1,380 | (1,223) | (1,696) | ||
Deferred income tax expense (benefit) | 4,133 | 3,351 | 6,901 | (8,618) | 10,895 | ||
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||
Accounts receivable | (559) | (3,545) | (6,156) | (6,851) | (13,127) | ||
Inventories | (1,244) | 11 | (535) | (12,178) | 4,565 | ||
Prepaid expenses and other assets | (2,763) | (1,196) | (3,924) | 6,864 | (990) | ||
Accounts payable and other | 16,569 | 4,057 | (3,175) | ||||
Accounts payable and other current liabilities | 2,522 | (3,042) | |||||
Net cash (used in) provided by continuing operating activities | 77,592 | 77,149 | 187,260 | 152,076 | 155,106 | ||
Net cash (used in) discontinued operations | (8,853) | 29,397 | 39,861 | 53,852 | 53,749 | ||
Net cash (used in) provided by operating activities | 68,739 | 106,546 | 227,121 | 205,928 | 208,855 | ||
Cash Flows From Investing Activities: | |||||||
Cash paid in connection with acquisitions, net of cash acquired | (24,000) | (192) | |||||
Purchases of property and equipment | (29,238) | (13,677) | (38,095) | (46,269) | (29,158) | ||
Other investing activities, net | 27 | (676) | (1,239) | ||||
Proceeds from disposition of assets | 700 | ||||||
Net cash (used in) provided by investing activities from continuing operations | (28,538) | (13,677) | (62,068) | (46,945) | (30,589) | ||
Net cash provided by investing activities from discontinued operations | (451) | (575) | (52) | ||||
Net cash (used in) provided by investing activities | (14,128) | (62,643) | (46,997) | (30,589) | |||
Cash Flows from Financing Activities: | |||||||
Intercompany | (38,991) | (89,888) | (164,321) | (153,596) | (181,030) | ||
Payment of contingent consideration | (5,690) | ||||||
Net cash provided by (used in) financing activities | (38,991) | (89,888) | (164,321) | (159,286) | (181,030) | ||
Net (decrease) increase in cash and cash equivalents | 1,210 | 2,530 | 157 | (355) | (2,764) | ||
Cash and cash equivalents at the beginning of the period | 160 | 3 | 3 | 358 | 3,122 | ||
Cash and cash equivalents at the end of the period | 1,370 | 2,533 | 1,370 | 2,533 | 160 | 3 | 358 |
Reportable Legal Entities | Non-Guarantors | |||||||
Cash Flows from Operating Activities: | |||||||
Net (loss) income | 5,539 | 2,881 | (1,474) | (8,331) | (4,699) | (5,972) | (10,040) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||
Depreciation | 2,486 | 2,377 | 5,096 | 6,265 | 5,383 | ||
Amortization of intangible assets | 386 | 621 | 817 | 1,251 | 2,395 | 3,899 | 5,369 |
(Gain) loss on disposal of assets, net | 55 | 127 | 75 | 105 | 684 | ||
Deferred income tax expense (benefit) | (321) | 384 | (961) | (1,104) | (1,233) | ||
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||
Accounts receivable | (3,650) | (2,404) | (1,908) | (7,609) | (6,332) | ||
Inventories | 2,793 | (1,603) | 11,885 | 12,746 | 7,738 | ||
Prepaid expenses and other assets | (252) | (892) | (1,775) | 4,851 | (7,368) | ||
Accounts payable and other | 805 | 1,618 | 7,597 | ||||
Accounts payable and other current liabilities | (69) | (3,322) | |||||
Net cash (used in) provided by continuing operating activities | 385 | (12,413) | 10,913 | 14,799 | 1,798 | ||
Net cash (used in) provided by operating activities | 385 | (12,413) | 10,913 | 14,799 | 1,798 | ||
Cash Flows From Investing Activities: | |||||||
Cash paid in connection with acquisitions, net of cash acquired | (4,587) | (1,761) | |||||
Purchases of property and equipment | (2,261) | (2,942) | (6,111) | (6,597) | (8,310) | ||
Other investing activities, net | (362) | (387) | |||||
Net cash (used in) provided by investing activities from continuing operations | (2,261) | (2,942) | (6,111) | (11,546) | (10,458) | ||
Net cash (used in) provided by investing activities | (2,942) | (6,111) | (11,546) | (10,458) | |||
Cash Flows from Financing Activities: | |||||||
Intercompany | 5,271 | 18,162 | (4,035) | (4,687) | 14,944 | ||
Proceeds from issuance of debt | 2,206 | ||||||
Repayments of debt obligations | (48) | (2,314) | (134) | ||||
Dividend paid by subsidiary to owners of noncontrolling interest | (541) | (617) | (684) | ||||
Net cash provided by (used in) financing activities | 5,271 | 18,114 | (4,684) | (5,438) | 14,260 | ||
Effect of exchange rate changes on cash and cash equivalents | 388 | (971) | 809 | (480) | 329 | ||
Net (decrease) increase in cash and cash equivalents | 3,783 | 1,788 | 927 | (2,665) | 5,929 | ||
Cash and cash equivalents at the beginning of the period | 19,110 | 18,183 | 18,183 | 20,848 | 14,919 | ||
Cash and cash equivalents at the end of the period | 22,893 | 19,971 | 22,893 | 19,971 | 19,110 | 18,183 | 20,848 |
Eliminations | |||||||
Cash Flows from Operating Activities: | |||||||
Net (loss) income | (12,898) | (30,709) | (16,438) | (37,443) | 101,963 | (73,782) | 25,577 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||
Depreciation | (28) | (49) | (100) | (179) | (258) | ||
(Gain) loss on disposal of assets, net | 4 | (8) | (8) | ||||
Deferred income tax expense (benefit) | (988) | 147 | |||||
Equity in (loss) income of subsidiaries, net | $ 19,181 | $ 34,558 | 23,143 | 41,902 | (100,217) | 84,713 | (24,823) |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||
Inventories | (7,199) | (7,159) | (19,456) | (20,065) | (9,064) | ||
Prepaid expenses and other assets | 1,127 | 73 | (622) | (291) | (311) | ||
Accounts payable and other | 7,020 | 2,052 | (744) | ||||
Accounts payable and other current liabilities | (3,258) | 4,421 | |||||
Net cash (used in) provided by continuing operating activities | (2,649) | 1,737 | (11,420) | (8,540) | (9,476) | ||
Net cash (used in) provided by operating activities | (2,649) | 1,737 | (11,420) | (8,540) | (9,476) | ||
Cash Flows From Investing Activities: | |||||||
Purchases of property and equipment | (1) | 11 | 117 | 125 | (16) | ||
Net cash (used in) provided by investing activities from continuing operations | (1) | 11 | 117 | 125 | (16) | ||
Net cash (used in) provided by investing activities | 11 | 117 | 125 | (16) | |||
Cash Flows from Financing Activities: | |||||||
Intercompany | 2,650 | (1,748) | 11,303 | 8,413 | 9,488 | ||
Net cash provided by (used in) financing activities | $ 2,650 | $ (1,748) | $ 11,303 | 8,413 | 9,488 | ||
Net (decrease) increase in cash and cash equivalents | (2) | (4) | |||||
Cash and cash equivalents at the beginning of the period | $ 2 | 6 | |||||
Cash and cash equivalents at the end of the period | $ 2 |
Schedule II-Valuation and Qu106
Schedule II-Valuation and Qualifying Accounts (Detail) - Allowance for Sales Discounts and Other Allowances - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Beginning Balance | $ 39,255 | $ 39,580 | $ 29,102 |
Provision | 72,723 | 61,598 | 53,590 |
Write-offs, net of recoveries | (68,630) | (61,923) | (43,112) |
Ending Balance | $ 43,348 | $ 39,255 | $ 39,580 |