K2M 10-Q 2 May 17 2017 Q1 Quarterly report Financial data

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION DOCUMENT AND ENTITY INFORMATION - shares	3 Months Ended
	Mar. 31, 2017	Apr. 25, 2017
Entity [Abstract]
Entity Registrant Name	K2M Group Holdings, Inc.
Entity Central Index Key	1,499,807
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		42,615,750

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 38,580	$ 45,511
Accounts receivable, net	46,155	46,430
Inventory, net	63,667	61,897
Prepaid expenses and other current assets	7,563	6,147
Total current assets	155,965	159,985
Property, plant and equipment, net	51,614	50,714
Goodwill	121,814	121,814
Intangible assets, net	20,412	22,758
Other assets, net	29,239	28,254
Total assets	379,044	383,525
Current liabilities:
Current maturities under capital lease obligation	1,009	973
Accounts payable	20,502	15,367
Accrued expenses	14,619	15,673
Accrued payroll liabilities	9,388	12,068
Total current liabilities	45,518	44,081
Convertible senior notes	37,444	36,894
Capital lease obligation, net of current maturities	34,675	34,933
Deferred income taxes, net	5,017	5,017
Other liabilities	1,047	1,032
Total liabilities	123,701	121,957
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value, 750,000,000 shares authorized; 42,565,112 and 42,282,741 shares issued and 42,556,501 and 42,274,130 shares outstanding, respectively	43	42
Additional paid-in capital	478,796	474,512
Accumulated deficit	(221,954)	(211,081)
Accumulated other comprehensive loss	(1,408)	(1,771)
Treasury stock, at cost, 8,611 and 8,611 shares, respectively	(134)	(134)
Total stockholders’ equity	255,343	261,568
Total liabilities and stockholders’ equity	$ 379,044	$ 383,525

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value per share (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	750,000,000	750,000,000
Common stock, shares issued (in shares)	42,565,112	42,282,741
Common stock, shares outstanding (in shares)	42,556,501	42,274,130
Treasury stock, (in shares)	8,611	8,611

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Revenue	$ 61,885	$ 56,306
Cost of revenue	21,479	19,604
Gross profit	40,406	36,702
Operating expenses:
Research and development	5,250	5,028
Sales and marketing	30,474	27,755
General and administrative	13,754	13,848
Total operating expenses	49,478	46,631
Loss from operations	(9,072)	(9,929)
Other expense, net:
Foreign currency transaction (loss) gain	(27)	420
Interest expense	(1,732)	(651)
Total other expense, net	(1,759)	(231)
Loss before income taxes	(10,831)	(10,160)
Income tax expense	42	25
Net loss	$ (10,873)	$ (10,185)
Basic and diluted (in dollars per share)	$ (0.26)	$ (0.25)
Weighted average shares outstanding:
Basic and diluted (in shares)	42,224,734	41,353,123

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (10,873)	$ (10,185)
Other comprehensive income (loss):
Foreign currency translation adjustment	363	(766)
Other comprehensive income (loss)	363	(766)
Comprehensive loss	$ (10,510)	$ (10,951)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Stock [Member]
Beginning Balance (in shares) at Dec. 31, 2016	42,274,130	42,282,741
Beginning Balance at Dec. 31, 2016	$ 261,568	$ 42	$ 474,512	$ (211,081)	$ (1,771)	$ (134)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(10,873)			(10,873)
Other comprehensive income	363				363
Stock-based compensation expense	$ 1,541		1,541
Issuances and exercise of stock-based compensation benefit plans, net of income tax (in shares)	282,371	282,371
Issuances and exercise of stock-based compensation benefit plans, net of income tax	$ 2,744	$ 1	2,743
Ending Balance (in shares) at Mar. 31, 2017	42,556,501	42,565,112
Ending Balance at Mar. 31, 2017	$ 255,343	$ 43	$ 478,796	$ (221,954)	$ (1,408)	$ (134)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities
Net loss	$ (10,873)	$ (10,185)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	7,195	6,743
Provision for inventory reserves	1,146	1,013
Provision for allowance for doubtful accounts	0	(57)
Stock-based compensation expense	1,541	2,106
Accretion of discounts and amortization of issuance costs of convertible senior notes	32	0
Changes in operating assets and liabilities:
Accounts receivable	438	(2,862)
Inventory	(1,263)	(2,139)
Prepaid expenses and other assets	(4,032)	(2,705)
Accounts payable, accrued expenses, and accrued payroll liabilities	969	(3,351)
Net cash used in operating activities	(4,847)	(11,437)
Investing activities
Purchase of surgical instruments	(3,157)	(3,339)
Purchase of property, plant and equipment	(1,553)	(6,141)
Changes in cash restricted for leasehold improvements	61	3,333
Purchase of intangible assets	(23)	(1,282)
Net cash used in investing activities	(4,672)	(7,429)
Financing activities
Borrowings on bank line of credit	0	5,000
Principal payments under capital lease	(223)	0
Issuances and exercise of stock-based compensation benefit plans, net of income tax	2,744	365
Net cash provided by financing activities	2,521	5,365
Effect of exchange rate changes on cash and cash equivalents	67	32
Net decrease in cash and cash equivalents	(6,931)	(13,469)
Cash and cash equivalents at beginning of period	45,511	34,646
Cash and cash equivalents at end of period	38,580	21,177
Significant non-cash investing and financing activities
Leasehold improvements under capital lease	0	8,562
Additions to property, plant and equipment	750	1,234
Accretion of discount on convertible senior notes	550	0
Cash paid for:
Income taxes	64	109
Interest	$ 1,090	$ 623

GENERAL AND SUMMARY OF SIGNIFIC

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to “K2M,” “the Company,” “we,” “us” and “our,” refer to K2M Group Holdings, Inc. together with its consolidated subsidiaries. We are a global medical device provider of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance TM . Since our inception, we have designed, developed and commercialized innovative complex spine and minimally invasive spine technologies and techniques used by spine surgeons to treat some of the most complicated spinal pathologies. K2M has leveraged these core competencies into Balance ACS™, a platform of products, services and research to help surgeons achieve three-dimensional spinal balance across the axial, coronal and sagittal planes, with the goal of supporting the full continuum of care to facilitate quality patient outcomes. The Balance ACS platform, in combination with our technologies, techniques and leadership in the 3D-printing of spinal devices, enable us to compete favorably in the global spinal surgery market. Unaudited Interim Results The accompanying condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016 , the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2017 and 2016 , the condensed consolidated statement of changes in stockholders’ equity for the three months ended March 31, 2017 , and the condensed consolidated statements of cash flows for the three months ended March 31, 2017 and 2016 are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis of accounting as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary to present fairly our financial position and results of operations and cash flows for the periods presented. The results for the three months ended March 31, 2017 are not necessarily indicative of future results. All information as of March 31, 2017 and for the three month periods ending March 31, 2017 and 2016 within these notes to the condensed consolidated financial statements is unaudited. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Net Loss per Share Basic net loss per common share is determined by dividing the net loss allocable to common stockholders by the weighted average number of common shares outstanding during the periods presented, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the net loss allocable to common stockholders by the weighted average number of shares of common stock and common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of our stock option grants. The if-converted method is used to determine the dilutive effect of the convertible senior notes. The weighted average shares used to calculate both basic and diluted loss per share are the same because common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive. Although included in our outstanding shares total as of March 31, 2017 , shares of restricted stock are contingently issuable until their restrictions lapse and have been excluded from the weighted average shares outstanding. Foreign Currency Translation and Other Comprehensive Loss Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar, which is also the functional currency of our domestic entities, while the functional currency of our foreign subsidiaries are the British Pound, Euro and Swiss Franc. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the balance sheet date. Revenues and expenses are translated using the average exchange rate for the period. Net gains and losses resulting from the translation of foreign financial statements are recorded in other comprehensive income (loss). Net foreign currency gains or losses resulting from transactions in currencies other than the functional currencies are included in other expense, net on the consolidated statements of operations. Recent Accounting Pronouncements We qualify as an emerging growth company (“EGC”) pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012 and have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act which permits EGCs to defer compliance with new or revised accounting standards (the “EGC extension”) until non-issuers are required to comply with such standards. Accordingly, so long as we continue to qualify as an EGC, we will not have to adopt or comply with new or revised accounting standards until non-issuers are required to comply with such standards. In January 2017, the Financial Accounting Standards Board, or FASB issued ASU 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment which no longer requires an entity to measure a goodwill impairment loss by comparing the implied fair value to the carrying value of a reporting unit’s goodwill. Instead, any goodwill impairment charge will be recognized as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. In addition, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The amendment does not affect the optional qualitative assessment of goodwill impairment. For public entities, the guidance will be effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. All other entities, such as EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for fiscal years and interim periods within those fiscal years beginning after December 15, 2021. The amendments in this guidance should be applied prospectively with earlier application permitted for goodwill impairment tests with measurement dates after January 1, 2017. We are currently assessing the impact of this guidance.

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE	3 Months Ended
	Mar. 31, 2017
Receivables [Abstract]
ACCOUNTS RECEIVABLE	ACCOUNTS RECEIVABLE The following table summarizes the accounts receivables, net of allowances: March 31, December 31, Accounts receivable $ 48,396 $ 48,664 Allowances (2,241 ) (2,234 ) Accounts receivable, net $ 46,155 $ 46,430

INVENTORY

INVENTORY	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
INVENTORY	INVENTORY The following table summarizes the inventory, net of allowances: March 31, December 31, Finished goods $ 99,616 $ 96,619 Inventory allowances (35,949 ) (34,722 ) Inventory, net $ 63,667 $ 61,897 Inventory includes surgical instruments available for sale with a carrying value of $ 9,535 and $ 9,874 at March 31, 2017 and December 31, 2016 , respectively.

PREPAID AND OTHER CURRENT ASSET

PREPAID AND OTHER CURRENT ASSETS (Notes)	3 Months Ended
	Mar. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
PREPAIDS AND OTHER CURRENT ASSETS	PREPAID EXPENSES AND OTHER CURRENT ASSETS The following table summarizes prepaid expenses and other current assets: March 31, December 31, Restricted cash $ — $ 61 Prepaid expenses 3,244 2,666 Other 4,319 3,420 Total $ 7,563 $ 6,147

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Notes)	3 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
PROPERTY, PLANT AND EQUIPMENT	PROPERTY, PLANT AND EQUIPMENT The following table summarizes property, plant and equipment: Estimated Useful Lives March 31, December 31, Buildings under capital lease 16 years $ 26,469 $ 26,469 Leasehold improvements, including property under capital lease 15 years 20,310 20,051 Equipment 3-5 years 3,919 3,817 Software 3 years 5,673 4,989 Computer equipment 3 years 1,121 1,070 Furniture and office equipment 5-7 years 3,678 3,696 Vehicles and other 3 years 1,675 832 Total 62,845 60,924 Less accumulated depreciation and amortization (11,231 ) (10,210 ) Property, plant and equipment, net $ 51,614 $ 50,714 Depreciation and amortization expense for property, plant and equipment was $ 1,361 and $ 877 for the three months ended March 31, 2017 and 2016 , respectively. Included in this total is amortization expense for buildings and leasehold improvements under capital lease of $ 416 for both periods. Interest expense on the capital lease obligation was $ 580 and $ 568 for the three months ended March 31, 2017 and 2016 , respectively.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	INTANGIBLE ASSETS Intangible assets, net comprise the following: March 31, 2017 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 224 — 224 Subtotal 14,024 — 14,024 Subject to amortization Developed technology 4 - 6 years 62,000 (59,247 ) 2,753 Licensed technology 4 - 6 years 52,600 (52,513 ) 87 Customer relationships 4 - 7 years 29,700 (28,109 ) 1,591 Patents and other 2 - 17 years 3,325 (1,368 ) 1,957 Subtotal 147,625 (141,237 ) 6,388 Intangible assets, net $ 161,649 $ (141,237 ) $ 20,412 December 31, 2016 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 220 — 220 Subtotal 14,020 — 14,020 Subject to amortization Developed technology 4 - 6 years 62,000 (58,026 ) 3,974 Licensed technology 4 - 6 years 52,600 (52,475 ) 125 Customer relationships 4 - 7 years 29,700 (27,048 ) 2,652 Patents and other 2 - 17 years 3,302 (1,315 ) 1,987 Subtotal 147,602 (138,864 ) 8,738 Intangible assets, net $ 161,622 $ (138,864 ) $ 22,758 Amortization expense of intangible assets was $ 2,373 and $ 2,601 for the three months ended March 31, 2017 and 2016 , respectively. As of March 31, 2017 , the expected amortization expense for the remainder of 2017 and the following four years and thereafter is as follows: March 31, 2017 2017 $ 4,402 2018 279 2019 261 2020 235 2021 177 Thereafter 1,034 Total $ 6,388

OTHER ASSETS

OTHER ASSETS	3 Months Ended
	Mar. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
OTHER ASSETS	OTHER ASSETS Other assets consist of the following: March 31, December 31, Surgical instruments, net $ 25,355 $ 24,810 Restricted cash 2,652 2,262 Other 1,232 1,182 Total $ 29,239 $ 28,254 Surgical instruments are stated net of accumulated amortization and allowances of $ 37,066 and $ 34,191 at March 31, 2017 and December 31, 2016 , respectively. Amortization expense was $ 2,516 and $ 2,395 for the three months ended March 31, 2017 and 2016 , respectively. Restricted cash balances represent deposits made on pending bids or contracts with customers.

ACCRUED EXPENSES

ACCRUED EXPENSES	3 Months Ended
	Mar. 31, 2017
Payables and Accruals [Abstract]
ACCRUED EXPENSES	ACCRUED EXPENSES Accrued expenses consist of the following: March 31, December 31, Accrued commissions $ 6,301 $ 6,607 Accrued royalties 2,823 3,495 Other 5,495 5,571 Total $ 14,619 $ 15,673

DEBT (Notes)

DEBT (Notes)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
DEBT	DEBT Convertible Senior Notes On August 11, 2016, we issued $ 50,000 aggregate principal amount of convertible senior notes (the “Notes”). The Notes pay interest at an annual rate of 4.125% , payable semi-annually in arrears on February 15 and August 15 of each year beginning on February 15, 2017 and mature on August 15, 2036, unless earlier converted, redeemed or repurchased by us. We received net proceeds from the sale of the Notes of $ 47,091 , after deducting underwriting discounts and commissions and offering expenses of $ 2,909 . The Notes are governed by an indenture between the Company and the Bank of New York Mellon. The Notes are senior, unsecured obligations of the Company and are equal in right of payment with our existing and future senior, unsecured indebtedness, senior in right of payment to our existing and future indebtedness that is expressly subordinated to the Notes, and effectively subordinated to our existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The Notes are structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries. Noteholders may convert their notes at their option only in the following circumstances: (1) during any calendar quarter, if the last reported sale price per share of our common stock for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price on such trading day; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $ 1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on our common stock; (4) if we call the Notes for redemption; and (5) at any time from, and including, February 15, 2036 until the close of business on the second scheduled trading day immediately before the maturity date. The Notes are redeemable, in whole or in part, at our option at any time, and from time to time, on or after August 15, 2021, at a cash redemption price equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any. If a “fundamental change” occurs prior to the stated maturity date, then noteholders may require us to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any. In addition, the Indenture contains customary terms and covenants and events of default with respect to the Notes. For the three months ended March 31, 2017 , we recognized $ 1,065 of interest expense related to the Notes, of which $ 515 was accrued and will be paid in cash and $ 550 was non-cash accretion of the debt discounts recorded. The Notes have been classified as long-term debt on our condensed consolidated balance sheet. As of March 31, 2017 , the fair value of the Notes was $ 40,532 . Revolving Credit Facility We maintain a senior secured credit facilities credit agreement (as amended from time to time) with Silicon Valley Bank and Comerica Bank as Lenders, which is secured primarily by the assets of our operating subsidiaries in the United States and United Kingdom and expires on April 26, 2018. As of March 31, 2017 , we had no outstanding borrowings on the revolving credit facility. The credit facility, as amended, consists of a revolving credit facility (“Bank Line of Credit”) of $ 55,000 , with a sub-facility for letters of credit in the aggregate availability amount of $ 10,000 and a swingline sub-facility in the aggregate availability amount of $ 5,000 . The revolving credit facility contains various financial covenants and negative covenants with which we must maintain compliance, including a consolidated adjusted quick ratio for K2M, Inc., K2M UK Limited and select subsidiaries not less than 1.20 : 1.00 as of the last day of any month, restrictive covenants which limits our ability to pay dividends on common stock and make certain investments, and the provision of certain financial reporting and company information as required. We were in compliance with all the financial and other covenants of the credit facility at March 31, 2017 . For the three months ended March 31, 2017 and 2016 , we recorded interest expense of $ 0 and $ 8 , respectively, under the credit agreement and amounts of $ 60 and $ 45 , respectively, related to the amortization of the loan issuance fees. Our average interest rate on borrowings under the Bank Line of Credit was 4.25 %. As of March 31, 2017 , we had $ 45,217 of unused borrowing capacity under the revolving credit facility which is net of an issued but undrawn letter of credit for $ 6,000 , representing a security deposit on the corporate headquarters and operations facilities lease.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK-BASED COMPENSATION	STOCK-BASED COMPENSATION As of March 31, 2017 , there was a total of 2,401,432 shares of common stock available for future grants under our stock purchase and equity award or incentive plans. The following table summarizes the stock-based compensation expense by financial statement line item, employees and non-employees and type of award: Three Months Ended March 31, 2017 2016 Cost of revenue $ 45 $ 60 Research and development 86 181 Sales and marketing 360 542 General and administrative 1,050 1,323 Total $ 1,541 $ 2,106 Three Months Ended March 31, 2017 2016 Stock options $ 811 $ 649 Restricted stock 349 156 Restricted stock units (“RSUs”) 260 1,202 Employee Stock Purchase Plan 121 99 Total $ 1,541 $ 2,106 The following table summarizes stock option plans activity: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2016 (2) 3,685,125 $ 12.45 6.05 $ 29,142 Granted 12,754 20.34 Exercised (282,371 ) 9.78 Expired — — Forfeited (1,030 ) 11.55 Outstanding at March 31, 2017 (3) 3,414,478 $ 12.71 5.94 $ 27,677 Vested: At March 31, 2017 (3) 2,438,080 $ 11.10 4.95 $ 23,232 Vested or expected to vest: At March 31, 2017 (3) (4) 3,316,081 $ 12.72 5.95 $ 26,816 (1) Calculated using the fair market value per-share of our common stock as of March 31, 2017 and December 31, 2016 of $ 20.51 , and $ 20.04 , respectively. (2) The total includes 980,671 performance-based options at December 31, 2016 which had not vested based on their performance criteria. (3) The total includes 978,717 performance-based options which had vested based on achievement of their rate of return performance criteria during the three months ended March 31, 2017 . (4) Outstanding options, net of expected forfeitures. A summary of restricted stock and RSU activity during the three months ended March 31, 2017 is as follows: Restricted Stock Restricted Stock Units Number of Shares Weighted-Average Grant Date Fair Value Weighted-Average Remaining Term (years) Number of shares Weighted-Average Grant Date Fair Value Weighted-Average Remaining Term (years) Non-vested at December 31, 2016 218,505 $ 16.59 2.35 79,457 $ 15.22 0.81 Vested — — — — Granted — — 4,916 20.34 Non-vested at March 31, 2017 218,505 $ 16.59 2.03 84,373 $ 15.52 0.70 Vested: At March 31, 2017 — $ — — $ — Vested or expected to vest: At March 31, 2017 218,505 $ 16.59 2.03 84,373 $ 15.52 0.70

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Intellectual Property In the normal course of business, we enter into agreements to obtain the rights to certain intellectual property. These agreements may require an up-front payment, milestone payments and/or royalties. Typically, we have certain rights to cancel these agreements, with notice, without additional payments due other than the amount due at the time of cancellation. As of March 31, 2017 , the aggregate amount of these future payments, assuming achievement of applicable milestones and non-cancellation, was $ 1,563 over a period not less than five years. Royalties ranging from 2% to 10% of net sales may be due on the sales of related products. Some of the agreements contain minimum annual royalty amounts. In November 2011, we entered into an agreement to purchase certain proprietary technology which could require us to make additional aggregate payments of up to $ 13,350 should certain milestones be met, including milestones related to regulatory applications and approvals. Cumulative payments under this agreement totaled $ 1,350 through March 31, 2017 . In addition, milestone payments of $ 500 , $ 2,000 and $ 4,000 are due upon the achievement of net sales of related products of $ 10,000 , $ 25,000 and $ 50,000 , respectively. A royalty payment of 7% of net sales of related products may be due until such sales reaches $ 20,000 . The medical device industry is characterized by frequent claims and litigation, including claims regarding patent and other intellectual property rights as well as improper hiring practices. We are not aware of any pending or threatened legal proceeding against us that would have a material adverse effect on our business, operating results or financial condition. However, we are a party in multiple legal actions involving claimants seeking various remedies, including monetary damages, and none of the outcomes are certain or entirely within our control.

RELATED PARTIES

RELATED PARTIES	3 Months Ended
	Mar. 31, 2017
Related Party Transactions [Abstract]
RELATED PARTIES	RELATED PARTIES On January 30, 2017, pursuant to an underwritten public offering, WCAS and certain of its affiliates completed the sale of an additional 4,000,000 shares of our common stock. We incurred underwriting commissions and transaction fees of approximately $ 225 which are reflected as general and administrative expenses for the three months ended March 31, 2017 . We did not receive any proceeds from the sale of these shares.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES The provision for income taxes for the three months ended March 31, 2017 and 2016 includes both domestic and foreign minimum income taxes and changes in the valuation allowance. For the three months ended March 31, 2017 and 2016 , the income tax expense was $ 42 and $ 25 , resulting in an effective tax rate of (0.4)% and (0.2)% , respectively. The effective tax rate differs from the statutory rate due to minimum income taxes, permanent differences and changes in valuation allowances.

NET LOSS PER SHARE

NET LOSS PER SHARE	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
NET LOSS PER SHARE	NET LOSS PER SHARE The following table sets forth the computation of basic and diluted loss per share: Three Months Ended March 31, 2017 2016 Net loss per common share: Net loss $ (10,873 ) $ (10,185 ) Basic and diluted loss per common share: Basic and diluted weighted average common shares outstanding 42,224,734 41,353,123 Basic and diluted loss per common share $ (0.26 ) $ (0.25 ) The following outstanding Company securities, using the treasury stock method, were excluded from the above computations of net loss per share because their impact would be antidilutive due to the net losses during the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, 2017 2016 Stock options 3,414,478 3,622,518 Restricted stock 218,505 79,940 RSUs 84,373 414,001 As discussed in Note 9, in August 2016, we issued $50,000 aggregate principal amount of Notes. The Notes may be settled, at our election, in cash, shares of our common stock or combination of cash and shares of our common stock. For purposes of calculating the maximum dilutive impact, it is presumed that the Notes will be settled in common stock with the resulting potential common shares included in diluted earnings per share if the effect is more dilutive. The effect of the conversion of Notes is excluded from the calculation of diluted loss per share because the net loss for the three months ended March 31, 2017 causes such securities to be antidilutive. The potential dilutive effect of these securities is shown in the table below: Three Months Ended March 31, 2017 2016 Conversion of Notes 2,746,680 —

SEGMENT AND GEOGRAPHICAL CONCEN

SEGMENT AND GEOGRAPHICAL CONCENTRATION	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
SEGMENT AND GEOGRAPHICAL CONCENTRATION	SEGMENT AND GEOGRAPHICAL CONCENTRATION Operating segments are defined as components of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. We manage the business globally within one reporting segment. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. Products are sold principally in the United States. International revenue represented 25.3% of total revenue for the three months ended March 31, 2017 ; however, revenue earned in any individual foreign country was below 10% of our consolidated revenue. The following table represents total revenue by geographic area, based on the location of the customer: Three Months Ended March 31, 2017 2016 United States $ 46,207 $ 42,193 International 15,678 14,113 Total $ 61,885 $ 56,306 We classify sales within the United States into three categories: complex spine pathologies, minimally invasive procedures and degenerative and other conditions. A significant portion of our international revenue is derived from our distributor partners who do not report their product usage at the surgeon or hospital level, which prevents us from providing a specific breakdown for our international revenue among its three product categories. These sales transactions are settled when we ship the product to the agent. The following table represents domestic revenue by current procedure category: Three Months Ended March 31, 2017 2016 Complex spine $ 17,136 $ 15,930 Minimally invasive 7,872 6,881 Degenerative 21,199 19,382 46,207 42,193 International 15,678 14,113 Total $ 61,885 $ 56,306

GENERAL AND SUMMARY OF SIGNIF23

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Net Loss per Share	Net Loss per Share Basic net loss per common share is determined by dividing the net loss allocable to common stockholders by the weighted average number of common shares outstanding during the periods presented, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the net loss allocable to common stockholders by the weighted average number of shares of common stock and common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of our stock option grants. The if-converted method is used to determine the dilutive effect of the convertible senior notes. The weighted average shares used to calculate both basic and diluted loss per share are the same because common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive. Although included in our outstanding shares total as of March 31, 2017 , shares of restricted stock are contingently issuable until their restrictions lapse and have been excluded from the weighted average shares outstanding.
Foreign Currency Translation and Other Comprehensive Loss	Foreign Currency Translation and Other Comprehensive Loss Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar, which is also the functional currency of our domestic entities, while the functional currency of our foreign subsidiaries are the British Pound, Euro and Swiss Franc. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the balance sheet date. Revenues and expenses are translated using the average exchange rate for the period. Net gains and losses resulting from the translation of foreign financial statements are recorded in other comprehensive income (loss). Net foreign currency gains or losses resulting from transactions in currencies other than the functional currencies are included in other expense, net on the consolidated statements of operations.
Recent Accounting Pronouncements	Recent Accounting Pronouncements We qualify as an emerging growth company (“EGC”) pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012 and have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act which permits EGCs to defer compliance with new or revised accounting standards (the “EGC extension”) until non-issuers are required to comply with such standards. Accordingly, so long as we continue to qualify as an EGC, we will not have to adopt or comply with new or revised accounting standards until non-issuers are required to comply with such standards. In January 2017, the Financial Accounting Standards Board, or FASB issued ASU 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment which no longer requires an entity to measure a goodwill impairment loss by comparing the implied fair value to the carrying value of a reporting unit’s goodwill. Instead, any goodwill impairment charge will be recognized as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. In addition, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The amendment does not affect the optional qualitative assessment of goodwill impairment. For public entities, the guidance will be effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. All other entities, such as EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for fiscal years and interim periods within those fiscal years beginning after December 15, 2021. The amendments in this guidance should be applied prospectively with earlier application permitted for goodwill impairment tests with measurement dates after January 1, 2017. We are currently assessing the impact of this guidance.

ACCOUNTS RECEIVABLE - (Tables)

ACCOUNTS RECEIVABLE - (Tables)	3 Months Ended
	Mar. 31, 2017
Receivables [Abstract]
Schedule of Accounts Receivable	The following table summarizes the accounts receivables, net of allowances: March 31, December 31, Accounts receivable $ 48,396 $ 48,664 Allowances (2,241 ) (2,234 ) Accounts receivable, net $ 46,155 $ 46,430

INVENTORY - (Tables)

INVENTORY - (Tables)	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
Schedule of Current Inventory	The following table summarizes the inventory, net of allowances: March 31, December 31, Finished goods $ 99,616 $ 96,619 Inventory allowances (35,949 ) (34,722 ) Inventory, net $ 63,667 $ 61,897

PREPAID AND OTHER CURRENT ASS26

PREPAID AND OTHER CURRENT ASSETS (Tables)	3 Months Ended
	Mar. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of prepaid expenses and other current assets	The following table summarizes prepaid expenses and other current assets: March 31, December 31, Restricted cash $ — $ 61 Prepaid expenses 3,244 2,666 Other 4,319 3,420 Total $ 7,563 $ 6,147

PROPERTY, PLANT AND EQUIPMENT27

PROPERTY, PLANT AND EQUIPMENT (Tables)	3 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment [Table Text Block]	The following table summarizes property, plant and equipment: Estimated Useful Lives March 31, December 31, Buildings under capital lease 16 years $ 26,469 $ 26,469 Leasehold improvements, including property under capital lease 15 years 20,310 20,051 Equipment 3-5 years 3,919 3,817 Software 3 years 5,673 4,989 Computer equipment 3 years 1,121 1,070 Furniture and office equipment 5-7 years 3,678 3,696 Vehicles and other 3 years 1,675 832 Total 62,845 60,924 Less accumulated depreciation and amortization (11,231 ) (10,210 ) Property, plant and equipment, net $ 51,614 $ 50,714

INTANGIBLE ASSETS - (Tables)

INTANGIBLE ASSETS - (Tables)	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets and Goodwill	Intangible assets, net comprise the following: March 31, 2017 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 224 — 224 Subtotal 14,024 — 14,024 Subject to amortization Developed technology 4 - 6 years 62,000 (59,247 ) 2,753 Licensed technology 4 - 6 years 52,600 (52,513 ) 87 Customer relationships 4 - 7 years 29,700 (28,109 ) 1,591 Patents and other 2 - 17 years 3,325 (1,368 ) 1,957 Subtotal 147,625 (141,237 ) 6,388 Intangible assets, net $ 161,649 $ (141,237 ) $ 20,412 December 31, 2016 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 220 — 220 Subtotal 14,020 — 14,020 Subject to amortization Developed technology 4 - 6 years 62,000 (58,026 ) 3,974 Licensed technology 4 - 6 years 52,600 (52,475 ) 125 Customer relationships 4 - 7 years 29,700 (27,048 ) 2,652 Patents and other 2 - 17 years 3,302 (1,315 ) 1,987 Subtotal 147,602 (138,864 ) 8,738 Intangible assets, net $ 161,622 $ (138,864 ) $ 22,758
Schedule of Expected Amortization Expense	As of March 31, 2017 , the expected amortization expense for the remainder of 2017 and the following four years and thereafter is as follows: March 31, 2017 2017 $ 4,402 2018 279 2019 261 2020 235 2021 177 Thereafter 1,034 Total $ 6,388

OTHER ASSETS - (Tables)

OTHER ASSETS - (Tables)	3 Months Ended
	Mar. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of Other Assets	Other assets consist of the following: March 31, December 31, Surgical instruments, net $ 25,355 $ 24,810 Restricted cash 2,652 2,262 Other 1,232 1,182 Total $ 29,239 $ 28,254

ACCRUED EXPENSES - (Tables)

ACCRUED EXPENSES - (Tables)	3 Months Ended
	Mar. 31, 2017
Payables and Accruals [Abstract]
Schedule of Accrued Expenses	Accrued expenses consist of the following: March 31, December 31, Accrued commissions $ 6,301 $ 6,607 Accrued royalties 2,823 3,495 Other 5,495 5,571 Total $ 14,619 $ 15,673

STOCK-BASED COMPENSATION - (Tab

STOCK-BASED COMPENSATION - (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of stock-based compensation expense	The following table summarizes the stock-based compensation expense by financial statement line item, employees and non-employees and type of award: Three Months Ended March 31, 2017 2016 Cost of revenue $ 45 $ 60 Research and development 86 181 Sales and marketing 360 542 General and administrative 1,050 1,323 Total $ 1,541 $ 2,106 Three Months Ended March 31, 2017 2016 Stock options $ 811 $ 649 Restricted stock 349 156 Restricted stock units (“RSUs”) 260 1,202 Employee Stock Purchase Plan 121 99 Total $ 1,541 $ 2,106
Schedule of employee stock option plan activity	The following table summarizes stock option plans activity: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2016 (2) 3,685,125 $ 12.45 6.05 $ 29,142 Granted 12,754 20.34 Exercised (282,371 ) 9.78 Expired — — Forfeited (1,030 ) 11.55 Outstanding at March 31, 2017 (3) 3,414,478 $ 12.71 5.94 $ 27,677 Vested: At March 31, 2017 (3) 2,438,080 $ 11.10 4.95 $ 23,232 Vested or expected to vest: At March 31, 2017 (3) (4) 3,316,081 $ 12.72 5.95 $ 26,816 (1) Calculated using the fair market value per-share of our common stock as of March 31, 2017 and December 31, 2016 of $ 20.51 , and $ 20.04 , respectively. (2) The total includes 980,671 performance-based options at December 31, 2016 which had not vested based on their performance criteria. (3) The total includes 978,717 performance-based options which had vested based on achievement of their rate of return performance criteria during the three months ended March 31, 2017 . (4) Outstanding options, net of expected forfeitures.
Schedule of restricted stock and RSU activity	A summary of restricted stock and RSU activity during the three months ended March 31, 2017 is as follows: Restricted Stock Restricted Stock Units Number of Shares Weighted-Average Grant Date Fair Value Weighted-Average Remaining Term (years) Number of shares Weighted-Average Grant Date Fair Value Weighted-Average Remaining Term (years) Non-vested at December 31, 2016 218,505 $ 16.59 2.35 79,457 $ 15.22 0.81 Vested — — — — Granted — — 4,916 20.34 Non-vested at March 31, 2017 218,505 $ 16.59 2.03 84,373 $ 15.52 0.70 Vested: At March 31, 2017 — $ — — $ — Vested or expected to vest: At March 31, 2017 218,505 $ 16.59 2.03 84,373 $ 15.52 0.70

NET LOSS PER SHARE - (Tables)

NET LOSS PER SHARE - (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Schedule of Basic and Diluted Earnings Per Share	The following table sets forth the computation of basic and diluted loss per share: Three Months Ended March 31, 2017 2016 Net loss per common share: Net loss $ (10,873 ) $ (10,185 ) Basic and diluted loss per common share: Basic and diluted weighted average common shares outstanding 42,224,734 41,353,123 Basic and diluted loss per common share $ (0.26 ) $ (0.25 )
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	The following outstanding Company securities, using the treasury stock method, were excluded from the above computations of net loss per share because their impact would be antidilutive due to the net losses during the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, 2017 2016 Stock options 3,414,478 3,622,518 Restricted stock 218,505 79,940 RSUs 84,373 414,001 As discussed in Note 9, in August 2016, we issued $50,000 aggregate principal amount of Notes. The Notes may be settled, at our election, in cash, shares of our common stock or combination of cash and shares of our common stock. For purposes of calculating the maximum dilutive impact, it is presumed that the Notes will be settled in common stock with the resulting potential common shares included in diluted earnings per share if the effect is more dilutive. The effect of the conversion of Notes is excluded from the calculation of diluted loss per share because the net loss for the three months ended March 31, 2017 causes such securities to be antidilutive. The potential dilutive effect of these securities is shown in the table below: Three Months Ended March 31, 2017 2016 Conversion of Notes 2,746,680 —

SEGMENT AND GEOGRAPHICAL CONC33

SEGMENT AND GEOGRAPHICAL CONCENTRATION - (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Schedule of Revenue by Geographic Area	The following table represents total revenue by geographic area, based on the location of the customer: Three Months Ended March 31, 2017 2016 United States $ 46,207 $ 42,193 International 15,678 14,113 Total $ 61,885 $ 56,306
Schedule of Revenue by Products	The following table represents domestic revenue by current procedure category: Three Months Ended March 31, 2017 2016 Complex spine $ 17,136 $ 15,930 Minimally invasive 7,872 6,881 Degenerative 21,199 19,382 46,207 42,193 International 15,678 14,113 Total $ 61,885 $ 56,306

ACCOUNTS RECEIVABLE - (Details)

ACCOUNTS RECEIVABLE - (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Accounts receivable	$ 48,396	$ 48,664
Allowances	(2,241)	(2,234)
Accounts receivable, net	$ 46,155	$ 46,430

INVENTORY - (Details)

INVENTORY - (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Inventory [Line Items]
Finished goods	$ 99,616	$ 96,619
Inventory allowances	(35,949)	(34,722)
Inventory, net	63,667	61,897
Surgical and Medical Instruments
Inventory [Line Items]
Inventory, net	$ 9,535	$ 9,874

PREPAID AND OTHER CURRENT ASS36

PREPAID AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Restricted cash	$ 0	$ 61
Prepaid expenses	3,244	2,666
Other	4,319	3,420
Total	$ 7,563	$ 6,147

PROPERTY, PLANT AND EQUIPMENT37

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Total	$ 62,845	$ 60,924
Less accumulated depreciation and amortization	(11,231)	(10,210)
Property, plant and equipment, net	$ 51,614	50,714
Buildings under capital lease
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	16 years
Total	$ 26,469	26,469
Leasehold improvements, including property under capital lease
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	15 years
Total	$ 20,310	20,051
Equipment
Property, Plant and Equipment [Line Items]
Total	$ 3,919	3,817
Software
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Total	$ 5,673	4,989
Computer equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Total	$ 1,121	1,070
Furniture and office equipment
Property, Plant and Equipment [Line Items]
Total	$ 3,678	3,696
Vehicles and other
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Total	$ 1,675	$ 832
Minimum | Equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	3 years
Minimum | Furniture and office equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	5 years
Maximum | Equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	5 years
Maximum | Furniture and office equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	7 years

PROPERTY, PLANT AND EQUIPMENT P

PROPERTY, PLANT AND EQUIPMENT PPE narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Property, Plant and Equipment [Abstract]
Depreciation	$ 1,361	$ 877
Amortization expense for capital lease	416	416
Interest expense on capital leases	$ 580	$ 568

INTANGIBLE ASSETS - (Details)

INTANGIBLE ASSETS - (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Schedule of Intangible Asset by Major Class [Line Items]
Indefinite-lived intangible assets	$ 14,024		$ 14,020
Subject to amortization, Gross	147,625		147,602
Accumulated Amortization	(141,237)		(138,864)
Total	6,388		8,738
Intangible Assets, Gross	161,649		161,622
Intangible Assets, Net	20,412		22,758
Amortization expense	2,373	$ 2,601
Developed technology
Schedule of Intangible Asset by Major Class [Line Items]
Subject to amortization, Gross	62,000		62,000
Accumulated Amortization	(59,247)		(58,026)
Total	2,753		3,974
Licensed technology
Schedule of Intangible Asset by Major Class [Line Items]
Subject to amortization, Gross	52,600		52,600
Accumulated Amortization	(52,513)		(52,475)
Total	87		125
Customer relationships
Schedule of Intangible Asset by Major Class [Line Items]
Subject to amortization, Gross	29,700		29,700
Accumulated Amortization	(28,109)		(27,048)
Total	1,591		2,652
Patents and other
Schedule of Intangible Asset by Major Class [Line Items]
Subject to amortization, Gross	3,325		3,302
Accumulated Amortization	(1,368)		(1,315)
Total	1,957		1,987
Trademarks
Schedule of Intangible Asset by Major Class [Line Items]
Indefinite-lived intangible assets	12,900		12,900
In-process research and development
Schedule of Intangible Asset by Major Class [Line Items]
Indefinite-lived intangible assets	900		900
Other
Schedule of Intangible Asset by Major Class [Line Items]
Indefinite-lived intangible assets	$ 224		$ 220
Minimum | Developed technology
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	4 years		4 years
Minimum | Licensed technology
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	4 years		4 years
Minimum | Customer relationships
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	4 years		4 years
Minimum | Patents and other
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	2 years		2 years
Maximum | Developed technology
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	6 years		6 years
Maximum | Licensed technology
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	6 years		6 years
Maximum | Customer relationships
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	7 years		7 years
Maximum | Patents and other
Schedule of Intangible Asset by Major Class [Line Items]
Estimated Useful Lives	17 years		17 years

INTANGIBLE ASSETS Schedule of E

INTANGIBLE ASSETS Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
2,017	$ 4,402
2,018	279
2,019	261
2,020	235
2,021	177
Thereafter	1,034
Total	$ 6,388	$ 8,738

OTHER ASSETS - (Details)

OTHER ASSETS - (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Surgical instruments, net	$ 25,355		$ 24,810
Restricted cash	2,652		2,262
Other	1,232		1,182
Total	29,239		28,254
Surgical instruments accumulated amortization	37,066		$ 34,191
Amortization expense	$ 2,516	$ 2,395

ACCRUED EXPENSES - (Details)

ACCRUED EXPENSES - (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Accrued commissions	$ 6,301	$ 6,607
Accrued royalties	2,823	3,495
Other	5,495	5,571
Total	$ 14,619	$ 15,673

DEBT (Details)

DEBT (Details)	3 Months Ended
	Mar. 31, 2017USD ($)trading_day	Mar. 31, 2016USD ($)	Aug. 31, 2016USD ($)	Aug. 11, 2016USD ($)
Debt Instrument [Line Items]
Interest Expense	$ 1,732,000	$ 651,000
Letter of credit	6,000,000
Convertible Senior Notes Due 2036
Debt Instrument [Line Items]
Principal amounts of debt			$ 50,000,000	$ 50,000,000
Interest rate (as a percent)				4.125%
Proceeds from issuance of convertible senior notes, net of issuance costs	47,091,000
Deferred convertible senior notes issuance costs	$ 2,909,000
Convertible debt, threshold trading days | trading_day	20
Convertible debt, threshold consecutive trading days	30 days
Convertible debt, threshold percentage of stock price trigger	130.00%
Convertible debt, measurement period (in trading days)	5 days
Convertible debt, maximum percentage of trading price per $1,000 principal amount trigger	98.00%
Interest expense	$ 1,065,000
Interest expense to be paid in cash	515,000
Interest expense, non cash accretion of debt discount	550,000
Long-term debt	40,532,000
Revolving Credit Facility
Debt Instrument [Line Items]
Long-term Line of Credit	$ 0
Long-term debt, average interest rate (as a percent)	4.25%
Unused borrowing capacity	$ 45,217,000
Revolving Credit Facility | October 2015 Amendment
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	55,000,000
Revolving Credit Facility | Credit Agreement 2012
Debt Instrument [Line Items]
Interest Expense	0	8,000
Revolving Credit Facility | Line of Credit | October 2015 Amendment
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	10,000,000
Revolving Credit Facility | Line of Credit | Credit Agreement 2012
Debt Instrument [Line Items]
Amortization of Financing Costs	60,000	$ 45,000
Revolving Credit Facility, Swing Line Loan | Line of Credit | Amended Credit Agreement 2012
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 5,000,000
Silicon Valley Bank And Comerica Bank [Member] | Revolving Credit Facility | Credit Agreement 2012
Debt Instrument [Line Items]
Line Of Credit Facility, Covenant Terms, Minimum Quick Ratio	1.20

STOCK-BASED COMPENSATION - Narr

STOCK-BASED COMPENSATION - Narrative (Details)	Mar. 31, 2017shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	2,401,432

STOCK-BASED COMPENSATION - Allo

STOCK-BASED COMPENSATION - Allocation of Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	$ 1,541	$ 2,106
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	45	60
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	86	181
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	360	542
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	1,050	1,323
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	811	649
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	349	156
Restricted stock units (“RSUs”)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	260	1,202
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated stock-based compensation expense	$ 121	$ 99

STOCK-BASED COMPENSATION - Summ

STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		12 Months Ended
		Mar. 31, 2017		Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding Beginning Balance, Shares	[1]	3,685,125
Granted, Shares		12,754
Exercised, Shares		(282,371)
Expired, Shares		0
Forfeited, Shares		(1,030)
Outstanding Ending Balance, Shares		3,414,478	[2]	3,685,125	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Beginning, Weighted-Average Exercise Price (in usd per share)	[1]	$ 12.45
Granted, Weighted-Average Exercise Price (in usd per share)		20.34
Exercised, Weighted-Average Exercise Price (in usd per share)		9.78
Expired, Weighted-Average Exercise Price (in usd per share)		0
Forfeited, Weighted-Average Exercise Price (in usd per share)		11.55
Ending, Weighted-Average Exercise Price (in usd per share)		$ 12.71	[2]	$ 12.45	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding, Weighted- Average Remaining Contractual Term (years)		5 years 11 months 8 days	[2]	6 years 18 days	[1]
Outstanding, Aggregate Intrinsic Value	[1],[3]	$ 29,142
Outstanding, Aggregate Intrinsic Value	[3]	$ 27,677	[2]	$ 29,142	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested [Abstract]
Vested, shares		2,438,080
Vested, Weighted-Average Exercise Price (in usd per share)		$ 11.10
Vested, Weighted-Average Remaining Contractual Term		4 years 11 months 12 days
Vested, Aggregate Intrinsic Value		$ 23,232
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	[2],[4]	3,316,081
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price	[2],[4]	$ 12.72
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	[2],[4]	5 years 11 months 12 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value	[2],[3],[4]	$ 26,816
Fair value valuation, estimated fair market value of stock (in dollars per share)		$ 20.51		$ 20.04
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding Beginning Balance, Shares		980,671
Outstanding Ending Balance, Shares		978,717		980,671
[1]	The total includes 980,671 performance-based options at December 31, 2016 which had not vested based on their performance criteria.
[2]	The total includes 978,717 performance-based options which had vested based on achievement of their rate of return performance criteria during the three months ended March 31, 2017.
[3]	Calculated using the fair market value per-share of our common stock as of March 31, 2017 and December 31, 2016 of $20.51, and $20.04, respectively.
[4]	Outstanding options, net of expected forfeitures.

STOCK-BASED COMPENSATION RSU an

STOCK-BASED COMPENSATION RSU and restricted stock table (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding Beginning Balance, Shares	218,505
Vested (in shares)	0
Granted (in shares)	0
Outstanding Ending Balance, Shares	218,505	218,505
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 16.59
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 16.59	$ 16.59
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms	2 years 10 days	2 years 4 months 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Vested, Outstanding, Number	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Vested, Outstanding, Weighted Average Exercise Price	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested or Expected to Vest, Number	218,505
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Vested and Expected to Vest, Outstanding, Weighted Average Grant Date Fair Value	$ 16.59
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	2 years 10 days
Restricted Stock and Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding Beginning Balance, Shares	79,457
Vested (in shares)	0
Granted (in shares)	4,916
Outstanding Ending Balance, Shares	84,373	79,457
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 15.22
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	20.34
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 15.52	$ 15.22
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms	8 months 12 days	9 months 21 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Vested, Outstanding, Number	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Vested, Outstanding, Weighted Average Exercise Price	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested or Expected to Vest, Number	84,373
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Vested and Expected to Vest, Outstanding, Weighted Average Grant Date Fair Value	$ 15.52
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term	8 months 12 days

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - (Details) - USD ($)	1 Months Ended	3 Months Ended
	Nov. 30, 2011	Mar. 31, 2017	Mar. 31, 2016
Long-term Purchase Commitment [Line Items]
Initial payment to acquire proprietary technology		$ 23,000	$ 1,282,000
Licensed technology
Long-term Purchase Commitment [Line Items]
Other Commitment		$ 1,563,000
Minimum contractual term		5 years
Licensed technology | Minimum
Long-term Purchase Commitment [Line Items]
Future maximum royalty payments		2.00%
Licensed technology | Maximum
Long-term Purchase Commitment [Line Items]
Future maximum royalty payments		10.00%
Patents and other
Long-term Purchase Commitment [Line Items]
Future maximum royalty payments	7.00%
Initial payment to acquire proprietary technology		$ 1,350,000
Milestone payment one	$ 500,000
Milestone payment two	2,000,000
Milestone payment three	4,000,000
Milestone for milestone payment one	10,000,000
Milestone for milestone payment two	25,000,000
Milestone for milestone payment three	50,000,000
Milestone for ending royalty payments, cumulative sales	20,000,000
Patents and other | Maximum
Long-term Purchase Commitment [Line Items]
Other Commitment	$ 13,350,000

RELATED PARTIES (Details)

RELATED PARTIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Jan. 30, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Common stock, shares issued (in shares)	42,565,112		42,282,741
WCAS [Member] | Related Party Transaction, Sale of Stock [Member]
Related Party Transaction [Line Items]
Common stock, shares issued (in shares)		4,000,000
Underwriting commissions and transaction fees	$ 225

INCOME TAXES - (Details)

INCOME TAXES - (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Income tax (benefit) expense	$ 42	$ 25
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent	(0.40%)	(0.20%)

NET LOSS PER SHARE - (Details)

NET LOSS PER SHARE - (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net loss	$ (10,873)	$ (10,185)
Basic and diluted weighted average common shares outstanding	42,224,734	41,353,123
Basic and diluted loss per common share (in dollars per share)	$ (0.26)	$ (0.25)

NET LOSS PER SHARE - Antidiluti

NET LOSS PER SHARE - Antidilutive Shares (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Aug. 31, 2016	Aug. 11, 2016
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Earnings Per Share (in shares)	3,414,478	3,622,518
Restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Earnings Per Share (in shares)	218,505	79,940
Restricted stock units (“RSUs”)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Earnings Per Share (in shares)	84,373	414,001
Convertible Senior Notes Due 2036
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Earnings Per Share (in shares)	2,746,680	0
Convertible Senior Notes Due 2036
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Principal amounts of debt			$ 50,000,000	$ 50,000,000

SEGMENT AND GEOGRAPHICAL CONC53

SEGMENT AND GEOGRAPHICAL CONCENTRATION - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)Segment	Mar. 31, 2016USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | Segment	1
Revenue	$ 61,885	$ 56,306
United States
Segment Reporting Information [Line Items]
Revenue	46,207	42,193
Sales Revenue, Net
Segment Reporting Information [Line Items]
Revenue	61,885	56,306
Sales Revenue, Net | International
Segment Reporting Information [Line Items]
Revenue	15,678	14,113
Sales Revenue, Net | United States
Segment Reporting Information [Line Items]
Revenue	$ 46,207	42,193
Sales Revenue, Net | Geographic Concentration Risk | International
Segment Reporting Information [Line Items]
International revenue as a percentage of total revenue	25.30%
Sales Revenue, Net | Geographic Concentration Risk | United States
Segment Reporting Information [Line Items]
International revenue as a percentage of total revenue	10.00%
Minimally invasive | United States
Segment Reporting Information [Line Items]
Revenue	$ 7,872	$ 6,881

SEGMENT AND GEOGRAPHICAL CONC54

SEGMENT AND GEOGRAPHICAL CONCENTRATION - Revenues by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Revenue	$ 61,885	$ 56,306
Sales Revenue, Net
Segment Reporting Information [Line Items]
Revenue	61,885	56,306
United States
Segment Reporting Information [Line Items]
Revenue	46,207	42,193
United States | Sales Revenue, Net
Segment Reporting Information [Line Items]
Revenue	46,207	42,193
International | Sales Revenue, Net
Segment Reporting Information [Line Items]
Revenue	$ 15,678	$ 14,113

SEGMENT AND GEOGRAPHICAL CONC55

SEGMENT AND GEOGRAPHICAL CONCENTRATION - Revenues by Product (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue from External Customer [Line Items]
Revenue	$ 61,885	$ 56,306
United States
Revenue from External Customer [Line Items]
Revenue	46,207	42,193
United States | Complex spine
Revenue from External Customer [Line Items]
Revenue	17,136	15,930
United States | Minimally invasive
Revenue from External Customer [Line Items]
Revenue	7,872	6,881
United States | Degenerative
Revenue from External Customer [Line Items]
Revenue	21,199	19,382
International
Revenue from External Customer [Line Items]
Revenue	$ 15,678	$ 14,113