SeaSpine (SPNE) 10-Q 12 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 05, 2015
Document Documentand Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Trading Symbol	SPNE
Entity Registrant Name	SeaSpine Holdings Corporation
Entity Central Index Key	1,637,761
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		11,102,928

CONDENSED COMBINED STATEMENT OF

CONDENSED COMBINED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Total revenue, net	$ 32,679	$ 33,606	$ 98,454	$ 103,547
Cost of goods sold	17,341	14,282	44,448	42,077
Gross profit	15,338	19,324	54,006	61,470
Selling, general and administrative	26,348	20,262	83,059	64,518
Research and development	2,364	2,111	5,973	6,259
Intangible amortization	1,295	1,397	4,049	4,174
Total operating expenses	30,007	23,770	93,081	74,951
Operating loss	(14,669)	(4,446)	(39,075)	(13,481)
Other income (expense), net	195	(30)	(577)	(59)
Loss before income taxes	(14,474)	(4,476)	(39,652)	(13,540)
Provision (benefit) for income taxes	(275)	840	2,130	2,764
Net loss	$ (14,199)	$ (5,316)	$ (41,782)	$ (16,304)
Earnings per share attributable to SeaSpine, Basic and diluted (in dollars per share)	$ (1.27)	$ (0.48)	$ (3.75)	$ (1.48)
Weighted average shares used to compute basic and diluted net loss per share	11,171	11,048	11,130	11,048

CONDENSED COMBINED STATEMENTS O

CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE LOSS Statement - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net loss	$ (14,199)	$ (5,316)	$ (41,782)	$ (16,304)
Change in foreign currency translation adjustments	525	(535)	937	(446)
Comprehensive loss	$ (13,674)	$ (5,851)	$ (40,845)	$ (16,750)

CONDENSED COMBINED BALANCE SHEE

CONDENSED COMBINED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 38,503	$ 652
Trade accounts receivable, net of allowances of $794 and $558	25,345	22,538
Inventories	52,897	49,862
Deferred tax assets	141	436
Prepaid expenses and other current assets	4,300	1,128
Total current assets	121,186	74,616
Property, plant and equipment, net	23,026	16,360
Intangible assets, net	41,589	46,891
Deferred tax assets	450	501
Other assets	222	1,274
Total assets	186,473	139,642
Current liabilities:
Accounts payable, trade	13,748	36,637
Income taxes payable	726	608
Accrued compensation	6,550	6,300
Accrued expenses and other current liabilities	3,724	2,407
Total current liabilities	24,748	45,952
Other liabilities	2,565	2,406
Total liabilities	$ 27,313	$ 48,358
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value; 15,000 authorized; none issued and outstanding	$ 0	$ 0
Common stock, $0.01 par value; 60,000 authorized; 11,103 shares issued and outstanding at September 30, 2015, and none issued and outstanding at December 31, 2014	111	0
Additional paid-in capital	171,418	0
Integra net investment prior to the spin-off	0	90,391
Accumulated other comprehensive income	1,830	893
Accumulated deficit	(14,199)	0
Total stockholders' equity	159,160	91,284
Total liabilities and stockholders' equity	$ 186,473	$ 139,642

CONDENSED COMBINED BALANCE SHE5

CONDENSED COMBINED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Allowance for trade accounts receivable	$ 794	$ 558
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	15,000,000	15,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	60,000,000	60,000,000
Common Stock, Shares, Issued	11,103,000	0
Common Stock, Shares, Outstanding	11,103,000	0

CONDENSED COMBINED STATEMENTS 6

CONDENSED COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
OPERATING ACTIVITIES:
Net loss	$ (41,782)	$ (16,304)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	9,169	9,857
Instrument replacement expense	944	1,206
Impairment of instruments	175	0
Provision for excess and obsolete inventories	6,069	2,037
Stock-based compensation	1,775	454
Amortization of inventory step-up	0	165
Allocation of non-cash charges from Integra	563	1,523
Changes in assets and liabilities
Accounts receivable	(2,099)	5,667
Inventories	(8,752)	(1,322)
Prepaid expenses and other current assets	5,612	213
Other non-current assets	(6,164)	524
Accounts payable	5,213	1,317
Income taxes payable	406	(621)
Accrued expenses and other current liabilities	1,413	308
Other non-current liabilities	(1,993)	(84)
Net cash (used in) provided by operating activities	(29,451)	4,940
INVESTING ACTIVITIES:
Purchases of property and equipment	(9,826)	(2,343)
Technology license milestone payment	(150)	0
Net cash used in investing activities	(9,976)	(2,343)
FINANCING ACTIVITIES:
Integra net investment prior to the spin-off	77,173	(2,587)
Excess tax benefits from stock-based compensation arrangements	37	0
Net cash provided by (used in) financing activities	77,210	(2,587)
Effect of exchange rate changes on cash and cash equivalents	68	(2)
Net change in cash and cash equivalents	37,851	8
Cash and cash equivalents at beginning of period	652	646
Cash and cash equivalents at end of period	38,503	654
Non-cash financing activities:
Settlement of related-party payable to Integra net investment	29,022	0
Property and equipment in liabilities	$ 1,419	$ 520

CONDENSED COMBINED STATEMENT O7

CONDENSED COMBINED STATEMENT OF EQUITY Statement - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Related Parties [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]
Beginning Balance, Shares, Outstanding at Dec. 31, 2014	0	0
Beginning Balance at Dec. 31, 2014	$ 91,284	$ 0	$ 0	$ 90,391	$ 893	$ 0
Net loss	(41,782)			(27,583)		(14,199)
Settlement of related-party payable to Integra net investment	107,106			107,106
Integra net investment prior to the spin-off	77,173		169,914	(169,914)
Foreign currency translation adjustment	$ 937				937
Issuance of common stock, Shares		11,047,967
Issuance of common stock		$ 110	(110)
Restricted stock awards issued, Shares	66,307
Restricted stock awards issued		$ 1	(1)
Restricted stock awards forfeited, Shares		(11,130)
Stock-based compensation	$ 1,578		1,578
Excess tax benefits from stock-based compensation arrangements	$ 37		37
Ending Balance, Shares, Outstanding at Sep. 30, 2015	11,103,000	11,102,928
Ending Balance at Sep. 30, 2015	$ 159,160	$ 111	$ 171,418	$ 0	$ 1,830	$ (14,199)

BUSINESS

BUSINESS	9 Months Ended
	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS	BUSINESS Spin-off from Integra As of June 30, 2015, SeaSpine Holdings Corporation ("SeaSpine", or the "Company") was a subsidiary of Integra LifeSciences Holdings Corporation (“Integra”). On July 1, 2015, Integra completed the spin-off of its orthobiologics and spinal fusion hardware business into SeaSpine, which was created to be a separate, independent, publicly-traded medical technology company focused on the design, development and commercialization of surgical solutions for the treatment of patients suffering from spinal disorders. Unless the context indicates otherwise, (i) references to "SeaSpine", the "Company", and the "Business", refer to SeaSpine Holdings Corporation and its orthobiologics and spinal fusion hardware business and (ii) references to "Integra" refer to Integra LifeSciences Holdings Corporation and its subsidiaries other than SeaSpine. On July 1, 2015 (the "Distribution Date"), SeaSpine common stock was distributed, on a pro rata basis, to Integra’s stockholders of record as of 5:00 p.m. Eastern Time on June 19, 2015 (the "Record Date"). On the Distribution Date, each holder of Integra common stock received one share of SeaSpine common stock for every three shares of Integra common stock held by such holder as of the Record Date. The spin-off was completed pursuant to a Separation and Distribution Agreement and several other agreements with Integra or its subsidiaries related to the spin-off, including an Employee Matters Agreement, a Tax Matters Agreement, a Transition Services Agreement and several Supply Agreements, each of which is filed as an Exhibit to the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission ("SEC") on July 1, 2015 and incorporated by reference herein. These agreements govern the relationship between SeaSpine and Integra following the spin-off and provide for the allocation of various assets, liabilities, rights and obligations. These agreements also include arrangements for transition services, products and raw materials to be provided by Integra to SeaSpine and transition services and products to be provided by SeaSpine to Integra. For a discussion of each agreement, see the section entitled “Certain Relationships and Related Party Transactions" in the SeaSpine Information Statement included as Exhibit 99.1 to the Registration Statement on Form 10, as amended, filed with the SEC on June 9, 2015 (the “Information Statement”). The SeaSpine Registration Statement on Form 10 became effective on June 9, 2015, and SeaSpine common stock began “regular-way” trading on the NASDAQ Global Market on July 2, 2015 under the symbol “SPNE.”

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation For periods prior to the spin-off, the Company’s condensed combined financial statements were derived from the audited combined financial statements included in the Information Statement, which were prepared on a stand-alone basis and derived from Integra's consolidated financial statements and accounting records related to its orthobiologics and spinal fusion hardware business and should be read in conjunction with the notes to financial statements included in the Information Statement. The Company relied on Integra for a significant portion of its operational and administrative support. The combined financial statements included allocations of certain Integra corporate expenses, including information technology resources and support; finance, accounting, auditing services; real estate and facility management services; human resources activities; certain procurement activities; treasury services, legal advisory services and costs for research and development. These costs were allocated to the Company on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of revenue, standard costs of sales, or other measures. Integra used a centralized approach to cash management and financing of its operations and substantially all cash generated by the Company through May 4, 2015, the date the Company implemented a separate enterprise resource planning ("ERP") system for SeaSpine, was assumed to be remitted to Integra. Prior to the spin-off, cash management and financing transactions relating to the Company were accounted for through the Integra invested equity account. Accordingly, none of the Integra cash and cash equivalents at the corporate level were assigned to SeaSpine in the combined financial statements. Integra’s debt and related interest expense were not allocated to SeaSpine for any of the periods presented since the Company was not the legal obligor of the debt and Integra’s borrowings were not directly attributable to SeaSpine. Subsequent to the spin-off, the Company’s unaudited interim condensed financial statements as of and for the three months ended September 30, 2015 are presented on a consolidated basis, as the Company became a separate publicly-traded company on July 1, 2015. The Company performs its operational and administrative support using internal resources and purchased services, some of which will be provided by Integra for a fee during a transitional period pursuant to a transition services agreement. These fees are partially offset by other income from SeaSpine services provided to Integra. The Company prepared the unaudited interim condensed consolidated and combined financial statements included in this report in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the rules and regulations of the SEC related to quarterly reports on Form 10-Q. Accordingly, they do not include all information and disclosures required by GAAP for annual audited financial statements and should be read in conjunction with the Company’s audited combined financial statements and notes thereto included in the Information Statement. In the opinion of management, the unaudited interim condensed consolidated and combined financial statements have been prepared on the same basis as the audited combined financial statements and include all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the financial position, results of operations, cash flows, and statement of equity for periods presented. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results expected for the full year. The condensed combined balance sheet as of December 31, 2014 was derived from the audited combined financial statements for the year ended December 31, 2014 included in the Information Statement. See Note 4, “Transactions with Integra,” for further information regarding the relationships the Company has with Integra. Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The reclassifications were not material to the interim condensed consolidated and combined financial statements. Principles of Consolidation and Combination For periods prior to the spin-off, the combined financial statements include certain assets and liabilities that have historically been held at the Integra level but were specifically identifiable or otherwise attributable to the Company. All significant intra-company transactions within Integra's pre-spin off orthobiologics and spinal fusion hardware business have been eliminated. All significant transactions between the Company and other businesses of Integra before the spin-off are included in these combined financial statements. For periods subsequent to the spin-off, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents include cash in readily available checking and money market accounts. Fair Value of Financial Instruments The carrying amounts of cash, cash equivalents, receivables, accounts payable and accrued expenses at September 30, 2015 and December 31, 2014, are considered to approximate fair value because of the short term nature of those items. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue when (or as) the entity satisfies a performance obligation. In July 2015, the FASB deferred for one year the effective date of the new revenue standard, but early adoption is permitted. The new standard will be effective for the Company on January 1, 2018. The Company is in the process of evaluating the impact of this standard on its financial statements. In August 2014, the FASB issued Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendment requires management to evaluate, for each annual and interim reporting period, whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued or are available to be issued. If substantial doubt is raised, additional disclosures around management’s plan to alleviate these doubts are required. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2016. The implementation of the amended guidance is not expected to have an impact on current disclosures in our financial statements. In April 2015, the FASB issued Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . The new standard will require debt issuance costs to be presented on the balance sheet as a direct reduction of the carrying value of the associated debt liability, consistent with the presentation of debt discounts. The recognition and measurement requirements will not change as a result of this guidance. The standard is effective for the annual reporting periods beginning after December 15, 2015 and requires a retrospective application. The guidance in ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. Under the new standard, the SEC staff will not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The implementation of the amended guidance is not expected to have an impact on current disclosures in our financial statements. In July 2015, the FASB issued Update No. 2015-11, Simplifying the Measurement of Inventory. The new guidance requires an entity to measure inventory within the scope of the amendment at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The implementation of the amended guidance is not expected to have an impact on current disclosures in our financial statements. Net Loss Per Share For periods prior to the spin-off, basic and diluted net loss per share was calculated based on the approximately 11.0 million shares of SeaSpine common stock that were distributed to Integra shareholders on July 1, 2015. For periods subsequent to the spin-off, basic and diluted net loss per share was calculated using the weighted-average number of shares of common stock outstanding during the period. The weighted average number of shares used to compute diluted net loss per share excludes any assumed exercise of stock options, and any assumed issuance of common stock under restricted stock units as the effect would be antidilutive. Common stock equivalents of 1.8 million shares for the three and nine months ended September 30, 2015 were excluded from the calculation because of their antidilutive effect. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands, except per share data) Net loss $ (14,199 ) $ (5,316 ) $ (41,782 ) $ (16,304 ) Loss Per Share Data Loss per share Basic and diluted $ (1.27 ) $ (0.48 ) $ (3.75 ) $ (1.48 ) Weighted average number of shares outstanding Basic and diluted 11,171 11,048 11,130 11,048

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
	Sep. 30, 2015
Fair Value Disclosures [Abstract]
Fair Value Disclosures [Text Block]	FAIR VALUE MEASUREMENTS In connection with the spin-off, the Company received $34.0 million in cash from Integra on July 1, 2015. The Company invested the entire amount in money market funds, which are valued based on publicly available quoted market prices for identical securities as of September 30, 2015 . The Company recorded the fair value of these money market funds, which totaled $26.0 million at September 30, 2015, as cash equivalents, based on quoted market prices in active markets. These cash equivalents are classified as level 1 fair value financial instruments.

TRANSACTIONS WITH INTEGRA

TRANSACTIONS WITH INTEGRA	9 Months Ended
	Sep. 30, 2015
Related Party Transactions [Abstract]
TRANSACTIONS WITH INTEGRA	TRANSACTIONS WITH INTEGRA Related-party Transactions Prior to the spin-off, and pursuant to certain supply agreements subsequent to the spin-off, SeaSpine purchases a portion of raw materials and finished goods from Integra for the Mozaik family of products, and SeaSpine contract manufactures certain finished goods for Integra. The Company's purchases of raw materials and Mozaik product finished goods from Integra for the three months ended September 30, 2015 and 2014 totaled $1.9 million and $0.3 million , respectively, and for the nine months ended September 30, 2015 and 2014 totaled $5.6 million and $1.2 million , respectively. The amount of finished goods sold by SeaSpine to Integra was immaterial for all periods presented. Pursuant to a transition services agreement, Integra and SeaSpine will provide certain services following the spin-off, and Integra and SeaSpine will indemnify each other against certain liabilities arising from their respective businesses. Under this agreement, Integra provides us with certain support functions, including information technology, accounting and other financial functions, regulatory affairs and quality assurance, human resources and other administrative support. In addition, SeaSpine provides limited information technology and systems support services to Integra. The Company incurred approximately $1.8 million of costs under the agreement during the three months ended September 30, 2015, of which $0.5 million was outstanding at September 30, 2015. The amount of services provided by SeaSpine to Integra was immaterial during the three months ended September 30, 2015. Integra also collected funds from customers on behalf of the Company, of which $1.0 million was outstanding as of September 30, 2015 and recorded in Other Current Assets. Allocated Costs For periods prior to the spin-off, the condensed combined statements of operations included direct expenses for cost of goods sold, research and development, sales and marketing, customer service, and administration as well as allocations of expenses arising from shared services and infrastructure provided by Integra to the Company, such as costs of information technology, including the costs of a multi-year global enterprise resource planning implementation, accounting and legal services, real estate and facilities management, corporate advertising, insurance and treasury services, and other corporate and infrastructure services. These allocations are included in the table below. These expenses were allocated to the Company using estimates that the Company considers to be a reasonable reflection of the utilization of services provided to or benefits received from the Company. The allocation methods include pro-rata basis of revenue, standard cost of sales or other measures. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Cost of goods sold $ — $ 326 $ 488 $ 978 Selling, general and administrative — 4,215 8,633 13,977 Research and development — 119 253 370 Total Allocated Costs $ — $ 4,660 $ 9,374 $ 15,325 Included in the above amounts are certain non-cash allocated costs, including stock-based compensation. Such amounts were $0.4 million for the three months ended September 30, 2014 , and $0.6 million and $1.5 million for the nine months ended September 30, 2015 and 2014 respectively. All significant related party transactions between SeaSpine and Integra were included in the condensed consolidated and combined financial statements and were considered to be effectively settled for cash at the time the transaction was recorded, with the exception of (i) the purchases from Integra of Mozaik raw materials and finished goods for all periods presented and (ii) the provision of services by Integra to SeaSpine under the transition services agreement during the three months ended September 30, 2015. The total net effect of the transactions considered to be effectively settled for cash was reflected in the combined statement of cash flows as a financing activity and in the combined balance sheet as Integra net investment. The following table summarizes the components of the net increase (decrease) in Integra net investment for the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Cash pooling and general financing activities (a) $ 34,025 $ (5,489 ) $ 68,386 $ (16,389 ) Corporate Allocations (excluding non-cash adjustments) — 4,265 8,787 13,802 Total Integra net investment in financing activities within cash flow statement 34,025 (1,224 ) 77,173 (2,587 ) Non-cash adjustments (b) — 540 29,806 1,977 Spin-off related adjustment (c) (166 ) — (166 ) — Reclassification of Integra net investment in connection with the spin-off (169,914 ) — (169,914 ) — Foreign exchange impact — (133 ) 293 (79 ) Net decrease in Integra investment $ (136,055 ) $ (817 ) $ (62,808 ) $ (689 ) (a) Includes financing activities for capital transfers, cash sweeps and other treasury services. (b) Reflects allocation of non-cash charges from Integra, stock-based compensation and settlement of related-party payable to Integra net investment. (c) During the three months ended September 30, 2015, certain spin-off related adjustments were recorded in stockholders' equity, to reflect the appropriate opening balances related to SeaSpine’s legal entities at the Distribution Date.

INVENTORIES

INVENTORIES	9 Months Ended
	Sep. 30, 2015
Inventory, Net [Abstract]
INVENTORIES	INVENTORIES Inventories consisted of the following: September 30, 2015 December 31, 2014 (In thousands) Finished goods $ 32,432 $ 32,364 Work in process 15,205 11,675 Raw materials 5,260 5,823 $ 52,897 $ 49,862 Inventories included $18.7 million and $12.7 million of reserves for excess and obsolete inventory as of September 30, 2015 and December 31, 2014, respectively. The Company recorded a $4.4 million provision for excess and obsolete spinal fusion hardware inventory during the three months ended September 30, 2015, the substantial majority of which was purchased prior to the spin-off and a portion of which was primarily intended for distribution in international markets. This charge was a result of the Company's assessment of its growth strategy for international markets, completed in the third quarter, following the spin-off. The Company now intends to deploy and invest its limited sales and marketing resources dedicated to international markets in a more targeted manner in fewer countries. As a result of this shift in international strategy and other factors, the Company no longer expects to sell the spinal fusion hardware inventory against which the excess and obsolete reserve was recorded.

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT	9 Months Ended
	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
PROPERTY, PLANT AND EQUIPMENT	PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment charges. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the lease term or the useful life. The cost of major additions and improvements is capitalized, while maintenance and repair costs that do not improve or extend the lives of the respective assets are charged to operations as incurred. The cost of computer software obtained for internal use is accounted for in accordance with the Accounting Standards Codification 350-40, Internal-Use Software. The cost of purchased instruments which the Company consigns to hospitals and independent sales agents to support surgeries is initially capitalized as construction in progress. The amount is then reclassified to instrument sets and depreciation is initiated when instruments are put together in a newly built set with spinal implants, or directly expensed for the instruments that are used to replace damaged instruments in an existing set. The depreciation expense and direct expense for replacement instruments are recorded in selling, general and administrative expense. Property, plant and equipment balances and corresponding useful lives were as follows: September 30, 2015 December 31, 2014 Useful Lives (In thousands) Leasehold improvement $ 4,655 $ 4,262 1 year Machinery and production equipment 6,240 5,810 3-20 years Instrument sets 23,880 22,122 4-5 years Information systems & hardware 6,524 1,720 1-7 years Furniture & fixtures 763 657 1-15 years Construction in progress 10,193 8,789 Total 52,255 43,360 Less accumulated depreciation and amortization (29,229 ) (27,000 ) Property, plant and equipment, net $ 23,026 $ 16,360 Depreciation expenses totaled $1.3 million and $1.2 million for the three month periods ended September 30, 2015 and 2014, respectively, and $3.1 million and $3.7 million for the nine months ended September 30, 2015 and 2014, respectively. The cost of purchased instruments used to replace damaged instruments in existing sets and recorded directly to expense totaled $0.4 million and $0.6 million for the three month periods ended September 30, 2015 and 2014, respectively, and $0.9 million and $1.2 million for the nine months ended September 30, 2015 and 2014, respectively. The Company entered a sublease agreement for an office located in Carlsbad, California, which became effective September 8, 2015 upon the Company's receipt of the consent to sublease of the landlord. As a result, the Company does not intend to exercise its renewal options for the lease of its offices located in Vista, California. The useful lives for leasehold improvements at the Vista facilities were previously based on the assumption that the renewal options would be exercised. In July 2015, the Company reduced those useful lives to reflect the lease term ending on the May 23, 2016 expiration date. The change in estimate resulted in additional depreciation expense of $0.3 million for the three months ended September 30, 2015 .

IDENTIFIABLE INTANGIBLE ASSETS

IDENTIFIABLE INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
IDENTIFIABLE INTANGIBLE ASSETS	IDENTIFIABLE INTANGIBLE ASSETS Identifiable intangible assets are initially recorded at fair value at the time of acquisition generally using an income or cost approach. The Company capitalizes costs incurred to renew or extend the term of recognized intangible assets and amortizes those costs over their expected useful lives. The components of the Company’s identifiable intangible assets were as follows: September 30, 2015 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 12 years $ 31,169 $ (18,604 ) $ 12,565 Customer relationships 12 years 56,830 (27,806 ) 29,024 Trademarks/brand names — 300 (300 ) — $ 88,299 $ (46,710 ) $ 41,589 December 31, 2014 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 12 years $ 30,419 $ (16,582 ) $ 13,837 Customer relationships 12 years 56,830 (23,963 ) 32,867 Trademarks/brand names — 300 (300 ) — Non-Compete agreements 4 years 1,900 (1,713 ) 187 $ 89,449 $ (42,558 ) $ 46,891 Annual amortization expense (including amounts reported in cost of goods sold) is expected to be approximately $8.0 million in 2015 , $7.0 million in 2016 , $5.8 million in 2017 , $5.5 million in 2018 and $4.8 million in 2019 . Amortization of product technology-based intangible assets totaled $ 0.7 million for each of the three months ended September 30, 2015 and 2014 and $ 2.0 million for each of the nine months ended September 30, 2015 and 2014 , and is presented by the Company within cost of goods sold.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	9 Months Ended
	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK-BASED COMPENSATION	STOCK-BASED COMPENSATION For periods prior to the spin-off, the Company’s stock-based compensation was derived from the equity awards granted by Integra to individuals who would become the Company’s employees. As those stock-based compensation plans were Integra’s plans, the amounts have been recognized in the condensed combined statements of operations and the Integra net investment account on the combined balance sheet. For periods after the spin-off, the Company's stock-based compensation has been recognized through the condensed consolidated statement of operations and the Company's additional paid-in capital account on the condensed consolidated balance sheet. Equity Award Plans As of June 30, 2015, Integra had stock options, restricted stock awards, performance stock awards, contract stock awards and restricted stock units outstanding under three plans, the 2000 Equity Incentive Plan, the 2001 Equity Incentive Plan, and the 2003 Equity Incentive Plan. In connection with the spin-off, Integra equity awards granted to individuals who would become employees of the Company were converted to SeaSpine equity awards. In general, each award is subject to the same terms and conditions as were in effect prior to the spin-off. In May 2015, the Company adopted a 2015 Incentive Award Plan (the "2015 Plan"), under which the Company can grant its employees and non-employee directors incentive stock options and non-qualified stock options, restricted stock, performance stock, dividend equivalent rights, stock appreciation rights, stock payment awards and other incentive awards. The Company may issue up to 2,000,000 shares of its common stock under the 2015 Plan. Restricted Stock Awards, Restricted Stock Units and Performance Stock Awards Performance stock awards, restricted stock awards and restricted stock units generally have requisite service periods of three years . Performance stock awards are subject to graded vesting and the Company expenses their fair value over the requisite service period. The Company expenses the fair value of restricted stock awards and restricted stock units on an accelerated basis over the vesting period or requisite service period, whichever is shorter. Stock-based compensation expense related to restricted stock awards, restricted stock units and performance stock awards includes an estimate for forfeitures. The expected forfeiture rate of all equity based compensation is based on historical patterns of the Company’s employees and is estimated to be 10% annually for the three months ended September 30, 2015 . As of September 30, 2015 , there were approximately $0.4 million of total unrecognized compensation expense related to unvested awards. These costs are expected to be recognized over a weighted-average period of approximately one year . Stock Options Stock option grants to employees generally have requisite service periods of four years, and stock option grants to non-employee directors generally have a requisite service period of one year. Both are subject to graded vesting. The Company records stock-based compensation expense associated with stock options on an accelerated basis over the various vesting periods within each grant and based on their fair value at the date of grant using the Black-Scholes-Merton option pricing model. The following weighted-average assumptions were used in the calculation of fair value for options grants during the three months ended September 30, 2015: September 30, 2015 Expected Dividend yield 0 % Risk-free interest rate 1.6 % Expected volatility 35.3 % Expected term (in years) 5.3 The Company considered that it has never paid cash dividends and does not currently intend to pay cash dividends. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected term of the options. Due to the Company’s limited historical data, the expected volatility is calculated based upon the historical volatility of comparable companies in the medical device industry whose share prices are publicly available for a sufficient period of time. The expected term of options is calculated using the simplified method as prescribed by accounting guidance for stock-based compensation. In addition, the Company applies an expected forfeiture rate when amortizing stock-based compensation expense. The expected forfeiture rate of stock options is based on historical patterns of the employee turnover rate and is estimated to be 10% annually for stock-based compensation expense recorded for the three months ended September 30, 2015 . As individual grant awards become fully vested, stock-based compensation expense is adjusted to recognize actual forfeitures. As of September 30, 2015 , there were approximately $5.5 million of total unrecognized compensation expense related to unvested stock options. These costs are expected to be recognized over a weighted-average period of approximately 1.4 years. Employee Stock Purchase Plan In May 2015, the Company adopted a 2015 Employee Stock Purchase Plan (the “ESPP”), which enables eligible employees to purchase shares of the Company’s common stock through payroll deductions of up to 15% of eligible compensation during an offering period, but not more than $25,000 in any calendar year, subject to certain restrictions. The purchase price is 85% of the market price of the stock at the beginning or at the end of an offering period, whichever is less. The ESPP authorizes the issuance of 400,000 shares of common stock pursuant to purchase rights granted to employees. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986. The Company expects the first offering period will commence on January 1, 2016 and end on December 31, 2016. As of September 30, 2015 , no shares of common stock have been purchased under the ESPP.

LEASES

LEASES	9 Months Ended
	Sep. 30, 2015
Leases [Abstract]
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]	LEASE The Company entered into a sublease agreement for an office located in Carlsbad, California, which became effective September 8, 2015 upon the Company's receipt of the consent to sublease of the landlord. The term of the lease agreement is from October 1, 2015 through April 28, 2027 at an average annual cost of approximately $1.6 million . Future minimum lease payments under this operating lease at September 30, 2015 are as follows: Payments Due by Calendar Year (In thousands) 2015 $ 302 2016 1,300 2017 1,500 2018 1,529 2019 1,559 Thereafter 12,827 Total minimum lease payments $ 19,017

INCOME TAXES

INCOME TAXES	9 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES The following table provides a summary of the Company’s effective tax rate for the three and nine months ended September 30, 2015 and 2014: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Reported tax rate 1.9 % (18.8 )% (5.4 )% (20.4 )% The Company reported income tax expense for the three months ended September 30, 2014 and for the nine month periods ended September 30, 2015 and 2014 related to the taxable income generated by its U.S. subsidiary that was not part of the U.S. consolidated tax group as of August 31, 2015. As such, despite the reported losses before income taxes in those periods, the taxable income generated by such U.S. subsidiary was not allowed to be offset against the taxable losses generated by its other U.S. subsidiaries through August 31, 2015. Effective September 1, 2015, the Company made an election that will allow it to offset any future taxable losses generated by its U.S. subsidiaries against any future taxable income generated by its U.S. subsidiaries. In addition, for all periods presented, the pretax losses incurred by the consolidated U.S. tax group received no corresponding tax benefit because we have concluded that it is more-likely-than-not that the Company will be unable to realize the value of any resulting deferred tax assets. The Company will continue to assess its position in future periods to determine if it is appropriate to reduce a portion of its valuation allowance in the future. For the three months ended September 30, 2015, the Company recognized a $0.3 million benefit from the change in realizable deferred tax assets of a foreign subsidiary. The income tax provision in the combined statements of operations for periods prior to the spinoff was calculated using the separate return method, as if the Company had filed a separate tax return and operated as a stand-alone business. However, because Integra historically generated taxable income in excess of the Company’s pretax losses incurred prior to the spinoff and all of the Company’s U.S. subsidiaries that incurred these pretax losses were included in Integra’s U.S. consolidated tax group, those pretax losses were more than offset by Integra’s taxable income. Therefore, there were no U.S. net operating losses available to the Company for future use at the date of the spin-off.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES In consideration for certain technology, manufacturing, distribution, and selling rights and licenses granted to the Company, the Company has agreed to pay royalties on sales of certain products sold by the Company. The royalty payments that the Company made under these agreements were not significant for any of the periods presented. The Company is subject to various claims, lawsuits and proceedings in the ordinary course of the Company’s business, including claims by current or former employees, distributors and competitors and with respect to its products and product liability claims, lawsuits and proceedings, some of which have been settled by the Company. In the opinion of management, such claims are either adequately covered by insurance or otherwise indemnified, or are not expected, individually or in the aggregate, to result in a material adverse effect on our financial condition. However, it is possible that the Company’s results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies. The Company accrues for loss contingencies when it is deemed probable that a loss has been incurred and that loss is estimable. The amounts accrued are based on the full amount of the estimated loss before considering insurance proceeds, and do not include an estimate for legal fees expected to be incurred in connection with the loss contingency. The Company consistently accrues legal fees expected to be incurred in connection with loss contingencies as those fees are incurred by outside counsel as a period cost. The Company does not believe there are any pending legal proceedings that would have a material impact on the Company’s financial position, liquidity or results of operations.

SEGMENT AND GEOGRAPHIC INFORMAT

SEGMENT AND GEOGRAPHIC INFORMATION	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
SEGMENT AND GEOGRAPHIC INFORMATION	SEGMENT AND GEOGRAPHIC INFORMATION In the three months ended September 30, 2015, subsequent to the spin-off from Integra, management assessed its segment reporting based on how the Company internally manages and reports the results of its business to its chief operating decision maker. The Company’s management reviews financial results, manages the business and allocates resources on an aggregate basis. Therefore, financial results are reported in a single operating segment: the development, manufacture and marketing of orthobiologics and spinal fusion hardware. The Company reports revenue in two product categories: orthobiologics and spinal fusion hardware. Orthobiologics products consist of a broad range of advanced and traditional bone graft substitutes that are designed to improve bone fusion rates following surgery. The spinal fusion hardware portfolio consists of an extensive line of products for minimally invasive surgery, complex spine, deformity and degenerative procedures. Revenue consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Orthobiologics $ 16,472 $ 16,571 $ 49,599 $ 49,595 Spinal fusion hardware 16,207 17,035 48,855 53,952 Total Revenues $ 32,679 $ 33,606 $ 98,454 $ 103,547 The Company attributes revenues to geographic areas based on the location of the customer. Total revenue by major geographic area consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) United States $ 30,139 $ 30,644 $ 89,081 $ 93,432 International 2,540 2,962 9,373 10,115 Total Revenues $ 32,679 $ 33,606 $ 98,454 $ 103,547

SUMMARY OF SIGNIFICANT ACCOUN20

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation For periods prior to the spin-off, the Company’s condensed combined financial statements were derived from the audited combined financial statements included in the Information Statement, which were prepared on a stand-alone basis and derived from Integra's consolidated financial statements and accounting records related to its orthobiologics and spinal fusion hardware business and should be read in conjunction with the notes to financial statements included in the Information Statement. The Company relied on Integra for a significant portion of its operational and administrative support. The combined financial statements included allocations of certain Integra corporate expenses, including information technology resources and support; finance, accounting, auditing services; real estate and facility management services; human resources activities; certain procurement activities; treasury services, legal advisory services and costs for research and development. These costs were allocated to the Company on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of revenue, standard costs of sales, or other measures. Integra used a centralized approach to cash management and financing of its operations and substantially all cash generated by the Company through May 4, 2015, the date the Company implemented a separate enterprise resource planning ("ERP") system for SeaSpine, was assumed to be remitted to Integra. Prior to the spin-off, cash management and financing transactions relating to the Company were accounted for through the Integra invested equity account. Accordingly, none of the Integra cash and cash equivalents at the corporate level were assigned to SeaSpine in the combined financial statements. Integra’s debt and related interest expense were not allocated to SeaSpine for any of the periods presented since the Company was not the legal obligor of the debt and Integra’s borrowings were not directly attributable to SeaSpine. Subsequent to the spin-off, the Company’s unaudited interim condensed financial statements as of and for the three months ended September 30, 2015 are presented on a consolidated basis, as the Company became a separate publicly-traded company on July 1, 2015. The Company performs its operational and administrative support using internal resources and purchased services, some of which will be provided by Integra for a fee during a transitional period pursuant to a transition services agreement. These fees are partially offset by other income from SeaSpine services provided to Integra. The Company prepared the unaudited interim condensed consolidated and combined financial statements included in this report in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the rules and regulations of the SEC related to quarterly reports on Form 10-Q. Accordingly, they do not include all information and disclosures required by GAAP for annual audited financial statements and should be read in conjunction with the Company’s audited combined financial statements and notes thereto included in the Information Statement. In the opinion of management, the unaudited interim condensed consolidated and combined financial statements have been prepared on the same basis as the audited combined financial statements and include all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the financial position, results of operations, cash flows, and statement of equity for periods presented. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results expected for the full year. The condensed combined balance sheet as of December 31, 2014 was derived from the audited combined financial statements for the year ended December 31, 2014 included in the Information Statement. See Note 4, “Transactions with Integra,” for further information regarding the relationships the Company has with Integra.
Principles of Combination	Principles of Consolidation and Combination For periods prior to the spin-off, the combined financial statements include certain assets and liabilities that have historically been held at the Integra level but were specifically identifiable or otherwise attributable to the Company. All significant intra-company transactions within Integra's pre-spin off orthobiologics and spinal fusion hardware business have been eliminated. All significant transactions between the Company and other businesses of Integra before the spin-off are included in these combined financial statements. For periods subsequent to the spin-off, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.
Cash and Cash Equivalents, Policy	Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents include cash in readily available checking and money market accounts.
Fair Value Measurement, Policy	Fair Value of Financial Instruments The carrying amounts of cash, cash equivalents, receivables, accounts payable and accrued expenses at September 30, 2015 and December 31, 2014, are considered to approximate fair value because of the short term nature of those items.
Recently Issued and Adopted Accounting Standards	ecently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue when (or as) the entity satisfies a performance obligation. In July 2015, the FASB deferred for one year the effective date of the new revenue standard, but early adoption is permitted. The new standard will be effective for the Company on January 1, 2018. The Company is in the process of evaluating the impact of this standard on its financial statements. In August 2014, the FASB issued Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendment requires management to evaluate, for each annual and interim reporting period, whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued or are available to be issued. If substantial doubt is raised, additional disclosures around management’s plan to alleviate these doubts are required. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2016. The implementation of the amended guidance is not expected to have an impact on current disclosures in our financial statements. In April 2015, the FASB issued Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . The new standard will require debt issuance costs to be presented on the balance sheet as a direct reduction of the carrying value of the associated debt liability, consistent with the presentation of debt discounts. The recognition and measurement requirements will not change as a result of this guidance. The standard is effective for the annual reporting periods beginning after December 15, 2015 and requires a retrospective application. The guidance in ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. Under the new standard, the SEC staff will not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The implementation of the amended guidance is not expected to have an impact on current disclosures in our financial statements.

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	For periods prior to the spin-off, basic and diluted net loss per share was calculated based on the approximately 11.0 million shares of SeaSpine common stock that were distributed to Integra shareholders on July 1, 2015. For periods subsequent to the spin-off, basic and diluted net loss per share was calculated using the weighted-average number of shares of common stock outstanding during the period. The weighted average number of shares used to compute diluted net loss per share excludes any assumed exercise of stock options, and any assumed issuance of common stock under restricted stock units as the effect would be antidilutive. Common stock equivalents of 1.8 million shares for the three and nine months ended September 30, 2015 were excluded from the calculation because of their antidilutive effect. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands, except per share data) Net loss $ (14,199 ) $ (5,316 ) $ (41,782 ) $ (16,304 ) Loss Per Share Data Loss per share Basic and diluted $ (1.27 ) $ (0.48 ) $ (3.75 ) $ (1.48 ) Weighted average number of shares outstanding Basic and diluted 11,171 11,048 11,130 11,048

TRANSACTIONS WITH INTEGRA (Tabl

TRANSACTIONS WITH INTEGRA (Tables)	9 Months Ended
	Sep. 30, 2015
Related Party Transactions [Abstract]
Schedule of Related Party Transactions	The allocation methods include pro-rata basis of revenue, standard cost of sales or other measures. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Cost of goods sold $ — $ 326 $ 488 $ 978 Selling, general and administrative — 4,215 8,633 13,977 Research and development — 119 253 370 Total Allocated Costs $ — $ 4,660 $ 9,374 $ 15,325 The following table summarizes the components of the net increase (decrease) in Integra net investment for the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Cash pooling and general financing activities (a) $ 34,025 $ (5,489 ) $ 68,386 $ (16,389 ) Corporate Allocations (excluding non-cash adjustments) — 4,265 8,787 13,802 Total Integra net investment in financing activities within cash flow statement 34,025 (1,224 ) 77,173 (2,587 ) Non-cash adjustments (b) — 540 29,806 1,977 Spin-off related adjustment (c) (166 ) — (166 ) — Reclassification of Integra net investment in connection with the spin-off (169,914 ) — (169,914 ) — Foreign exchange impact — (133 ) 293 (79 ) Net decrease in Integra investment $ (136,055 ) $ (817 ) $ (62,808 ) $ (689 ) (a) Includes financing activities for capital transfers, cash sweeps and other treasury services. (b) Reflects allocation of non-cash charges from Integra, stock-based compensation and settlement of related-party payable to Integra net investment. (c) During the three months ended September 30, 2015, certain spin-off related adjustments were recorded in stockholders' equity, to reflect the appropriate opening balances related to SeaSpine’s legal entities at the Distribution Date.

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory, Net [Abstract]
Schedule of Inventory, Net	Inventories consisted of the following: September 30, 2015 December 31, 2014 (In thousands) Finished goods $ 32,432 $ 32,364 Work in process 15,205 11,675 Raw materials 5,260 5,823 $ 52,897 $ 49,862

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Tables)	9 Months Ended
	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	Property, plant and equipment balances and corresponding useful lives were as follows: September 30, 2015 December 31, 2014 Useful Lives (In thousands) Leasehold improvement $ 4,655 $ 4,262 1 year Machinery and production equipment 6,240 5,810 3-20 years Instrument sets 23,880 22,122 4-5 years Information systems & hardware 6,524 1,720 1-7 years Furniture & fixtures 763 657 1-15 years Construction in progress 10,193 8,789 Total 52,255 43,360 Less accumulated depreciation and amortization (29,229 ) (27,000 ) Property, plant and equipment, net $ 23,026 $ 16,360

IDENTIFIABLE INTANGIBLE ASSETS

IDENTIFIABLE INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Components of Company's Identifiable Intangible Assets	The components of the Company’s identifiable intangible assets were as follows: September 30, 2015 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 12 years $ 31,169 $ (18,604 ) $ 12,565 Customer relationships 12 years 56,830 (27,806 ) 29,024 Trademarks/brand names — 300 (300 ) — $ 88,299 $ (46,710 ) $ 41,589 December 31, 2014 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 12 years $ 30,419 $ (16,582 ) $ 13,837 Customer relationships 12 years 56,830 (23,963 ) 32,867 Trademarks/brand names — 300 (300 ) — Non-Compete agreements 4 years 1,900 (1,713 ) 187 $ 89,449 $ (42,558 ) $ 46,891

LEASES (Tables)

LEASES (Tables)	9 Months Ended
	Sep. 30, 2015
Leases [Abstract]
Schedule of Future Minimum Lease Payments for Capital Leases	Future minimum lease payments under this operating lease at September 30, 2015 are as follows: Payments Due by Calendar Year (In thousands) 2015 $ 302 2016 1,300 2017 1,500 2018 1,529 2019 1,559 Thereafter 12,827 Total minimum lease payments $ 19,017

INCOME TAXES (Tables)

INCOME TAXES (Tables)	9 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Schedule of effective income tax rate reconciliation	The following table provides a summary of the Company’s effective tax rate for the three and nine months ended September 30, 2015 and 2014: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Reported tax rate 1.9 % (18.8 )% (5.4 )% (20.4 )%

SEGMENT AND GEOGRAPHIC INFORM28

SEGMENT AND GEOGRAPHIC INFORMATION (Tables)	9 Months Ended
	Sep. 30, 2015
Segment Reporting [Abstract]
Total Revenue By Major Geographic Area	Revenue consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Orthobiologics $ 16,472 $ 16,571 $ 49,599 $ 49,595 Spinal fusion hardware 16,207 17,035 48,855 53,952 Total Revenues $ 32,679 $ 33,606 $ 98,454 $ 103,547 The Company attributes revenues to geographic areas based on the location of the customer. Total revenue by major geographic area consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) United States $ 30,139 $ 30,644 $ 89,081 $ 93,432 International 2,540 2,962 9,373 10,115 Total Revenues $ 32,679 $ 33,606 $ 98,454 $ 103,547

BUSINESS Narrative (Details)

BUSINESS Narrative (Details)	Jul. 01, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Stockholders' Equity Note, Spin-off, Shares Issued Ratio	0.3333

SUMMARY OF SIGNIFICANT ACCOUN30

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Narrative (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accounting Policies [Abstract]
Weighted Average Number of Shares Outstanding, Basic and Diluted	11,171	11,048	11,130	11,048
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			1,800

SUMMARY OF SIGNIFICANT ACCOUN31

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss	$ (14,199)	$ (5,316)	$ (41,782)	$ (16,304)
Earnings per share attributable to SeaSpine, Basic and diluted (in dollars per share)	$ (1.27)	$ (0.48)	$ (3.75)	$ (1.48)
Weighted Average Number of Shares Outstanding, Basic and Diluted	11,171	11,048	11,130	11,048
Pro Forma
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net loss	$ (14,199)	$ (5,316)	$ (41,782)	$ (16,304)
Earnings per share attributable to SeaSpine, Basic and diluted (in dollars per share)	$ (1.27)	$ (0.48)	$ (3.75)	$ (1.48)
Weighted Average Number of Shares Outstanding, Basic and Diluted	11,171	11,048	11,130	11,048

FAIR VALUE MEASUREMENTS Narrati

FAIR VALUE MEASUREMENTS Narrative(Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Integra net investment prior to the spin-off			$ 77,173	$ (2,587)
Affiliated Entity | Integra
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Integra net investment prior to the spin-off	$ (136,055)	$ (817)	(62,808)	(689)
Affiliated Entity | Integra | Total Integra net investment in financing activities within cash flow statement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Integra net investment prior to the spin-off	34,025	$ (1,224)	77,173	$ (2,587)
Money Market Funds | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	$ 26,000		$ 26,000

FAIR VALUE MEASUREMENTS Cash eq

FAIR VALUE MEASUREMENTS Cash equivalents measured at fair value (Details) $ in Millions	Sep. 30, 2015USD ($)
Fair Value, Inputs, Level 1 | Money Market Funds | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	$ 26

TRANSACTIONS WITH INTEGRA Narra

TRANSACTIONS WITH INTEGRA Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Related Party Transaction [Line Items]
Purchases			$ 8,752	$ 1,322
Related party costs incurred during the period	$ 1,800
Costs outstanding from related party	500		500
Other amounts due from Integra	1,000		1,000
Stock-based compensation			1,775	454
Allocation of non-cash charges from Integra			563	1,523
Integra | Affiliated Entity
Related Party Transaction [Line Items]
Purchases	1,900	$ 300	5,600	1,200
Stock-based compensation	$ 0	$ 400	$ 600	1,500
Allocation of non-cash charges from Integra				$ 1,500

TRANSACTIONS WITH INTEGRA Alloc

TRANSACTIONS WITH INTEGRA Allocated Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Related Party Transaction [Line Items]
Cost of goods sold	$ 17,341	$ 14,282	$ 44,448	$ 42,077
Selling, general and administrative	26,348	20,262	83,059	64,518
Research and development	2,364	2,111	5,973	6,259
Integra | Affiliated Entity
Related Party Transaction [Line Items]
Cost of goods sold	0	326	488	978
Selling, general and administrative	0	4,215	8,633	13,977
Research and development	0	119	253	370
Total Allocated Costs	$ 0	$ 4,660	$ 9,374	$ 15,325

TRANSACTIONS WITH INTEGRA Integ

TRANSACTIONS WITH INTEGRA Integra Net Investment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Related Party Transaction [Line Items]
Reclassification of Integra investment			$ 77,173	$ (2,587)
Integra | Affiliated Entity
Related Party Transaction [Line Items]
Reclassification of Integra investment	$ (136,055)	$ (817)	(62,808)	(689)
Cash pooling and general financing activities | Integra | Affiliated Entity
Related Party Transaction [Line Items]
Reclassification of Integra investment	34,025	(5,489)	68,386	(16,389)
Corporate Allocations (excluding non-cash adjustments) | Integra | Affiliated Entity
Related Party Transaction [Line Items]
Reclassification of Integra investment	0	4,265	8,787	13,802
Total Integra net investment in financing activities within cash flow statement | Integra | Affiliated Entity
Related Party Transaction [Line Items]
Reclassification of Integra investment	34,025	(1,224)	77,173	(2,587)
Non-cash adjustments | Integra | Affiliated Entity
Related Party Transaction [Line Items]
Reclassification of Integra investment	0	540	29,806	1,977
Spinoff Related Adjustment [Member] | Integra | Affiliated Entity
Related Party Transaction [Line Items]
Reclassification of Integra investment	(166)	0	(166)	0
Foreign exchange impact | Integra | Affiliated Entity
Related Party Transaction [Line Items]
Reclassification of Integra investment	0	(133)	293	(79)
Retained Investment in Subsidiary [Member] | Integra | Affiliated Entity
Related Party Transaction [Line Items]
Reclassification of Integra investment	$ (169,914)	$ 0	$ (169,914)	$ 0

INVENTORIES Schedule of Invento

INVENTORIES Schedule of Inventories, net (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Inventory, Net [Abstract]
Finished goods	$ 32,432	$ 32,432		$ 32,364
Work in process	15,205	15,205		11,675
Raw materials	5,260	5,260		5,823
Inventories, net	52,897	52,897		49,862
Inventory Adjustments	18,700	18,700		$ 12,700
Provision for excess and obsolete inventories	$ 4,400	$ 6,069	$ 2,037

PROPERTY, PLANT AND EQUIPMENT N

PROPERTY, PLANT AND EQUIPMENT Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Property, Plant and Equipment [Abstract]
Depreciation	$ 1,300	$ 1,200	$ 3,100	$ 3,700
Instrument replacement expense	400	$ 600	944	1,206
Depreciation and amortization	$ 300		$ 9,169	$ 9,857

PROPERTY, PLANT AND EQUIPMENT P

PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment balances (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Total	$ 52,255	$ 43,360
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	29,229	27,000
Property, plant and equipment, net	23,026	16,360
Leasehold improvement
Property, Plant and Equipment [Line Items]
Total	$ 4,655	4,262
Leasehold improvement | Minimum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	1 year
Leasehold improvement | Maximum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	20 years
Machinery and production equipment
Property, Plant and Equipment [Line Items]
Total	$ 6,240	5,810
Machinery and production equipment | Minimum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	3 years
Machinery and production equipment | Maximum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	20 years
Instrument sets
Property, Plant and Equipment [Line Items]
Total	$ 23,880	22,122
Instrument sets | Minimum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	4 years
Instrument sets | Maximum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	5 years
Information systems & hardware
Property, Plant and Equipment [Line Items]
Total	$ 6,524	1,720
Information systems & hardware | Minimum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	1 year
Information systems & hardware | Maximum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	7 years
Furniture & fixtures
Property, Plant and Equipment [Line Items]
Total	$ 763	657
Furniture & fixtures | Minimum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	1 year
Furniture & fixtures | Maximum
Property, Plant and Equipment [Line Items]
Useful Lives (in years)	15 years
Construction in progress
Property, Plant and Equipment [Line Items]
Total	$ 10,193	$ 8,789

IDENTIFIABLE INTANGIBLE ASSET40

IDENTIFIABLE INTANGIBLE ASSETS Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Finite-Lived Intangible Assets [Line Items]
Annual amortization expense expected to approximate in 2015	$ 8,000		$ 8,000
Annual amortization expense expected to approximate in 2016	7,000		7,000
Annual amortization expense expected to approximate in 2017	5,800		5,800
Annual amortization expense expected to approximate in 2018	5,500		5,500
Annual amortization expense expected to approximate in 2019	4,800		4,800
Intangible asset amortization	1,295	$ 1,397	4,049	$ 4,174
Payments to Acquire Intangible Assets			150	0
Completed technology | Cost of goods sold
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 700	$ 700	$ 2,000	$ 2,000

IDENTIFIABLE INTANGIBLE ASSET41

IDENTIFIABLE INTANGIBLE ASSETS Components of Company's Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Cost	$ 88,299	$ 89,449
Accumulated Amortization	(46,710)	(42,558)
Net	$ 41,589	$ 46,891
Completed technology
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life (in years)	12 years	12 years
Cost	$ 31,169	$ 30,419
Accumulated Amortization	(18,604)	(16,582)
Net	$ 12,565	$ 13,837
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life (in years)	12 years	12 years
Cost	$ 56,830	$ 56,830
Accumulated Amortization	(27,806)	(23,963)
Net	$ 29,024	$ 32,867
Trademarks/brand names
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life (in years)	0 years	0 years
Cost	$ 300	$ 300
Accumulated Amortization	(300)	(300)
Net	$ 0	$ 0
Non-Compete agreements
Finite-Lived Intangible Assets [Line Items]
Weighted Average Life (in years)		4 years
Cost		$ 1,900
Accumulated Amortization		(1,713)
Net		$ 187

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Detail) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	May. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options	2,000,000	2,000,000
Restricted Stock Awards and Performance Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service periods of awards (in years)		3 years
Total unrecognized compensation costs	$ 400,000	$ 400,000
Recognition period (in years)		1 year
Expected forfeiture rate		10.00%
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation costs	$ 5,500,000	$ 5,500,000
Recognition period (in years)		1 year 4 months 10 days
Expected forfeiture rate		10.00%
Stock Options
Expected Dividend yield		0.00%
Risk-free interest rate		1.60%
Expected volatility		35.30%
Expected term (in years)		5 years 3 months
Employee Stock Purchase Plan [Member] | Employee Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Stock Purchase Plan, Maximum Contributions Per Employee, Percent	15.00%
Employee Stock Purchase Plan, Maximum Annual Contributions Per Employee	$ 25,000
Employee Stock Purchase Plan, Stock Purchase Price, Percentage of Market Price			85.00%
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	400,000	400,000

LEASES Operating lease annual p

LEASES Operating lease annual payment (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Operating Leased Assets [Line Items]
2,015	$ 302
2,016	1,300
2,017	1,500
2,018	1,529
2,019	1,559
Thereafter	12,827
Total minimum lease payments	19,017
Property Subject to Operating Lease [Member]
Operating Leased Assets [Line Items]
Payments for Rent	$ 1,600

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Tax Disclosure [Abstract]
Reported tax rate (as a percent)	1.90%	(18.80%)	(5.40%)	(20.40%)
Benefit from change in realizable deferred tax assets	$ 0.3

SEGMENT AND GEOGRAPHIC INFORM45

SEGMENT AND GEOGRAPHIC INFORMATION Narrative (Detail)	9 Months Ended
	Sep. 30, 2015product
Segment Reporting [Abstract]
Number of product categories	2

SEGMENT AND GEOGRAPHIC INFORM46

SEGMENT AND GEOGRAPHIC INFORMATION Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting Information [Line Items]
Revenues	$ 32,679	$ 33,606	$ 98,454	$ 103,547
United States
Segment Reporting Information [Line Items]
Revenues	30,139	30,644	89,081	93,432
International
Segment Reporting Information [Line Items]
Revenues	2,540	2,962	9,373	10,115
Orthobiologics
Segment Reporting Information [Line Items]
Revenues	16,472	16,571	49,599	49,595
Spinal fusion hardware
Segment Reporting Information [Line Items]
Revenues	$ 16,207	$ 17,035	$ 48,855	$ 53,952