Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 02, 2016 | |
Document Documentand Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
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 | 11,092,931 |
CONDENSED COMBINED STATEMENT OF
CONDENSED COMBINED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Total revenue, net | $ 31,399 | $ 32,314 |
Cost of goods sold | 14,283 | 12,601 |
Gross profit | 17,116 | 19,713 |
Selling, general and administrative | 25,374 | 25,051 |
Research and development | 2,753 | 1,582 |
Intangible amortization | 1,281 | 1,397 |
Total operating expenses | 29,408 | 28,030 |
Operating loss | (12,292) | (8,317) |
Other income (expense), net | 258 | (721) |
Loss before income taxes | (12,034) | (9,038) |
Provision (benefit) for income taxes | (27) | 860 |
Net loss | $ (12,007) | $ (9,898) |
Earnings per share attributable to SeaSpine, Basic and diluted (in dollars per share) | $ (1.08) | $ (0.90) |
Weighted average shares used to compute basic and diluted net loss per share | 11,167 | 11,048 |
CONDENSED COMBINED STATEMENTS O
CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE LOSS Statement - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (12,007) | $ (9,898) |
Foreign currency translation adjustments | 190 | 63 |
Comprehensive loss | $ (11,817) | $ (9,835) |
CONDENSED COMBINED BALANCE SHEE
CONDENSED COMBINED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 28,602 | $ 33,429 |
Trade accounts receivable, net of allowances of $588 and $764 | 22,893 | 25,326 |
Inventories | 50,309 | 51,271 |
Prepaid expenses and other current assets | 2,165 | 3,696 |
Total current assets | 103,969 | 113,722 |
Property, plant and equipment, net | 21,051 | 21,958 |
Intangible assets, net | 37,677 | 39,632 |
Other assets | 1,007 | 1,077 |
Total assets | 163,704 | 176,389 |
Current liabilities: | ||
Accounts payable, trade | 11,185 | 13,689 |
Accrued compensation | 3,948 | 4,177 |
Accrued commissions | 4,029 | 4,227 |
Accrued expenses and other current liabilities | 3,906 | 3,942 |
Total current liabilities | 23,068 | 26,035 |
Long-term borrowings under credit facility | 361 | 328 |
Other liabilities | 2,908 | 2,687 |
Total liabilities | $ 26,337 | $ 29,050 |
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; 11,093 shares issued and outstanding at March 31, 2016, and 11,102 shares issued and outstanding at December 31, 2015 | 111 | 111 |
Additional paid-in capital | 175,631 | 173,786 |
Accumulated other comprehensive income | 1,581 | 1,391 |
Accumulated deficit | (39,956) | (27,949) |
Total stockholders' equity | 137,367 | 147,339 |
Total liabilities and stockholders' equity | $ 163,704 | $ 176,389 |
CONDENSED COMBINED BALANCE SHE5
CONDENSED COMBINED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for trade accounts receivable | $ 588 | $ 764 |
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 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 | 11,093,000 | 11,102,000 |
Common Stock, Shares, Outstanding | 11,093,000 | 11,102,000 |
CONDENSED COMBINED STATEMENTS 6
CONDENSED COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (12,007) | $ (9,898) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 3,162 | 3,005 |
Instrument replacement expense | 589 | 200 |
Impairment of instruments | 103 | 0 |
Provision for excess and obsolete inventories | 2,525 | 430 |
Amortization of debt issuance costs | 35 | 0 |
Deferred income tax benefit | (35) | 0 |
Stock-based compensation | 1,974 | 89 |
Allocation of non-cash charges from Integra | 0 | 247 |
Changes in assets and liabilities | ||
Accounts receivable | 2,551 | 2,525 |
Inventories | (1,022) | 846 |
Prepaid expenses and other current assets | 1,534 | 362 |
Other non-current assets | 101 | (4) |
Accounts payable | (3,394) | 676 |
Income taxes payable | 0 | (157) |
Accrued commissions | (200) | (478) |
Accrued compensation, accrued expenses and other current liabilities | (277) | 2,866 |
Other non-current liabilities | 170 | (101) |
Net cash (used in) provided by operating activities | (4,191) | 608 |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (983) | (3,571) |
Net cash used in investing activities | (983) | (3,571) |
FINANCING ACTIVITIES: | ||
Proceeds from (Payments for) Other Financing Activities | (2) | 0 |
Integra net investment prior to the spin-off | 0 | 2,962 |
Net cash (used in) provided by financing activities | (2) | 2,962 |
Effect of exchange rate changes on cash and cash equivalents | 349 | (3) |
Net change in cash and cash equivalents | (4,827) | (4) |
Cash and cash equivalents at beginning of period | 33,429 | 652 |
Cash and cash equivalents at end of period | 28,602 | 648 |
Non-cash financing activities: | ||
Property and equipment in liabilities | $ 998 | $ 541 |
CONDENSED COMBINED STATEMENT O7
CONDENSED COMBINED STATEMENT OF EQUITY Statement - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] |
Beginning Balance, Shares, Outstanding at Dec. 31, 2015 | 11,102,000 | 11,102,224 | |||
Beginning Balance at Dec. 31, 2015 | $ 147,339 | $ 111 | $ 173,786 | $ 1,391 | $ (27,949) |
Net loss | (12,007) | (12,007) | |||
Foreign currency translation adjustment | 190 | 190 | |||
Restricted stock awards forfeited | (9,447) | ||||
Restricted stock awards forfeited | (129) | (129) | |||
Stock-based compensation | $ 1,974 | 1,974 | |||
Ending Balance, Shares, Outstanding at Mar. 31, 2016 | 11,093,000 | 11,092,931 | |||
Ending Balance at Mar. 31, 2016 | $ 137,367 | $ 111 | $ 175,631 | $ 1,581 | $ (39,956) |
BUSINESS
BUSINESS | 3 Months Ended |
Mar. 31, 2016 | |
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. 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 | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company prepared the unaudited interim condensed consolidated financial statements included in this report in accordance with accounting principles generally accepted in the U.S. (“GAAP”). For periods prior to the spin-off, the Company’s consolidated financial statements 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. The Company relied on Integra for a significant portion of its operational and administrative support. The consolidated financial statements for all periods prior to the spin-off 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 consolidated 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 financial statements are presented on a consolidated basis, as the Company became a separate publicly-traded company on July 1, 2015. In the opinion of management, the March 31, 2016 unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations and cash flows of the Company. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC. The Company's consolidated balance sheet as of December 31, 2015 was derived from audited financial statements, but does not include all disclosures required by GAAP. The Company performs its operational and administrative support using internal resources and purchased services, some of which have been provided by Integra for a fee pursuant to a transition services agreement. See Note 4, “Transactions with Integra,” for further information regarding the relationships the Company has with Integra. Principles of Consolidation For periods prior to the spin-off, the consolidated 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 condensed consolidated 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. 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 Accounting Standards Update ("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 did not 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 (Topic 330). 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 our financial statements. In November 2015, the FASB issued Update No. 2015-17, Income Taxes - Balance Sheet Reclassification of Deferred Taxes (Topic 740) . This ASU requires that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and the amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company early adopted this ASU in the fourth quarter of 2015 on a prospective basis. The Company did not adjust our prior period consolidated balance sheet as a result of the adoption of this ASU. In February 2016, the FASB issued Update No. 2016-02, Leases (Topic 842) , which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. Topic 842 supersedes the previous leases standard, Topic 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance. In March 2016, the FASB issued Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) . Under current accounting guidance an entity is required to report excess tax benefits and tax deficiencies to the extent of previous windfalls in equity when the tax benefit is realized. Excess settlements are currently reported as cash inflows from financing activities. The amendment requires that an entity present all excess tax benefits and all tax deficiencies as income tax expense or benefit in the statement of operations to be applied using a prospective transition method. Related tax settlements are to be presented as cash inflows from operating activities. The Company has the option to use either a prospective or retrospective transition method. The amendment removes the requirement to delay recognition of an excess tax benefit until the tax benefit is realized. A modified retrospective transition method must be applied. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is in the process of evaluating the impact of this standard on its 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 2.7 million shares for the three months ended March 31, 2016 were excluded from the calculation because of their antidilutive effect. Three Months Ended March 31, 2016 2015 (In thousands, except per share data) Net loss $ (12,007 ) $ (9,898 ) Loss Per Share Data Loss per share Basic and diluted $ (1.08 ) $ (0.90 ) Weighted average number of shares outstanding Basic and diluted 11,167 11,048 Out-of-Period Adjustment In the second quarter of 2015, the Company recorded an adjustment to correct an error in the first quarter of 2015 reported amounts. This resulted in an increase to finished goods inventory and Integra's net investment by $0.7 million . In addition to understating the inventory balance and net investment balance as of March 31, 2015, the error had the effect of increasing first quarter cash flows from operations and decreasing first quarter cash flows from financing by $0.7 million . The adjustment recorded in the second quarter of 2015 corrects the year to date cash flows from operations and cash flows from financing. The Company retrospectively adjusted the Condensed Consolidated Statement of Cash Flows for the period ended March 31, 2015. |
CREDIT AGREEMENT
CREDIT AGREEMENT | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Related Party Transactions And Debt Disclosure [Text Block] | On December 24, 2015, the Company entered into a three -year credit facility (the "Credit Facility") with Wells Fargo Capital Finance. The Credit Facility provides an asset-backed revolving line of credit of up to $30.0 million in borrowing capacity with a maturity date of December 24, 2018, which maturity date is subject to a one -time one -year extension at the Company's election. In connection with the Credit Facility, the Company was required to become guarantors and to provide a security interest in substantially all its assets for the benefit of the counterparty. Borrowings under the Credit Facility accrue interest at the rate then applicable to the Base Rate (as customarily defined) Loans, unless and until converted into LIBOR Rate Loans in accordance with the terms of the Credit Facility. Borrowings bear interest at a floating annual rate equal to (a) during any month for which the Company's average excess availability (as customarily defined) is greater than $20.0 million , base rate plus (i) 1.25 percentage points for base rate loans and (ii) LIBOR rate plus 2.25 percentage points for LIBOR loans, (b) during any month for which the Company's average excess availability is greater than $10.0 million but less than or equal to $20.0 million , (i) base rate plus 1.50 percentage points for base rate loans and (ii) LIBOR rate plus 2.50 percentage points for LIBOR loans and (c) during any month for which the Company's average excess availability is less than or equal to $10.0 million , (i) base rate plus 1.75 percentage points for base rate loans and (ii) LIBOR rate plus 2.75 percentage points for LIBOR loans. The Company will also pay an annual unused line fee in an amount equal to 0.375% of the unused Credit Facility amount. The unused line fee is due and payable on the first day of each month. At March 31, 2016, there was $0.4 million outstanding under the Credit Facility. Debt issuance costs and legal fees related to the Credit Facility totaling $0.4 million were recorded as a deferred asset and are being amortized ratably over the term of the arrangement. The Credit Facility contains various customary affirmative and negative covenants, including prohibiting the Company from incurring indebtedness without the lender’s consent. The Credit Facility also includes a financial covenant that requires the Company to maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 for the applicable measurement period, if the Company's Total Liquidity (as defined in the Credit Facility) is less than $5.0 million . The Company was in compliance with all applicable covenants at March 31, 2016. The Credit Facility also includes customary events of default, including events relating to non-payment of amounts due under the Credit Facility, material inaccuracy of representations and warranties, violation of covenants, bankruptcy and insolvency, failure to comply with health care laws, violation of certain of the Company’s existing agreements, and the occurrence of a change of control. Under the Credit Facility, if an event of default occurs, lenders holding a majority of the revolving commitments will have the right to terminate the commitments and accelerate the maturity of any loans outstanding. |
TRANSACTIONS WITH INTEGRA
TRANSACTIONS WITH INTEGRA | 3 Months Ended |
Mar. 31, 2016 | |
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 purchased a portion of raw materials and finished goods from Integra for the Company's Mozaik family of products, and SeaSpine contract manufactured certain finished goods for Integra. The Company's purchases of raw materials and Mozaik product finished goods from Integra for the three months ended March 31, 2016 and 2015 totaled $0.5 million and $1.2 million , respectively. The amount of finished goods sold by SeaSpine to Integra under its contract manufacturing arrangement 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. The Company incurred approximately $0.1 million of costs under the agreement for the three months ended March 31, 2016, all of which was outstanding at March 31, 2016. Integra collects certain funds from customers on behalf of the Company, of which $0.3 million was due to the Company as of March 31, 2016 and recorded in Other Current Assets. Allocated Costs For periods prior to the spin-off, the condensed consolidated 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 March 31, 2015 (In thousands) Cost of goods sold $ 244 Selling, general and administrative 4,249 Research and development 105 Total Allocated Costs $ 4,598 Included in the above amounts are certain non-cash allocated costs, including stock-based compensation. Such amounts were $0.2 million for the three months ended March 31, 2015. There were no allocated costs for the three months ended March 31, 2016. All significant related party transactions between SeaSpine and Integra were included in the condensed consolidated financial statements and, prior to the spin-off, were considered to be effectively settled for cash at the time the transaction was recorded, with the exception of the purchases from Integra of Mozaik raw materials and finished goods for all periods presented. The total net effect of the transactions considered to be effectively settled for cash was reflected in the consolidated statement of cash flows as a financing activity and in the consolidated balance sheet as Integra net investment. The following table summarizes the components of the net increase (decrease) in Integra net investment for the three months ended March 31, 2015 . The Integra net investment was reclassified to Additional Paid-in Capital in connection with the spin-off. Three Months Ended March 31, 2015 (In thousands) Cash pooling and general financing activities (a) $ (1,390 ) Corporate Allocations (excluding non-cash adjustments) 4,351 Total Integra net investment in financing activities within cash flow statement 2,961 Non-cash adjustments (b) 336 Foreign exchange impact 475 Net increase in Integra investment $ 3,772 (a) Includes financing activities for capital transfers, cash sweeps and other treasury services. (b) Reflects allocation of non-cash charges from Integra, including stock-based compensation. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2016 | |
Inventory, Net [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following: March 31, 2016 December 31, 2015 (In thousands) Finished goods $ 30,275 $ 29,845 Work in process 16,505 15,574 Raw materials 3,529 5,852 $ 50,309 $ 51,271 During the three months ended March 31, 2016, the Company recorded a $1.7 million provision for excess and obsolete orthobiologics inventory related to a portion of its matched-donor cancellous bone raw material on hand. This charge resulted from the repurposing of a large portion of the Company’s matched-donor cortical bone raw material that has historically been used in production with the matched-donor cancellous bone raw material. The quantities on hand of the now unmatched cancellous bone raw material exceed the anticipated volumes that will be consumed in future production needs such that its shelf life is expected to expire before it would be consumed. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2016 | |
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: March 31, 2016 December 31, 2015 Useful Lives (In thousands) Leasehold improvement $ 4,950 $ 4,830 Lease Term Machinery and production equipment 6,404 6,404 3-20 years Instrument sets 25,243 25,080 5 years Information systems and hardware 6,908 6,872 3-7 years Furniture and fixtures 1,052 944 3-15 years Construction in progress 8,022 8,375 Total 52,579 52,505 Less accumulated depreciation and amortization (31,528 ) (30,547 ) Property, plant and equipment, net $ 21,051 $ 21,958 Depreciation expenses totaled $1.2 million and $0.9 million for the three month periods ended March 31, 2016 and 2015, respectively. The cost of purchased instruments used to replace damaged instruments in existing sets and recorded directly to the instrument replacement expense totaled $0.6 million and $0.2 million for the three month periods ended March 31, 2016 and 2015, respectively. |
IDENTIFIABLE INTANGIBLE ASSETS
IDENTIFIABLE INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2016 | |
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: March 31, 2016 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 12 years $ 31,169 $ (19,955 ) $ 11,214 Customer relationships 12 years 56,830 (30,367 ) 26,463 Trademarks/brand names — 300 (300 ) — $ 88,299 $ (50,622 ) $ 37,677 December 31, 2015 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 12 years $ 31,169 $ (19,280 ) $ 11,889 Customer relationships 12 years 56,830 (29,087 ) 27,743 Trademarks/brand names — 300 (300 ) — $ 88,299 $ (48,667 ) $ 39,632 Annual amortization expense (including amounts reported in cost of goods sold) is expected to be approximately $7.0 million in 2016 , $5.8 million in 2017 , $5.5 million in 2018 , $4.8 million in 2019 and $4.0 million in 2020 . Amortization of product technology-based intangible assets totaled $ 0.7 million for each of the three months ended March 31, 2016 and 2015 , and is presented by the Company within cost of goods sold. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2016 | |
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 consolidated statements of operations and the Integra net investment account on the consolidated balance sheet. For periods after the spin-off, the Company's stock-based compensation has been recognized through the consolidated statement of operations and the Company's additional paid-in capital account on the 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 became 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. On January 27, 2016, the Company's board of directors approved an amendment and restatement of the 2015 Plan, pursuant to which the share reserve was increased by 300,000 shares over the original share reserve under the 2015 Plan, and on March 30, 2016, the board of directors approved a further amendment and restatement of the 2015 Plan, pursuant to which the share reserve was increased by an additional 1,209,500 shares of common stock, in each case subject to the Company obtaining the requisite stockholder approval. As a result, pursuant to the final amended and restated 2015 Plan (the "Restated Plan"), an aggregate of 1,509,500 additional shares will be reserved for issuance under the Restated Plan relative to the share reserve 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 March 31, 2016 . As of March 31, 2016 , there was approximately $0.2 million of total unrecognized compensation expense related to unvested awards. This cost is 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 for the three months ended March 31, 2016 : March 31, 2016 Expected dividend yield 0 % Risk-free interest rate 1.5 % Expected volatility 38.6 % Expected term (in years) 5.1 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 March 31, 2016 . As individual grant awards become fully vested, stock-based compensation expense is adjusted to recognize actual forfeitures. There were 700,532 stock options granted during the three months ended March 31, 2016, of which 547,099 shares were granted, in part, out of the share reserve increases approved by the board of directors under the Restated Plan and, in part, out of the remaining share reserve under the 2015 Plan, but all of which were granted subject to the Company obtaining the requisite stockholder approval (the “Contingent Options”). In the event stockholder approval of the Restated Plan is not obtained, all of the Contingent Options will automatically be forfeited. There were no expenses recorded for these Contingent Options for the three months ended March 31, 2016 in accordance with the Accounting Standards Codification 718, Compensation- Stock Compensation. As of March 31, 2016 , there was approximately $3.9 million of total unrecognized compensation expense related to unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately 1.9 years. Employee Stock Purchase Plan In May 2015, the Company adopted a 2015 Employee Stock Purchase Plan (the “ESPP”), which was amended in December 2015. The ESPP 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. Generally, each offering will be for a period of twenty-four months as determined by the Company's board of directors. There are four six-month purchase periods in each offering period for contributions to be made and to be converted into shares at the end of the purchase period. In no event may an employee purchase more than 2,500 shares per purchase period based on the closing price on the first trading date of an offering period or more than $25,000 worth of stock during each calendar year. The purchase price is 85% of the lesser of the market price of the stock at the first trading date of an offering period or any purchase date during an offering period (June 30 or December 31). 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 first offering period commenced on January 1, 2016 and will end on December 31, 2017. As of March 31, 2016 , no shares of common stock have been purchased under the ESPP. The Company estimates the fair value of shares issued to employees under the ESPP using the Black-Scholes-Merton option-pricing model. The following weighted average assumptions were used in the calculation of fair value of shares under the ESPP at the grant date: March 31, 2016 Expected dividend yield 0 % Risk-free interest rate 0.7 % Expected volatility 32.4 % Expected term (in years) 1.3 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | LEASES The Company leases administrative, manufacturing, research, and distribution facilities and various manufacturing, office and transportation equipment through operating lease agreements. Future minimum lease payments under these operating leases at March 31, 2016 are as follows: Payments Due by Calendar Year (In thousands) 2016 $ 1,777 2017 2,177 2018 2,208 2019 2,262 2020 2,317 Thereafter 12,160 Total minimum lease payments $ 22,901 Total rental expense for the three months ended March 31, 2016 and 2015 was $0.8 million and $0.6 million , respectively. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table provides a summary of the Company’s effective tax rate for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 Reported tax rate 0.2 % (9.5 )% The Company reported income tax expense for the three months ended March 31, 2015 related to the taxable income generated by its U.S. subsidiary that was not part of the U.S. consolidated tax group as of March 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. The income tax provision in the consolidated statements of operations for periods prior to the spin-off 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 spin-off 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 | 3 Months Ended |
Mar. 31, 2016 | |
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 included on the interim condensed consolidated statements of operations as a component of cost of goods sold. The Company is subject to various claims, lawsuits and proceedings in the ordinary course of its business with respect to its products, its current or former employees, and involving commercial disputes, 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 the Company's financial condition. However, it is possible that our 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 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 | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION Subsequent to the spin-off from Integra, management assessed its segment reporting based on how it 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, net consisted of the following: Three Months Ended March 31, 2016 2015 (In thousands) Orthobiologics $ 16,658 $ 16,028 Spinal fusion hardware 14,741 16,286 Total revenue, net $ 31,399 $ 32,314 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 March 31, 2016 2015 (In thousands) United States $ 28,544 $ 29,362 International 2,855 2,952 Total revenue, net $ 31,399 $ 32,314 |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company prepared the unaudited interim condensed consolidated financial statements included in this report in accordance with accounting principles generally accepted in the U.S. (“GAAP”). For periods prior to the spin-off, the Company’s consolidated financial statements 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. The Company relied on Integra for a significant portion of its operational and administrative support. The consolidated financial statements for all periods prior to the spin-off 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 consolidated 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 financial statements are presented on a consolidated basis, as the Company became a separate publicly-traded company on July 1, 2015. In the opinion of management, the March 31, 2016 unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations and cash flows of the Company. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC. The Company's consolidated balance sheet as of December 31, 2015 was derived from audited financial statements, but does not include all disclosures required by GAAP. The Company performs its operational and administrative support using internal resources and purchased services, some of which have been provided by Integra for a fee pursuant to a transition services agreement. See Note 4, “Transactions with Integra,” for further information regarding the relationships the Company has with Integra. |
Principles of Combination | Principles of Consolidation For periods prior to the spin-off, the consolidated 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 condensed consolidated 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. |
Recently Issued and Adopted Accounting Standards | 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 Accounting Standards Update ("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 did not 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 (Topic 330). 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 our financial statements. In November 2015, the FASB issued Update No. 2015-17, Income Taxes - Balance Sheet Reclassification of Deferred Taxes (Topic 740) . This ASU requires that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and the amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company early adopted this ASU in the fourth quarter of 2015 on a prospective basis. The Company did not adjust our prior period consolidated balance sheet as a result of the adoption of this ASU. In February 2016, the FASB issued Update No. 2016-02, Leases (Topic 842) , which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. Topic 842 supersedes the previous leases standard, Topic 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance. In March 2016, the FASB issued Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) . Under current accounting guidance an entity is required to report excess tax benefits and tax deficiencies to the extent of previous windfalls in equity when the tax benefit is realized. Excess settlements are currently reported as cash inflows from financing activities. The amendment requires that an entity present all excess tax benefits and all tax deficiencies as income tax expense or benefit in the statement of operations to be applied using a prospective transition method. Related tax settlements are to be presented as cash inflows from operating activities. The Company has the option to use either a prospective or retrospective transition method. The amendment removes the requirement to delay recognition of an excess tax benefit until the tax benefit is realized. A modified retrospective transition method must be applied. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is in the process of evaluating the impact of this standard on its financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 2.7 million shares for the three months ended March 31, 2016 were excluded from the calculation because of their antidilutive effect. Three Months Ended March 31, 2016 2015 (In thousands, except per share data) Net loss $ (12,007 ) $ (9,898 ) Loss Per Share Data Loss per share Basic and diluted $ (1.08 ) $ (0.90 ) Weighted average number of shares outstanding Basic and diluted 11,167 11,048 |
TRANSACTIONS WITH INTEGRA (Tabl
TRANSACTIONS WITH INTEGRA (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table summarizes the components of the net increase (decrease) in Integra net investment for the three months ended March 31, 2015 . The Integra net investment was reclassified to Additional Paid-in Capital in connection with the spin-off. Three Months Ended March 31, 2015 (In thousands) Cash pooling and general financing activities (a) $ (1,390 ) Corporate Allocations (excluding non-cash adjustments) 4,351 Total Integra net investment in financing activities within cash flow statement 2,961 Non-cash adjustments (b) 336 Foreign exchange impact 475 Net increase in Integra investment $ 3,772 (a) Includes financing activities for capital transfers, cash sweeps and other treasury services. (b) Reflects allocation of non-cash charges from Integra, including stock-based compensation. The allocation methods include pro-rata basis of revenue, standard cost of sales or other measures. Three Months Ended March 31, 2015 (In thousands) Cost of goods sold $ 244 Selling, general and administrative 4,249 Research and development 105 Total Allocated Costs $ 4,598 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory, Net [Abstract] | |
Schedule of Inventory, Net | Inventories consisted of the following: March 31, 2016 December 31, 2015 (In thousands) Finished goods $ 30,275 $ 29,845 Work in process 16,505 15,574 Raw materials 3,529 5,852 $ 50,309 $ 51,271 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment balances and corresponding useful lives were as follows: March 31, 2016 December 31, 2015 Useful Lives (In thousands) Leasehold improvement $ 4,950 $ 4,830 Lease Term Machinery and production equipment 6,404 6,404 3-20 years Instrument sets 25,243 25,080 5 years Information systems and hardware 6,908 6,872 3-7 years Furniture and fixtures 1,052 944 3-15 years Construction in progress 8,022 8,375 Total 52,579 52,505 Less accumulated depreciation and amortization (31,528 ) (30,547 ) Property, plant and equipment, net $ 21,051 $ 21,958 |
IDENTIFIABLE INTANGIBLE ASSETS
IDENTIFIABLE INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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: March 31, 2016 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 12 years $ 31,169 $ (19,955 ) $ 11,214 Customer relationships 12 years 56,830 (30,367 ) 26,463 Trademarks/brand names — 300 (300 ) — $ 88,299 $ (50,622 ) $ 37,677 December 31, 2015 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 12 years $ 31,169 $ (19,280 ) $ 11,889 Customer relationships 12 years 56,830 (29,087 ) 27,743 Trademarks/brand names — 300 (300 ) — $ 88,299 $ (48,667 ) $ 39,632 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 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 for the three months ended March 31, 2016 : March 31, 2016 Expected dividend yield 0 % Risk-free interest rate 1.5 % Expected volatility 38.6 % Expected term (in years) 5.1 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block] | The Company estimates the fair value of shares issued to employees under the ESPP using the Black-Scholes-Merton option-pricing model. The following weighted average assumptions were used in the calculation of fair value of shares under the ESPP at the grant date: March 31, 2016 Expected dividend yield 0 % Risk-free interest rate 0.7 % Expected volatility 32.4 % Expected term (in years) 1.3 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | Future minimum lease payments under these operating leases at March 31, 2016 are as follows: Payments Due by Calendar Year (In thousands) 2016 $ 1,777 2017 2,177 2018 2,208 2019 2,262 2020 2,317 Thereafter 12,160 Total minimum lease payments $ 22,901 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 Reported tax rate 0.2 % (9.5 )% |
SEGMENT AND GEOGRAPHIC INFORM29
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Total Revenue By Major Geographic Area | Revenue, net consisted of the following: Three Months Ended March 31, 2016 2015 (In thousands) Orthobiologics $ 16,658 $ 16,028 Spinal fusion hardware 14,741 16,286 Total revenue, net $ 31,399 $ 32,314 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 March 31, 2016 2015 (In thousands) United States $ 28,544 $ 29,362 International 2,855 2,952 Total revenue, net $ 31,399 $ 32,314 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Narrative (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 11,167 | 11,048 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,700 | |
Inventories [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Prior Period Reclassification Adjustment | $ 0.7 |
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 | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net loss | $ (12,007) | $ (9,898) |
Earnings per share attributable to SeaSpine, Basic and diluted (in dollars per share) | $ (1.08) | $ (0.90) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 11,167 | 11,048 |
Pro Forma | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net loss | $ (12,007) | $ (9,898) |
Earnings per share attributable to SeaSpine, Basic and diluted (in dollars per share) | $ (1.08) | $ (0.90) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 11,167 | 11,048 |
CREDIT AGREEMENT Credit Agreeme
CREDIT AGREEMENT Credit Agreement (Details) | Dec. 24, 2015USD ($)extension | Dec. 31, 2015USD ($) | Mar. 31, 2016USD ($) |
Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Expiration Period | 3 years | ||
Line of Credit Facility, Number of Extension Options | extension | 1 | ||
Line Of Credit Facility, Extension Period | 1 year | ||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.375% | ||
Unamortized Debt Issuance Expense | $ 400,000 | ||
Debt Instrument, Covenant, Fixed Charge Ratio, Minimum | 1.1 | ||
Debt Instrument, Covenant Description, Required Liquidity | $ 5,000,000 | ||
Credit Agreement [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30,000,000 | ||
Long-term Line of Credit | $ 400,000 | ||
Credit Agreement [Member] | Minimum | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Current Borrowing Capacity | 10,000,000 | ||
Credit Agreement [Member] | Maximum | |||
Line of Credit Facility [Line Items] | |||
Line of Credit Facility, Current Borrowing Capacity | $ 20,000,000 | ||
Credit Agreement, Contingent Interest Rate Three [Member] | Base Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||
Credit Agreement, Contingent Interest Rate Three [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | ||
Credit Agreement. Contingent Interest Rate Two [Member] | Base Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | ||
Credit Agreement. Contingent Interest Rate Two [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | ||
Credit Agreement, Contingent Interest Rate One [Member] | Base Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | ||
Credit Agreement, Contingent Interest Rate One [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.25% |
TRANSACTIONS WITH INTEGRA Narra
TRANSACTIONS WITH INTEGRA Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Purchases | $ 1,022 | $ (846) |
Related party costs incurred during the period | 100 | |
Other amounts due from Integra | 300 | |
Stock-based compensation | 1,974 | 89 |
Integra | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Purchases | $ 500 | 1,200 |
Stock-based compensation | $ 200 |
TRANSACTIONS WITH INTEGRA Alloc
TRANSACTIONS WITH INTEGRA Allocated Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Cost of goods sold | $ 14,283 | $ 12,601 |
Selling, general and administrative | 25,374 | 25,051 |
Research and development | $ 2,753 | 1,582 |
Integra | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Cost of goods sold | 244 | |
Selling, general and administrative | 4,249 | |
Research and development | 105 | |
Total Allocated Costs | $ 4,598 |
TRANSACTIONS WITH INTEGRA Integ
TRANSACTIONS WITH INTEGRA Integra Net Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Reclassification of Integra investment | $ 0 | $ 2,962 |
Integra | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Reclassification of Integra investment | 3,772 | |
Cash pooling and general financing activities | Integra | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Reclassification of Integra investment | (1,390) | |
Corporate Allocations (excluding non-cash adjustments) | Integra | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Reclassification of Integra investment | 4,351 | |
Total Integra net investment in financing activities within cash flow statement | Integra | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Reclassification of Integra investment | 2,961 | |
Non-cash adjustments | Integra | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Reclassification of Integra investment | 336 | |
Foreign exchange impact | Integra | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Reclassification of Integra investment | $ 475 |
INVENTORIES Schedule of Invento
INVENTORIES Schedule of Inventories, net (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory, Net [Abstract] | ||
Finished goods | $ 30,275 | $ 29,845 |
Work in process | 16,505 | 15,574 |
Raw materials | 3,529 | 5,852 |
Inventories, net | 50,309 | $ 51,271 |
Provision for excess and obsolete inventories | $ 1,700 |
PROPERTY, PLANT AND EQUIPMENT N
PROPERTY, PLANT AND EQUIPMENT Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 1,200 | $ 900 |
Instrument replacement expense | $ 589 | $ 200 |
PROPERTY, PLANT AND EQUIPMENT P
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Total | $ 52,579 | $ 52,505 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 31,528 | 30,547 |
Property, plant and equipment, net | 21,051 | 21,958 |
Leasehold improvement | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 4,950 | 4,830 |
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 | $ 6,404 | 6,404 |
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 | $ 25,243 | 25,080 |
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 and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 6,908 | 6,872 |
Information systems and hardware | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives (in years) | 1 year | |
Information systems and hardware | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives (in years) | 7 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,052 | 944 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives (in years) | 1 year | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives (in years) | 15 years | |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 8,022 | $ 8,375 |
IDENTIFIABLE INTANGIBLE ASSET39
IDENTIFIABLE INTANGIBLE ASSETS Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Annual amortization expense expected to approximate in 2016 | $ 7,000 | |
Annual amortization expense expected to approximate in 2017 | 5,800 | |
Annual amortization expense expected to approximate in 2018 | 5,500 | |
Annual amortization expense expected to approximate in 2019 | 4,800 | |
Annual amortization expense expected to approximate in 2020 | 4,000 | |
Intangible asset amortization | 1,281 | $ 1,397 |
Completed technology | Cost of goods sold | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset amortization | $ 700 |
IDENTIFIABLE INTANGIBLE ASSET40
IDENTIFIABLE INTANGIBLE ASSETS Components of Company's Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 88,299 | $ 88,299 | |
Accumulated Amortization | (50,622) | (48,667) | |
Net | $ 37,677 | 39,632 | |
Completed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life (in years) | 12 years | 12 years | |
Cost | $ 31,169 | 31,169 | |
Accumulated Amortization | (19,955) | (19,280) | |
Net | $ 11,214 | 11,889 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life (in years) | 12 years | 12 years | |
Cost | $ 56,830 | 56,830 | |
Accumulated Amortization | (30,367) | (29,087) | |
Net | 26,463 | 27,743 | |
Trademarks/brand names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 300 | 300 | |
Accumulated Amortization | (300) | (300) | |
Net | $ 0 | $ 0 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Detail) - USD ($) | Mar. 30, 2016 | Jan. 27, 2016 | Mar. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 1,209,500 | 300,000 | 1,509,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 700,532 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,000,000 | ||
Employee Stock Purchase Plan [Member] | |||
Stock Options | |||
Expected dividend yield | 0.00% | ||
Risk-free interest rate | 0.70% | ||
Expected volatility | 32.40% | ||
Expected term (in years) | 1 year 3 months | ||
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 | ||
Expected forfeiture rate | 10.00% | ||
Total unrecognized compensation costs | $ 200,000 | ||
Recognition period (in years) | 1 year | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected forfeiture rate | 10.00% | ||
Total unrecognized compensation costs | $ 3,900,000 | ||
Recognition period (in years) | 1 year 11 months 6 days | ||
Stock Options | |||
Expected dividend yield | 0.00% | ||
Risk-free interest rate | 1.50% | ||
Expected volatility | 38.60% | ||
Expected term (in years) | 5 years 1 month | ||
Contingent Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 547,099 | ||
Employee Stock [Member] | Employee Stock Purchase Plan [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 |
LEASES Operating lease annual p
LEASES Operating lease annual payment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Leases [Abstract] | ||
2,016 | $ 1,777 | |
2,017 | 2,177 | |
2,018 | 2,208 | |
2,019 | 2,262 | |
2,020 | 2,317 | |
Thereafter | 12,160 | |
Total minimum lease payments | 22,901 | |
Operating Leases, Rent Expense | $ 800 | $ 600 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Reported tax rate (as a percent) | 0.20% | (9.50%) |
SEGMENT AND GEOGRAPHIC INFORM44
SEGMENT AND GEOGRAPHIC INFORMATION Narrative (Detail) | 3 Months Ended |
Mar. 31, 2016product | |
Segment Reporting [Abstract] | |
Number of product categories | 2 |
SEGMENT AND GEOGRAPHIC INFORM45
SEGMENT AND GEOGRAPHIC INFORMATION Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 31,399 | $ 32,314 |
United States | ||
Segment Reporting Information [Line Items] | ||
Revenues | 28,544 | 29,362 |
International | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2,855 | 2,952 |
Orthobiologics | ||
Segment Reporting Information [Line Items] | ||
Revenues | 16,658 | 16,028 |
Spinal fusion hardware | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 14,741 | $ 16,286 |