Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 04, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | RTIX | |
Entity Registrant Name | RTI Surgical Holdings, Inc. | |
Entity Central Index Key | 0001760173 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 73,814,831 | |
Entity File Number | 001-38832 | |
Entity Tax Identification Number | 83-2540607 | |
Entity Address, Address Line One | 520 Lake Cook Road | |
Entity Address, Address Line Two | Suite 315 | |
Entity Address, City or Town | Deerfield | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60015 | |
City Area Code | 877 | |
Local Phone Number | 343-6832 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes | |
Security Exchange Name | NASDAQ | |
Title of 12(b) Security | common stock, $0.001 par value |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 2,950 | $ 10,949 |
Accounts receivable - less allowances of $2,988 at September 30, 2019 and $2,380 at December 31, 2018 | 56,556 | 48,351 |
Inventories - net | 130,913 | 107,471 |
Prepaid and other current assets | 8,631 | 8,791 |
Total current assets | 199,050 | 175,562 |
Non-current inventories - net | 18,345 | |
Property, plant and equipment - net | 81,206 | 77,954 |
Deferred tax assets - net | 20,967 | 17,510 |
Goodwill | 236,547 | 59,798 |
Other intangible assets - net | 24,345 | 26,359 |
Other assets - net | 7,271 | 4,003 |
Total assets | 587,731 | 361,186 |
Current Liabilities: | ||
Accounts payable | 17,800 | 26,309 |
Accrued expenses | 31,067 | 24,683 |
Current portion of deferred revenue | 2,748 | 4,908 |
Total current liabilities | 51,615 | 55,900 |
Long-term obligations | 169,137 | 49,073 |
Acquisition contingencies | 63,719 | 4,986 |
Other long-term liabilities | 2,271 | 633 |
Deferred revenue | 1,134 | 744 |
Total liabilities | 287,876 | 111,336 |
Commitments and contingencies (Note 22) | ||
Preferred stock Series A, $.001 par value: 5,000,000 shares authorized; 50,000 shares issued and outstanding | 66,364 | 66,226 |
Stockholders' equity: | ||
Common stock, $.001 par value: 150,000,000 shares authorized; 75,087,917 and 63,461,700 shares issued and outstanding, respectively | 75 | 64 |
Additional paid-in capital | 497,518 | 433,143 |
Accumulated other comprehensive loss | (8,390) | (7,270) |
Accumulated deficit | (250,639) | (237,444) |
Less treasury stock, 1,265,761 and 1,221,180 shares, respectively, at cost | (5,073) | (4,869) |
Total stockholders' equity | 233,491 | 183,624 |
Total liabilities and stockholders' equity | $ 587,731 | $ 361,186 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 2,988 | $ 2,380 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 50,000 | 50,000 |
Preferred stock, shares outstanding | 50,000 | 50,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 75,087,917 | 63,461,700 |
Common stock, shares outstanding | 75,087,917 | 63,461,700 |
Treasury stock, shares | 1,265,761 | 1,221,180 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive (Loss) Gain - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 76,129 | $ 69,064 | $ 228,177 | $ 209,639 |
Costs of processing and distribution | 34,642 | 31,409 | 103,941 | 108,262 |
Gross profit | 41,487 | 37,655 | 124,236 | 101,377 |
Expenses: | ||||
Marketing, general and administrative | 37,107 | 29,671 | 107,983 | 87,326 |
Research and development | 4,271 | 3,606 | 12,475 | 10,297 |
Severance and restructuring costs | 824 | 1,708 | ||
Gain on acquisition contingency | (1,590) | |||
Asset impairment and abandonments | 104 | 15 | 4,748 | |
Acquisition and integration expenses | 3,209 | 1,941 | 14,119 | 2,741 |
Cardiothoracic closure business divestiture contingency consideration | (3,000) | (3,000) | ||
Total operating expenses | 44,587 | 33,146 | 133,002 | 103,820 |
Operating (loss) income | (3,100) | 4,509 | (8,766) | (2,443) |
Other (expense) income: | ||||
Interest expense | (3,718) | (611) | (8,957) | (2,223) |
Interest income | 4 | 14 | 161 | 31 |
Loss on extinguishment of debt | (309) | |||
Foreign exchange loss | (78) | (1) | (128) | (23) |
Total other expense - net | (3,792) | (598) | (8,924) | (2,524) |
(Loss) income before income tax benefit (expense) | (6,892) | 3,911 | (17,690) | (4,967) |
Income tax benefit (expense) | 2,040 | (807) | 4,495 | 1,646 |
Net (loss) income | (4,852) | 3,104 | (13,195) | (3,321) |
Convertible preferred dividend | (173) | (2,120) | ||
Net (loss) income applicable to common shares | (4,852) | 2,931 | (13,195) | (5,441) |
Other comprehensive (loss) gain: | ||||
Unrealized foreign currency translation loss | (1,122) | (130) | (1,120) | (651) |
Comprehensive (loss) gain | $ (5,974) | $ 2,801 | $ (14,315) | $ (6,092) |
Net (loss) income per common share - basic | $ (0.06) | $ 0.05 | $ (0.18) | $ (0.09) |
Net (loss) income per common share - diluted | $ (0.06) | $ 0.04 | $ (0.18) | $ (0.09) |
Weighted average shares outstanding - basic | 75,194,036 | 63,495,952 | 72,007,860 | 63,517,958 |
Weighted average shares outstanding - diluted | 75,194,036 | 79,284,315 | 72,007,860 | 63,517,958 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Series A Preferred Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] |
Beginning Balance at Dec. 31, 2017 | $ 181,737 | $ 63 | $ 429,459 | $ (6,329) | $ (237,066) | $ (4,390) | ||
Accumulated effect of adoption of the revenue recognition standard | 872 | 872 | ||||||
Net (loss) income | (965) | (965) | ||||||
Foreign currency translation adjustment | 393 | 393 | ||||||
Exercise of common stock options | 287 | 287 | ||||||
Stock-based compensation | 1,280 | 1,280 | ||||||
Purchase of treasury stock | (363) | (363) | ||||||
Amortization of preferred stock series A issuance costs | $ (46) | $ (46) | ||||||
Preferred stock Series A dividend | (966) | (966) | ||||||
Ending Balance at Mar. 31, 2018 | 182,229 | 63 | 430,014 | (5,936) | (237,159) | (4,753) | ||
Beginning Balance at Dec. 31, 2017 | 181,737 | 63 | 429,459 | (6,329) | (237,066) | (4,390) | ||
Net (loss) income | (3,321) | |||||||
Foreign currency translation adjustment | (651) | |||||||
Ending Balance at Sep. 30, 2018 | 180,776 | 63 | 432,077 | (6,980) | (239,515) | (4,869) | ||
Beginning Balance at Mar. 31, 2018 | 182,229 | 63 | 430,014 | (5,936) | (237,159) | (4,753) | ||
Net (loss) income | (5,460) | (5,460) | ||||||
Foreign currency translation adjustment | (914) | (914) | ||||||
Exercise of common stock options | 33 | 33 | ||||||
Stock-based compensation | 1,290 | 1,290 | ||||||
Purchase of treasury stock | (77) | (77) | ||||||
Amortization of preferred stock series A issuance costs | (45) | (45) | ||||||
Preferred stock Series A dividend | (981) | (981) | ||||||
Ending Balance at Jun. 30, 2018 | 176,075 | 63 | 430,311 | (6,850) | (242,619) | (4,830) | ||
Net (loss) income | 3,104 | 3,104 | ||||||
Foreign currency translation adjustment | (130) | (130) | ||||||
Exercise of common stock options | 905 | 905 | ||||||
Stock-based compensation | 1,080 | 1,080 | ||||||
Purchase of treasury stock | (39) | (39) | ||||||
Amortization of preferred stock series A issuance costs | (46) | (46) | ||||||
Preferred stock Series A dividend | (173) | (173) | ||||||
Ending Balance at Sep. 30, 2018 | 180,776 | 63 | 432,077 | (6,980) | (239,515) | (4,869) | ||
Beginning Balance at Dec. 31, 2018 | 183,624 | 64 | 433,143 | (7,270) | (237,444) | (4,869) | ||
Net (loss) income | (9,087) | (9,087) | ||||||
Foreign currency translation adjustment | (393) | (393) | ||||||
Exercise of common stock options | 284 | 284 | ||||||
Equity instruments issued in connection with Paradigm Spine acquisition - net of fees | 60,730 | 11 | 60,719 | |||||
Stock-based compensation | 1,163 | 1,163 | ||||||
Purchase of treasury stock | (130) | (130) | ||||||
Amortization of preferred stock series A issuance costs | (46) | (46) | ||||||
Ending Balance at Mar. 31, 2019 | 236,145 | 75 | 495,263 | (7,663) | (246,531) | (4,999) | ||
Beginning Balance at Dec. 31, 2018 | 183,624 | 64 | 433,143 | (7,270) | (237,444) | (4,869) | ||
Net (loss) income | (13,195) | |||||||
Foreign currency translation adjustment | (1,120) | |||||||
Ending Balance at Sep. 30, 2019 | 233,491 | 75 | 497,518 | (8,390) | (250,639) | (5,073) | ||
Beginning Balance at Mar. 31, 2019 | 236,145 | 75 | 495,263 | (7,663) | (246,531) | (4,999) | ||
Net (loss) income | 744 | 744 | ||||||
Foreign currency translation adjustment | 395 | 395 | ||||||
Exercise of common stock options | 111 | 111 | ||||||
Stock-based compensation | 1,267 | 1,267 | ||||||
Purchase of treasury stock | (42) | (42) | ||||||
Amortization of preferred stock series A issuance costs | (45) | (45) | ||||||
Ending Balance at Jun. 30, 2019 | 238,575 | 75 | 496,596 | (7,268) | (245,787) | (5,041) | ||
Net (loss) income | (4,852) | (4,852) | ||||||
Foreign currency translation adjustment | (1,122) | (1,122) | ||||||
Stock-based compensation | 969 | 969 | ||||||
Purchase of treasury stock | (32) | (32) | ||||||
Amortization of preferred stock series A issuance costs | $ (47) | $ (47) | ||||||
Ending Balance at Sep. 30, 2019 | $ 233,491 | $ 75 | $ 497,518 | $ (8,390) | $ (250,639) | $ (5,073) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (13,195) | $ (3,321) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization expense | 11,413 | 10,794 |
Provision for bad debts and product returns | 1,050 | 845 |
Provision for inventory write-downs | 5,482 | 12,906 |
Amortization of deferred revenue | (3,772) | (3,652) |
Deferred income tax benefit | (4,229) | (1,214) |
Stock-based compensation | 3,399 | 3,650 |
Asset impairment and abandonments | 15 | 4,748 |
Cardiothoracic closure business divestiture contingency consideration | (3,000) | |
Gain on acquisition contingency | (1,590) | |
Paid in kind interest expense | 2,948 | |
Other | 1,069 | 728 |
Change in assets and liabilities: | ||
Accounts receivable | (4,278) | (6,587) |
Inventories | (4,904) | (5,843) |
Accounts payable | (12,608) | 826 |
Accrued expenses | 4,329 | (4,417) |
Deferred revenue | 2,000 | 2,000 |
Other operating assets and liabilities | 177 | 2,544 |
Net cash (used in) provided by operating activities | (12,709) | 11,007 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (10,882) | (7,106) |
Patent and acquired intangible asset costs | (1,786) | (2,798) |
Cardiothoracic closure business divestiture | 3,000 | |
Net cash used in investing activities | (112,360) | (27,904) |
Cash flows from financing activities: | ||
Proceeds from exercise of common stock options | 395 | 2,334 |
Proceeds from long-term obligations | 118,000 | 74,425 |
Payments of debt issuance costs | (729) | |
Payments on long-term obligations | (500) | (71,171) |
Other financing activities | (1,035) | |
Net cash provided by financing activities | 117,166 | 4,553 |
Effect of exchange rate changes on cash and cash equivalents | (96) | (15) |
Net decrease in cash and cash equivalents | (7,999) | (12,359) |
Cash and cash equivalents, beginning of period | 10,949 | 22,381 |
Cash and cash equivalents, end of period | 2,950 | 10,022 |
Supplemental cash flow disclosure: | ||
Cash paid for interest | 4,941 | 2,517 |
Income tax refunds, net of payments | 1,982 | (6,659) |
Non-cash acquisition of property, plant and equipment | 817 | 471 |
Increase in accrual for dividend payable | 2,120 | |
Non-cash common stock issuance | 60,730 | |
Zyga Technology Inc [Member] | ||
Cash flows from investing activities: | ||
Payments to acquire businesses | $ (21,000) | |
Paradigm Spine [Member] | ||
Cash flows from investing activities: | ||
Payments to acquire businesses | (99,692) | |
Supplemental cash flow disclosure: | ||
Non-cash acquisition of Paradigm Spine | $ 60,730 |
Operations and Organization
Operations and Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Operations and Organization | 1. Operations and Organization RTI Surgical Holdings, Inc. and Subsidiaries (defined as the “Company” for matters occurring after March 8, 2019) |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, which the Company considers necessary for a fair presentation of the results of operations for the periods shown. The condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a fair presentation of condensed consolidated financial position, results of operations, comprehensive loss and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, RTI Surgical, Inc. (defined as “Legacy RTI” for matters occurring after March 8, 2019, and as the “Company” for matters occurring before March 8, 2019), Paradigm Spine, LLC (“Paradigm”), Pioneer Surgical Technology, Inc. (“Pioneer Surgical”), Tutogen Medical, Inc. (“TMI”), and Zyga Technology, Inc. (“Zyga”). The condensed consolidated financial statements also include the accounts of RTI Donor Services, Inc. (“RTIDS”), which is a controlled entity. Prior to the completion of the acquisition of Paradigm, the financial statements were that of RTI Surgical Inc. and subsidiaries. Subsequently, RTI Surgical Holdings, Inc. and Subsidiaries is the successor reporting company. See Note 6 for further discussion. |
Recently Issued and Adopted Acc
Recently Issued and Adopted Accounting Standards | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently Issued and Adopted Accounting Standards | 3. Recently Issued and Adopted Accounting Standards In May 2019, the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASU”) Financial Instruments — Credit Losses (Topic 326) In April 2019, the FASB issued ASU No. 2019-04 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities; Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses In February 2016, the FASB ASU Leases (Topic 842) “Leases (Topic 840).” Effective January 1, 2019, the Company adopted the new lease accounting standard using the optional transition method which allowed us to continue to apply the guidance under the lease standard in effect at the time in the comparative periods presented. In addition, the Company elected the package of practical expedients, which allowed us to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company has also elected the practical expedient allowing us to not separate the lease and non-lease components for all classes of underlying assets. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities of $3,164 and $3,155, respectively, as of January 1, 2019 with no impact on accumulated deficit. Financial position for reporting periods beginning on or after January 1, 2019, are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous guidance. Note disclosures required in Topic 842 are reported in Note 4, Leases. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 4 . Leases The Company’s leases are classified as operating leases and includes office space, automobiles, and copiers. The Company does not have any finance leases and the Company’s operating leases do not have any residual value guarantees, restrictions or covenants. The Company does not have any leases that have not yet commenced as of September 30, 2019. The majority of our leases have remaining lease terms of 1 to 14 years, some of which include options to extend or terminate the leases. The option to extend is only included in the lease term if the Company is reasonably certain of exercising that option. Operating lease ROU assets are presented within other assets-net on the condensed consolidated balance sheet. The current portion of operating lease liabilities are presented within accrued expenses, and the non-current portion of operating lease liabilities are presented within other long-term liabilities on the condensed consolidated balance sheet. A subset of the Company’s automobile and copier leases contain variable payments. The variable lease payments for such automobile leases are based on actual mileage incurred at the standard contractual rate. The variable lease payments for such copier leases are based on actual copies incurred at the standard contractual rate. The variable lease costs for all leases are immaterial. The components of operating lease expense were as follows: For the Three Months Ended For the Nine Months Ended September 30, 2019 September 30, 2019 Operating lease cost $ 437 $ 1,221 Short-term operating lease cost — 36 Total operating lease cost $ 437 $ 1,257 Supplemental cash flow information related to operating leases was as follows: For the Three Months Ended For the Nine Months Ended September 30, 2019 September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 432 $ 1,123 ROU assets obtained in exchange for lease obligations — 34 Supplemental balance sheet information related to operating leases was as follows: Balance at Balance Sheet Classification September 30, 2019 Assets: Right-of-use assets Other assets - net $ 3,110 Liabilities: Current Accrued expenses $ 1,376 Noncurrent Other long-term liabilities 1,815 Total operating lease liabilities $ 3,191 As of September 30, 2019, the weighted-average remaining lease term was 4.7 years. The Company’s lease agreements do not provide a readily determinable implicit rate nor is it available to the Company from its lessors. Instead, the Company estimates its incremental borrowing rate based on information available at lease commencement in order to discount lease payments to present value. The weighted-average discount rate of the Company’s operating leases was 4.7%, as of September 30, 2019. As of September 30, 2019, maturities of operating lease liabilities were as follows: Balance at Maturity of Operating Lease Liabilities September 30, 2019 2019 (remaining) $ 434 2020 1,351 2021 559 2022 221 2023 160 2024 and beyond 875 Total future minimum lease payments 3,600 Less imputed interest (409 ) Total $ 3,191 As previously disclosed in our 2018 Annual Report on Form 10-K, which followed the lease accounting prior to adoption of ASC 842, future commitments relating to operating leases for the five years and period thereafter as of December 31, 2018 were as follows: Balance at Maturity of Operating Lease Liabilities December 31, 2018 2019 $ 1,374 2020 806 2021 276 2022 162 2023 166 2024 and beyond 882 Total future minimum lease payments $ 3,666 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | 5. Revenue from Contracts with Customers The Company operates in one reportable segment composed of four lines of business. The reporting of the Company’s lines of business are composed primarily of four franchises: spine; sports; o riginal equipment manufacturer (“OEM”) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Revenues: Spine $ 23,661 $ 20,741 $ 70,337 $ 58,938 Sports 12,704 12,271 40,507 39,896 OEM 32,341 30,092 93,815 91,382 International 7,423 5,960 23,518 19,423 Total revenues from contracts with customers $ 76,129 $ 69,064 $ 228,177 $ 209,639 The following table presents revenues recognized at a point in time and over time for the three and nine months ended September 30, 2019 and 2018: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Revenue recognized at a point in time $ 57,586 $ 56,401 $ 176,509 $ 178,098 Revenue recognized over time 18,543 12,663 51,668 31,541 Total revenues from contracts with customers $ 76,129 $ 69,064 $ 228,177 $ 209,639 The Company’s performance obligations consist mainly of transferring control of implants identified in the contracts. Some of the Company’s contracts offer assurance-type warranties in connection with the sale of a product to a customer. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation and are not material to the condensed consolidated financial statements. The opening and closing balances of the Company’s accounts receivable, contract asset and current and long-term contract liability for the nine months ended September 30, 2019 and 2018 are as follows: Contract Contract Liability Accounts Liability (Long- Receivable (Current) Term) Opening Balance, January 1, 2019 $ 48,351 $ 5,425 $ 744 Closing Balance, September 30, 2019 56,556 3,311 1,134 Increase/(decrease) 8,205 (2,114 ) 390 Contract Contract Liability Accounts Liability (Long- Receivable (Current) Term) Opening Balance, January 1, 2018 $ 38,324 $ 5,978 $ 3,741 Closing Balance, September 30, 2018 44,141 5,892 1,968 Increase/(decrease) 5,817 (86 ) (1,773 ) Contract liabilities consist primarily of the return allowance described above, and of deferred revenue arising from upfront and annual exclusivity fees. The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the Company’s performance of the Company’s contractual obligations over time. The Company recognizes sales commissions as incurred because the amortization period is less than one year. The Company does not incur other incremental costs relating to obtaining a contract with a customer, and therefore, does not have contract assets, or impairment losses associated therewith. Revenue recognized for the nine months ended September 30, 2019 and 2018, from amounts included in contract liabilities at the beginning of the period were $3,771 and $3,651, respectively. |
Acquisition of Paradigm Spine,
Acquisition of Paradigm Spine, LLC | 9 Months Ended |
Sep. 30, 2019 | |
Paradigm Spine [Member] | |
Acquisition | 6. Acquisition of Paradigm Spine, LLC On March 8, 2019, pursuant to the Master Transaction Agreement (the “Master Transaction Agreement”), dated as of November 1, 2018, by and among Legacy RTI, PS Spine Holdco, LLC, a Delaware limited liability company (“PS Spine”), the Company, and Bears Merger Sub, Inc., a Delaware corporation and direct wholly owned subsidiary of the Company (“Merger Sub”), the Company acquired all of the outstanding equity interests of Paradigm, through a transaction in which: (i) PS Spine contributed all of the issued and outstanding equity interests in Paradigm to the Company (the “Contribution”); (ii) Merger Sub merged with and into Legacy RTI (the “Merger”), with Legacy RTI surviving as a wholly owned direct subsidiary of the Company; and (iii) the Company was renamed “RTI Surgical Holdings, Inc.” (collectively, the “Transaction”). Legacy RTI retained its existing name “RTI Surgical, Inc.” Pursuant to the Master Transaction Agreement: (i) each share of common stock, par value $0.001 per share, of Legacy RTI issued and outstanding immediately prior to the Transaction (other than shares held by Legacy RTI as treasury shares or by the Company or Merger Sub immediately prior to the Transaction, which were automatically cancelled and ceased to exist) was converted automatically into one fully paid and non-assessable share of Company common stock , par value $0.001 per share; (ii) each share of Series A convertible preferred stock, par value $0.001 per share, of Legacy RTI issued and outstanding immediately prior to the Transaction (other than shares held by Legacy RTI as treasury shares or by the Company or Merger Sub immediately prior to the Transaction, which were automatically cancelled and ceased to exist) was converted automatically into one fully paid and non-assessable share of Series A convertible preferred stock, par value $0.001 per share, of the Company; and (iii) each stock option and restricted stock award granted by Legacy RTI was converted into a stock option or restricted stock award, as applicable, of the Company with respect to an equivalent number of shares of the Company common stock on the same terms and conditions as were applicable prior to the closing. The consideration for the Contribution was $100,000 (the “Cash Consideration Amount”) in cash and 10,729,614 shares of Company common stock (the “Stock Consideration Amount”). The Cash Consideration Amount was adjusted by Paradigm’s working capital of $7,000. In addition to the Cash Consideration Amount and the Stock Consideration Amount, the Company may be required to make further cash payments or issue additional shares of Company common stock to PS Spine in an amount up to $50,000 of shares of Company common stock to be valued based upon the Legacy RTI Price and an additional $100,000 of cash and/or Company common stock to be valued at the time of issuance, in each case, if certain revenue targets are achieved between closing, March 8, 2019, and December 31, 2022. The Company estimates a contingent liability related to the revenue based earnout of $94,976 utilizing a Monte-Carlo simulation model. A Monte-Carlo simulation is an analytical method used to estimate fair value by performing a large number of simulations or trial runs and thereby determining a value based on the possible outcomes. Accounted for as a liability to be revalued at each reporting period, the preliminary f The Company has accounted for the acquisition of Paradigm under Accounting Standards Codification (“ASC”) 805, Business Combinations The purchase price was financed as follows: (In thousands) Cash proceeds from second lien credit agreement $ 100,000 Fair market value of securities issued 60,730 Fair market value of contingent earnout 60,323 Total purchase price $ 221,053 The preliminary valuation of the acquired assets and liabilities is not yet complete, and as such, the Company has not yet finalized its allocation of the purchase price for the acquisition. The table below represents the preliminary allocation of the total consideration to Paradigm’s tangible assets and liabilities based on management’s preliminary estimate of their respective fair values as of March 8, 2019. During the three months ended September 30, 2019, the Company made the following changes to the fair values of acquired assets and liabilities as follows: Balance at September 30, 2019 June 30, 2019 Change (In thousands) Cash $ 308 $ 79 $ 229 Accounts receivable 5,220 5,220 - Inventories 43,084 43,084 - Other current assets 1,693 1,693 - Property, plant and equipment 379 379 - Current liabilities (6,380 ) (6,380 ) - Net tangible assets acquired 44,304 44,075 229 Goodwill 176,749 211,631 (34,882 ) Total net assets acquired $ 221,053 $ 255,706 $ (34,653 ) As of March 8, 2019, the inventory fair value was composed of current inventory of $19,703 and non-current inventory of $23,381. Total net assets acquired as of March 8, 2019, are all part of the Company’s only operating segment. Fair values are based on management’s estimates and assumptions including variations of the income approach, the cost approach and the market approach. The Company believes that the acquisition of Paradigm, a spine focused business, offers the potential for substantial strategic and financial benefits. The transaction further advances the Company’s strategic transformation focused on reducing complexity, driving operational excellence and accelerating growth. The Company believes the acquisition will enhance stockholder value through, among other things, enabling the Company to capitalize on the following strategic advantages and opportunities: • Paradigm will strengthen the Company’s spine portfolio with the addition of the coflex® Interlaminar Stabilization® device. Coflex is a differentiated and minimally invasive motion preserving stabilization implant that is FDA PMA-approved for the treatment of moderate to severe lumbar spinal stenosis (“LSS”) in conjunction with decompression. • Coflex allows the Company to provide surgeons who treat patients with moderate to severe LSS with a PMA-approved device supported by more than 12 years of clinical data. These potential benefits resulted in the Company paying a premium for Paradigm resulting in the preliminary recognition of $176,749 of goodwill assigned to the Company’s only operating segment and reporting unit. The amount of Paradigm’s revenues and net loss since the March 8, 2019, acquisition date, included in the Company’s condensed consolidated statement of comprehensive (loss) gain for the nine months ended September 30, 2019, excluding acquisition and integration related costs of approximately $11,394, are $20,304 and $99, respectively. The following unaudited pro forma information shows the results of the Paradigm’s operations as though the acquisition had occurred as of the beginning of the prior comparable period, January 1, 2018, (in thousands): For the Nine Months Ended September 30, 2018 Revenues $ 30,532 Net loss applicable to common shares (30,604 ) Net loss applicable to common shares excluding acquisition and integration costs (30,604 ) The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the acquisition taken place as of the beginning of the periods presented, or the results that may occur in the future. |
Acquisition of Zyga Technology,
Acquisition of Zyga Technology, Inc | 9 Months Ended |
Sep. 30, 2019 | |
Zyga Technology Inc [Member] | |
Acquisition | 7. Acquisition of Zyga Technology, Inc. On January 4, 2018, the Company acquired Zyga Technology, Inc. (“Zyga”), a spine-focused medical device company that develops and produces innovative minimally invasive devices to treat underserved conditions of the lumbar spine. Zyga’s primary product is the SImmetry® Sacroiliac Joint Fusion System. Under the terms of the merger agreement dated January 4, 2018, the Company acquired Zyga for $21,000 in consideration paid at closing (consisting of borrowings of $18,000 on the Company’s revolving credit facility and $3,000 cash on hand), $1,000 contingent upon the successful achievement of a clinical milestone, and a revenue based earnout consideration of up to $35,000. Based on a probability weighted model, the Company estimates a contingent liability related to the clinical milestone and revenue based earnout of $4,986. Acquisition related costs were approximately $1,430, of which approximately $630 was incurred in 2017 and $800 was incurred for the three months ended March 31, 2018 and is reflected separately in the accompanying condensed consolidated statements of comprehensive (loss) gain. As of September 30, 2019, there was a $1,590 reduction in the contingent liability estimate of the Zyga acquisition revenue earnout, as the probability weighted model has been updated based on the current updated forecast for the performance of the Zyga product portfolio. The Company has accounted for the acquisition of Zyga under ASC 805, Business Combinations The purchase price was financed as follows: (In thousands) Cash proceeds from revolving credit facility $ 18,000 Cash from RTI Surgical 3,000 Total purchase price $ 21,000 In the fourth quarter of 2018, the Company completed its valuation of the purchase price allocation. The table below represents the final allocation of the total consideration to Zyga’s tangible and intangible assets and liabilities fair values as of January 4, 2018. (In thousands) Inventories $ 1,099 Accounts receivable 573 Other current assets 53 Property, plant and equipment 151 Other assets 26 Deferred tax assets 4,715 Current liabilities (947 ) Acquisition contingencies (4,986 ) Net tangible assets acquired 684 Other intangible assets 6,760 Goodwill 13,556 Total net assets acquired $ 21,000 Total net assets acquired as of January 4, 2018, are all part of the Company’s only operating segment and reporting unit. Fair values are based on management’s estimates and assumptions including variations of the income approach, the cost approach and the market approach. Other intangible assets include patents of $6,500 with a useful life of 13 years, trademarks of $80 with a useful life of 1 year and selling and marketing relationships of $180 with a useful life of 7 years. The Company believes that the acquisition of Zyga has offered and continues to offer the potential for substantial strategic and financial benefits. The transaction further advances our strategic transformation focused on reducing complexity, driving operational excellence and accelerating growth. The Company believes the acquisition will enhance stockholder value through, among other things, enabling the Company to capitalize on the following strategic advantages and opportunities: • Zyga’s innovative minimally invasive treatment should accentuate our spine portfolio and opens significant opportunities to accelerate our Spine-focused expansion strategy. • Zyga should leverage the core competencies of our Spine franchise by pursuing niche differentiated products, to gain scale and customer retention and support portfolio pull-through. These potential benefits resulted in the Company paying a premium for Zyga resulting in the recognition of $13,556 of goodwill assigned to the Company’s only operating segment and reporting unit. For tax purposes, none of the goodwill is deductible. The following unaudited pro forma information shows the results of the Zyga’s operations as though the acquisition had occurred as of the beginning of the prior comparable period, January 1, 2018, (in thousands): For the Nine Months Ended September 30, 2018 Revenues $ 3,595 Net loss applicable to common shares (2,295 ) The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the acquisition taken place as of the beginning of the periods presented, or the results that may occur in the future. These amounts exclude costs incurred which are directly attributable to the acquisition, and which do not have a continuing impact on the combined companies’ operating results. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 8. Stock-Based Compensation The Company’s policy is to grant stock options at an exercise price equal to 100% of the market value of a share of common stock at closing on the date of the grant. The Company’s stock options generally have five to ten-year contractual terms and vest over a one to five-year period from the date of grant. The Company’s policy is to grant restricted stock awards at a fair value equal to 100% of the market value of a share of common stock at closing on the date of the grant. The Company’s restricted stock awards generally vest over one to three-year periods. 2018 Incentive Compensation Plan – On April 30, 2018, the Company’s stockholders approved and adopted the 2018 Incentive Compensation Plan (the “2018 Plan”). The 2018 Plan provides for the grant of incentive and nonqualified stock options and restricted stock to key employees, including officers and directors of the Company and consultants and advisors. The 2018 Plan allows for up to 5,726,035 shares of common stock to be issued with respect to awards granted. Stock Options As of September 30, 2019, there was $1,440 of total unrecognized stock-based compensation related to nonvested stock options. The expense related to these stock options is expected to be recognized over a weighted-average period of 2.99 years. The following table summarizes information about stock options outstanding, exercisable and available for grant as of September 30, 2019: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding at January 1, 2019 4,295,744 $ 3.76 Granted 395,900 4.68 Exercised (118,500 ) 3.34 Forfeited or expired (197,620 ) 4.32 Outstanding at September 30, 2019 4,375,524 $ 3.83 5.37 $ 15 Vested or expected to vest at September 30, 2019 4,154,261 $ 3.79 5.19 $ 15 Exercisable at September 30, 2019 3,163,099 $ 3.56 4.20 $ 15 Available for grant at September 30, 2019 4,186,650 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value of stock options for which the fair market value of the underlying common stock exceeded the respective stock option exercise price. Estimated forfeitures are based on the Company’s historical forfeiture activity. Compensation expense recognized for all option grants is net of estimated forfeitures and is recognized over the awards’ respective requisite service periods. Other information concerning stock options are as follows: For the Nine Months Ended September 30, 2019 2018 Weighted average fair value of stock options granted $ 1.97 $ 2.05 Aggregate intrinsic value of stock options exercised 161 344 The aggregate intrinsic value of stock options exercised in a period represents the pre-tax cumulative difference, for the stock options exercised during the period, between the fair market value of the underlying common stock and the stock option exercise prices. Restricted Stock Awards As of September 30, 2019, there was $2,991 of total unrecognized stock-based compensation related to unvested restricted stock awards. That expense is expected to be recognized on a straight-line basis over a weighted-average period of 1.63 years. The following table summarizes information about unvested restricted stock awards as of September 30, 2019: Weighted Average Number of Grant Date Shares Fair Value Unvested at January 1, 2019 1,075,215 $ 4.29 Granted 667,205 4.80 Vested (458,646 ) 4.16 Forfeited (81,169 ) 4.86 Unvested at September 30, 2019 1,202,605 $ 4.61 Restricted Stock Units As of September 30, 2019, there was $903 of total unrecognized stock-based compensation related to unvested restricted stock units. That expense is expected to be recognized on a straight-line basis over a weighted-average period of 2.25 years. The following table summarizes information about unvested restricted stock units as of September 30, 2019: Weighted Average Number of Grant Date Shares Fair Value Unvested at January 1, 2019 — $ — Granted 226,352 7.41 Vested — — Forfeited (41,770 ) 7.41 Unvested at September 30, 2019 184,582 $ 7.41 For the three and nine months ended September 30, 2019 and 2018, the Company recognized stock-based compensation as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Stock-based compensation: Costs of processing and distribution $ 36 $ 33 $ 108 $ 99 Marketing, general and administrative 918 1,032 3,246 3,506 Research and development 15 15 45 45 Total $ 969 $ 1,080 $ 3,399 $ 3,650 |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | 9. Net Income Per Common Share A reconciliation of the number of shares of common stock used in the calculation of basic and diluted net income per common share is presented below: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Basic shares 75,194,036 63,495,952 72,007,860 63,517,958 Effect of dilutive securities: Stock options — 675,028 — — Preferred stock Series A — 15,113,335 — — Diluted shares 75,194,036 79,284,315 72,007,860 63,517,958 For the three months ended September 30, 2019 and 2018, approximately 2,315,856 and 1,474,375, respectively, and for the nine months ended September 30, 2019 and 2018, approximately 1,653,991 and 1,456,829, respectively, of issued stock options were not included in the computation of diluted net loss per common share because they were anti-dilutive because their exercise price exceeded the market price. For the three months and nine ended September 30, 2019, options to purchase 327,085 and 667,015, respectively, shares of common stock were not included in the computation of diluted loss per share because dilutive shares are not factored into this calculation when net loss is reported. For the nine months ended September 30, 2018, options to purchase 608,390 shares of common stock were not included in the computation of diluted loss per share because dilutive shares are not factored into this calculation when a net loss is reported. For the three and nine months ended September 30, 2019 nine 2018, |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 10. Inventories Inventories by stage of completion are as follows: September 30, December 31, 2019 2018 Unprocessed tissue, raw materials and supplies $ 27,170 $ 24,211 Tissue and work in process 34,186 31,796 Implantable tissue and finished goods 87,902 51,464 Total 149,258 107,471 Less current portion 130,913 107,471 Long-term portion $ 18,345 $ - For the three months ended September 30, 2019 and 2018, the Company had inventory write-downs of $2,208 and $2041, respectively, and for the nine months ended September 30, 2019 and 2018, the Company had inventory write-downs of $5,482 and $12,906, respectively, relating primarily to product obsolescence. As of September 30, 2019, the long-term portion of inventory relates to finished goods. Included in the three months ended March 31, 2018, are $1,023 of product obsolescence which was due to the rationalization of our international distribution infrastructure. Included in the three months ended June 30, 2018, was $6,559 of inventory write-off which was due to the suspension of the map3® implant. |
Prepaid and Other Current Asset
Prepaid and Other Current Assets | 9 Months Ended |
Sep. 30, 2019 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Prepaid and Other Current Assets | 11. Prepaid and Other Current Assets Prepaid and Other Current Assets are as follows: September 30, December 31, 2019 2018 Income tax receivable $ 3,222 $ 3,920 Prepaid expenses 5,016 4,127 Other 393 744 $ 8,631 $ 8,791 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | 12. Property, Plant and Equipment Property, plant and equipment are as follows: September 30, December 31, 2019 2018 Land $ 1,982 $ 2,020 Buildings and improvements 57,906 58,093 Processing equipment 46,046 42,599 Surgical instruments 27,164 24,070 Office equipment, furniture and fixtures 1,994 1,877 Computer equipment and software 19,146 18,873 Construction in process 12,757 8,934 166,995 156,466 Less accumulated depreciation (85,789 ) (78,512 ) $ 81,206 $ 77,954 For the three months ended September 30, 2019 and 2018, the Company had depreciation expense in connection with property, plant and equipment of $2,898 and $2,577, respectively, and for the nine months ended September 30, 2019 and 2018, the Company had depreciation expense in connection with property, plant and equipment of $8,437 and $7,824, respectively. For the three months ended June 30, 2018, the Company had $1,797 of asset impairment and abandonment charges relating to the suspension of the map3® implant. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | 13. Goodwill Goodwill acquired during the nine months ended September 30, 2019, includes the excess of the Paradigm purchase price over the sum of the amounts assigned to assets acquired less liabilities assumed. September 30, December 31, 2019 2018 Balance at January 1 $ 59,798 $ 46,242 Goodwill acquired related to Zyga acquisition — 13,556 Goodwill acquired related to Paradigm acquisition 176,749 — Balance at end of period $ 236,547 $ 59,798 |
Other Intangible Assets
Other Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | 14. Other intangible assets are as follows: September 30, 2019 December 31, 2018 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Patents $ 16,376 $ 5,014 $ 11,362 $ 16,092 $ 4,194 $ 11,898 Acquired licensing rights 7,452 2,076 5,376 11,852 6,468 5,384 Marketing and procurement and other intangible assets 20,181 12,574 7,607 20,356 11,279 9,077 Total $ 44,009 $ 19,664 $ 24,345 $ 48,300 $ 21,941 $ 26,359 For the three months ended September 30, 2019 and 2018, the Company had amortization expense of other intangible assets of $1,024 and $1,149, respectively , and for . For the three months ended June 30, 2018, the Company had $2,718 of asset impairment and abandonment charges map3® implant. At September 30, 2019, management’s estimates of future amortization expense for the next five years are as follows: Amortization Expense 2019 (remaining) $ 1,050 2020 4,100 2021 4,100 2022 4,100 2023 1,800 2024 1,800 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Accrued Expenses | 15. Accrued Expenses Accrued expenses are as follows: September 30, December 31, 2019 2018 Accrued compensation $ 4,641 $ 8,678 Accrued severance and restructuring costs 518 931 Accrued distributor commissions 4,019 3,907 Accrued donor recovery fees 10,217 4,088 Accrued leases 1,376 - Accrued acquisition and integration expenses 2,725 - Other 7,571 7,079 $ 31,067 $ 24,683 |
Short and Long-Term Obligations
Short and Long-Term Obligations | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Short and Long-Term Obligations | 16. Short and Long-Term Obligations Short and long-term obligations are as follows: September 30, December 31, 2019 2018 Ares Term loan $ 102,948 $ — JPM facility 67,500 50,000 Less unamortized debt issuance costs (1,311 ) (927 ) Total 169,137 49,073 Less current portion — — Long-term portion $ 169,137 $ 49,073 On June 5, 2018, the Company, along with its wholly-owned subsidiary, Pioneer Surgical, entered into a Credit Agreement (the “2018 Credit Agreement”), as borrowers, with JP Morgan Chase Bank, N.A., as lender (together with the various financial institutions as in the future may become parties thereto, the “JPM Lenders”) and as administrative agent for the JPM Lenders. The 2018 Credit Agreement provides for a revolving credit facility in the aggregate principal amount of up to $100,000 (the “JPM Facility”) (subsequently reduced to $75,000, as described below). The Company and Pioneer Surgical will be able to, at their option, and subject to customary conditions and JPM Lender approval, request an increase to the JPM Facility in an amount not to exceed $50,000. The JPM Facility is guaranteed by the Company’s domestic subsidiaries and is secured by: (i) substantially all of the assets of the Company and Pioneer Surgical; (ii) substantially all of the assets of each of the Company’s domestic subsidiaries; and (iii) 65% of the stock of the Company’s foreign subsidiaries. The initial borrowings made under the 2018 Credit Agreement will bear interest at a rate per annum equal to the monthly REVLIBOR30 Rate (“CBFR Loans”) plus an adjustable margin of up to 2.00% (the “CBFR Rate”). The Company may elect to convert the interest rate for the initial borrowings to a rate per annum equal to the adjusted LIBO Rate (“Eurodollar Loans”) plus an adjustable margin of up to 2.00% (the “JPM Eurodollar Rate”). For all subsequent borrowings, the Company may elect to apply either the CBFR Rate or JPM Eurodollar Rate. The applicable margin is subject to adjustment after the end of each fiscal quarter, based upon the Company’s average quarterly availability. The maturity date of the JPM Facility is June 5, 2023. The Company may make optional prepayments on the JPM Facility without penalty. The Company paid certain customary closing costs and bank fees upon entering into the 2018 Credit Agreement. The Company is subject to certain affirmative and negative covenants, including (but not limited to), covenants limiting the Company’s ability to: incur certain additional indebtedness; create certain liens; enter into sale and leaseback transactions; and consolidate or merge with, or convey, transfer or lease all or substantially all of its assets to another person. The Company is required to maintain a minimum fixed charge coverage ratio of at least 1.00:1.00 (the “JPM Required Minimum Fixed Charge Coverage Ratio”) during either of the following periods (each, a “JPM Covenant Testing Period”): (i) a period beginning on a date that a default has occurred and is continuing under the loan documents entered into by the Company in conjunction with the 2018 Credit Agreement through the first date on which no default has occurred and is continuing; or (ii) a period beginning on a date that availability under the JPM Facility is less than the specified covenant testing threshold and continuing until availability under the JPM Facility is greater than or equal to the specified covenant testing threshold for thirty (30) consecutive days. The JPM Required Minimum Fixed Charge Coverage Ratio is measured on the last day of each calendar month during the JPM Covenant Testing Period (each a “JPM Calculation Date”), and is calculated using the minimum fixed charge coverage ratio for the twelve (12) consecutive months ending on each JPM Calculation Date. The amounts owed under the 2018 Credit Agreement may be accelerated upon the occurrence of certain events of default customary for facilities for similarly rated borrowers. First Amendment to Credit Agreement and Joinder Agreement On March 8, 2019, the Company entered into a First Amendment to Credit Agreement and Joinder Agreement dated as of March 8, 2019 (the “2019 First Amendment”), among the Company, Legacy RTI, as a borrower, Pioneer Surgical, as a borrower, the other loan parties thereto as guarantors, JP Morgan Chase Bank, N.A., as lender (together with the various financial institutions as in the future may become parties thereto) and as administrative agent for the JPM Lenders. The 2019 First Amendment amended the 2018 Credit Agreement by: (i) reducing the aggregate revolving commitments available to Legacy RTI and Pioneer Surgical from $100,000 to $75,000; (ii) joining the Company and Paradigm, and its domestic subsidiaries as guarantors and loan parties to the 2018 Credit Agreement; (iii) permitting the Ares Term Loan (as defined below); and (iv) making certain other changes to the 2018 Credit Agreement consistent with the foregoing including pro rata reductions to certain thresholds that were based on the aggregate commitments under the 2018 Credit Agreement. At September 30, 2019, the interest rate for the JPM Facility was 4.10%. As of September 30, 2019, there was $67,500 outstanding on the JPM Facility and total remaining available credit on the JPM Facility was $7,500. The Company’s ability to access the JPM Facility is subject to and can be limited by the Company’s compliance with the Company’s financial and other covenants. The Company was in compliance with the financial covenants related to the JPM Facility as of September 30, 2019. Second Lien Credit Agreement and Term Loan On March 8, 2019, Legacy RTI entered into a Second Lien Credit Agreement dated as of March 8, 2019 (the “2019 Credit Agreement”), among Legacy RTI, as a borrower, the other loan parties thereto as guarantors (together with Legacy RTI, the “Ares Loan Parties”), Ares Capital Corporation, as lender (together with the various financial institutions as in the future may become parties thereto, the “Ares Lenders”) and as administrative agent for the Ares Lenders. The 2019 Credit Agreement provides for a term loan in the principal amount of up to $100,000 (the “Ares Term Loan”). The Ares Term Loan was advanced in a single borrowing on March 8, 2019. The Ares Term Loan is guaranteed by the Company and each of the Company’s domestic subsidiaries and is secured by: (i) substantially all of the assets of Legacy RTI; (ii) substantially all of the assets of the Company; (iii) substantially all of the assets of the Company’s domestic subsidiaries; and (iv) 65% of the stock of the Company’s foreign subsidiaries. The Ares Term Loan will bear interest at a rate per annum equal to, at the option of Legacy RTI: (i) the monthly Base Rate plus an adjustable margin of up to 7.50% (the “Base Rate”); or (ii) the LIBOR plus an adjustable margin of up to 8.50% (the “Ares Eurodollar Rate”). Subject to customary notices, Legacy RTI may elect to convert the Ares Term Loan from Base Rate to Ares Eurodollar Rate or from Ares Eurodollar Rate to Base Rate. The applicable margin is subject to adjustment after the end of each fiscal quarter, based upon the Ares Loan Parties’ total net leverage ratio. At any time during the period commencing on March 8, 2019 and ending on March 8, 2021, if the Ares Loan Parties’ total net leverage ratio is greater than 4.50:1.00, Legacy RTI shall have the option (the “PIK Option”) to elect to pay 50% of the interest that will accrue in the subsequent quarterly period in kind by capitalizing it and adding such amount to the principal balance of the Ares Term Loan. If Legacy RTI exercises the PIK Option, the adjustable margin applicable to the Ares Term Loan shall be increased by 0.75%. The maturity date of the Ares Term Loan is December 5, 2023. Legacy RTI may make optional prepayments on the Ares Term Loan, provided that any such optional prepayments made on or prior to March 8, 2022, shall be subject to a make whole premium or a prepayment price, as the case may be. Legacy RTI is required to make mandatory prepayments of the Ares Term Loan based on excess cash flow and the Ares Loan Parties’ total net leverage ratio, upon the incurrence of certain indebtedness not otherwise permitted under the 2019 Credit Agreement, upon consummation of certain dispositions, and upon the receipt of certain proceeds of casualty events. Legacy RTI was required to pay certain customary closing costs and bank fees upon entering into the 2019 Credit Agreement. Legacy RTI is subject to certain affirmative and negative covenants, including (but not limited to), covenants limiting Legacy RTI’s ability to: incur certain additional indebtedness; create certain liens; enter into sale and leaseback transactions; and consolidate or merge with, or convey, transfer or lease all or substantially all of its assets to another person. During any period beginning on a date that either: (i) a default has occurred and is continuing under the loan documents entered into by Legacy RTI in conjunction with the Credit Agreement (the “Ares Loan Documents”); or (ii) availability under the Ares Term Loan is less than the specified covenant testing threshold, and continuing until either (a) no default has occurred and is continuing under the Ares Loan Documents or (b) availability under the Ares Term Loan is greater than or equal to the specified covenant testing threshold for thirty (30) consecutive days, respectively, (the “Ares Covenant Testing Period”) Legacy RTI is required to maintain a minimum fixed charge coverage ratio of at least 0.91:1.00 (the “Ares Required Minimum Fixed Charge Coverage Ratio”). The Ares Required Minimum Fixed Charge Coverage Ratio is measured on the last day of each calendar month during the Ares Covenant Testing Period (each a “Ares Calculation Date”), and is calculated using the minimum fixed charge coverage ratio for the twelve (12) consecutive months ending on each Ares Calculation Date. The Ares Loan Parties are required to maintain an initial total net leverage ratio of 9.00:1.00, which ratio steps down each fiscal quarter of Legacy RTI resulting in a requirement that the Ares Loan Parties maintain a total net leverage ratio of 3.50:1.00 for the fiscal quarter ending June 30, 2021, and each fiscal quarter ending thereafter. The amounts owed under the 2019 Credit Agreement may be accelerated upon the occurrence of certain events of default customary for facilities for similarly rated borrowers. At September 30, 2019, the interest rate for the Ares Term Loan was 10.79%. The Company was in compliance with the financial covenants related to the Ares Term Loan as of September 30, 2019. For the nine months ended September 30, 2019 and 2018, i nterest expense associated with the amortization of debt issuance costs was As of September 30, 2019, the Company had approximately $2,950 of cash and cash equivalents and $7,500 of availability under its revolver agreement. For the nine-month period ended September 30, 2019, the Company used approximately $12,709 of cash in its operations. To maintain adequate available liquidity and execute on the Company’s current business plan, which includes the integration of recent acquisitions, the Company intends to utilize cash flow from operations to fund business expenses. In addition, the Company intends to manage the timing and payment of variable expenditures and utilize available working capital. As of November 7, 2019, the Company believes that its working capital, together with available borrowings under the revolving credit facility will be adequate to fund ongoing operations for the next twelve months. The Company’s debt agreements contain a leverage to EBITDA covenant, which as of September 30, 2019, required the Company to maintain a 6:1 leverage to trailing twelve-month adjusted EBITDA ratio. The debt agreement successively reduces the covenant ratio to 5:1, 4.75:1, 4.5:1, and 4.25:1, over each of the next four quarters. The Company’s leverage ratio as of September 30, 2019 is approximately 5.0:1. If the Company is unable to execute on its acquisition integration plans or achieve its projected growth and cash flow targets, its available liquidity could be further limited, and its operations may lead to defaults under the borrowing agreements. |
Other long-term liabilities
Other long-term liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Other long-term liabilities | 17. Other long-term liabilities Other long-term liabilities are as follows: September 30, December 31, 2019 2018 Acquisition contingencies $ 63,719 $ 4,986 Other 2,271 633 $ 65,990 $ 5,619 Acquisition contingencies represent the Company’s fair value estimate of the Zyga acquisition clinical and revenue |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 18. Income Taxes The Company expects its deferred tax assets of $20,967, net of the valuation allowance at September 30, 2019 of $3,082, to be realized through the generation of future taxable income and the reversal of existing taxable temporary differences. The Company evaluates the need for deferred tax asset valuation allowances based on a more likely than not standard. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and negative evidence. It is difficult to conclude a valuation allowance is not required when there is significant objective and verifiable negative evidence, such as cumulative losses in recent years. The Company utilizes a rolling three-years of actual results as the primary measure of cumulative income or losses in recent years. On a rolling three-years, the Company’s consolidated U.S. operations are in a cumulative income position. However, one U.S. entity is in a three-year cumulative loss position. The Company has established a valuation allowance on this entity’s separate state deferred tax assets. The Company’s foreign operations are in a three-year cumulative loss position. Future taxable income exclusive of reversing temporary differences and carryforwards is one source of taxable income that may be available under the tax law to realize a tax benefit for deductible temporary differences and carryforwards. Beginning in 2017, the Company began a restructuring plan, which was finalized in 2018. The efforts under this plan have led the Company to achieve operational improvements and a reduction in complexities which has contributed to current year and projected future earnings within its foreign subsidiary. The Company considers the current year and projected future earnings to be objectively verifiable evidence which will allow the Company to fully utilize its foreign deferred tax assets. The Company believes this positive evidence outweighs the negative evidence of its foreign subsidiaries’ cumulative three-year loss position. As a result, no valuation allowances have been established against its foreign subsidiaries’ deferred tax assets. The Company will continue to regularly assess the realizability of its deferred tax assets. Changes in historical earnings performance and future earnings projections, among other factors, may cause the Company to adjust its valuation allowance, which would impact the Company’s income tax expense in the period the Company determines that these factors have changed. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Preferred Stock | 19. Preferred Stock On June 12, 2013, the Company and WSHP Biologics Holdings, LLC, an affiliate of Water Street Healthcare Partners, a leading healthcare-focused private equity firm (“Water Street”), entered into an investment agreement. Pursuant to the terms of the investment agreement, the Company issued $50,000 of convertible preferred equity to Water Street in a private placement which closed on July 16, 2013, with preferred stock issuance costs of $1,290. Before July 16, 2018, the preferred stock accrued dividends at a rate of 6% per annum. Dividends that were not paid in cash in any quarter accrued on each outstanding share of preferred stock during such three-month period and accumulated. On August 1, 2018, the Company and Water Street, a related party, entered into an Amended and Restated Certificate of Designation of Series A Convertible Preferred Stock of RTI Surgical, Inc. (the “Amended and Restated Certificate of Designation”). Pursuant to the Amended and Restated Certificate of Designation: (1) dividends on the Series A Preferred Stock will not accrue after July 16, 2018 (in the event of a default by the Company, dividends will begin accruing and will continue to accrue until the default is cured); (2) the Company may not force a redemption of the Series A Preferred Stock prior to July 16, 2020; and (3) the holders of the Series A Preferred Stock may not convert the Series A Preferred Stock into common stock prior to July 16, 2021 (with certain exceptions). The Company evaluated and concluded on a qualitative basis the amendment qualifies as modification accounting to the preferred shares, which did not result in a change in the valuation of the shares. Preferred stock is as follows: Preferred Stock Liquidation Preferred Stock Issuance Net Value Costs Total Balance at January 1, 2019 $ 66,519 $ (293 ) $ 66,226 Amortization of preferred stock issuance costs — 138 138 Balance at September 30, 2019 $ 66,519 $ (155 ) $ 66,364 |
Severance and Restructuring Cos
Severance and Restructuring Costs | 9 Months Ended |
Sep. 30, 2019 | |
Employee Severance [Member] | |
Severance and Restructuring Costs | 20. Severance and Restructuring Costs The Company recorded severance and restructuring costs related to the reduction of our organizational structure which resulted in $2,280 of expenses for the year ended December 31, 2018. As part of the acquisition of Paradigm, management implemented a plan which resulted in $896 of severance expenses for the nine months ended September 30, 2019 included in acquisition and integration expenses within the condensed consolidated statements of comprehensive (loss) gain. The total severance and restructuring costs are expected to be paid in full by the fourth quarter of 2019. Severance and restructuring payments are made over periods ranging from one month to twelve months and are not expected to have a material impact on cash flows of the Company in any quarterly period. The following table includes a roll-forward of severance and restructuring costs included in accrued expenses, see Note 15. Accrued severance and restructuring costs at January 1, 2019 $ 931 Severance and restructuring costs accrued in 2019 896 Subtotal severance and restructuring costs 1,827 Severance and restructuring related cash payments (1,309 ) Accrued severance and restructuring charges at September 30, 2019 $ 518 |
Executive Transition Costs
Executive Transition Costs | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Executive Transition Costs | 21. Executive Transition Costs The Company recorded Chief Executive Officer retirement and transition costs related to the retirement of our former Chief Executive Officer pursuant to the Executive Transition Agreement dated August 29, 2012 (as amended and extended to date), which resulted in $4,404 of expenses for the year ended December 31, 2016. The total Chief Executive Officer retirement and transition costs were paid in full in the first quarter of 2019. The following table includes a roll-forward of executive transition costs included in accrued expenses, see Note 15. Accrued executive transition costs at January 1, 2019 $ 43 Cash payments (43 ) Accrued executive transition costs at September 30, 2019 $ - |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 22. Commitments and Contingencies Agreement to Acquire Paradigm – On March 8, 2019, pursuant to the Master Transaction Agreement, the Company acquired Paradigm in a cash and stock transaction valued at up to $300,000, consisting of $150,000 on March 8, 2019, plus potential future milestone payments. Established in 2005, Paradigm’s primary product is the coflex® Interlaminar Stabilization® device, a differentiated and minimally invasive motion preserving stabilization implant that is FDA premarket approved for the treatment of moderate to severe lumbar spinal stenosis in conjunction with decompression. Under the terms of the agreement, the Company paid $100,000 in cash and issued 10,729,614 shares of the Company’s common stock. The shares of Company common stock issued on March 8, 2019, were valued based on the volume weighted average closing trading price for the five trading days prior to the date of execution of the definitive agreement, representing $50,000 of value. In addition, the Company may be required to pay up to an additional $150,000 in a combination of cash and Company common stock based on a revenue earnout consideration. Based on a probability weighted model, the Company estimates a preliminary contingent liability related to the revenue based earnout of $60,323. The Company has not completed its preliminary purchase price allocation. Acquisition of Zyga – O n January 4, 2018, the Company acquired Zyga, a leading spine-focused medical device company that develops and produces innovative minimally invasive devices to treat underserved conditions of the lumbar spine. Zyga’s primary product is the SImmetry® Sacroiliac Joint Fusion System. Under the terms of the merger agreement dated January 4, 2018, the Company acquired Zyga for $21,000 in consideration paid at closing (consisting of borrowings of $18,000 on its revolving credit facility and $3,000 cash on hand), $1,000 contingent upon the successful achievement of a clinical milestone, and a revenue based earnout consideration of up to an additional $35,000. Based on a probability weighted model, the Company estimates a contingent liability related to the clinical and revenue milestones of $3,396, see Note 17. Distribution Agreement with Medtronic – On October 12, 2013, the Company entered into a replacement distribution agreement with Medtronic, plc. (“Medtronic”), as amended January 1, 2019, pursuant to which Medtronic will distribute certain allograft implants for use in spinal, general orthopedic and trauma surgery. Under the terms of this distribution agreement, Medtronic is a non-exclusive distributor except for certain specified implants for which Medtronic is the exclusive distributor. Medtronic will maintain its exclusivity with respect to these specified implants unless the cumulative fees received by the Company from Medtronic for these specified implants decline by a certain amount during any trailing 12-month period. The initial term of this distribution agreement was to have been through December 31, 2017. The term automatically renews for successive five-year periods, unless either party provides written notice of its intent not to renew at least one year prior to the expiration of the applicable renewal period. The distribution agreement will continue at least through December 31, 2022. Distribution Agreement with Zimmer Dental Inc. - On September 3, 2010, the Company entered into an exclusive distribution agreement with Zimmer Dental, Inc. (“Zimmer Dental”), a subsidiary of Zimmer, with an effective date of September 30, 2010, as amended from time to time. The Agreement was assigned to Biomet 3i, LLC (“Biomet”), an affiliate of Zimmer Dental, on January 1, 2016. The Agreement has an initial term of ten years. Under the terms of this distribution agreement, the Company agreed to supply sterilized allograft and xenograft implants at an agreed upon transfer price, and Biomet agreed to be the exclusive distributor of the implants for dental and oral applications worldwide (except Ukraine), subject to certain Company obligations under an existing distribution agreement with a third party with respect to certain implants for the dental market. In consideration for Biomet’s exclusive distribution rights, Biomet agreed to the following: 1) payment to the Company of $13,000 within ten days of the effective date (the “Upfront Payment”); 2) annual exclusivity fees (“Annual Exclusivity Fees”) paid annually as long as Biomet maintains exclusivity for the term of the contract to be paid at the beginning of each calendar year; and 3) annual purchase minimums to maintain exclusivity. Upon occurrence of an event that materially and adversely affects Biomet’s ability to distribute the implants, Biomet may be entitled to certain refund rights with respect to the then current Annual Exclusivity Fee, where such refund would be in an amount limited by a formula specified in this agreement that is based substantially on the occurrence’s effect on Biomet’s revenues. The Upfront Payment, the Annual Exclusivity Fees and the fees associated with distributions of processed tissue are considered to be a single performance obligation. Accordingly, the Upfront Payment and the Annual Exclusivity Fees are deferred as received and are being recognized as other revenues over the term of this distribution agreement based on the expected contractual annual purchase minimums relative to the total contractual minimum purchase requirements in this distribution agreement. Additionally, the Company considered the potential impact of this distribution agreement’s contractual refund provisions and does not expect these provisions to impact future expected revenue related to this distribution agreement. The Company’s aforementioned revenue recognition methods related to the Zimmer distribution agreements do not result in the deferral of revenue less than amounts that would be refundable in the event the agreements were to be terminated in future periods. Additionally, the Company evaluates the appropriateness of the aforementioned revenue recognition methods on an ongoing basis. |
Legal Actions
Legal Actions | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal Actions | 23. Legal Actions The Company is, from time to time, involved in litigation relating to claims arising out of its operations in the ordinary course of business. The Company believes that none of these claims that were outstanding as of September 30, 2019 , Coloplast — The Company is presently named as co-defendant along with other companies in a small percentage of the transvaginal surgical mesh (“TSM”) mass tort claims being brought in various state and federal courts. The TSM litigation has as its catalyst various Public Health Notifications issued by the FDA with respect to the placement of certain TSM implants that were the subject of 510k regulatory clearance prior to their distribution. The Company does not process or otherwise manufacture for distribution in the U.S. any implants that were the subject of these FDA Public Health Notifications. The Company denies any allegations against it and intends to continue to vigorously defend itself. In addition to claims made directly against the Company, Coloplast, a distributor of TSM’s and certain allografts processed and private labeled for them under a contract with the Company, has also been named as a defendant in individual TSM cases in various federal and state courts. Coloplast requested that the Company indemnify or defend Coloplast in those claims which allege injuries caused by the Company’s allograft implants, and on April 24, 2014, Coloplast sued RTI Surgical, Inc. in the Fourth Judicial District of Minnesota for declaratory relief and breach of contract. On December 11, 2014, Coloplast entered into a settlement agreement with RTI Surgical, Inc. and Tutogen Medical, Inc. (the “Company Parties”) resulting in dismissal of the case. Under the terms of the settlement agreement, the Company Parties are responsible for the defense and indemnification of two categories of present and future claims: (1) tissue only (where Coloplast is solely the distributor of Company processed allograft tissue and no Coloplast-manufactured or distributed synthetic mesh is identified) (“Tissue Only Claims”), and (2) tissue plus non-Coloplast synthetic mesh (“Tissue-Non-Coloplast Claims”) (the Tissue Only Claims and the Tissue-Non-Coloplast Claims being collectively referred to as “Indemnified Claims”). As of September 30, 2019, there are a cumulative total of 1,113 Indemnified Claims for which the Company Parties are providing defense and indemnification. The defense and indemnification of these cases are covered under the Company’s insurance policy subject to a reservation of rights by the insurer. Based on the current information available to the Company, the impact that current or any future TSM litigation may have on the Company cannot be reasonably estimated. LifeNet — On June 27, 2018, LifeNet Health, Inc. (“LifeNet”) filed a patent infringement lawsuit in the United States District Court for the Middle District of Florida (since moved to the Northern District of Florida) claiming infringement of five of its patents by the Company. The suit requests damages, enhanced damages, reimbursement of costs and expenses, reasonable attorney fees, and an injunction. The asserted patents are now expired. On April 7, 2019, the Court granted the Company’s request to stay the lawsuit pending the U.S. Patent Trial and Appeal Board’s (PTAB) decision whether to institute review of the patentability of LifeNet’s patents. On August 12, 2019 the PTAB instituted review of three LifeNet patents, and on September 3 the PTAB instituted review of the remaining two. Final decisions with respect to the patentability of LifeNet’s patents (which may be appealed by either party) is expected to take place in the second half of 2020. The Company continues to believe the suit is without merit and will vigorously defend its position. The Company’s accounting policy is to accrue for legal costs as they are incurred. |
Regulatory Actions
Regulatory Actions | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Regulatory Actions | 24. Regulatory Actions During the third quarter of 2018, the Company decided to stop procurement, manufacturing and distributing its map3® implants effective October 31, 2018. The map3® product has been either sold or destroyed and is off the market. In April 2019, the Company received a letter from the FDA indicating that no further corrective actions are necessary with respect to its previously issued Warning Letter in connection with the map3® product. |
Segment Data
Segment Data | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Data | 25. Segment Data The Company distributes human tissue, bovine and porcine animal tissue, metal and synthetic implants through various distribution channels. The Company operates in one reportable segment composed of four franchises: spine; sports; OEM and international. Discrete financial information is not available for these four franchises. The following table presents revenues from these four franchises for the three and nine months ended September 30, 2019 and 2018: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (In thousands) Revenues: Spine $ 23,661 $ 20,741 $ 70,337 $ 58,938 Sports 12,704 12,271 40,507 39,896 OEM 32,341 30,092 93,815 91,382 International 7,423 5,960 23,518 19,423 Total revenues $ 76,129 $ 69,064 $ 228,177 $ 209,639 The following table presents percentage of total revenues derived from the Company’s largest distributors: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Percent of revenues derived from: Distributor Zimmer Biomet Holdings, Inc. 18 % 22 % 19 % 21 % Medtronic, PLC 7 % 9 % 8 % 8 % DePuy Synthes 4 % 3 % 4 % 5 % The following table presents property, plant and equipment - net by significant geographic location: September 30, December 31, 2019 2018 Property, plant and equipment - net: Domestic $ 75,211 $ 72,501 International 5,995 5,453 Total $ 81,206 $ 77,954 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 26. Subsequent Events The Company evaluated subsequent events as of the issuance date of the condensed consolidated financial statements as defined by ASC 855 Subsequent Events, and identified no subsequent events that require adjustment to, or disclosure of, in these condensed consolidated financial statements. |
Recently Issued and Adopted A_2
Recently Issued and Adopted Accounting Standards (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards In May 2019, the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASU”) Financial Instruments — Credit Losses (Topic 326) In April 2019, the FASB issued ASU No. 2019-04 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities; Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses In February 2016, the FASB ASU Leases (Topic 842) “Leases (Topic 840).” Effective January 1, 2019, the Company adopted the new lease accounting standard using the optional transition method which allowed us to continue to apply the guidance under the lease standard in effect at the time in the comparative periods presented. In addition, the Company elected the package of practical expedients, which allowed us to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company has also elected the practical expedient allowing us to not separate the lease and non-lease components for all classes of underlying assets. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities of $3,164 and $3,155, respectively, as of January 1, 2019 with no impact on accumulated deficit. Financial position for reporting periods beginning on or after January 1, 2019, are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous guidance. Note disclosures required in Topic 842 are reported in Note 4, Leases. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Operating Leases | The components of operating lease expense were as follows: For the Three Months Ended For the Nine Months Ended September 30, 2019 September 30, 2019 Operating lease cost $ 437 $ 1,221 Short-term operating lease cost — 36 Total operating lease cost $ 437 $ 1,257 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to operating leases was as follows: For the Three Months Ended For the Nine Months Ended September 30, 2019 September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 432 $ 1,123 ROU assets obtained in exchange for lease obligations — 34 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to operating leases was as follows: Balance at Balance Sheet Classification September 30, 2019 Assets: Right-of-use assets Other assets - net $ 3,110 Liabilities: Current Accrued expenses $ 1,376 Noncurrent Other long-term liabilities 1,815 Total operating lease liabilities $ 3,191 |
Schedule of Maturities of Operating Lease Liabilities | As of September 30, 2019, maturities of operating lease liabilities were as follows: Balance at Maturity of Operating Lease Liabilities September 30, 2019 2019 (remaining) $ 434 2020 1,351 2021 559 2022 221 2023 160 2024 and beyond 875 Total future minimum lease payments 3,600 Less imputed interest (409 ) Total $ 3,191 |
Future Minimum Lease Commitments Under Non-Cancelable Operating Leases Prior to Adoption of ASC 842 | As previously disclosed in our 2018 Annual Report on Form 10-K, which followed the lease accounting prior to adoption of ASC 842, future commitments relating to operating leases for the five years and period thereafter as of December 31, 2018 were as follows: Balance at Maturity of Operating Lease Liabilities December 31, 2018 2019 $ 1,374 2020 806 2021 276 2022 162 2023 166 2024 and beyond 882 Total future minimum lease payments $ 3,666 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition from Four Categories | The following table presents revenues from these four categories for the three and nine months ended September 30, 2019 and 2018: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Revenues: Spine $ 23,661 $ 20,741 $ 70,337 $ 58,938 Sports 12,704 12,271 40,507 39,896 OEM 32,341 30,092 93,815 91,382 International 7,423 5,960 23,518 19,423 Total revenues from contracts with customers $ 76,129 $ 69,064 $ 228,177 $ 209,639 |
Revenue Recognized at a Point in Time and Over Time | The following table presents revenues recognized at a point in time and over time for the three and nine months ended September 30, 2019 and 2018: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Revenue recognized at a point in time $ 57,586 $ 56,401 $ 176,509 $ 178,098 Revenue recognized over time 18,543 12,663 51,668 31,541 Total revenues from contracts with customers $ 76,129 $ 69,064 $ 228,177 $ 209,639 |
Contract with Customer, Asset and Liability | The opening and closing balances of the Company’s accounts receivable, contract asset and current and long-term contract liability for the nine months ended September 30, 2019 and 2018 are as follows: Contract Contract Liability Accounts Liability (Long- Receivable (Current) Term) Opening Balance, January 1, 2019 $ 48,351 $ 5,425 $ 744 Closing Balance, September 30, 2019 56,556 3,311 1,134 Increase/(decrease) 8,205 (2,114 ) 390 Contract Contract Liability Accounts Liability (Long- Receivable (Current) Term) Opening Balance, January 1, 2018 $ 38,324 $ 5,978 $ 3,741 Closing Balance, September 30, 2018 44,141 5,892 1,968 Increase/(decrease) 5,817 (86 ) (1,773 ) |
Acquisition of Paradigm Spine_2
Acquisition of Paradigm Spine, LLC (Tables) - Paradigm Spine [Member] | 9 Months Ended |
Sep. 30, 2019 | |
Acquisition Purchase Price | The purchase price was financed as follows: (In thousands) Cash proceeds from second lien credit agreement $ 100,000 Fair market value of securities issued 60,730 Fair market value of contingent earnout 60,323 Total purchase price $ 221,053 |
Summary of Changes to Fair Value of Acquired Assets and Liabilities | During the three months ended September 30, 2019, the Company made the following changes to the fair values of acquired assets and liabilities as follows: Balance at September 30, 2019 June 30, 2019 Change (In thousands) Cash $ 308 $ 79 $ 229 Accounts receivable 5,220 5,220 - Inventories 43,084 43,084 - Other current assets 1,693 1,693 - Property, plant and equipment 379 379 - Current liabilities (6,380 ) (6,380 ) - Net tangible assets acquired 44,304 44,075 229 Goodwill 176,749 211,631 (34,882 ) Total net assets acquired $ 221,053 $ 255,706 $ (34,653 ) |
Pro Forma Information of Operations | The following unaudited pro forma information shows the results of the Paradigm’s operations as though the acquisition had occurred as of the beginning of the prior comparable period, January 1, 2018, (in thousands): For the Nine Months Ended September 30, 2018 Revenues $ 30,532 Net loss applicable to common shares (30,604 ) Net loss applicable to common shares excluding acquisition and integration costs (30,604 ) |
Acquisition of Zyga Technolog_2
Acquisition of Zyga Technology, Inc (Tables) - Zyga Technology Inc [Member] | 9 Months Ended |
Sep. 30, 2019 | |
Acquisition Purchase Price | The purchase price was financed as follows: (In thousands) Cash proceeds from revolving credit facility $ 18,000 Cash from RTI Surgical 3,000 Total purchase price $ 21,000 |
Summary of Final Allocation of Total Consideration to Tangible and Intangible Assets and Liabilities | The table below represents the final allocation of the total consideration to Zyga’s tangible and intangible assets and liabilities fair values as of January 4, 2018. (In thousands) Inventories $ 1,099 Accounts receivable 573 Other current assets 53 Property, plant and equipment 151 Other assets 26 Deferred tax assets 4,715 Current liabilities (947 ) Acquisition contingencies (4,986 ) Net tangible assets acquired 684 Other intangible assets 6,760 Goodwill 13,556 Total net assets acquired $ 21,000 |
Pro Forma Information of Operations | The following unaudited pro forma information shows the results of the Zyga’s operations as though the acquisition had occurred as of the beginning of the prior comparable period, January 1, 2018, (in thousands): For the Nine Months Ended September 30, 2018 Revenues $ 3,595 Net loss applicable to common shares (2,295 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stock Options Outstanding, Exercisable and Available for Grant | The following table summarizes information about stock options outstanding, exercisable and available for grant as of September 30, 2019: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding at January 1, 2019 4,295,744 $ 3.76 Granted 395,900 4.68 Exercised (118,500 ) 3.34 Forfeited or expired (197,620 ) 4.32 Outstanding at September 30, 2019 4,375,524 $ 3.83 5.37 $ 15 Vested or expected to vest at September 30, 2019 4,154,261 $ 3.79 5.19 $ 15 Exercisable at September 30, 2019 3,163,099 $ 3.56 4.20 $ 15 Available for grant at September 30, 2019 4,186,650 |
Other Information Concerning Stock Options | Other information concerning stock options are as follows: For the Nine Months Ended September 30, 2019 2018 Weighted average fair value of stock options granted $ 1.97 $ 2.05 Aggregate intrinsic value of stock options exercised 161 344 |
Unvested Restricted Stock Awards | The following table summarizes information about unvested restricted stock awards as of September 30, 2019: Weighted Average Number of Grant Date Shares Fair Value Unvested at January 1, 2019 1,075,215 $ 4.29 Granted 667,205 4.80 Vested (458,646 ) 4.16 Forfeited (81,169 ) 4.86 Unvested at September 30, 2019 1,202,605 $ 4.61 |
Stock-Based Compensation Recognized | For the three and nine months ended September 30, 2019 and 2018, the Company recognized stock-based compensation as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Stock-based compensation: Costs of processing and distribution $ 36 $ 33 $ 108 $ 99 Marketing, general and administrative 918 1,032 3,246 3,506 Research and development 15 15 45 45 Total $ 969 $ 1,080 $ 3,399 $ 3,650 |
Restricted Stock Units [Member] | |
Unvested Restricted Stock Awards | The following table summarizes information about unvested restricted stock units as of September 30, 2019: Weighted Average Number of Grant Date Shares Fair Value Unvested at January 1, 2019 — $ — Granted 226,352 7.41 Vested — — Forfeited (41,770 ) 7.41 Unvested at September 30, 2019 184,582 $ 7.41 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of Common Stock used in Calculation of Basic and Diluted Earnings Per Share | A reconciliation of the number of shares of common stock used in the calculation of basic and diluted net income per common share is presented below: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Basic shares 75,194,036 63,495,952 72,007,860 63,517,958 Effect of dilutive securities: Stock options — 675,028 — — Preferred stock Series A — 15,113,335 — — Diluted shares 75,194,036 79,284,315 72,007,860 63,517,958 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories by stage of completion are as follows: September 30, December 31, 2019 2018 Unprocessed tissue, raw materials and supplies $ 27,170 $ 24,211 Tissue and work in process 34,186 31,796 Implantable tissue and finished goods 87,902 51,464 Total 149,258 107,471 Less current portion 130,913 107,471 Long-term portion $ 18,345 $ - |
Prepaid and Other Current Ass_2
Prepaid and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid and Other Current Assets are as follows: September 30, December 31, 2019 2018 Income tax receivable $ 3,222 $ 3,920 Prepaid expenses 5,016 4,127 Other 393 744 $ 8,631 $ 8,791 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Components of Property, Plant and Equipment | Property, plant and equipment are as follows: September 30, December 31, 2019 2018 Land $ 1,982 $ 2,020 Buildings and improvements 57,906 58,093 Processing equipment 46,046 42,599 Surgical instruments 27,164 24,070 Office equipment, furniture and fixtures 1,994 1,877 Computer equipment and software 19,146 18,873 Construction in process 12,757 8,934 166,995 156,466 Less accumulated depreciation (85,789 ) (78,512 ) $ 81,206 $ 77,954 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | September 30, December 31, 2019 2018 Balance at January 1 $ 59,798 $ 46,242 Goodwill acquired related to Zyga acquisition — 13,556 Goodwill acquired related to Paradigm acquisition 176,749 — Balance at end of period $ 236,547 $ 59,798 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Other Intangible Assets | Other intangible assets are as follows: September 30, 2019 December 31, 2018 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Patents $ 16,376 $ 5,014 $ 11,362 $ 16,092 $ 4,194 $ 11,898 Acquired licensing rights 7,452 2,076 5,376 11,852 6,468 5,384 Marketing and procurement and other intangible assets 20,181 12,574 7,607 20,356 11,279 9,077 Total $ 44,009 $ 19,664 $ 24,345 $ 48,300 $ 21,941 $ 26,359 |
Estimates of Future Amortization Expense | At September 30, 2019, management’s estimates of future amortization expense for the next five years are as follows: Amortization Expense 2019 (remaining) $ 1,050 2020 4,100 2021 4,100 2022 4,100 2023 1,800 2024 1,800 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Accrued Expenses | Accrued expenses are as follows: September 30, December 31, 2019 2018 Accrued compensation $ 4,641 $ 8,678 Accrued severance and restructuring costs 518 931 Accrued distributor commissions 4,019 3,907 Accrued donor recovery fees 10,217 4,088 Accrued leases 1,376 - Accrued acquisition and integration expenses 2,725 - Other 7,571 7,079 $ 31,067 $ 24,683 |
Short and Long-Term Obligatio_2
Short and Long-Term Obligations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Short and Long-Term Obligations | Short and long-term obligations are as follows: September 30, December 31, 2019 2018 Ares Term loan $ 102,948 $ — JPM facility 67,500 50,000 Less unamortized debt issuance costs (1,311 ) (927 ) Total 169,137 49,073 Less current portion — — Long-term portion $ 169,137 $ 49,073 |
Other long-term liabilities (Ta
Other long-term liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Summary of Other long-term liabilities | Other long-term liabilities are as follows: September 30, December 31, 2019 2018 Acquisition contingencies $ 63,719 $ 4,986 Other 2,271 633 $ 65,990 $ 5,619 |
Preferred Stock (Tables)
Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Preferred Stock | Preferred stock is as follows: Preferred Stock Liquidation Preferred Stock Issuance Net Value Costs Total Balance at January 1, 2019 $ 66,519 $ (293 ) $ 66,226 Amortization of preferred stock issuance costs — 138 138 Balance at September 30, 2019 $ 66,519 $ (155 ) $ 66,364 |
Severance and Restructuring C_2
Severance and Restructuring Costs (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Employee Severance [Member] | |
Schedule of Restructuring Charges | The following table includes a roll-forward of severance and restructuring costs included in accrued expenses, see Note 15. Accrued severance and restructuring costs at January 1, 2019 $ 931 Severance and restructuring costs accrued in 2019 896 Subtotal severance and restructuring costs 1,827 Severance and restructuring related cash payments (1,309 ) Accrued severance and restructuring charges at September 30, 2019 $ 518 |
Executive Transition Costs (Tab
Executive Transition Costs (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Former Chief Executive Officer [Member] | |
Schedule of Restructuring Charges | The following table includes a roll-forward of executive transition costs included in accrued expenses, see Note 15. Accrued executive transition costs at January 1, 2019 $ 43 Cash payments (43 ) Accrued executive transition costs at September 30, 2019 $ - |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Revenues from Tissue Distribution and Other Revenues | The following table presents revenues from these four franchises for the three and nine months ended September 30, 2019 and 2018: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (In thousands) Revenues: Spine $ 23,661 $ 20,741 $ 70,337 $ 58,938 Sports 12,704 12,271 40,507 39,896 OEM 32,341 30,092 93,815 91,382 International 7,423 5,960 23,518 19,423 Total revenues $ 76,129 $ 69,064 $ 228,177 $ 209,639 |
Schedule of Percentage of Total Revenues Derived from Company's Largest Distributors | The following table presents percentage of total revenues derived from the Company’s largest distributors: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Percent of revenues derived from: Distributor Zimmer Biomet Holdings, Inc. 18 % 22 % 19 % 21 % Medtronic, PLC 7 % 9 % 8 % 8 % DePuy Synthes 4 % 3 % 4 % 5 % |
Schedule of Property, Plant and Equipment - Net by Significant Geographic Location | The following table presents property, plant and equipment - net by significant geographic location: September 30, December 31, 2019 2018 Property, plant and equipment - net: Domestic $ 75,211 $ 72,501 International 5,995 5,453 Total $ 81,206 $ 77,954 |
Operations and Organization - A
Operations and Organization - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019Country | |
Minimum [Member] | |
Operations And Organization [Line Items] | |
Number of countries that receive distribution | 50 |
Recently Issued and Adopted A_3
Recently Issued and Adopted Accounting Standards - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Operating lease, right-of-use asset | $ 3,164 | |
Operating lease, liability | $ 3,191 | $ 3,155 |
Maximum [Member] | ||
Lease term | 12 months |
Leases - Additional Information
Leases - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019 | |
Operating lease, description | The Company's operating leases do not have any residual value guarantees, restrictions or covenants. |
Lessee, operating lease, existence of residual value guarantees, restrictions or covenants | false |
Lease not yet commenced, description | The Company does not have any leases that have not yet commenced as of September 30, 2019. |
Operating lease remaining term | 4 years 8 months 12 days |
Lease not yet commenced, option to extend | The option to extend is only included in the lease term if the Company is reasonably certain of exercising that option. |
Weighted-average discount rate, operating leases | 4.70% |
Minimum [Member] | |
Operating lease remaining term | 1 year |
Maximum [Member] | |
Operating lease remaining term | 14 years |
Leases - Schedule of Operating
Leases - Schedule of Operating Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 437 | $ 1,221 |
Short-term operating lease cost | 36 | |
Total operating lease cost | $ 437 | $ 1,257 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 432 | $ 1,123 |
ROU assets obtained in exchange for lease obligations | $ 34 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Right-of-use assets | $ 3,164 | |
Current | $ 1,376 | |
Total operating lease liabilities | 3,191 | $ 3,155 |
Other Assets [Member] | ||
Right-of-use assets | 3,110 | |
Accrued Expenses [Member] | ||
Current | 1,376 | |
Other Long Term Liabilities [Member] | ||
Noncurrent | $ 1,815 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2019 (remaining) | $ 434 | |
2020 | 1,351 | |
2021 | 559 | |
2022 | 221 | |
2023 | 160 | |
2024 and beyond | 875 | |
Total future minimum lease payments | 3,600 | |
Less imputed interest | (409) | |
Total | $ 3,191 | $ 3,155 |
Leases - Future Minimum Lease C
Leases - Future Minimum Lease Commitments Under Non-Cancelable Operating Leases Prior to Adoption of ASC 842 (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 1,374 |
2020 | 806 |
2021 | 276 |
2022 | 162 |
2023 | 166 |
2024 and beyond | 882 |
Total future minimum lease payments | $ 3,666 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Detail) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)SegmentBusinessUnit | Sep. 30, 2018USD ($) | |
Revenue From Contract With Customer [Abstract] | ||
Number of reportable segment | Segment | 1 | |
Number of business lines | BusinessUnit | 4 | |
Revenue recognized from amounts included in contract liabilities | $ | $ 3,771 | $ 3,651 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Revenue Recognition from Four Franchises (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 76,129 | $ 69,064 | $ 228,177 | $ 209,639 |
Spine [Member] | Tissue Distribution [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 23,661 | 20,741 | 70,337 | 58,938 |
Sports [Member] | Tissue Distribution [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 12,704 | 12,271 | 40,507 | 39,896 |
OEM [Member] | Tissue Distribution [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 32,341 | 30,092 | 93,815 | 91,382 |
International [Member] | Tissue Distribution [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 7,423 | $ 5,960 | $ 23,518 | $ 19,423 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Revenues Recognized at a Point in Time and Over Time (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 76,129 | $ 69,064 | $ 228,177 | $ 209,639 |
Transferred at Point in Time [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 57,586 | 56,401 | 176,509 | 178,098 |
Transferred over Time [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 18,543 | $ 12,663 | $ 51,668 | $ 31,541 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Contract with Customer, Asset and Liability (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | |
Revenue From Contract With Customer [Abstract] | |||||
Accounts Receivable | $ 56,556 | $ 44,141 | $ 48,351 | $ 48,351 | $ 38,324 |
Contract Liability (Current) | 3,311 | 5,892 | 5,425 | 5,978 | |
Contract Liability (Long- Term) | 1,134 | 1,968 | $ 744 | $ 3,741 | |
Accounts Receivable, Increase/(decrease) | 8,205 | 5,817 | |||
Contract Liability (Current), Increase/(decrease) | (2,114) | (86) | |||
Contract Liability (Long-Term), Increase/(decrease) | $ 390 | $ (1,773) |
Acquisition of Paradigm Spine_3
Acquisition of Paradigm Spine, LLC - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 08, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 |
Business Combinations [Line Items] | |||||||
Common stock par value | $ 0.001 | $ 0.001 | |||||
Severance expenses | $ 824 | $ 1,708 | |||||
Goodwill | $ 59,798 | $ 236,547 | $ 46,242 | ||||
Paradigm Spine [Member] | |||||||
Business Combinations [Line Items] | |||||||
Potential debt to finance business combination | $ 100,000 | ||||||
Number of common stock to be issued at closing, shares | 10,729,614 | ||||||
Cash consideration threshold working capital amount | $ 7,000 | ||||||
Potential debt to finance business combination | 100,000 | ||||||
Contingent liability | 94,976 | ||||||
Acquisition and integration expenses | $ 4,143 | $ 15,537 | 11,394 | ||||
Business development expenses | 462 | ||||||
Severance expenses | 896 | ||||||
Inventory fair value, current | 19,703 | ||||||
Inventory fair value, noncurrent | 23,381 | ||||||
Goodwill | 176,749 | $ 211,631 | 176,749 | ||||
Revenue | 20,304 | ||||||
Net loss | 99 | ||||||
Paradigm Spine [Member] | Earn Out Payment [Member] | |||||||
Business Combinations [Line Items] | |||||||
Contingent liability | 60,323 | ||||||
Reduction in contingent liability | $ 34,653 | ||||||
Paradigm Spine [Member] | Maximum [Member] | |||||||
Business Combinations [Line Items] | |||||||
Number of common stock to be issued at closing, value | $ 50,000 | ||||||
Master Transaction Agreement [Member] | |||||||
Business Combinations [Line Items] | |||||||
Common stock par value | $ 0.001 | ||||||
Master Transaction Agreement [Member] | Series A Preferred Stock [Member] | |||||||
Business Combinations [Line Items] | |||||||
Common stock par value | 0.001 | ||||||
Master Transaction Agreement [Member] | One Fully Paid and Nonassessable [Member] | |||||||
Business Combinations [Line Items] | |||||||
Common stock par value | 0.001 | ||||||
Master Transaction Agreement [Member] | One Fully Paid and Nonassessable [Member] | Series A Preferred Stock [Member] | |||||||
Business Combinations [Line Items] | |||||||
Common stock par value | $ 0.001 |
Acquisition of Paradigm Spine_4
Acquisition of Paradigm Spine, LLC - Acquisition Purchase Price (Detail) - USD ($) $ in Thousands | Mar. 08, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Business Combinations [Line Items] | |||
Cash proceeds from second lien credit agreement | $ 118,000 | $ 74,425 | |
Paradigm Spine [Member] | |||
Business Combinations [Line Items] | |||
Cash proceeds from second lien credit agreement | $ 100,000 | ||
Fair market value of securities issued | 60,730 | ||
Fair market value of contingent earnout | 60,323 | ||
Total purchase price | $ 221,053 | $ 99,692 |
Acquisition of Paradigm Spine_5
Acquisition of Paradigm Spine, LLC - Summary of Changes to Fair Value of Acquired Assets and Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 08, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Line Items] | |||||
Goodwill | $ 236,547 | $ 59,798 | $ 46,242 | ||
Paradigm Spine [Member] | |||||
Business Combinations [Line Items] | |||||
Cash | 308 | $ 79 | |||
Accounts receivable | 5,220 | 5,220 | |||
Inventories | 43,084 | 43,084 | |||
Other current assets | 1,693 | 1,693 | |||
Property, plant and equipment | 379 | 379 | |||
Current liabilities | (6,380) | (6,380) | |||
Net tangible assets acquired | 44,304 | 44,075 | |||
Goodwill | 176,749 | 211,631 | $ 176,749 | ||
Total net assets acquired | 221,053 | $ 255,706 | |||
Change, Cash | 229 | ||||
Change, Net tangible assets acquired | 229 | ||||
Change, Goodwill | (34,882) | ||||
Change, Total net assets acquired | $ (34,653) |
Acquisition of Paradigm Spine_6
Acquisition of Paradigm Spine, LLC. - Pro Forma Information of Operations (Detail) - Paradigm Spine [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Business Acquisition Pro Forma Information [Line Items] | |
Revenues | $ 30,532 |
Net loss applicable to common shares | (30,604) |
Net loss applicable to common shares excluding acquisition and integration costs | $ (30,604) |
Acquisition of Zyga Technology
Acquisition of Zyga Technology Inc. - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 04, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 |
Business Combinations [Line Items] | ||||||||
Acquisition and integration expenses | $ 3,209 | $ 1,941 | $ 14,119 | $ 2,741 | ||||
Goodwill | 236,547 | 236,547 | $ 46,242 | $ 59,798 | ||||
Zyga Technology Inc [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Date of merger agreement | Jan. 4, 2018 | |||||||
Payments to acquire businesses | $ 21,000 | |||||||
Cash from RTI Surgical | 3,000 | $ 21,000 | ||||||
Acquisition related costs | 1,430 | |||||||
Acquisition and integration expenses | $ 800 | $ 630 | ||||||
Goodwill | 13,556 | |||||||
Zyga Technology Inc [Member] | Patents [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Other intangible assets | $ 6,500 | |||||||
Other intangible assets, useful life | 13 years | |||||||
Zyga Technology Inc [Member] | Trademarks [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Other intangible assets | $ 80 | |||||||
Other intangible assets, useful life | 1 year | |||||||
Zyga Technology Inc [Member] | Marketing-Related Intangible Assets [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Other intangible assets | $ 180 | |||||||
Other intangible assets, useful life | 7 years | |||||||
Zyga Technology Inc [Member] | Revolving Credit Facility [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Cash proceeds from revolving credit facility | $ 18,000 | |||||||
Zyga Technology Inc [Member] | Clinical Milestones [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Earnout consideration | 1,000 | 4,986 | 4,986 | |||||
Zyga Technology Inc [Member] | Earn Out Payment [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Revenue based earnout consideration | $ 35,000 | $ 4,986 | 4,986 | |||||
Reduction in contingent liability | $ 1,590 |
Acquisition of Zyga Technolog_3
Acquisition of Zyga Technology Inc. - Acquisition Purchase Price (Detail) - Zyga Technology Inc [Member] - USD ($) $ in Thousands | Jan. 04, 2018 | Sep. 30, 2018 |
Business Combinations [Line Items] | ||
Cash from RTI Surgical | $ 3,000 | $ 21,000 |
Total purchase price | 21,000 | |
Revolving Credit Facility [Member] | ||
Business Combinations [Line Items] | ||
Cash proceeds from revolving credit facility | $ 18,000 |
Acquisition of Zyga Technolog_4
Acquisition of Zyga Technology Inc. - Summary of Final Allocation of Total Consideration to Tangible and Intangible Assets and Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Jan. 04, 2018 | Dec. 31, 2017 |
Business Combinations [Line Items] | ||||
Acquisition contingencies | $ (63,719) | $ (4,986) | ||
Goodwill | 236,547 | 59,798 | $ 46,242 | |
Zyga Technology Inc [Member] | ||||
Business Combinations [Line Items] | ||||
Inventories | $ 1,099 | |||
Accounts receivable | 573 | |||
Other current assets | 53 | |||
Property, plant and equipment | 151 | |||
Other assets | 26 | |||
Deferred tax assets | 4,715 | |||
Current liabilities | (947) | |||
Acquisition contingencies | $ (63,719) | $ (4,986) | (4,986) | |
Net tangible assets acquired | 684 | |||
Other intangible assets | 6,760 | |||
Goodwill | 13,556 | |||
Total net assets acquired | $ 21,000 |
Acquisition of Zyga Technolog_5
Acquisition of Zyga Technology, Inc. - Pro Forma Information of Operations (Detail) - Zyga Technology Inc [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Business Acquisitions Pro Forma Infomation [Line Items] | |
Revenues | $ 3,595 |
Net loss applicable to common shares | $ (2,295) |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of market value of common stock, stock options exercise price | 100.00% |
Percentage of market value of common stock, restricted stock award granted | 100.00% |
Total unrecognized stock-based compensation | $ 2,991 |
Stock-based compensation awards, weighted-average period recognized | 1 year 7 months 17 days |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Contractual term of stock options granted | 5 years |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Contractual term of stock options granted | 10 years |
Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation | $ 1,440 |
Stock-based compensation awards, weighted-average period recognized | 2 years 11 months 26 days |
Stock Option [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation award, vesting period | 1 year |
Stock Option [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation award, vesting period | 5 years |
Restricted Stock Awards [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation award, vesting period | 1 year |
Restricted Stock Awards [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation award, vesting period | 3 years |
Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation | $ 903 |
Stock-based compensation awards, weighted-average period recognized | 2 years 3 months |
2018 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares of common stock allowed to be issued | shares | 5,726,035 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Outstanding, Exercisable and Available for Grant (Detail) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Outstanding, Number of Shares | 4,295,744 |
Granted, Number of Shares | 395,900 |
Exercised, Number of Shares | (118,500) |
Forfeited or expired, Number of Shares | (197,620) |
Outstanding, Number of Shares | 4,375,524 |
Vested or expected to vest, Number of Shares | 4,154,261 |
Exercisable, Number of Shares | 3,163,099 |
Available for grant, Number of Shares | 4,186,650 |
Outstanding, Weighted Average Exercise Price | $ / shares | $ 3.76 |
Granted, Weighted Average Exercise Price | $ / shares | 4.68 |
Exercised, Weighted Average Exercise Price | $ / shares | 3.34 |
Forfeited or expired, Weighted Average Exercise Price | $ / shares | 4.32 |
Outstanding, Weighted Average Exercise Price | $ / shares | 3.83 |
Vested or expected to vest, Weighted Average Exercise Price | $ / shares | 3.79 |
Exercisable, Weighted Average Exercise Price | $ / shares | $ 3.56 |
Outstanding, Weighted Average Remaining Contractual Life (Years) | 5 years 4 months 13 days |
Vested or expected to vest, Weighted Average Remaining Contractual Life (Years) | 5 years 2 months 8 days |
Exercisable, Weighted Average Remaining Contractual Life (Years) | 4 years 2 months 12 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 15 |
Vested or expected to vest, Aggregate Intrinsic Value | $ | 15 |
Exercisable, Aggregate Intrinsic Value | $ | $ 15 |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other Information Concerning Stock Options (Detail) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Weighted average fair value of stock options granted | $ 1.97 | $ 2.05 |
Aggregate intrinsic value of stock options exercised | $ 161 | $ 344 |
Stock-Based Compensation - Unve
Stock-Based Compensation - Unvested Restricted Stock Awards (Detail) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning Balance, Number of shares | shares | 1,075,215 |
Granted, Number of shares | shares | 667,205 |
Vested, Number of shares | shares | (458,646) |
Forfeited, Number of shares | shares | (81,169) |
Ending Balance, Number of shares | shares | 1,202,605 |
Beginning Balance, Weighted Average Grant Date Fair Value | $ / shares | $ 4.29 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 4.80 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 4.16 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 4.86 |
Ending Balance, Weighted Average Grant Date Fair Value | $ / shares | $ 4.61 |
Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted, Number of shares | shares | 226,352 |
Forfeited, Number of shares | shares | (41,770) |
Ending Balance, Number of shares | shares | 184,582 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | $ 7.41 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 7.41 |
Ending Balance, Weighted Average Grant Date Fair Value | $ / shares | $ 7.41 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 969 | $ 1,080 | $ 3,399 | $ 3,650 |
Costs of Processing and Distribution [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | 36 | 33 | 108 | 99 |
Marketing General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | 918 | 1,032 | 3,246 | 3,506 |
Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 15 | $ 15 | $ 45 | $ 45 |
Net Income Per Common Share - R
Net Income Per Common Share - Reconciliation of Common Stock Used in Calculation of Basic and Diluted Earnings Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic shares | 75,194,036 | 63,495,952 | 72,007,860 | 63,517,958 |
Effect of dilutive securities: Stock options | 675,028 | |||
Preferred stock Series A | 15,113,335 | |||
Diluted shares | 75,194,036 | 79,284,315 | 72,007,860 | 63,517,958 |
Net Income Per Common Share - A
Net Income Per Common Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential Dilutive Securities included in computation of diluted EPS | 15,113,335 | |||
Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential Dilutive Securities included in computation of diluted EPS | 50,000 | 50,000 | 50,000 | |
Convertible Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential Dilutive Securities included in computation of diluted EPS | 15,152,761 | 15,152,761 | 15,113,335 | |
Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive stock excluded from the computation of diluted EPS | 327,085 | 667,015 | 608,390 | |
Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive stock excluded from the computation of diluted EPS | 2,315,856 | 1,474,375 | 1,653,991 | 1,456,829 |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Unprocessed tissue, raw materials and supplies | $ 27,170 | $ 24,211 |
Tissue and work in process | 34,186 | 31,796 |
Implantable tissue and finished goods | 87,902 | 51,464 |
Total | 149,258 | 107,471 |
Inventories - net | 130,913 | $ 107,471 |
Long-term portion | $ 18,345 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Inventory [Line Items] | ||||||
Provision for inventory write-downs | $ 2,208 | $ 2,041 | $ 5,482 | $ 12,906 | ||
Product obsolescence | $ 1,023 | |||||
Map3® Implant [Member] | ||||||
Inventory [Line Items] | ||||||
Provision for inventory write-downs | $ 6,559 |
Prepaid and Other Current Ass_3
Prepaid and Other Current Assets - Schedule of Prepaid and Other Current Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Income tax receivable | $ 3,222 | $ 3,920 |
Prepaid expenses | 5,016 | 4,127 |
Other | 393 | 744 |
Prepaid and other current assets | $ 8,631 | $ 8,791 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 166,995 | $ 156,466 |
Less accumulated depreciation | (85,789) | (78,512) |
Property, plant and equipment, net | 81,206 | 77,954 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,982 | 2,020 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 57,906 | 58,093 |
Processing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 46,046 | 42,599 |
Surgical Instruments [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 27,164 | 24,070 |
Office Equipment Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,994 | 1,877 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 19,146 | 18,873 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 12,757 | $ 8,934 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense in connection with property, plant and equipment | $ 2,898 | $ 2,577 | $ 8,437 | $ 7,824 | |
Asset impairment and abandonments | $ 104 | $ 15 | $ 4,748 | ||
Map3® Implant [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Asset impairment and abandonments | $ 1,797 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Goodwill [Line Items] | ||
Beginning Balance | $ 59,798 | $ 46,242 |
Ending Balance | 236,547 | 59,798 |
Zyga Technology Inc [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | $ 13,556 | |
Paradigm Spine [Member] | ||
Goodwill [Line Items] | ||
Goodwill acquired | 176,749 | |
Ending Balance | $ 176,749 |
Other Intangible Assets - Compo
Other Intangible Assets - Components of Other Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 44,009 | $ 48,300 |
Accumulated Amortization | 19,664 | 21,941 |
Net Carrying Amount | 24,345 | 26,359 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 16,376 | 16,092 |
Accumulated Amortization | 5,014 | 4,194 |
Net Carrying Amount | 11,362 | 11,898 |
Licensing Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,452 | 11,852 |
Accumulated Amortization | 2,076 | 6,468 |
Net Carrying Amount | 5,376 | 5,384 |
Marketing and Procurement and Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20,181 | 20,356 |
Accumulated Amortization | 12,574 | 11,279 |
Net Carrying Amount | $ 7,607 | $ 9,077 |
Other Intangible Assets - Addit
Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense of other intangible assets | $ 1,024 | $ 1,149 | $ 2,976 | $ 2,970 | |
Map3® Implant [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment and abandonment charges | $ 2,718 |
Other Intangible Assets - Estim
Other Intangible Assets - Estimates of Future Amortization Expense (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2019 (remaining) | $ 1,050 |
2020 | 4,100 |
2021 | 4,100 |
2022 | 4,100 |
2023 | 1,800 |
2024 | $ 1,800 |
Accrued Expenses - Accrued Expe
Accrued Expenses - Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Accrued compensation | $ 4,641 | $ 8,678 |
Accrued severance and restructuring costs | 518 | 931 |
Accrued distributor commissions | 4,019 | 3,907 |
Accrued donor recovery fees | 10,217 | 4,088 |
Accrued leases | 1,376 | |
Accrued acquisition and integration expenses | 2,725 | |
Other | 7,571 | 7,079 |
Total accrued expenses | $ 31,067 | $ 24,683 |
Short and Long-Term Obligatio_3
Short and Long-Term Obligations - Short and Long-Term Obligations (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Ares Term loan | $ 102,948 | $ 0 |
JPM facility | 67,500 | 50,000 |
Less unamortized debt issuance costs | (1,311) | (927) |
Debt and capital lease obligation, total | 169,137 | 49,073 |
Less current portion | 0 | 0 |
Long-term portion | $ 169,137 | $ 49,073 |
Short and Long-Term Obligatio_4
Short and Long-Term Obligations - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 08, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2021 | Dec. 31, 2018 | Jun. 05, 2018 |
Line of Credit Facility [Line Items] | ||||||
Debt instrument, maturity date | Jun. 5, 2023 | |||||
Amortization of debt issuance cost | $ 219 | |||||
Debt issuance cost | 826 | |||||
Cash and cash equivalents | 2,950 | $ 10,949 | ||||
Cash used in operations | $ 12,709 | $ (11,007) | ||||
Leverage to adjusted EBITDA ratio | 6.00% | |||||
Covenant ratio for first quarter | 5.00% | |||||
Covenant ratio for second quarter | 4.75% | |||||
Covenant ratio for third quarter | 4.50% | |||||
Covenant ratio for fourth quarter | 4.25% | |||||
Leverage ratio | 5.00% | |||||
Revolving Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility, variable interest rate | 4.10% | |||||
Line of credit outstanding amount | $ 67,500 | |||||
Line of credit remaining borrowing capacity | 7,500 | |||||
Amortization of debt issuance cost | $ 442 | $ 476 | ||||
Ares Term Loans [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, maturity date | Dec. 5, 2023 | |||||
Interest rate on term loan | 10.79% | |||||
2018 Loan Agreement [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Percentage of foreign subsidiaries stock held as collateral | 65.00% | |||||
Credit facility guaranteed description | The JPM Facility is guaranteed by the Company’s domestic subsidiaries and is secured by: (i) substantially all of the assets of the Company and Pioneer Surgical; (ii) substantially all of the assets of each of the Company’s domestic subsidiaries; and (iii) 65% of the stock of the Company’s foreign subsidiaries. | |||||
Minimum fixed charge coverage ratio | 0.01 | |||||
Covenant Terms of Credit Facility | The Company is required to maintain a minimum fixed charge coverage ratio of at least 1.00:1.00 (the “JPM Required Minimum Fixed Charge Coverage Ratio”) during either of the following periods (each, a “JPM Covenant Testing Period”): (i) a period beginning on a date that a default has occurred and is continuing under the loan documents entered into by the Company in conjunction with the 2018 Credit Agreement through the first date on which no default has occurred and is continuing; or (ii) a period beginning on a date that availability under the JPM Facility is less than the specified covenant testing threshold and continuing until availability under the JPM Facility is greater than or equal to the specified covenant testing threshold for thirty (30) consecutive days. | |||||
2018 Loan Agreement [Member] | Revolving Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility, original borrowing capacity | $ 100,000 | $ 100,000 | ||||
Revolving line of credit commitment reduction amount | 75,000 | |||||
2018 Loan Agreement [Member] | Revolving Credit Facility [Member] | Debt Instrument Variable Rate Base CBFR Using Monthly REVLIBOR30 Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility, variable interest rate | 2.00% | |||||
2018 Loan Agreement [Member] | Revolving Credit Facility [Member] | Debt Instrument Variable Rate Base Eurodollars Adjusted LIBO Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility, variable interest rate | 2.00% | |||||
2018 Loan Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility, additional borrowing capacity | $ 50,000 | |||||
2019 Loan Agreement [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Minimum leverage ratio | 4.50% | |||||
Increase in term loan interest rate | 0.75% | |||||
Paid in kind option to pay interest | 50.00% | |||||
2019 Loan Agreement [Member] | Base Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 7.50% | |||||
2019 Loan Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 8.50% | |||||
2019 Loan Agreement [Member] | Ares Term Loans [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility, original borrowing capacity | $ 100,000 | |||||
Percentage of foreign subsidiaries stock held as collateral | 65.00% | |||||
Covenant Terms of Credit Facility | During any period beginning on a date that either: (i) a default has occurred and is continuing under the loan documents entered into by Legacy RTI in conjunction with the Credit Agreement (the “Ares Loan Documents”); or (ii) availability under the Ares Term Loan is less than the specified covenant testing threshold, and continuing until either (a) no default has occurred and is continuing under the Ares Loan Documents or (b) availability under the Ares Term Loan is greater than or equal to the specified covenant testing threshold for thirty (30) consecutive days, | |||||
Term loan guaranteed description | The Ares Term Loan is guaranteed by the Company and each of the Company’s domestic subsidiaries and is secured by: (i) substantially all of the assets of Legacy RTI; (ii) substantially all of the assets of the Company; (iii) substantially all of the assets of the Company’s domestic subsidiaries; and (iv) 65% of the stock of the Company’s foreign subsidiaries. | |||||
Minimum fixed charge coverage ratio | 91.00% | |||||
Net leverage ratio | 900.00% | |||||
2019 Loan Agreement [Member] | Ares Term Loans [Member] | Scenario, Forecast [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Net leverage ratio | 350.00% |
Other Long-Term Liabilities - S
Other Long-Term Liabilities - Summary of Other Long-term Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Jan. 04, 2018 |
Acquisition contingencies | $ 63,719 | $ 4,986 | |
Other | 2,271 | 633 | |
Total other long-term liabilities | 65,990 | 5,619 | |
Zyga Technology Inc [Member] | |||
Acquisition contingencies | $ 63,719 | $ 4,986 | $ 4,986 |
Other Long Term Liabilities - A
Other Long Term Liabilities - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Mar. 08, 2019 | Jan. 04, 2018 | |
Zyga Technology Inc [Member] | Clinical and Revenue Milestones Earnout Payment [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Revenue earnout contingencies | $ 3,396 | $ 3,396 | |
Zyga Technology Inc [Member] | Earn Out Payment [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Reduction in contingent liability | 1,590 | ||
Paradigm Spine [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Revenue earnout contingencies | $ 94,976 | ||
Paradigm Spine [Member] | Earn Out Payment [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Revenue earnout contingencies | 60,323 | ||
Reduction in contingent liability | $ 34,653 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Deferred tax assets | $ 20,967 |
Domestic deferred tax assets, valuation allowances | $ 3,082 |
Primary measure of cumulative losses, number of rolling years | 3 years |
Preferred Stock - Additional In
Preferred Stock - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 16, 2013 | Jun. 12, 2013 | Sep. 30, 2019 | Dec. 31, 2018 |
Series A Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Preferred stock issuance cost | $ (155) | $ (293) | ||
Private Placement [Member] | Convertible Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Convertible preferred stock issued | $ 50,000 | |||
Preferred stock issuance cost | $ 1,290 | |||
Private Placement [Member] | Series A Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Preferred stock dividend rate | 6.00% |
Preferred Stock - Schedule of P
Preferred Stock - Schedule of Preferred Stock (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Temporary Equity [Line Items] | ||
Net Total | $ 66,364 | $ 66,226 |
Amortization of preferred stock issuance costs | 138 | |
Series A Preferred Stock [Member] | ||
Temporary Equity [Line Items] | ||
Net Total | 66,519 | 66,519 |
Amortization of preferred stock issuance costs | 138 | |
Preferred stock issuance cost | $ (155) | $ (293) |
Severance and Restructuring C_3
Severance and Restructuring Costs - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Severance and restructuring costs | $ 2,280 | |
Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and restructuring costs | $ 896 | |
Paradigm Spine [Member] | Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and restructuring costs | $ 896 |
Severance and Restructuring C_4
Severance and Restructuring Costs - Schedule of Restructuring Charges (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Accrued severance and restructuring charges, beginning balance | $ 931 | |
Severance and restructuring costs accrued in 2019 | $ 2,280 | |
Accrued severance and restructuring charges, ending balance | 518 | 931 |
Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Accrued severance and restructuring charges, beginning balance | 931 | |
Severance and restructuring costs accrued in 2019 | 896 | |
Subtotal severance and restructuring costs | 1,827 | |
Severance and restructuring related cash payments | (1,309) | |
Accrued severance and restructuring charges, ending balance | $ 518 | $ 931 |
Executive Transition Costs - Ad
Executive Transition Costs - Additional Information (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Former Chief Executive Officer [Member] | |
Postemployment Benefits Disclosure [Line Items] | |
Executive transition costs | $ 4,404 |
Executive Transition Costs - Sc
Executive Transition Costs - Schedule of Restructuring Charges (Detail) - Chief Executive Officer and Chief Financial and Administrative Officer [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Accrued executive transition costs at January 1, 2019 | $ 43 |
Cash payments | $ (43) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 08, 2019 | Jan. 04, 2018 | Oct. 12, 2013 | Sep. 30, 2010 | Sep. 30, 2019 | Sep. 30, 2018 |
Medtronic [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Decline in cumulative fees received, trailing period | 12 months | |||||
Distribution agreement automatic renewal term | 5 years | |||||
Period prior to expiration of initial term for notice | 1 year | |||||
Zimmer [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Initial agreement term | 10 years | |||||
Upfront payment | $ 13,000 | |||||
Upfront payment period | 10 days | |||||
Paradigm Spine [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Agreement to acquire business | $ 300,000 | |||||
Cash to be paid at closing | 150,000 | |||||
Potential debt to finance business combination | $ 100,000 | |||||
Number of common stock to be issued at closing, shares | 10,729,614 | |||||
Number of common stock to be issued at closing, value | $ 50,000 | |||||
Revenue based earnout considerations | 60,323 | |||||
Cash from RTI Surgical | 221,053 | $ 99,692 | ||||
Earnout consideration | 94,976 | |||||
Paradigm Spine [Member] | Earn Out Payment [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Earnout consideration | 60,323 | |||||
Paradigm Spine [Member] | Maximum [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Revenue based earnout considerations | $ 150,000 | |||||
Zyga Technology Inc [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Date of merger agreement | Jan. 4, 2018 | |||||
Payments to acquire businesses | $ 21,000 | |||||
Cash from RTI Surgical | 3,000 | $ 21,000 | ||||
Zyga Technology Inc [Member] | Clinical Milestones [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Earnout consideration | 1,000 | 4,986 | ||||
Zyga Technology Inc [Member] | Earn Out Payment [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Revenue based earnout consideration | 35,000 | 4,986 | ||||
Zyga Technology Inc [Member] | Clinical and Revenue Milestones Earnout Payment [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Earnout consideration | 3,396 | $ 3,396 | ||||
Zyga Technology Inc [Member] | Revolving Credit Facility [Member] | ||||||
Commitment And Contingencies [Line Items] | ||||||
Cash proceeds from credit facility | $ 18,000 |
Legal Actions - Additional Info
Legal Actions - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019LitigationClaim | |
Commitments And Contingencies Disclosure [Abstract] | |
Outstanding claims | Litigation | 0 |
Claims for which the Company Parties are providing defense and indemnification | Claim | 1,113 |
Segment Data - Additional Infor
Segment Data - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segment | 1 |
Lines of business | 4 |
Segment Data - Revenues from Ti
Segment Data - Revenues from Tissue Distribution and Other Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 76,129 | $ 69,064 | $ 228,177 | $ 209,639 |
Spine [Member] | Tissue Distribution [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 23,661 | 20,741 | 70,337 | 58,938 |
Sports [Member] | Tissue Distribution [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 12,704 | 12,271 | 40,507 | 39,896 |
OEM [Member] | Tissue Distribution [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 32,341 | 30,092 | 93,815 | 91,382 |
International [Member] | Tissue Distribution [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 7,423 | $ 5,960 | $ 23,518 | $ 19,423 |
Segment Data - Schedule of Perc
Segment Data - Schedule of Percentage of Total Revenues Derived from Company's Largest Distributors (Detail) - Distributors Concentration Risk [Member] - Sales Revenue, Net [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Zimmer [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 18.00% | 22.00% | 19.00% | 21.00% |
Medtronic [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 7.00% | 9.00% | 8.00% | 8.00% |
DePuy Synthes [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 4.00% | 3.00% | 4.00% | 5.00% |
Segment Data - Schedule of Prop
Segment Data - Schedule of Property, Plant and Equipment - Net by Significant Geographic Location (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - net | $ 81,206 | $ 77,954 |
Domestic [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - net | 75,211 | 72,501 |
International [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - net | $ 5,995 | $ 5,453 |