Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 26, 2016 | |
Document Documentand Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | iart | |
Entity Registrant Name | INTEGRA LIFESCIENCES HOLDINGS CORP | |
Entity Central Index Key | 917,520 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 37,360,514 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Total revenue, net | $ 249,309 | $ 212,673 | $ 486,079 | $ 415,207 |
Costs and expenses: | ||||
Cost of goods sold | 89,565 | 75,251 | 174,338 | 150,472 |
Research and development | 14,679 | 12,012 | 29,130 | 23,091 |
Selling, general and administrative | 119,217 | 99,318 | 231,192 | 192,583 |
Intangible asset amortization | 3,471 | 1,747 | 6,943 | 3,476 |
Total costs and expenses | 226,932 | 188,328 | 441,603 | 369,622 |
Operating income | 22,377 | 24,345 | 44,476 | 45,585 |
Interest income | 6 | 8 | 12 | 13 |
Interest expense | (6,588) | (5,485) | (12,961) | (10,957) |
Other income (expense), net | (852) | (860) | (1,590) | 1,157 |
Income from continuing operations before income taxes | 14,943 | 18,008 | 29,937 | 35,798 |
Income tax expense | 2,188 | 5,988 | 3,764 | 12,046 |
Income from continuing operations | 12,755 | 12,020 | 26,173 | 23,752 |
Loss from discontinued operations (net of tax benefit) | 0 | (7,022) | 0 | (10,370) |
Net income | $ 12,755 | $ 4,998 | $ 26,173 | $ 13,382 |
Net income per share - basic: | ||||
Income from continuing operations (in dollars per share) | $ 0.34 | $ 0.36 | $ 0.71 | $ 0.72 |
Loss from discontinued operations (in dollars per share) | 0 | (0.21) | 0 | (0.32) |
Net income per share - basic (in dollars per share) | 0.34 | 0.15 | 0.71 | 0.40 |
Net income per share - diluted: | ||||
Income from continuing operations (in dollars per share) | 0.32 | 0.35 | 0.68 | 0.71 |
Loss from discontinued operations (in dollars per share) | 0 | (0.21) | 0 | (0.31) |
Net income per share - diluted (in dollars per share) | $ 0.32 | $ 0.14 | $ 0.68 | $ 0.40 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 37,196 | 33,032 | 37,037 | 32,884 |
Diluted (in shares) | 39,355 | 33,939 | 38,771 | 33,644 |
Comprehensive income (loss) | $ 5,844 | $ 12,325 | $ 30,499 | $ (3,418) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 86,803 | $ 48,132 |
Restricted cash and cash equivalents | 0 | 4,073 |
Trade accounts receivable, net of allowances of $6,023 and $5,572 | 145,571 | 132,241 |
Inventories, net | 220,442 | 211,429 |
Prepaid expenses and other current assets | 41,170 | 42,620 |
Total current assets | 493,986 | 438,495 |
Property, plant and equipment, net | 208,648 | 205,181 |
Intangible assets, net | 583,569 | 603,740 |
Goodwill | 514,023 | 512,389 |
Deferred tax assets | 7,062 | 6,932 |
Other assets | 6,874 | 7,487 |
Total assets | 1,814,162 | 1,774,224 |
Current liabilities: | ||
Borrowings under senior credit facility | 21,250 | 14,375 |
Accounts payable, trade | 43,954 | 34,772 |
Deferred revenue | 8,151 | 5,666 |
Accrued compensation | 38,435 | 45,154 |
Accrued expenses and other current liabilities | 38,037 | 39,160 |
Total current liabilities | 149,827 | 139,127 |
Long-term borrowings under senior credit facility | 461,250 | 481,875 |
Long-term convertible securities | 223,041 | 218,240 |
Deferred tax liabilities | 156,337 | 154,891 |
Other liabilities | 28,920 | 28,648 |
Total liabilities | 1,019,375 | 1,022,781 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock; no par value; 15,000 authorized shares; none outstanding | 0 | 0 |
Common stock; $0.01 par value; 60,000 authorized shares; 46,238 and 45,857 issued at June 30, 2016 and December 31, 2015, respectively | 462 | 459 |
Additional paid-in capital | 1,032,970 | 1,020,128 |
Treasury stock, at cost; 8,915 shares at June 30, 2016 and December 31, 2015 | (367,121) | (367,121) |
Accumulated other comprehensive loss | (43,576) | (47,902) |
Retained earnings | 172,052 | 145,879 |
Total stockholders’ equity | 794,787 | 751,443 |
Total liabilities and stockholders’ equity | $ 1,814,162 | $ 1,774,224 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $ 6,023 | $ 5,572 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, authorized shares (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 46,238,000 | 45,857,000 |
Treasury stock, shares (in shares) | 8,915,000 | 8,915,000 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
OPERATING ACTIVITIES: | ||
Net income | $ 26,173 | $ 13,382 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Loss from discontinued operations, net of tax | 0 | 10,370 |
Depreciation and amortization | 36,267 | 24,362 |
Deferred income tax | (642) | 1,565 |
Amortization of debt issuance costs | 1,236 | 1,060 |
Non-cash interest expense | 4,168 | 3,744 |
Loss on disposal of property and equipment | 1,184 | 38 |
Change in fair value of contingent consideration | 251 | 239 |
Share-based compensation | 7,897 | 5,419 |
Changes in assets and liabilities, net of business acquisitions: | ||
Accounts receivable | (13,525) | (5,192) |
Inventories | (7,362) | (6,118) |
Prepaid expenses and other current assets | 4,362 | 903 |
Other non-current assets | (571) | (1,806) |
Accounts payable, accrued expenses and other current liabilities | 2,237 | 23,951 |
Deferred revenue | 2,510 | (805) |
Other non-current liabilities | (1,076) | 700 |
Net cash provided by operating activities of continuing operations | 63,109 | 71,812 |
Net cash used in operating activities of discontinued operations | 0 | (12,209) |
Net cash provided by operating activities | 63,109 | 59,603 |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (19,162) | (14,953) |
Sale of property and equipment | 0 | 1,438 |
Cash received from business acquisition purchase price adjustment | 224 | 1,831 |
Change in restricted cash | 4,165 | 0 |
Net cash used in investing activities of continuing operations | (14,773) | (11,684) |
Net cash used in investing activities of discontinued operations | 0 | (7,060) |
Net cash used in investing activities | (14,773) | (18,744) |
FINANCING ACTIVITIES: | ||
Borrowings under senior credit facility | 15,000 | 35,000 |
Repayments under senior credit facility | (28,750) | (15,000) |
Principal payments under capital lease obligations | (323) | (396) |
Proceeds from exercised stock options | 9,260 | 7,345 |
Cash taxes paid in net equity settlement | (4,269) | (6,359) |
Net cash (used in) provided by financing activities | (9,082) | 20,590 |
Effect of exchange rate changes on cash and cash equivalents | (583) | (2,146) |
Net increase in cash and cash equivalents | 38,671 | 59,303 |
Cash and cash equivalents at beginning of period | 48,132 | 71,734 |
Cash and cash equivalents at end of period | $ 86,803 | $ 131,037 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION General The terms “we,” “our,” “us,” “Company” and “Integra” refer to Integra LifeSciences Holdings Corporation, a Delaware corporation, and its subsidiaries unless the context suggests otherwise. In the opinion of management, the June 30, 2016 unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations and cash flows of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K. The December 31, 2015 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. Operating results for the three and six-month periods ended June 30, 2016 are not necessarily indicative of the results to be expected for the entire year. On July 1, 2015, the Company completed the distribution of 100% of the outstanding common shares of SeaSpine Holdings Corporation ("SeaSpine") to Integra shareholders who received one share of SeaSpine common stock for every three shares of Integra common stock held as of the close of business on the record date, June 19, 2015. The Company has classified the results of operations and cash flows of SeaSpine as discontinued operations for the three- and six-month periods ended June 30, 2015 presented in the Company's Form 10-Q. Unless indicated otherwise, the information in the Notes to the condensed consolidated financial statements relates to the Company's continuing operations. Refer to Note 2 - Discontinued Operations , for additional information regarding the distribution. The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses. Significant estimates affecting amounts reported or disclosed in the consolidated financial statements include allowances for doubtful accounts receivable and sales returns and allowances, net realizable value of inventories, valuation of intangible assets including in-process research and development, amortization periods for acquired intangible assets, discount rates and estimated projected cash flows used to value and test impairments of long-lived assets and goodwill, estimates of projected cash flows and depreciation and amortization periods for long-lived assets, computation of taxes, valuation allowances recorded against deferred tax assets, the valuation of stock-based compensation, valuation of derivative instruments, valuation of the equity component of convertible debt instruments, valuation of contingent liabilities, the fair value of debt instruments and loss contingencies. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the current circumstances. Actual results could differ from these estimates. Recently Issued Accounting Standards In May 2014, the FASB issued Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue when (or as) the entity satisfies a performance obligation. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2017. Early adoption as of January 1, 2017 is permitted. The Company is in the process of evaluating the impact of this standard on its financial statements. In June 2014, the FASB issued Update No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (Topic 718) . The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This update is effective for annual and interim reporting periods beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016 on a prospective basis. The implementation of the amended guidance did not have a material impact on the Company's consolidated financial position or results of operations. In August 2014, the FASB issued Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The amendment requires management to evaluate, for each annual and interim reporting period, whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued or are available to be issued. If substantial doubt is raised, additional disclosures around management’s plan to alleviate these doubts are required. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2016. The implementation of the amended guidance is not expected to have an impact on current disclosures in the financial statements. In April 2015, the FASB issued Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . The amendment requires that all costs incurred to issue certain debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. The new standard is limited to the presentation of debt issuance costs and does not affect the recognition or measurement of debt issuance costs. This update is effective for all annual periods and interim reporting periods beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016 on a retrospective basis. The implementation of the amended guidance did not have a material impact on the consolidated results of operations and resulted in a reclassification of a portion of the debt issuance costs from other long-term assets to long-term debt. In July 2015, the FASB issued Update No. 2015-11, Simplifying the Measurement of Inventory . The amendment requires an entity to measure inventory that is within the scope of this amendment at the lower of cost and net realizable value. Existing impairment models will continue to be used for inventories that are accounted for using the last-in first-out (“LIFO”) method. The ASU requires prospective adoption for inventory measurements for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years for public business entities. Early adoption is permitted. The implementation of the amended guidance is not expected to have a material impact on the consolidated financial position or results of operations. In August 2015, the FASB issued Update No. 2015-15, Interest - Imputation of Interest . The amendment requires entities to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability. The guidance in ASU No. 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU No. 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity's deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This update is effective for all annual periods and interim reporting periods beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016 on a retrospective basis. The implementation of the amended guidance did not have a material impact on the consolidated financial position or results of operations. In September 2015, the FASB issued Update No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments . The amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This update also requires an entity to present separately in the income statement or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This update is effective for all annual periods and interim reporting periods beginning after December 15, 2015. The new standard must be applied prospectively to adjustments to provisional amounts that occur after the effective date. The implementation of the amended guidance did not have a material impact on the consolidated results of operations or disclosures in the financial statements. In November 2015, the FASB issued Update No. 2015-17, Income Taxes (Topic 740) . Under current accounting guidance an entity is required to separate deferred income tax liabilities and assets into current and non-current amounts in a classified statement of financial position. The amendment requires that an entity present all deferred tax assets and liabilities as non-current in a classified statement of financial position. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2016, however the Company adopted this guidance effective December 31, 2015 on a prospective basis. In February 2016, the FASB issued Update No. 2016-02, Leases (Topic 842) . Under current accounting guidance an entity is not required to report operating leases on the balance sheet. The amendment requires that lessees recognize virtually all of their leases on the balance sheet, by recording a right-of-use asset and lease liability (other than leases that meet the definition of a "short-term lease"). This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2018. The new standard must be adopted using a modified retrospective transition. Early adoption is permitted. The Company is in the process of evaluating the impact of this standard on its financial statements. In March 2016, the FASB issued Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) (ASU 2016-09) , which simplifies several aspect of the accounting for share-based payment. Under current accounting guidance an entity is required to report excess tax benefits and tax deficiencies, to the extent of previous windfalls, in equity when an award is settled. A tax benefit currently only recognized when it is realized. Excess tax benefits at settlements are currently reported as cash inflows from financing activities. The amendment requires that an entity present all excess tax benefits and all tax deficiencies as income tax expense or benefit in the statement of operations to be applied using a prospective transition method. Related tax effects of share-based payment settlements are to be presented as cash inflows from operating activities with a transition method of either a prospective or retrospective transition method. The amendment also removes the requirement to delay recognition of an excess tax benefit until the tax benefit is realized. A modified retrospective transition method must be applied for this provision of amendment. ASU 2016-09 allows the Company to elect to account for forfeitures either based on an estimate of the number of awards for which the requisite service period is not expected be rendered with a true-up for actual forfeitures or to account for forfeitures as they occur. The amendment also requires cash outflows attributable to tax withholdings on the net settlement of equity-classified awards to be classified in financing cash flows, with any changes to be applied retrospectively. ASU 2016-09 is effective for all annual periods and interim reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company elected to early adopt ASU 2016-09 during the quarter ended June 30, 2016, which requires any adjustments to be reflected as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The Company elected to account for forfeitures as they occur. The impact in retained earnings as of December 31, 2015 from this provision was not significant. Amendments related to accounting for excess tax benefits have been adopted prospectively, resulting in recognition of excess tax benefits against income tax expenses rather than additional paid-in capital of $1.2 million and $3.0 million for the three and six months ended June 30, 2016, respectively. Amendments related to the condensed consolidated statement of cash flows have been adopted retrospectively. As a result of this adoption, the excess tax settlement and taxes on net settlement of $7.2 million was included in net cash provided by operating activities for the six months ended June 30, 2016. The six months ended June 30, 2015 was adjusted as follows: a $9.9 million increase to net cash provided by operating activities and a $9.9 million decrease in net cash provided by financing activities. There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company's financial position, results of operations or cash flows. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On October 29, 2014, Integra's Board of Directors approved the announcement of a plan to separate the Company's spine and orthobiologics businesses, now known as SeaSpine Holdings Corporation, from Integra as a new, publicly traded medical technology company focused on the design, development and commercialization of surgical solutions for the treatment of patients suffering from spinal disorders. Integra's board of directors based this determination, in part, on its belief that the tax-free distribution of SeaSpine's shares to Integra stockholders is the most efficient manner to separate the business from Integra's other medical technology businesses. On November 3, 2014, the Company announced its intention to separate its spine business, which was previously a separate reportable segment. On July 1, 2015, the Company completed the distribution of 100% of the outstanding common stock of SeaSpine to Integra's stockholders, who received one share of SeaSpine common stock for every three shares of Integra common stock held as of the close of business on the record date, June 19, 2015. The Company and SeaSpine share three board members, including the chair of Integra’s board of directors, who is lead director for SeaSpine. The separation agreement provided SeaSpine with approximately $47.0 million of total cash immediately following the distribution. No gain or loss was recognized on the part of the Company or shareholders as a result of the distribution resulting from the separation of the spine business. The historical results of operations, cash flows, and statement of financial position of SeaSpine have been presented as discontinued operations in the condensed consolidated financial statements and prior periods have been restated. Discontinued operations include results of SeaSpine's business except for certain allocated corporate overhead costs and certain costs associated with transition services provided by Integra to SeaSpine. These allocated costs remain part of continuing operations. Discontinued operations also include other costs incurred by Integra to separate SeaSpine from the fourth quarter of 2014 through the second quarter of 2015. These costs include transaction charges, advisory and consulting fees, and information system expenses. Since the third quarter of 2015, SeaSpine is a stand-alone public company that separately reports its financial results. Due to differences between the basis of presentation for discontinued operations and the basis of presentation as a stand-alone company, the financial results of SeaSpine included within discontinued operations for the Company may not be indicative of actual financial results of SeaSpine as a stand-alone company. The following table summarizes results from discontinued operations of SeaSpine included in the condensed consolidated statement of operations: Three Months Ended June 30, Six Months Ended June 30, 2015 2015 (in thousands) Total revenue $ 33,461 $ 65,775 Costs and expenses 43,852 80,618 Operating loss (10,391 ) (14,843 ) Other income (expense), net (45 ) (766 ) Loss from discontinued operations before tax (10,436 ) (15,609 ) Benefit for income taxes (3,414 ) (5,239 ) Net loss from discontinued operations $ (7,022 ) $ (10,370 ) The removal of SeaSpine's net assets and unrealized accelerated currency translation adjustment was presented as a reduction in Integra's retained earnings. In order to effect the separation and govern Integra's relationship with SeaSpine after the separation, the Company entered into a Separation and Distribution Agreement and other agreements, including a Tax Matters Agreement, an Employee Matters Agreement, several supply agreements, and a Transition Services Agreement. The Separation and Distribution Agreement governs the separation of the spine business, the transfer of assets and other matters related to the Company's relationship with SeaSpine. The Tax Matters Agreement governs the respective rights, responsibilities and obligations of SeaSpine and Integra with respect to taxes, tax attributes, tax returns, tax proceedings and certain other tax matters. The Employee Matters Agreement governs the compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of SeaSpine and Integra, and generally allocates liabilities and responsibilities relating to employee compensation, benefit plans and programs. The Employee Matters Agreement provides that employees of SeaSpine will no longer participate in benefit plans sponsored or maintained by Integra. In addition, the Employee Matters Agreement provides that each of the parties will be responsible for their respective former and current employees and compensation plans for such current employees. The Company entered into several Supply Agreements in which SeaSpine engaged Integra to be the product supplier of Integra's former Integra Mozaik TM product line ("Mozaik") for a three -year period following the separation, after which there will be no defined terms and this will be considered a normal purchase/sale arrangement. This product line has been licensed to SeaSpine in conjunction with the spin-off. Prior to the spin-off, sales of Mozaik products from an Integra facility to a SeaSpine facility were eliminated in Integra's historical consolidated financial results of operations. The revenue and cost of goods sold related to prior sales of Mozaik to SeaSpine have been restated and are presented in Integra's continuing operations as results of operations. The Company has recorded $0.5 million and $2.0 million in revenue related to the sale of Mozaik products for the three-month period ended June 30, 2016 and 2015 , respectively, and $0.6 million and $3.2 million , respectively for the six-month periods ended June 30, 2016 and 2015. The Company has recorded the related cost of goods sold of approximately $0.5 million and $2.0 million in for the three-months periods ended June 30, 2016 and 2015 , respectively and $0.6 million and $3.2 million for the six-month periods ended June 30, 2016 and 2015, respectively, in its continuing operations. Under the terms of the Transition Services Agreement, the Company agreed to provide administrative, site services, information technology systems and various other corporate and support services to SeaSpine over various periods after the separation on a cost or cost-plus basis. The most significant components of the service income are the provision of information systems and legal services, which were substantially completed during the first quarter of 2016. In the three- and six-month periods ended June 30, 2016 other income (expense), net, includes a minimal amount and $0.3 million , respectively of income in respect of the provision of services to SeaSpine. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS Tekmed On December 15, 2015, the Company acquired the assets of Tekmed Instruments S.p.A ("Tekmed") for an aggregate purchase price of $14.1 million including a minimal amount of working capital and purchase adjustment which was recorded as an adjustment to assumed liabilities. Tekmed was a distributor of the Company's and third-party products in Italy and focuses on neurosurgery and neurotrauma, along with representation in plastic and reconstructive surgery, cardiovascular surgery, image diagnostics, general surgery, anesthesia and intensive care, interventional radiology, and proton therapy. This acquisition enables the Company to sell directly into the market to support our Specialty Surgical Solutions division's growth in Italy along with other key Integra franchises. The Company recorded revenue for Tekmed of approximately $1.2 million and $2.4 million related to third party products in the consolidated statements of operations for the three and six months ended June 30, 2016 . The net income or loss attributable to this acquisition cannot be identified on a stand-alone basis because it is in the process of being integrated into the Company's operations. The following summarizes the preliminary allocation of the purchase price as of June 30, 2016 based on the fair value of the assets acquired and liabilities assumed: Preliminary Purchase Price Allocation (Dollars in thousands) Inventory $ 1,143 Other current assets 11 Property, plant, and equipment 669 Intangible assets: Wtd. Avg. Life: Supplier contracts 4,981 2 -13 Years Goodwill 9,665 Total assets acquired 16,469 Accrued expenses and other liabilities 802 Deferred tax liabilities 1,564 Net assets acquired $ 14,103 Tornier's United States Toe & Ankle Business On October 2, 2015, the Company acquired the United States rights to Tornier's Salto Talaris® and Salto Talaris® XT ankle replacement products and Tornier's Futura TM silastic toe replacement products (the "Salto and Futura") for $6.0 million in cash. The estimated fair value of the net assets acquired exceeded the purchase price for the Salto and Futura product lines and resulted in the Company's recording a gain of $1.1 million for the year ended December 31, 2015 in Other Income. The acquired toe and ankle products enhance the Company's lower extremities product offering and accelerate its entry into the U.S. total ankle replacement market. The Company recorded revenue for Salto and Futura of approximately $3.4 million and $7.3 million in the consolidated statements of operations for the three and six months period ended June 30, 2016 . The net income or loss attributable to this acquisition cannot be identified on a stand-alone basis because it is in the process of being integrated into the Company's operations. The following summarizes the allocation of the purchase price as of June 30, 2016 based on the fair value of the assets acquired and liabilities assumed: Purchase Price Allocation (Dollars in thousands) Inventory $ 2,688 Property, plant, and equipment 1,453 Intangible assets: Wtd. Avg. Life: Ankle product family 3,210 11 years Toe product family 460 10 years Total assets acquired 7,811 Deferred tax liabilities 700 Net assets acquired $ 7,111 TEI On July 17, 2015, the Company executed the two merger agreements (collectively, the "Agreements") under which the Company acquired TEI Biosciences, Inc., a Delaware corporation ("TEI Bio"), and TEI Medical Inc., a Delaware corporation ("TEI Med", collectively "TEI") for an aggregate purchase price of approximately $312.2 million ( $210.9 million for TEI Bio and $101.3 million for TEI Med) including working capital and purchase price adjustment of $0.2 million ( $0.5 million for TEI Bio offset by $0.7 million cash received for TEI Med) which was recorded as a reduction from goodwill. The purchase price consists of a cash payment to the former shareholders of TEI Bio and TEI Med of approximately $312.4 million upon the closing of the transaction, net of $1.2 million of acquired cash. TEI Bio is in the business of developing and commercializing biologic devices for soft tissue repair and regenerative applications, including dura and hernia repair and plastic and reconstructive surgery. TEI Med holds a license to TEI Bio’s regenerative technology in the fields of wound healing and orthopedics. The Company recorded revenue for TEI of approximately $12.4 million and $26.0 million in the condensed consolidated statements of operations for the three and six months ended June 30, 2016 . The net income or loss attributable to this acquisition cannot be identified on a stand-alone basis because it is in the process of being integrated into the Company's operations. The following summarizes the allocation of the purchase price as of June 30, 2016 based on the fair value of the assets acquired and liabilities assumed: Purchase Price Allocation (Dollars in thousands) Cash $ 1,241 Accounts receivable, net 9,011 Inventory 23,223 Income tax receivable 5,135 Other current assets 2,670 Property, plant, and equipment 2,027 Intangible assets: Wtd. Avg. Life: Developed technology 167,400 14 -16 Years Contractual relationships 51,345 11 -14 Years Leasehold interest 69 Goodwill 147,704 Total assets acquired 409,825 Accrued expenses and other liabilities 9,732 Deferred tax liabilities 87,908 Net assets acquired $ 312,185 Pro Forma Results The following unaudited pro forma financial information summarizes the results of operations for the three and six months ended June 30, 2015 as if the acquisitions completed by the Company during 2015 had been completed as of the beginning of the prior year. The pro forma results are based upon certain assumptions and estimates, and they give effect to actual operating results prior to the acquisition and adjustments to reflect (i) the change in interest expense, depreciation expense, and intangible asset amortization, (ii) certain external expenses related to the acquisition as if they were incurred on January 1 of the year prior to the acquisition that will not be recurring in the post-acquisition periods, and (iii) income taxes on the aforementioned adjustments at the Company’s statutory rate. No effect has been given to other cost reductions or operating synergies. As a result, these pro forma results do not necessarily represent results that would have occurred if the acquisition had taken place on the basis assumed above, nor are they indicative of the results of future combined operations. Three Months Ended June 30, Six Months Ended June 30, 2015 2015 (In thousands, except per share amounts) Total revenue $ 235,357 $ 460,828 Net income $ 13,585 $ 26,892 Net income per share: Basic $ 0.41 $ 0.82 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2016 | |
Inventory, Net [Abstract] | |
INVENTORIES | INVENTORIES Inventories, net consisted of the following: June 30, 2016 December 31, 2015 (In thousands) Finished goods $ 128,432 $ 125,869 Work in process 50,232 47,962 Raw materials 41,778 37,598 $ 220,442 $ 211,429 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill for the six -month period ended June 30, 2016 were as follows: Specialty Surgical Solutions Orthopedics and Tissue Technologies Total (In thousands) Goodwill at December 31, 2015 $ 284,976 $ 227,413 $ 512,389 TEI working capital and purchase price adjustment — (174 ) (174 ) Foreign currency translation 1,006 802 1,808 Balance, June 30, 2016 $ 285,982 $ 228,041 $ 514,023 The components of the Company’s identifiable intangible assets were as follows: June 30, 2016 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 17 years $ 480,599 $ (81,750 ) $ 398,849 Customer relationships 12 years 153,926 (73,483 ) 80,443 Trademarks/brand names 30 years 91,282 (18,000 ) 73,282 Supplier relationships 27 years 34,721 (12,950 ) 21,771 All other (1) 5 years 11,068 (1,844 ) 9,224 $ 771,596 $ (188,027 ) $ 583,569 December 31, 2015 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 17 years $ 480,684 $ (67,978 ) $ 412,706 Customer relationships 12 years 153,246 (68,811 ) 84,435 Trademarks/brand names 30 years 90,837 (16,374 ) 74,463 Supplier relationships 27 years 34,721 (12,236 ) 22,485 All other (1) 5 years 10,958 (1,307 ) 9,651 $ 770,446 $ (166,706 ) $ 603,740 (1) At June 30, 2016 and December 31, 2015 , all other included in-process research and development ("IPR&D") of $1.0 million in both periods, which was indefinite-lived. Based on quarter-end exchange rates, annual amortization expense (including amounts reported in cost of product revenues, but excluding any possible future amortization associated with acquired in-process research and development) is expected to approximate $41.5 million in 2016 , $40.9 million in 2017 , $40.4 million in 2018 , $40.4 million in 2019 and $40.2 million in 2020 . Identifiable intangible assets are initially recorded at fair market value at the time of acquisition using an income or cost approach. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Amended and Restated Senior Credit Agreement On August 28, 2015 , the Company entered into a second amendment (the “Second Amendment”) to the certain Third Amended and Restated Credit Agreement, dated as of July 2, 2014 among the Company, a syndicate of lending banks, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National Association, as Syndication Agent, and HSBC Bank USA, National Association, Royal Bank of Canada, Citizens Bank, National Association, DNB Capital LLC, Crédit Agricole-Corporate and Investment Bank, and TD Bank, N.A., as Co-Documentation Agents. The Second Amendment creates an aggregate principal amount of up to $1.1 billion available to the Company through the following facilities: i. a $750.0 million revolving credit facility, which includes a $60.0 million sublimit for the issuance of standby letters of credit and a $60.0 million sublimit for swingline loans, and ii. a $350.0 million term loan facility. In connection with the Second Amendment, the Company borrowed $200.0 million of incremental term loans as permitted under the original terms of the Senior Credit Facility to repay a portion of the Company's outstanding revolving loans. Additionally, the Second Amendment (i) enables the Company to incur up to $200.0 million of incremental loans in the future and (ii) modifies the consolidated leverage ratio covenant in the Credit Agreement. The July 2014 amended and restated Senior Credit Facility extended the maturity date of the prior facility from June 8, 2016 to July 2, 2019. Borrowings under the Senior Credit Facility bear interest, at the Company’s option, at a rate equal to: i. the Eurodollar Rate (as defined in the amendment and restatement) in effect from time to time plus the applicable rate (ranging from 1.00% to 1.75% ), or ii. the highest of: 1. the weighted average overnight Federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50% , 2. the prime lending rate of Bank of America, N.A., or 3. the one-month Eurodollar Rate plus 1.00% . The applicable rates are based on the Company’s consolidated total leverage ratio (defined as the ratio of (a) consolidated funded indebtedness less cash in excess of $40.0 million that is not subject to any restriction of the use or investment thereof to (b) consolidated EBITDA) at the time of the applicable borrowing. The Company will also pay an annual commitment fee (ranging from 0.15% to 0.30% , based on the Company’s consolidated total leverage ratio) on the daily amount by which the revolving credit facility exceeds the outstanding loans and letters of credit under the credit facility. The Senior Credit Facility is collateralized by substantially all of the assets of the Company’s U.S. subsidiaries, excluding intangible assets. The Senior Credit Facility is subject to various financial and negative covenants and at June 30, 2016 the Company was in compliance with all such covenants. The Company capitalized $1.4 million of incremental financing costs in 2015 in connection with the modifications of the Senior Credit Facility. At June 30, 2016 and December 31, 2015 , there was $140.0 million and $150.0 million outstanding, respectively, under the revolving credit component of the Senior Credit Facility at a weighted average interest rate of 2.1% and 1.9% , respectively. At June 30, 2016 and December 31, 2015, there was $342.5 million and $346.2 million outstanding, respectively, under the term loan component of the Senior Credit Facility at a weighted average interest rate of 2.1% and 1.8% , respectively. At June 30, 2016 , there was approximately $610.0 million available for borrowing under the Senior Credit Facility. The fair value of outstanding borrowings of the Senior Credit Facility's revolving credit facility and term loan components at June 30, 2016 was approximately $134.5 million and $330.3 million , respectively. These fair values were determined by using a discounted cash flow model based on current market interest rates available to the Company. These inputs are corroborated by observable market data for similar liabilities and therefore classified within Level 2 of the fair value hierarchy. Level 2 inputs represent inputs that are observable for the asset or liability, either directly or indirectly and are other than active market observable inputs that reflect unadjusted quoted prices for identical assets or liabilities. The Company considers the balance to be long-term in nature based on its current intent and ability to repay the borrowing outside of the next twelve-month period. Contractual repayments of the term loan began September 30, 2015 and are due as follows: Year Ended December 31, Principal Repayment (In thousands) 2016 $ 10,625 2017 25,625 2018 32,500 2019 273,750 $ 342,500 The outstanding balance of revolving credit component of the Senior Credit Facility is due on July 2, 2019. 2016 Convertible Senior Notes On June 15, 2011, the Company issued $230.0 million aggregate principal amount of its 1.625% Convertible Senior Notes due in 2016 (the “2016 Notes”). The 2016 Notes mature on December 15, 2016, and bear interest at a rate of 1.625% per annum payable semi-annually in arrears on December 15 and June 15 of each year. The portion of the debt proceeds that was classified as equity at the time of the offering was $43.2 million , an equivalent of that amount is being amortized to interest expense using the effective interest method through December 2016. The effective interest rate implicit in the liability component is 5.6% . At June 30, 2016 , the carrying amount of the liability component was $223.0 million , the remaining unamortized discount was $4.1 million , the unamortized debt issuance cost was fully amortized and the principal amount outstanding was $227.1 million . At December 31, 2015 , the carrying amount of the liability component was $218.2 million , the remaining unamortized discount was $8.4 million , the remaining unamortized debt issuance cost was $0.5 million and the principal amount outstanding was $227.1 million . The fair value of the 2016 Notes at June 30, 2016 was approximately $343.2 million . The fair value of the liability of the 2016 Notes was determined using a discounted cash flow model based on current market interest rates available to the Company. These inputs are corroborated by observable market data for similar liabilities and therefore classified within Level 2 of the fair value hierarchy. The 2016 Notes are senior, unsecured obligations of the Company, and are convertible into cash and, if applicable, shares of its common stock based on an initial conversion rate, subject to adjustment of 18.9287 shares per $1,000 principal amount of 2016 Notes (which represents an initial conversion price of approximately $52.83 per share). The Company will satisfy any conversion of the 2016 Notes with cash up to the principal amount of the 2016 Notes pursuant to the net share settlement mechanism set forth in the indenture and, with respect to any excess conversion value, with shares of the Company’s common stock. The 2016 Notes are convertible only in the following circumstances: (1) if the closing sale price of the Company’s common stock exceeds 150% of the conversion price during a period as defined in the indenture; (2) if the average trading price per $1,000 principal amount of the 2016 Notes is less than or equal to 98% of the average conversion value of the 2016 Notes during a period as defined in the indenture; (3) at any time on or after June 15, 2016 ; or (4) if specified corporate transactions occur, which included the spin-off of the spine business. The issue price of the 2016 Notes was equal to their face amount, which is also the amount holders are entitled to receive at maturity if the 2016 Notes are not converted. As of March 31, 2015, certain conversion features were triggered due to the announced spin-off of the Company's subsidiary, SeaSpine Holdings Corporation, which allowed the holders to convert all or any of the 2016 Notes subject to certain conditions. The 2016 Notes were convertible through June 10, 2015 and as of the close of the conversion window, note holders provided notice to convert 2,903 notes. During 2015, the Company paid $2.9 million in cash and issued 8,457 shares to settle the obligation to the note holders that converted. The Company considers the balance to be long-term in nature based on its current intent and ability to refinance the borrowing. In connection with the issuance of the 2016 Notes, the Company entered into call transactions and warrant transactions, primarily with affiliates of the initial purchasers of such notes (the “hedge participants”). The initial strike price of the call transaction is approximately $52.83 per share, subject to customary anti-dilution adjustments. The initial strike price of the warrant transaction is approximately $64.43 per share, subject to customary anti-dilution adjustments. Convertible Note Interest The interest expense components of the Company’s convertible notes are as follows (net of capitalized interest amounts): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands) 2016 Notes: Amortization of the discount on the liability component (1) $ 2,104 $ 1,885 $ 4,168 $ 3,744 Cash interest related to the contractual interest coupon (2) 892 824 1,780 1,669 Total $ 2,996 $ 2,709 $ 5,948 $ 5,413 (1) The amortization of the discount on the liability component of the 2016 Notes is presented net of capitalized interest of $0.1 million and $0.2 million for the three months ended June 30, 2016 and 2015, and $0.2 million and $0.4 million for the six months ended June 30, 2016 and 2015, respectively. (2) The cash interest related to the contractual interest coupon on the 2016 Notes is presented net of capitalized interest of $0.1 million for the three months ended June 30, 2015 and $0.1 million and $0.2 million for the six months ended June 30, 2016 and 2015, respectively. A minimal amount was capitalized for the three months ended June 30, 2016. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS Interest Rate Hedging The Company’s interest rate risk relates to U.S. dollar denominated variable interest rate borrowings. On June 22, 2016, the Company entered into two $50.0 million interest rate swap derivative instruments with separate financial institutions, each with an effective date of December 31, 2016 to manage its earnings and cash flow exposure to changes in interest rates covering a portion of its floating-rate debt. These interest rate swaps expires on June 30, 2019. On August 10, 2015 the interest rate swap derivative instrument the Company entered into on August 10, 2010 with an effective date of December 31, 2010 expired. The interest rate swap was used to manage the Company's earnings and cash flow exposure to changes in interest rates by converting a portion of its floating-rate debt into fixed-rate debt. The Company designated these derivative instruments as cash flow hedges. The Company recorded the effective portion of any change in the fair value of a derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive income (“AOCI”), net of tax, until the hedged item affected earnings, at which point the effective portion of any gain or loss was reclassified to earnings. If the hedged cash flow does not occur, or if it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to interest expense at that time. As of June 30, 2016 , the Company had total outstanding interest rate swaps of $100.0 million each with an effective date of December 31, 2016. Foreign Currency Hedging From time to time the Company enters into foreign currency hedge contracts intended to protect the U.S. dollar value of certain forecasted foreign currency denominated transactions. The Company records the effective portion of any change in the fair value of foreign currency cash flow hedges in AOCI, net of tax, until the hedged item affects earnings. Once the related hedged item affects earnings, the Company reclassifies the effective portion of any related unrealized gain or loss on the foreign currency cash flow hedge to earnings. If the hedged forecasted transaction does not occur, or if it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. The success of the Company’s hedging program depends, in part, on forecasts of certain activity denominated in euros. The Company may experience unanticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activity during periods of currency volatility. In addition, changes in currency exchange rates related to any unhedged transactions may affect its earnings and cash flows. Counterparty Credit Risk The Company manages its concentration of counterparty credit risk on its derivative instruments by limiting acceptable counterparties to a group of major financial institutions with investment grade credit ratings, and by actively monitoring their credit ratings and outstanding positions on an ongoing basis. Therefore, the Company considers the credit risk of the counterparties to be low. Furthermore, none of the Company’s derivative transactions are subject to collateral or other security arrangements, and none contain provisions that depend upon the Company’s credit ratings from any credit rating agency. Fair Value of Derivative Instruments The Company has classified all of its derivative instruments within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of the derivative instruments. The fair value of the foreign currency forward exchange contracts related to inventory purchases is determined by comparing the forward rate as of the period end and the settlement rate specified in each contract. The fair value of the interest rate swaps was developed using a market approach based on publicly available market yield curves and the terms of the related swap. The Company performs ongoing assessments of counterparty credit risk. The following table summarizes the fair value and presentation for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of June 30, 2016 : Location on Balance Sheet (1) : Fair Value as of June 30, 2016 (In thousands) Derivatives designated as hedges — Liabilities: Interest rate swap — Accrued expenses and other current liabilities (2) $ 131 Interest rate swap — Other liabilities (2) 471 Total Derivatives designated as hedges — Liabilities $ 602 (1) The Company classifies derivative assets and liabilities as non-current based on the cash flows expected to be incurred within the following 12 months. (2) At June 30, 2016 , the notional amount related to the Company’s interest rate swaps was $100.0 million . There are no expected reduction in notional amount in the next twelve months. There were no instruments outstanding as of December 31, 2015. The following presents the effect of derivative instruments designated as cash flow hedges on the accompanying condensed consolidated statements of operations during the three and six months ended June 30, 2016 and 2015 : Balance in AOCI Beginning of Quarter Amount of Loss Recognized in AOCI- Effective Portion Amount of Loss Reclassified from AOCI into Earnings-Effective Portion Balance in AOCI End of Quarter Location in Statements of Operations (In thousands) Three Months Ended June 30, 2016 Interest rate swap $ — $ (602 ) $ — $ (602 ) $ — $ (602 ) $ — $ (602 ) Three months ended June 30, 2015 Interest rate swap $ (527 ) $ (7 ) $ (373 ) $ (161 ) Interest (expense) $ (527 ) $ (7 ) $ (373 ) $ (161 ) Balance in AOCI Beginning of Quarter Amount of Loss Recognized in AOCI- Effective Portion Amount of Loss Reclassified from AOCI into Earnings-Effective Portion Balance in AOCI End of Quarter Location in Statements of Operations (In thousands) Six Months Ended June 30, 2016 Interest rate swap $ — $ (602 ) $ — $ (602 ) $ — $ (602 ) $ — $ (602 ) Six months ended June 30, 2015 Interest rate swap $ (898 ) $ (25 ) (762 ) $ (161 ) Interest (expense) $ (898 ) $ (25 ) $ (762 ) $ (161 ) The Company recognized no gains or losses resulting from ineffectiveness of cash flow hedges during the three and six months ended June 30, 2016 and 2015. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION As of June 30, 2016 , the Company had stock options, restricted stock awards, performance stock units, contract stock awards and restricted stock unit awards outstanding under three plans, the 2000 Equity Incentive Plan (the “2000 Plan”), the 2001 Equity Incentive Plan (the “2001 Plan”), and the 2003 Equity Incentive Plan (the “2003 Plan,” and collectively, the “Plans”). Stock options issued under the Plans become exercisable over specified periods, generally within four years from the date of grant for officers, directors, and employees, and generally expire eight years from the grant date for employees, and from eight to ten years for directors and certain executive officers. Restricted stock issued under the Plans vests over specified periods, generally three years after the date of grant. The vesting of performance stock, issued under the Plans, is subject to service and performance conditions. In connection with the separation of SeaSpine on July 1, 2015 and in accordance with the Employee Matters Agreement, the Company made certain adjustments to the exercise price and number of share-based compensation awards with the intention of preserving the intrinsic value of the awards prior to the separation. Stock options issued in 2015 prior to the separation converted to those of the entity where the employee is working post-separation. Stock options issued prior to 2015 converted to both Integra and SeaSpine options such that the holders received stock options in both companies. The exercise price of these outstanding awards was adjusted to preserve the value of the awards immediately prior to the separation. Performance stock, restricted stock, and contract stock were adjusted to provide holders performance stock, restricted stock, and contract stock in the company that employs such employee following the separation. The adjustments to the Company's stock-based compensation awards resulted in an increase in incremental fair value of $4.4 million , of which $3.3 million has been previously recorded and $0.2 million and $0.4 million were recorded in the three and six months ended June 30, 2016. The remaining $0.7 million will be recognized prospectively over the remaining term of outstanding awards, adjusted, as applicable, for forfeitures. Stock Options As of June 30, 2016 , there were approximately $4.0 million of total unrecognized compensation costs related to unvested stock options, including the additional incremental fair value expense discussed above. These costs are expected to be recognized over a weighted-average period of approximately two years . There were 111,662 stock options granted during the six months ended June 30, 2016 . Awards of Restricted Stock, Performance Stock and Contract Stock Performance stock, restricted stock and contract stock awards generally have requisite service periods of three years. Performance stock units are subject to graded vesting conditions, and the Company expenses their fair value over the requisite service period. The Company expenses the fair value of restricted stock and contract stock awards on a straight-line basis over the vesting period or requisite service period, whichever is shorter. As of June 30, 2016 , there were approximately $22.2 million of total unrecognized compensation costs related to these unvested awards, including the additional incremental fair value expense discussed above. The Company expects to recognize these costs over a weighted-average period of approximately two years . The Company granted 155,371 restricted stock awards/stock units and 78,177 performance shares during the six months ended June 30, 2016 . The Company has no formal policy related to the repurchase of shares for the purpose of satisfying stock-based compensation obligations. The Company also maintains an Employee Stock Purchase Plan (the “ESPP”), which provides eligible employees with the opportunity to acquire shares of common stock at periodic intervals by means of accumulated payroll deductions. The ESPP is a non-compensatory plan based on its terms. |
TREASURY STOCK
TREASURY STOCK | 6 Months Ended |
Jun. 30, 2016 | |
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract] | |
TREASURY STOCK | TREASURY STOCK On October 28, 2014, the Board of Directors authorized a repurchase plan of up to $75.0 million of its outstanding common stock through December 2016. As of June 30, 2016 , there remained $75.0 million available for repurchases under this authorization. There were no cash treasury stock repurchases during the six months ended June 30, 2016 and 2015 . |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table provides a summary of the Company’s effective tax rate: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Reported tax rate 14.6 % 33.3 % 12.6 % 33.6 % The Company’s effective income tax rates for the three months ended June 30, 2016 and 2015 were 14.6% and 33.3% , respectively. In the three months ended June 30, 2016 , the primary drivers of the lower tax rate are excess tax benefits of $1.2 million as a result of early adoption of ASU 2016-09 and a $0.2 million benefit included for the release of uncertain tax positions. The primary driver of the higher tax rate for the three months ended June 30, 2015, compared to the three months ended June 30, 2016 , was $0.4 million expense relating to foreign tax returns filed during the three months ended June 30, 2015 and jurisdiction mix of income earned. The Company's effective income tax rates for the six months ended June 30, 2016 and 2015 were 12.6% and 33.6% , respectively. In the six months ended June 30, 2016, the primary drivers of the lower tax rate are excess tax benefits of $3.0 million as a result of early adoption of ASU 2016-09 and a $0.5 million benefit included for the release of uncertain tax positions. The primary drivers of the higher income tax rate for the six months ended June 30, 2015, compared to the six months ended June 30, 2016, are the $0.6 million expense and $0.4 million expense related to transfer pricing recorded and foreign tax returns filed for the six months ended June 30, 2015, respectively, and jurisdiction mix of income earned. The Company expects its effective income tax rate for the full year to be approximately 20.3% , resulting largely from the release of uncertain tax positions and jurisdiction mix of pre-tax income in U.S.-based operations relative to foreign operations. This estimate could be revised in the future as additional information is presented to the Company. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic and diluted net income per share was as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands, except per share amounts) Basic net income per share: Net income from continuing operations $ 12,755 $ 12,020 $ 26,173 $ 23,752 Net loss from discontinued operations — (7,022 ) — (10,370 ) Net income $ 12,755 $ 4,998 $ 26,173 $ 13,382 Weighted average common shares outstanding 37,196 33,032 37,037 32,884 Basic net income per common share from continuing operations $ 0.34 $ 0.36 $ 0.71 $ 0.72 Basic net loss per common share from discontinued operations — (0.21 ) — (0.32 ) Basic net income per common share $ 0.34 $ 0.15 $ 0.71 $ 0.40 Diluted net income per share: Net income from continuing operations $ 12,755 $ 12,020 $ 26,173 $ 23,752 Net loss from discontinued operations — (7,022 ) — (10,370 ) Net income $ 12,755 $ 4,998 $ 26,173 $ 13,382 Weighted average common shares outstanding — Basic 37,196 33,032 37,037 32,884 Effect of dilutive securities: 2016 Convertible notes and warrants 1,598 477 1,125 268 Stock options and restricted stock 561 430 609 492 Weighted average common shares for diluted earnings per share 39,355 33,939 38,771 33,644 Diluted net income per common share from continuing operations $ 0.32 $ 0.35 $ 0.68 $ 0.71 Diluted net loss per common share from discontinued operations — (0.21 ) — (0.31 ) Diluted net income per common share $ 0.32 $ 0.14 $ 0.68 $ 0.40 In connection with the separation of SeaSpine on July 1, 2015 and in accordance with the Employee Matters Agreement the Company made certain adjustments to the exercise price and number of share-based compensation awards with the intention of preserving the intrinsic value of the awards prior to the separation. Stock options issued in 2015 prior to the separation converted to those of the entity where the employee is working post-separation. Stock options issued prior to 2015 converted to both Integra and SeaSpine options such that the holders received stock options in both companies. The exercise price of these outstanding awards was adjusted to preserve the value of the awards immediately prior to the separation. Performance stock, restricted stock, and contract stock were adjusted to provide holders performance stock, restricted stock, and contract stock in the company that employs such employee following the separation. Common stock of approximately 0.2 million and 0.1 million of shares at June 30, 2016 and 2015 , respectively, that are issuable through exercise or conversion of dilutive securities were not included in the computation of diluted net income per share because their effect, would have been antidilutive. For the three and six months ended June 30, 2016 and 2015, the potential excess conversion value on the 2016 Notes and warrants were included in the Company's dilutive share calculation because the average stock price for the three and six months ended June 30, 2016 and 2015 exceeded the conversion price. Restricted Units that entitle the holders to approximately 0.1 million shares of common stock are included in the diluted weighted average shares outstanding calculation. |
COMPREHENSIVE INCOME (LOSS)
COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
COMPREHENSIVE INCOME (LOSS) | COMPREHENSIVE INCOME (LOSS) Comprehensive income (loss) was as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands) Net income $ 12,755 $ 4,998 $ 26,173 $ 13,382 Foreign currency translation adjustment (6,569 ) 7,166 4,675 (17,227 ) Change in unrealized (loss) gain on derivatives, net of tax (345 ) 209 (345 ) 420 Pension liability adjustment, net of tax 3 (48 ) (4 ) 7 Comprehensive income (loss) $ 5,844 $ 12,325 $ 30,499 $ (3,418 ) Changes in Accumulated Other Comprehensive Loss by component between December 31, 2015 and June 30, 2016 are presented in the table below, net of tax: Loss on Cash Flow Hedges Defined Benefit Pension Items Foreign Currency Items Total (In thousands) Beginning balance $ — $ 9 $ (47,911 ) $ (47,902 ) Other comprehensive (loss) income (345 ) (4 ) 4,675 4,326 Ending balance $ (345 ) $ 5 $ (43,236 ) $ (43,576 ) |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION The Company internally manages two global reportable segments and reports the results of its businesses to its chief operating decision maker. The two reportable segments and their activities are described below: • The Specialty Surgical Solutions segment includes (i) the Neurosurgery business, which sells a full line of products for neurosurgery and neuro critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, and cranial stabilization equipment and (ii) the Instruments business, which sells more than 60,000 instrument patterns and surgical and lighting products to hospitals, surgery centers, and dental, podiatry, and veterinary offices. • The Orthopedics and Tissue Technologies segment includes such offerings as skin and wound repair products, bone and joint fixation implants in the upper and lower extremities, bone grafts, plastic and reconstruction and nerve and tendon repair collagen implants. The Corporate and other category includes (i) various legal, finance, information systems, executive, and human resource functions, (ii) brand management, and (iii) share-based compensation costs. The operating results of the various reportable segments as presented are not comparable to one another because (i) certain operating segments are more dependent than others on corporate functions for unallocated general and administrative and/or operational manufacturing functions, and (ii) the Company does not allocate certain manufacturing costs and general and administrative costs to the operating segment results. Net sales and profit by reportable segment for the three and six months ended June 30, 2016 and 2015 are as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands) Segment Net Sales Specialty Surgical Solutions $ 158,163 $ 146,709 $ 309,338 $ 286,767 Orthopedics and Tissue Technologies 91,146 65,964 176,741 128,440 Total revenues $ 249,309 $ 212,673 $ 486,079 $ 415,207 Segment Profit Specialty Surgical Solutions $ 63,397 $ 62,325 $ 120,978 $ 122,657 Orthopedics and Tissue Technologies 26,025 18,428 46,300 38,348 Segment profit 89,422 80,753 167,278 161,005 Amortization (3,471 ) (1,747) (6,943) (3,476) Corporate and other (63,574 ) (54,661 ) (115,859) (111,944 ) Operating income from continuing operations $ 22,377 $ 24,345 $ 44,476 $ 45,585 The Company attributes revenues to geographic areas based on the location of the customer. Total revenue by major geographic area consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands) United States $ 191,872 $ 162,511 $ 373,101 $ 315,270 Europe 31,663 25,564 61,098 50,700 Rest of World 25,774 24,598 51,880 49,237 Total Revenues $ 249,309 $ 212,673 $ 486,079 $ 415,207 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES In consideration for certain technology, manufacturing, distribution, and selling rights and licenses granted to the Company, the Company has agreed to pay royalties on sales of certain products that it sells. The royalty payments that the Company made under these agreements were not significant for any of the periods presented. The Company is subject to various claims, lawsuits and proceedings in the ordinary course of the Company's business, including claims by current or former employees, distributors and competitors and with respect to its products and product liability claims, lawsuits and proceedings, some of which have been settled by the Company. In the opinion of management, such claims are either adequately covered by insurance or otherwise indemnified, or are not expected, individually or in the aggregate, to result in a material adverse effect on our financial condition. However, it is possible that the Company's results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies. TEI, acquired by Integra on July 17, 2015, manufactures a bovine-derived surgical mesh product for Boston Scientific Corporation ("BSC") and has been named as a defendant in lawsuits under a broad range of products liability theories, many of which have not been served on TEI. Currently, there are approximately fifty active cases against TEI. Pursuant to an indemnification agreement with BSC (i) BSC is managing the litigation; (ii) TEI has in place a products liability insurance policy, of which it must exhaust $3.0 million before BSC’s indemnity begins to cover relevant claims (and of which only a small portion has been utilized to date and against which the insurer has reserved the entire $3.0 million ). Because the thrust of products liability litigation focuses on synthetic surgical mesh products, counsel is filing motions to dismiss on behalf of TEI in many cases. In addition, Integra has certain protections in the merger agreements with TEI which would indemnify it for approximately $30.0 million for the first fifteen months after closing and between $20.0 and $30.0 million for the remainder of the three -year period after closing for losses relating to a variety of matters, including half of certain products liability claims (including those related to the product it manufactures for BSC) not covered by insurance. The Company accrues for loss contingencies when it is deemed probable that a loss has been incurred and that loss is estimable. The amounts accrued are based on the full amount of the estimated loss before considering insurance proceeds, and do not include an estimate for legal fees expected to be incurred in connection with the loss contingency. The Company consistently accrues legal fees expected to be incurred in connection with loss contingencies as those fees are incurred by outside counsel as a period cost. Contingent Consideration The Company increased the fair value of contingent consideration during the six -month period ended June 30, 2016 to reflect the change in the time value of money during the period. A reconciliation of the opening balances to the closing balances of these Level 3 measurements is as follows (in thousands): Location in Statement of Operations Balance as of January 1, 2016 $ 21,831 Loss from increase in fair value of contingent consideration liabilities 251 Selling, general and administrative Fair value at June 30, 2016 $ 22,082 The fair values of contingent consideration were estimated using a discounted cash flow model using discount rate of 2.20% . The Company assesses these assumptions on an ongoing basis as additional information impacting the assumptions is obtained. The entire contingent consideration balance was included in Other liabilities at June 30, 2016 and December 31, 2015 . |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT On July 12, 2016, the Company entered into an additional $50.0 million interest rate swap derivative instruments with an effective date of December 31, 2016 to manage its earnings and cash flow exposure to changes in interest rates covering a portion of its floating-rate debt. This interest rate swap expires on June 30, 2019. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue when (or as) the entity satisfies a performance obligation. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2017. Early adoption as of January 1, 2017 is permitted. The Company is in the process of evaluating the impact of this standard on its financial statements. In June 2014, the FASB issued Update No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (Topic 718) . The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This update is effective for annual and interim reporting periods beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016 on a prospective basis. The implementation of the amended guidance did not have a material impact on the Company's consolidated financial position or results of operations. In August 2014, the FASB issued Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The amendment requires management to evaluate, for each annual and interim reporting period, whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued or are available to be issued. If substantial doubt is raised, additional disclosures around management’s plan to alleviate these doubts are required. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2016. The implementation of the amended guidance is not expected to have an impact on current disclosures in the financial statements. In April 2015, the FASB issued Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . The amendment requires that all costs incurred to issue certain debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. The new standard is limited to the presentation of debt issuance costs and does not affect the recognition or measurement of debt issuance costs. This update is effective for all annual periods and interim reporting periods beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016 on a retrospective basis. The implementation of the amended guidance did not have a material impact on the consolidated results of operations and resulted in a reclassification of a portion of the debt issuance costs from other long-term assets to long-term debt. In July 2015, the FASB issued Update No. 2015-11, Simplifying the Measurement of Inventory . The amendment requires an entity to measure inventory that is within the scope of this amendment at the lower of cost and net realizable value. Existing impairment models will continue to be used for inventories that are accounted for using the last-in first-out (“LIFO”) method. The ASU requires prospective adoption for inventory measurements for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years for public business entities. Early adoption is permitted. The implementation of the amended guidance is not expected to have a material impact on the consolidated financial position or results of operations. In August 2015, the FASB issued Update No. 2015-15, Interest - Imputation of Interest . The amendment requires entities to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability. The guidance in ASU No. 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU No. 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity's deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This update is effective for all annual periods and interim reporting periods beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016 on a retrospective basis. The implementation of the amended guidance did not have a material impact on the consolidated financial position or results of operations. In September 2015, the FASB issued Update No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments . The amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This update also requires an entity to present separately in the income statement or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This update is effective for all annual periods and interim reporting periods beginning after December 15, 2015. The new standard must be applied prospectively to adjustments to provisional amounts that occur after the effective date. The implementation of the amended guidance did not have a material impact on the consolidated results of operations or disclosures in the financial statements. In November 2015, the FASB issued Update No. 2015-17, Income Taxes (Topic 740) . Under current accounting guidance an entity is required to separate deferred income tax liabilities and assets into current and non-current amounts in a classified statement of financial position. The amendment requires that an entity present all deferred tax assets and liabilities as non-current in a classified statement of financial position. This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2016, however the Company adopted this guidance effective December 31, 2015 on a prospective basis. In February 2016, the FASB issued Update No. 2016-02, Leases (Topic 842) . Under current accounting guidance an entity is not required to report operating leases on the balance sheet. The amendment requires that lessees recognize virtually all of their leases on the balance sheet, by recording a right-of-use asset and lease liability (other than leases that meet the definition of a "short-term lease"). This update will become effective for all annual periods and interim reporting periods beginning after December 15, 2018. The new standard must be adopted using a modified retrospective transition. Early adoption is permitted. The Company is in the process of evaluating the impact of this standard on its financial statements. In March 2016, the FASB issued Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) (ASU 2016-09) , which simplifies several aspect of the accounting for share-based payment. Under current accounting guidance an entity is required to report excess tax benefits and tax deficiencies, to the extent of previous windfalls, in equity when an award is settled. A tax benefit currently only recognized when it is realized. Excess tax benefits at settlements are currently reported as cash inflows from financing activities. The amendment requires that an entity present all excess tax benefits and all tax deficiencies as income tax expense or benefit in the statement of operations to be applied using a prospective transition method. Related tax effects of share-based payment settlements are to be presented as cash inflows from operating activities with a transition method of either a prospective or retrospective transition method. The amendment also removes the requirement to delay recognition of an excess tax benefit until the tax benefit is realized. A modified retrospective transition method must be applied for this provision of amendment. ASU 2016-09 allows the Company to elect to account for forfeitures either based on an estimate of the number of awards for which the requisite service period is not expected be rendered with a true-up for actual forfeitures or to account for forfeitures as they occur. The amendment also requires cash outflows attributable to tax withholdings on the net settlement of equity-classified awards to be classified in financing cash flows, with any changes to be applied retrospectively. ASU 2016-09 is effective for all annual periods and interim reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company elected to early adopt ASU 2016-09 during the quarter ended June 30, 2016, which requires any adjustments to be reflected as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The Company elected to account for forfeitures as they occur. The impact in retained earnings as of December 31, 2015 from this provision was not significant. Amendments related to accounting for excess tax benefits have been adopted prospectively, resulting in recognition of excess tax benefits against income tax expenses rather than additional paid-in capital of $1.2 million and $3.0 million for the three and six months ended June 30, 2016, respectively. Amendments related to the condensed consolidated statement of cash flows have been adopted retrospectively. As a result of this adoption, the excess tax settlement and taxes on net settlement of $7.2 million was included in net cash provided by operating activities for the six months ended June 30, 2016. The six months ended June 30, 2015 was adjusted as follows: a $9.9 million increase to net cash provided by operating activities and a $9.9 million decrease in net cash provided by financing activities. There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company's financial position, results of operations or cash flows. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Balance Sheet and Income Statement of Disposal Group | The following table summarizes results from discontinued operations of SeaSpine included in the condensed consolidated statement of operations: Three Months Ended June 30, Six Months Ended June 30, 2015 2015 (in thousands) Total revenue $ 33,461 $ 65,775 Costs and expenses 43,852 80,618 Operating loss (10,391 ) (14,843 ) Other income (expense), net (45 ) (766 ) Loss from discontinued operations before tax (10,436 ) (15,609 ) Benefit for income taxes (3,414 ) (5,239 ) Net loss from discontinued operations $ (7,022 ) $ (10,370 ) |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following summarizes the preliminary allocation of the purchase price as of June 30, 2016 based on the fair value of the assets acquired and liabilities assumed: Preliminary Purchase Price Allocation (Dollars in thousands) Inventory $ 1,143 Other current assets 11 Property, plant, and equipment 669 Intangible assets: Wtd. Avg. Life: Supplier contracts 4,981 2 -13 Years Goodwill 9,665 Total assets acquired 16,469 Accrued expenses and other liabilities 802 Deferred tax liabilities 1,564 Net assets acquired $ 14,103 The following summarizes the allocation of the purchase price as of June 30, 2016 based on the fair value of the assets acquired and liabilities assumed: Purchase Price Allocation (Dollars in thousands) Cash $ 1,241 Accounts receivable, net 9,011 Inventory 23,223 Income tax receivable 5,135 Other current assets 2,670 Property, plant, and equipment 2,027 Intangible assets: Wtd. Avg. Life: Developed technology 167,400 14 -16 Years Contractual relationships 51,345 11 -14 Years Leasehold interest 69 Goodwill 147,704 Total assets acquired 409,825 Accrued expenses and other liabilities 9,732 Deferred tax liabilities 87,908 Net assets acquired $ 312,185 The following summarizes the allocation of the purchase price as of June 30, 2016 based on the fair value of the assets acquired and liabilities assumed: Purchase Price Allocation (Dollars in thousands) Inventory $ 2,688 Property, plant, and equipment 1,453 Intangible assets: Wtd. Avg. Life: Ankle product family 3,210 11 years Toe product family 460 10 years Total assets acquired 7,811 Deferred tax liabilities 700 Net assets acquired $ 7,111 |
Pro Forma Information | As a result, these pro forma results do not necessarily represent results that would have occurred if the acquisition had taken place on the basis assumed above, nor are they indicative of the results of future combined operations. Three Months Ended June 30, Six Months Ended June 30, 2015 2015 (In thousands, except per share amounts) Total revenue $ 235,357 $ 460,828 Net income $ 13,585 $ 26,892 Net income per share: Basic $ 0.41 $ 0.82 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory, Net [Abstract] | |
Schedule of Inventory, Net | Inventories, net consisted of the following: June 30, 2016 December 31, 2015 (In thousands) Finished goods $ 128,432 $ 125,869 Work in process 50,232 47,962 Raw materials 41,778 37,598 $ 220,442 $ 211,429 |
GOODWILL AND OTHER INTANGIBLE25
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes In Carrying Amount Of Goodwill | Changes in the carrying amount of goodwill for the six -month period ended June 30, 2016 were as follows: Specialty Surgical Solutions Orthopedics and Tissue Technologies Total (In thousands) Goodwill at December 31, 2015 $ 284,976 $ 227,413 $ 512,389 TEI working capital and purchase price adjustment — (174 ) (174 ) Foreign currency translation 1,006 802 1,808 Balance, June 30, 2016 $ 285,982 $ 228,041 $ 514,023 |
Components of Company's Identifiable Intangible Assets | The components of the Company’s identifiable intangible assets were as follows: June 30, 2016 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 17 years $ 480,599 $ (81,750 ) $ 398,849 Customer relationships 12 years 153,926 (73,483 ) 80,443 Trademarks/brand names 30 years 91,282 (18,000 ) 73,282 Supplier relationships 27 years 34,721 (12,950 ) 21,771 All other (1) 5 years 11,068 (1,844 ) 9,224 $ 771,596 $ (188,027 ) $ 583,569 December 31, 2015 Weighted Average Life Cost Accumulated Amortization Net (Dollars in thousands) Completed technology 17 years $ 480,684 $ (67,978 ) $ 412,706 Customer relationships 12 years 153,246 (68,811 ) 84,435 Trademarks/brand names 30 years 90,837 (16,374 ) 74,463 Supplier relationships 27 years 34,721 (12,236 ) 22,485 All other (1) 5 years 10,958 (1,307 ) 9,651 $ 770,446 $ (166,706 ) $ 603,740 (1) At June 30, 2016 and December 31, 2015 , all other included in-process research and development ("IPR&D") of $1.0 million in both periods, which was indefinite-lived. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Contractual repayments of the term loan began September 30, 2015 and are due as follows: Year Ended December 31, Principal Repayment (In thousands) 2016 $ 10,625 2017 25,625 2018 32,500 2019 273,750 $ 342,500 |
Components of Interest Expense | The interest expense components of the Company’s convertible notes are as follows (net of capitalized interest amounts): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands) 2016 Notes: Amortization of the discount on the liability component (1) $ 2,104 $ 1,885 $ 4,168 $ 3,744 Cash interest related to the contractual interest coupon (2) 892 824 1,780 1,669 Total $ 2,996 $ 2,709 $ 5,948 $ 5,413 (1) The amortization of the discount on the liability component of the 2016 Notes is presented net of capitalized interest of $0.1 million and $0.2 million for the three months ended June 30, 2016 and 2015, and $0.2 million and $0.4 million for the six months ended June 30, 2016 and 2015, respectively. (2) The cash interest related to the contractual interest coupon on the 2016 Notes is presented net of capitalized interest of $0.1 million for the three months ended June 30, 2015 and $0.1 million and $0.2 million for the six months ended June 30, 2016 and 2015, respectively. A minimal amount was capitalized for the three months ended June 30, 2016. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table summarizes the fair value and presentation for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of June 30, 2016 : Location on Balance Sheet (1) : Fair Value as of June 30, 2016 (In thousands) Derivatives designated as hedges — Liabilities: Interest rate swap — Accrued expenses and other current liabilities (2) $ 131 Interest rate swap — Other liabilities (2) 471 Total Derivatives designated as hedges — Liabilities $ 602 (1) The Company classifies derivative assets and liabilities as non-current based on the cash flows expected to be incurred within the following 12 months. (2) At June 30, 2016 , the notional amount related to the Company’s interest rate swaps was $100.0 million . There are no expected reduction in notional amount in the next twelve months. |
Effect of Derivative Instruments Designated as Cash Flow Hedges on Statements of Operations | The following presents the effect of derivative instruments designated as cash flow hedges on the accompanying condensed consolidated statements of operations during the three and six months ended June 30, 2016 and 2015 : Balance in AOCI Beginning of Quarter Amount of Loss Recognized in AOCI- Effective Portion Amount of Loss Reclassified from AOCI into Earnings-Effective Portion Balance in AOCI End of Quarter Location in Statements of Operations (In thousands) Three Months Ended June 30, 2016 Interest rate swap $ — $ (602 ) $ — $ (602 ) $ — $ (602 ) $ — $ (602 ) Three months ended June 30, 2015 Interest rate swap $ (527 ) $ (7 ) $ (373 ) $ (161 ) Interest (expense) $ (527 ) $ (7 ) $ (373 ) $ (161 ) Balance in AOCI Beginning of Quarter Amount of Loss Recognized in AOCI- Effective Portion Amount of Loss Reclassified from AOCI into Earnings-Effective Portion Balance in AOCI End of Quarter Location in Statements of Operations (In thousands) Six Months Ended June 30, 2016 Interest rate swap $ — $ (602 ) $ — $ (602 ) $ — $ (602 ) $ — $ (602 ) Six months ended June 30, 2015 Interest rate swap $ (898 ) $ (25 ) (762 ) $ (161 ) Interest (expense) $ (898 ) $ (25 ) $ (762 ) $ (161 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective income tax rate reconciliation | The following table provides a summary of the Company’s effective tax rate: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Reported tax rate 14.6 % 33.3 % 12.6 % 33.6 % |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income Per Share | Basic and diluted net income per share was as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands, except per share amounts) Basic net income per share: Net income from continuing operations $ 12,755 $ 12,020 $ 26,173 $ 23,752 Net loss from discontinued operations — (7,022 ) — (10,370 ) Net income $ 12,755 $ 4,998 $ 26,173 $ 13,382 Weighted average common shares outstanding 37,196 33,032 37,037 32,884 Basic net income per common share from continuing operations $ 0.34 $ 0.36 $ 0.71 $ 0.72 Basic net loss per common share from discontinued operations — (0.21 ) — (0.32 ) Basic net income per common share $ 0.34 $ 0.15 $ 0.71 $ 0.40 Diluted net income per share: Net income from continuing operations $ 12,755 $ 12,020 $ 26,173 $ 23,752 Net loss from discontinued operations — (7,022 ) — (10,370 ) Net income $ 12,755 $ 4,998 $ 26,173 $ 13,382 Weighted average common shares outstanding — Basic 37,196 33,032 37,037 32,884 Effect of dilutive securities: 2016 Convertible notes and warrants 1,598 477 1,125 268 Stock options and restricted stock 561 430 609 492 Weighted average common shares for diluted earnings per share 39,355 33,939 38,771 33,644 Diluted net income per common share from continuing operations $ 0.32 $ 0.35 $ 0.68 $ 0.71 Diluted net loss per common share from discontinued operations — (0.21 ) — (0.31 ) Diluted net income per common share $ 0.32 $ 0.14 $ 0.68 $ 0.40 |
COMPREHENSIVE INCOME (LOSS) (Ta
COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of Comprehensive (Loss) Income | Comprehensive income (loss) was as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands) Net income $ 12,755 $ 4,998 $ 26,173 $ 13,382 Foreign currency translation adjustment (6,569 ) 7,166 4,675 (17,227 ) Change in unrealized (loss) gain on derivatives, net of tax (345 ) 209 (345 ) 420 Pension liability adjustment, net of tax 3 (48 ) (4 ) 7 Comprehensive income (loss) $ 5,844 $ 12,325 $ 30,499 $ (3,418 ) |
Schedule of Changes in Accumulated Other Comprehensive Income by Component | Changes in Accumulated Other Comprehensive Loss by component between December 31, 2015 and June 30, 2016 are presented in the table below, net of tax: Loss on Cash Flow Hedges Defined Benefit Pension Items Foreign Currency Items Total (In thousands) Beginning balance $ — $ 9 $ (47,911 ) $ (47,902 ) Other comprehensive (loss) income (345 ) (4 ) 4,675 4,326 Ending balance $ (345 ) $ 5 $ (43,236 ) $ (43,576 ) |
SEGMENT AND GEOGRAPHIC INFORM31
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Total Revenue By Major Geographic Area | Net sales and profit by reportable segment for the three and six months ended June 30, 2016 and 2015 are as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands) Segment Net Sales Specialty Surgical Solutions $ 158,163 $ 146,709 $ 309,338 $ 286,767 Orthopedics and Tissue Technologies 91,146 65,964 176,741 128,440 Total revenues $ 249,309 $ 212,673 $ 486,079 $ 415,207 Segment Profit Specialty Surgical Solutions $ 63,397 $ 62,325 $ 120,978 $ 122,657 Orthopedics and Tissue Technologies 26,025 18,428 46,300 38,348 Segment profit 89,422 80,753 167,278 161,005 Amortization (3,471 ) (1,747) (6,943) (3,476) Corporate and other (63,574 ) (54,661 ) (115,859) (111,944 ) Operating income from continuing operations $ 22,377 $ 24,345 $ 44,476 $ 45,585 The Company attributes revenues to geographic areas based on the location of the customer. Total revenue by major geographic area consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (In thousands) United States $ 191,872 $ 162,511 $ 373,101 $ 315,270 Europe 31,663 25,564 61,098 50,700 Rest of World 25,774 24,598 51,880 49,237 Total Revenues $ 249,309 $ 212,673 $ 486,079 $ 415,207 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contingent Consideration | A reconciliation of the opening balances to the closing balances of these Level 3 measurements is as follows (in thousands): Location in Statement of Operations Balance as of January 1, 2016 $ 21,831 Loss from increase in fair value of contingent consideration liabilities 251 Selling, general and administrative Fair value at June 30, 2016 $ 22,082 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands | Jul. 02, 2015 | Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net cash provided by (used in) operating activities | $ 63,109 | $ 59,603 | ||
Net cash provided by (used in) financing activities | 9,082 | $ (20,590) | ||
Spinoff | SeaSpine Inc. | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Distribution of spinoff shares | 100.00% | |||
Shares of Integra for share of SeaSpine | 0.3333 | |||
Accounting Standards Update 2016-09 | New Accounting Pronouncement, Early Adoption, Effect | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income tax benefit | $ 1,200 | 3,000 | ||
Excess tax settlement from share-based compensation, operating activities | 7,200 | |||
Net cash provided by (used in) operating activities | 9,900 | |||
Net cash provided by (used in) financing activities | $ 9,900 |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net loss from discontinued operations | $ 0 | $ (7,022) | $ 0 | $ (10,370) |
SeaSpine Inc. | Spinoff | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total revenue | 33,461 | 65,775 | ||
Costs and expenses | 43,852 | 80,618 | ||
Operating loss | (10,391) | (14,843) | ||
Other income (expense), net | (45) | (766) | ||
Loss from discontinued operations before tax | (10,436) | (15,609) | ||
Benefit for income taxes | (3,414) | (5,239) | ||
Net loss from discontinued operations | $ (7,022) | $ (10,370) |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - SeaSpine Inc. | Jul. 02, 2015director | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Oct. 29, 2014USD ($) |
Supply Commitment | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Period of continuing involvement after spinoff | 3 years | |||||
Revenue of SeaSpine | $ 500,000 | $ 2,000,000 | $ 600,000 | $ 3,200,000 | ||
Expenses of SeaSpine | 500,000 | $ 2,000,000 | 600,000 | $ 3,200,000 | ||
Information Technology and Administrative Support | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Revenue of SeaSpine | $ 300,000 | 300,000 | ||||
Spinoff | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Distribution of spinoff shares | 100.00% | |||||
Cash | $ 47,000,000 | |||||
Discontinued operation, gain (loss) on disposal of discontinued operation, net of tax | $ 0 | |||||
Shares of Integra for share of SeaSpine | 0.3333 | |||||
Spinoff | Director | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of shared board members | director | 3 |
BUSINESS ACQUISITIONS - Narrati
BUSINESS ACQUISITIONS - Narrative (Details) $ in Thousands | Dec. 15, 2015USD ($) | Oct. 02, 2015USD ($) | Jul. 17, 2015USD ($)acquisition | Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | ||||||
Business acquired | acquisition | 2 | |||||
Tekmed | ||||||
Business Acquisition [Line Items] | ||||||
Consideration for acquisition | $ 14,100 | |||||
Revenue of acquired company since acquisition | $ 1,200 | $ 2,400 | ||||
Salto and Futura | ||||||
Business Acquisition [Line Items] | ||||||
Revenue of acquired company since acquisition | 3,400 | 7,300 | ||||
Payments for acquisition | $ 6,000 | |||||
Salto and Futura | Other Income | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, bargain purchase, gain recognized, amount | $ 1,100 | |||||
TEI | ||||||
Business Acquisition [Line Items] | ||||||
Consideration for acquisition | $ 312,200 | |||||
Goodwill, Purchase Accounting Adjustments | 200 | (174) | ||||
Revenue of acquired company since acquisition | 12,400 | 26,000 | ||||
Cash used in business acquisition, net of cash acquired | 312,400 | |||||
Business combination, cash acquired | 1,200 | $ 1,241 | $ 1,241 | |||
TEI Biosciences Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Consideration for acquisition | 210,900 | |||||
Goodwill, Purchase Accounting Adjustments | 500 | |||||
TEI Medical Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Consideration for acquisition | 101,300 | |||||
Goodwill, Purchase Accounting Adjustments | $ 700 |
BUSINESS ACQUISITIONS - Schedul
BUSINESS ACQUISITIONS - Schedule of Assets Acquired and Liabilities Assumed, Tekmed (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Intangible assets: | ||
Goodwill | $ 514,023 | $ 512,389 |
Tekmed | ||
Business Acquisition [Line Items] | ||
Inventory | 1,143 | |
Other current assets | 11 | |
Property, plant, and equipment | 669 | |
Intangible assets: | ||
Goodwill | 9,665 | |
Total assets acquired | 16,469 | |
Accrued expenses and other liabilities | 802 | |
Deferred tax liabilities | 1,564 | |
Net assets acquired | 14,103 | |
Integra Supplier Contract | Tekmed | ||
Intangible assets: | ||
Supplier contracts | $ 4,981 | |
Minimum | Integra Supplier Contract | Tekmed | ||
Intangible assets: | ||
Wtd. Avg. Life: | 2 years | |
Maximum | Integra Supplier Contract | Tekmed | ||
Intangible assets: | ||
Wtd. Avg. Life: | 13 years |
BUSINESS ACQUISITIONS - Sched38
BUSINESS ACQUISITIONS - Schedule of Assets Acquired and Liabilities Assumed, Salto and Futura (Details) - Salto and Futura $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Business Acquisition [Line Items] | |
Inventory | $ 2,688 |
Property, plant, and equipment | 1,453 |
Total assets acquired | 7,811 |
Deferred tax liabilities | 700 |
Net assets acquired | 7,111 |
Ankle product family | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 3,210 |
Wtd. Avg. Life: | 11 years |
Toe product family | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 460 |
Wtd. Avg. Life: | 10 years |
BUSINESS ACQUISITIONS - Sched39
BUSINESS ACQUISITIONS - Schedule of Assets Acquired and Liabilities Assumed, TEI (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2015 | Jul. 17, 2015 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 514,023 | $ 512,389 | |
TEI | |||
Business Acquisition [Line Items] | |||
Cash | 1,241 | $ 1,200 | |
Accounts receivable, net | 9,011 | ||
Inventory | 23,223 | ||
Income tax receivable | 5,135 | ||
Other current assets | 2,670 | ||
Property, plant, and equipment | 2,027 | ||
Goodwill | 147,704 | ||
Total assets acquired | 409,825 | ||
Accrued expenses and other liabilities | 9,732 | ||
Deferred tax liabilities | 87,908 | ||
Net assets acquired | 312,185 | ||
Developed technology | TEI | |||
Business Acquisition [Line Items] | |||
Intangible assets: | 167,400 | ||
Contractual relationships | TEI | |||
Business Acquisition [Line Items] | |||
Intangible assets: | 51,345 | ||
Leasehold interest | TEI | |||
Business Acquisition [Line Items] | |||
Intangible assets: | $ 69 | ||
Minimum | Developed technology | TEI | |||
Business Acquisition [Line Items] | |||
Wtd. Avg. Life: | 14 years | ||
Minimum | Contractual relationships | TEI | |||
Business Acquisition [Line Items] | |||
Wtd. Avg. Life: | 11 years | ||
Maximum | Developed technology | TEI | |||
Business Acquisition [Line Items] | |||
Wtd. Avg. Life: | 16 years | ||
Maximum | Contractual relationships | TEI | |||
Business Acquisition [Line Items] | |||
Wtd. Avg. Life: | 14 years |
BUSINESS ACQUISITIONS - Pro For
BUSINESS ACQUISITIONS - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | |
Business Combinations [Abstract] | ||
Total revenue | $ 235,357 | $ 460,828 |
Net income | $ 13,585 | $ 26,892 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.41 | $ 0.82 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Inventory, Net [Abstract] | ||
Finished goods | $ 128,432 | $ 125,869 |
Work in process | 50,232 | 47,962 |
Raw materials | 41,778 | 37,598 |
Inventories, net | $ 220,442 | $ 211,429 |
GOODWILL AND OTHER INTANGIBLE42
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | Jul. 17, 2015 | Jun. 30, 2016 |
Goodwill [Roll Forward] | ||
Goodwill at December 31, 2015 | $ 512,389 | |
Foreign currency translation | 1,808 | |
Balance, June 30, 2016 | 514,023 | |
Specialty Surgical Solutions | ||
Goodwill [Roll Forward] | ||
Goodwill at December 31, 2015 | 284,976 | |
Foreign currency translation | 1,006 | |
Balance, June 30, 2016 | 285,982 | |
Orthopedics and Tissue Technologies | ||
Goodwill [Roll Forward] | ||
Goodwill at December 31, 2015 | 227,413 | |
Foreign currency translation | 802 | |
Balance, June 30, 2016 | 228,041 | |
TEI | ||
Goodwill [Roll Forward] | ||
TEI working capital and purchase price adjustment | $ 200 | (174) |
Balance, June 30, 2016 | 147,704 | |
TEI | Specialty Surgical Solutions | ||
Goodwill [Roll Forward] | ||
TEI working capital and purchase price adjustment | 0 | |
TEI | Orthopedics and Tissue Technologies | ||
Goodwill [Roll Forward] | ||
TEI working capital and purchase price adjustment | $ (174) |
GOODWILL AND OTHER INTANGIBLE43
GOODWILL AND OTHER INTANGIBLE ASSETS - Components of Company's Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 771,596 | $ 770,446 |
Accumulated Amortization | (188,027) | (166,706) |
Net | $ 583,569 | $ 603,740 |
Completed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 17 years | 17 years |
Cost | $ 480,599 | $ 480,684 |
Accumulated Amortization | (81,750) | (67,978) |
Net | $ 398,849 | $ 412,706 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 12 years | 12 years |
Cost | $ 153,926 | $ 153,246 |
Accumulated Amortization | (73,483) | (68,811) |
Net | $ 80,443 | $ 84,435 |
Trademarks/brand names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 30 years | 30 years |
Cost | $ 91,282 | $ 90,837 |
Accumulated Amortization | (18,000) | (16,374) |
Net | $ 73,282 | $ 74,463 |
Supplier relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 27 years | 27 years |
Cost | $ 34,721 | $ 34,721 |
Accumulated Amortization | (12,950) | (12,236) |
Net | $ 21,771 | $ 22,485 |
All other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 5 years | 5 years |
Cost | $ 11,068 | $ 10,958 |
Accumulated Amortization | (1,844) | (1,307) |
Net | 9,224 | 9,651 |
In Process Research and Development | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Other Indefinite-lived Intangible Assets | $ 1,000 | $ 1,000 |
GOODWILL AND OTHER INTANGIBLE44
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) $ in Millions | Jun. 30, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Annual amortization expense expected to approximate in 2016 | $ 41.5 |
Annual amortization expense expected to approximate in 2017 | 40.9 |
Annual amortization expense expected to approximate in 2018 | 40.4 |
Annual amortization expense expected to approximate in 2019 | 40.4 |
Annual amortization expense expected to approximate in 2020 | $ 40.2 |
DEBT (Details)
DEBT (Details) | Aug. 28, 2015USD ($) | Jun. 15, 2011USD ($)$ / shares | Dec. 31, 2015USD ($)shares | Jun. 30, 2016USD ($) | Jun. 10, 2015convertible_debt_instrument |
2016 Notes: | |||||
Carrying amount of liability | $ 218,240,000 | $ 223,041,000 | |||
Revolving Credit Facility | |||||
2016 Notes: | |||||
Line of credit facility outstanding | $ 150,000,000 | $ 140,000,000 | |||
Weighted average interest rate on debt | 1.90% | 2.10% | |||
Available borrowings under senior secured revolving credit facility | $ 610,000,000 | ||||
Line of credit facility, fair value of amount outstanding | 134,500,000 | ||||
Term Loan | |||||
2016 Notes: | |||||
Line of credit facility outstanding | $ 346,200,000 | $ 342,500,000 | |||
Weighted average interest rate on debt | 1.80% | 2.10% | |||
Long-term debt, fair value | $ 330,300,000 | ||||
Convertible Debt | |||||
2016 Notes: | |||||
Deferred finance costs, gross | $ 500,000 | ||||
Principal amount outstanding | $ 230,000,000 | 227,100,000 | 227,096,000 | ||
Interest rate on debt | 1.625% | ||||
Portion of the debt proceeds that was classified as equity at the time of the offering | $ 43,200,000 | ||||
Effective interest rate implicit in the liability component | 5.60% | ||||
Carrying amount of liability | 218,200,000 | 223,000,000 | |||
Unamortized discount | 8,400,000 | 4,100,000 | |||
Fair value of outstanding borrowings | $ 343,200,000 | ||||
Common stock based on initial conversion rate ratio (in shares) | 18.9287 | ||||
Initial conversion price (in dollars per share) | $ / shares | $ 52.83 | ||||
Maximum selling price of company's common stock | 150.00% | ||||
Principal amount of notes per average trading price | $ 1,000 | ||||
Maximum average conversion value of the Notes (less than or equal to) | 98.00% | ||||
Number debt instruments pending conversion | convertible_debt_instrument | 2,903 | ||||
Repayments of debt | $ 2,900,000 | ||||
Stock issued during period, shares, conversion of convertible securities | shares | 8,457 | ||||
Strike price of the call transaction (in dollars per share) | $ / shares | $ 52.83 | ||||
Strike price of warrant transactions (in dollars per share) | $ / shares | $ 64.43 | ||||
August 2015 Amendment | |||||
2016 Notes: | |||||
Senior credit facility, maximum borrowing capacity | $ 1,100,000,000 | ||||
Cash balance threshold above which excess amount is not subject to any restriction of use or investment | $ 40,000,000 | ||||
August 2015 Amendment | Minimum | |||||
2016 Notes: | |||||
Line of credit, commitment fee percentage | 0.15% | ||||
August 2015 Amendment | Maximum | |||||
2016 Notes: | |||||
Line of credit, commitment fee percentage | 0.30% | ||||
August 2015 Amendment | Revolving Credit Facility | |||||
2016 Notes: | |||||
Senior credit facility, maximum borrowing capacity | $ 750,000,000 | ||||
August 2015 Amendment | Standby Letters of Credit | |||||
2016 Notes: | |||||
Senior credit facility, maximum borrowing capacity | 60,000,000 | ||||
August 2015 Amendment | Swingline Loan | |||||
2016 Notes: | |||||
Senior credit facility, maximum borrowing capacity | $ 60,000,000 | ||||
August 2015 Amendment | Eurodollar | |||||
2016 Notes: | |||||
Interest rates available to the Company at its option | 1.00% | ||||
August 2015 Amendment | Eurodollar | Minimum | |||||
2016 Notes: | |||||
Interest rates available to the Company at its option | 1.00% | ||||
August 2015 Amendment | Eurodollar | Maximum | |||||
2016 Notes: | |||||
Interest rates available to the Company at its option | 1.75% | ||||
August 2015 Amendment | Federal Funds | |||||
2016 Notes: | |||||
Interest rates available to the Company at its option | 0.50% | ||||
August 2015 Amendment | Term Loan | |||||
2016 Notes: | |||||
Senior credit facility, maximum borrowing capacity | $ 350,000,000 | ||||
August 2015 Amendment | Term Loan | Maximum | |||||
2016 Notes: | |||||
Proceeds from lines of credit | $ 200,000,000 | ||||
July 2014 Amendment | |||||
2016 Notes: | |||||
Deferred finance costs, gross | $ 1,400,000 |
DEBT - Four year payout table
DEBT - Four year payout table (Details) - Term Loan $ in Thousands | Jun. 30, 2016USD ($) |
Line of Credit Facility [Line Items] | |
2,016 | $ 10,625 |
2,017 | 25,625 |
2,018 | 32,500 |
2,019 | 273,750 |
Total repayments | $ 342,500 |
DEBT - Components of Interest E
DEBT - Components of Interest Expense (Details) - 2016 Convertible Senior Notes - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
2016 Notes: | ||||
Amortization of the discount on the liability component | $ 2,104 | $ 1,885 | $ 4,168 | $ 3,744 |
Cash interest related to the contractual interest coupon | 892 | 824 | 1,780 | 1,669 |
Total | 2,996 | 2,709 | 5,948 | 5,413 |
Amortization of debt discount (premium), interest costs capitalized | $ 100 | 200 | 200 | 400 |
Interest expense, debt, excluding amortization, interest costs capitalized | $ 100 | $ 100 | $ 200 |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 22, 2016USD ($)instrument | |
Derivative [Line Items] | |||||
Gain (loss) on hedging ineffectiveness | $ 0 | $ 0 | $ 0 | $ 0 | |
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 100,000,000 | $ 100,000,000 | |||
Interest Rate Swap Two | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | $ 50,000,000 | ||||
Cash Flow Hedging | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Interest rate swap expiration date | August 10, 2015 | ||||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative contracts | instrument | 2 | ||||
Derivative, notional amount | $ 100,000,000 | $ 100,000,000 | |||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap One | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | $ 50,000,000 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value of Derivative Instruments By Balance Sheet Location (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Derivatives, Fair Value [Line Items] | |
Derivative liability, fair value, gross liability | $ 602 |
Interest Rate Swap | |
Derivatives, Fair Value [Line Items] | |
Derivative, notional amount | 100,000 |
Interest Rate Swap | Designated as Hedging Instrument | Accrued Expenses And Other Current Liabilities | |
Derivatives, Fair Value [Line Items] | |
Derivative liability, fair value, gross liability | 131 |
Interest Rate Swap | Designated as Hedging Instrument | Other Noncurrent Liabilities | |
Derivatives, Fair Value [Line Items] | |
Derivative liability, fair value, gross liability | $ 471 |
DERIVATIVE INSTRUMENTS - Effect
DERIVATIVE INSTRUMENTS - Effect of Derivative Instruments Designated Cash Flow Hedges on Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Balance in AOCI Beginning of Quarter | $ 0 | $ (527) | $ 0 | $ (898) |
Amount of Loss Recognized in AOCI- Effective Portion | (602) | (7) | (602) | (25) |
Amount of Loss Reclassified from AOCI into Earnings-Effective Portion | 0 | (373) | 0 | (762) |
Balance in AOCI End of Quarter | (602) | (161) | (602) | (161) |
Interest rate swap | ||||
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Balance in AOCI Beginning of Quarter | 0 | 0 | ||
Amount of Loss Recognized in AOCI- Effective Portion | (602) | (602) | ||
Amount of Loss Reclassified from AOCI into Earnings-Effective Portion | 0 | 0 | ||
Balance in AOCI End of Quarter | $ (602) | $ (602) | ||
Interest (expense) | Interest rate swap | ||||
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Balance in AOCI Beginning of Quarter | (527) | (898) | ||
Amount of Loss Recognized in AOCI- Effective Portion | (7) | (25) | ||
Amount of Loss Reclassified from AOCI into Earnings-Effective Portion | (373) | (762) | ||
Balance in AOCI End of Quarter | $ (161) | $ (161) |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) $ in Millions | Jul. 02, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($)planshares | Dec. 31, 2015USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, number of plans | plan | 3 | |||
Grants in period, net of forfeitures (in shares) | shares | 111,662 | |||
Requisite service periods of awards, in years | 3 years | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options exercisable, vesting period, in years | 4 years | |||
Total unrecognized compensation costs | $ 4 | $ 4 | ||
Weighted-average period for cost recognition, in years | 2 years | |||
Restricted stock awards/stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options exercisable, vesting period, in years | 3 years | |||
Total unrecognized compensation costs | 22.2 | $ 22.2 | ||
Weighted-average period for cost recognition, in years | 2 years | |||
Awards granted during period (in shares) | shares | 155,371 | |||
Performance shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted during period (in shares) | shares | 78,177 | |||
SeaSpine Inc. | Spinoff | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Incremental increase in stock based award expense after spinoff | $ 4.4 | 0.2 | $ 0.4 | $ 3.3 |
Total unrecognized compensation costs | $ 0.7 | $ 0.7 | ||
Employee | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period, in years | 8 years | |||
Directors and certain executive officers | Minimum | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period, in years | 8 years | |||
Directors and certain executive officers | Maximum | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period, in years | 10 years |
TREASURY STOCK (Details)
TREASURY STOCK (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Oct. 28, 2014 | |
Accelerated Share Repurchases [Line Items] | |||
Amount available for share repurchase under this latest authorization | $ 75,000,000 | ||
Stock repurchased during period, shares | 0 | 0 | |
October 2012 Authorization | |||
Accelerated Share Repurchases [Line Items] | |||
Stock repurchase program, authorized amount | $ 75,000,000 |
INCOME TAXES - Summary of Effec
INCOME TAXES - Summary of Effective Tax Rate (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Reported tax rate | 14.60% | 33.30% | 12.60% | 33.60% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Contingency [Line Items] | |||||
Reported tax rate | 14.60% | 33.30% | 12.60% | 33.60% | |
Income tax benefit | $ (2,188) | $ (5,988) | $ (3,764) | $ (12,046) | |
Unrecognized tax benefit, current period | 200 | 500 | |||
Unrecognized tax benefit, current period, transfer pricing | 600 | ||||
Scenario, Forecast | |||||
Income Tax Contingency [Line Items] | |||||
Reported tax rate | 20.30% | ||||
Foreign Tax Authority | |||||
Income Tax Contingency [Line Items] | |||||
Unrecognized tax benefit, current period | 400 | ||||
Unrecognized tax benefit, prior period | 400 | ||||
New Accounting Pronouncement, Early Adoption, Effect | |||||
Income Tax Contingency [Line Items] | |||||
Income tax benefit | $ 1,200 | $ 3,000 |
NET INCOME PER SHARE - Basic an
NET INCOME PER SHARE - Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Basic net income per share: | ||||
Net income from continuing operations | $ 12,755 | $ 12,020 | $ 26,173 | $ 23,752 |
Net loss from discontinued operations | 0 | (7,022) | 0 | (10,370) |
Net income | $ 12,755 | $ 4,998 | $ 26,173 | $ 13,382 |
Weighted average common shares outstanding, basic (in shares) | 37,196 | 33,032 | 37,037 | 32,884 |
Basic net income per common share from continuing operations (in dollars per share) | $ 0.34 | $ 0.36 | $ 0.71 | $ 0.72 |
Basic net loss per common share from discontinued operations (in dollars per share) | 0 | (0.21) | 0 | (0.32) |
Net income per share - basic (in dollars per share) | $ 0.34 | $ 0.15 | $ 0.71 | $ 0.40 |
Diluted net income per share: | ||||
Net income from continuing operations | $ 12,755 | $ 12,020 | $ 26,173 | $ 23,752 |
Net loss from discontinued operations | 0 | (7,022) | 0 | (10,370) |
Net income | $ 12,755 | $ 4,998 | $ 26,173 | $ 13,382 |
Weighted average common shares outstanding, basic (in shares) | 37,196 | 33,032 | 37,037 | 32,884 |
Effect of dilutive securities: | ||||
2016 Convertible notes (in shares) | 1,598 | 477 | 1,125 | 268 |
Stock options and restricted stock (in shares) | 561 | 430 | 609 | 492 |
Weighted average common shares for diluted earnings per share (in shares) | 39,355 | 33,939 | 38,771 | 33,644 |
Diluted net income per common share from continuing operations (in dollars per share) | $ 0.32 | $ 0.35 | $ 0.68 | $ 0.71 |
Diluted net loss per common share from discontinued operations (in dollars per share) | 0 | (0.21) | 0 | (0.31) |
Net income per share - diluted (in dollars per share) | $ 0.32 | $ 0.14 | $ 0.68 | $ 0.40 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from computation as their effect would be anti-dilutive | 0.2 | 0.1 |
Performance Shares and Restricted Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of shares outstanding, basic and diluted | 0.1 |
COMPREHENSIVE INCOME (LOSS) - S
COMPREHENSIVE INCOME (LOSS) - Schedule of Comprehensive Loss Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Equity [Abstract] | ||||
Net income | $ 12,755 | $ 4,998 | $ 26,173 | $ 13,382 |
Foreign currency translation adjustment | (6,569) | 7,166 | 4,675 | (17,227) |
Change in unrealized (loss) gain on derivatives, net of tax | (345) | 209 | (345) | 420 |
Pension liability adjustment, net of tax | 3 | (48) | (4) | 7 |
Comprehensive income (loss) | $ 5,844 | $ 12,325 | $ 30,499 | $ (3,418) |
COMPREHENSIVE INCOME (LOSS) -58
COMPREHENSIVE INCOME (LOSS) - Schedule of Changes in Accumulated Other Comprehensive Income by Component (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Beginning balance | $ 751,443 |
Ending balance | 794,787 |
Loss on Cash Flow Hedges | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Beginning balance | 0 |
Other comprehensive (loss) income | (345) |
Ending balance | (345) |
Defined Benefit Pension Items | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Beginning balance | 9 |
Other comprehensive (loss) income | (4) |
Ending balance | 5 |
Foreign Currency Items | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Beginning balance | (47,911) |
Other comprehensive (loss) income | 4,675 |
Ending balance | (43,236) |
Total | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Beginning balance | (47,902) |
Other comprehensive (loss) income | 4,326 |
Ending balance | $ (43,576) |
SEGMENT AND GEOGRAPHIC INFORM59
SEGMENT AND GEOGRAPHIC INFORMATION (Details) | 6 Months Ended |
Jun. 30, 2016productSegment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | Segment | 2 |
Specialty Surgical Solutions | |
Segment Reporting Information [Line Items] | |
Number of products offered (more than) | product | 60,000 |
SEGMENT AND GEOGRAPHIC INFORM60
SEGMENT AND GEOGRAPHIC INFORMATION - Net Sales and Profit by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Net Sales | ||||
Revenues | $ 249,309 | $ 212,673 | $ 486,079 | $ 415,207 |
Segment Profit | ||||
Operating income | 22,377 | 24,345 | 44,476 | 45,585 |
Amortization | (3,471) | (1,747) | (6,943) | (3,476) |
Operating Segments | ||||
Segment Profit | ||||
Operating income | 89,422 | 80,753 | 167,278 | 161,005 |
Operating Segments | Specialty Surgical Solutions | ||||
Segment Net Sales | ||||
Revenues | 158,163 | 146,709 | 309,338 | 286,767 |
Segment Profit | ||||
Operating income | 63,397 | 62,325 | 120,978 | 122,657 |
Operating Segments | Orthopedics and Tissue Technologies | ||||
Segment Net Sales | ||||
Revenues | 91,146 | 65,964 | 176,741 | 128,440 |
Segment Profit | ||||
Operating income | 26,025 | 18,428 | 46,300 | 38,348 |
Segment Reconciling Items | ||||
Segment Profit | ||||
Amortization | (3,471) | (1,747) | (6,943) | (3,476) |
Corporate and other | ||||
Segment Profit | ||||
Operating income | $ (63,574) | $ (54,661) | $ (115,859) | $ (111,944) |
SEGMENT AND GEOGRAPHIC INFORM61
SEGMENT AND GEOGRAPHIC INFORMATION - Total Revenue by Major Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 249,309 | $ 212,673 | $ 486,079 | $ 415,207 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 191,872 | 162,511 | 373,101 | 315,270 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 31,663 | 25,564 | 61,098 | 50,700 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 25,774 | $ 24,598 | $ 51,880 | $ 49,237 |
COMMITMENTS AND CONTINGENCIES62
COMMITMENTS AND CONTINGENCIES (Details) | Jul. 17, 2015USD ($)case | Jun. 30, 2016 |
Loss Contingencies [Line Items] | ||
Fair value inputs, discount rate | 2.20% | |
TEI | ||
Loss Contingencies [Line Items] | ||
Number of active cases | case | 50 | |
Indemnification policy in place | $ 3,000,000 | |
Indemnification period - up to fifteen months after close | TEI | ||
Loss Contingencies [Line Items] | ||
Period of indemnification | 15 months | |
Maximum indemnification from acquisition | $ 30,000,000 | |
Indemnification period - up to 3 years after close | TEI | ||
Loss Contingencies [Line Items] | ||
Period of indemnification | 3 years | |
Minimum indemnification from acquisition | $ 20,000,000 | |
Maximum indemnification from acquisition | 30,000,000 | |
Third Party Insurer | TEI | ||
Loss Contingencies [Line Items] | ||
Indemnification policy in place | $ 3,000,000 |
COMMITMENTS AND CONTINGENCIES,
COMMITMENTS AND CONTINGENCIES, Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Loss from increase in fair value of contingent consideration liabilities | $ 251 | $ 239 |
Cash Consideration One | Fair Value, Inputs, Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance as of January 1, 2016 | 21,831 | |
Fair value at June 30, 2016 | 22,082 | |
Cash Consideration One | Selling, general and administrative | Fair Value, Inputs, Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Loss from increase in fair value of contingent consideration liabilities | $ 251 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Interest Rate Swap - USD ($) | Jul. 12, 2016 | Jun. 30, 2016 |
Derivative [Line Items] | ||
Derivative, notional amount | $ 100,000,000 | |
Subsequent Event | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 50,000,000 |