Discontinued Operations And Restructuring Activities

6 Months Ended

Jun. 30, 2011

Discontinued Operations And Restructuring Activities

Discontinued Operations And Restructuring Activities

13. Discontinued Operations and Restructuring Activities

Discontinued Operations

In connection with the Company's strategy to focus on the sale of spinal implants in Japan, Alphatec Pacific entered into an agreement to sell one of its wholly owned subsidiaries, IMC Co., to a third party in April 2010. The Company determined that IMC Co. was a non-strategic asset given that it is a distribution company that primarily sells general orthopedic trauma products in a limited geographic market. In exchange for all of the shares of IMC Co., the purchaser agreed to pay the Company a total purchase price of $0.5 million, of which $0.3 million was paid during the second quarter of 2010, and the remaining $0.2 million will be paid thereafter in three annual installments. A gain of $0.2 million was recorded on the sale of IMC Co. by the Company during the second quarter of 2010.

The amount of IMC Co. revenue and pretax income reported in discontinued operations for the three and six months ended June 30, 2010 is as follows (in thousands):

	Three Months Ended June 30, 2010		Six Months Ended June 30, 2010
Revenue	$	—	$	3,109
Income from continuing operations before income taxes	$	188	$	120
Income tax provision		66		42
Income from discontinued operations, net of tax	$	122	$	78

Restructuring Activities

As a result of the acquisition of Scient'x, the Company elected to consolidate Scient'x's operations in the United States, close its United States facility and move its operations to the Company's corporate location in Carlsbad, California. This consolidation was completed by April 30, 2010. Restructuring expenses also consist of severance and other personnel costs related to the reorganization of the Company's management.

The changes in the restructuring liability for the three months ended June 30, 2011 is as follows (in thousands):

Restructuring liability as of March 31, 2011	$	750
Additional severance and personnel costs incurred		—
Less: restructuring related payments made during the three months ended June 30, 2011		(452	)
Restructuring liability as of June 30, 2011	$	298