PROPERTY, PLANT AND EQUIPMENT

3 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment charges. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the lease term or the useful life. The cost of major additions and improvements is capitalized, while maintenance and repair costs that do not improve or extend the lives of the respective assets are charged to operations as incurred. The cost of computer software obtained for internal use is accounted for in accordance with the Codification 350-40, Internal-Use Software.

The cost of purchased spinal instruments that the Company consigns to hospitals and independent sales agents to support surgeries is initially capitalized as construction in progress. The amount is then either reclassified to spinal instruments and sets, and depreciation is initiated when instruments are put together in a newly built set with spinal implants, or directly expensed for the instruments used to replace damaged instruments in an existing set. The depreciation expense and direct expense for replacement instruments are recorded in selling and marketing expense.

Property, plant and equipment balances and corresponding useful lives were as follows:


	September 30, 2021		December 31, 2020		Useful Lives
	(In thousands)
Leasehold improvements	$	6,503	$	5,976	Shorter of lease term or useful life
Machinery and production equipment	10,466		9,577			3	-	10	years
Spinal instruments and sets	42,851		30,275			4	-	6	years
Information systems and hardware	8,123		7,554			3	-	7	years
Furniture and fixtures	1,697		1,640			3	-	5	years
Construction in progress	15,345		12,645
Total	84,985		67,667
Less accumulated depreciation and amortization	(41,898)		(36,245)
Property, plant and equipment, net	$	43,087	$	31,422

Depreciation and amortization expenses totaled $2.2 million and $1.7 million for the three months ended September 30, 2021 and 2020, respectively, and $5.5 million and $4.8 million for the nine months ended September 30, 2021 and 2020, respectively. The cost of purchased instruments used to replace damaged instruments in existing sets and recorded directly to instrument replacement expense totaled $1.0 million and $0.6 million for the three months ended September 30, 2021 and 2020, respectively, and $2.7 million and $1.6 million for the nine months ended September 30, 2021 and 2020, respectively.