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Supplemental Finanical Information
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Supplemental Financial Information Note 21. Supplemental Financial Information
Inventories, net as of December 31, 2019 and 2018, consisted of the following (in thousands):

 
2019
 
2018
Raw materials
 
$
45,225

 
$
40,387

Work-in-process
 
14,581

 
15,999

Finished goods
 
104,348

 
97,149

 
 
$
164,154

 
$
153,535


Inventories are reported net of the provision for obsolescence. The provision, which reflects normal obsolescence and includes components that are phased out or expired, totaled $12.7 million and $11.6 million at December 31, 2019 and December 31, 2018, respectively.
PP&E as of December 31, 2019 and 2018, consisted of the following (in thousands):
 
 
2019
 
2018
 
Lives in Years
Land
 
$
15,165

 
$
15,866

 
 
Building and building improvements
 
86,814

 
82,035

 
3 to 39
Equipment, software, furniture and fixtures
 
205,711

 
195,008

 
2 to 16
Other
 
9,431

 
8,298

 
1 to 10
Capital investment in process
 
18,220

 
20,228

 
 
Total
 
335,341

 
321,435

 
 
Accumulated depreciation
 
(153,987
)
 
(130,035
)
 
 
Net
 
$
181,354

 
$
191,400

 
 

Accrued liabilities as of December 31, 2019 and 2018, consisted of the following (in thousands):
 
 
2019
 
2018
Contingent consideration (1)
 
$
22,953

 
$
18,530

CRM purchase price adjustments payable to MicroPort Scientific Corporation
 
14,891

 
14,891

Operating lease liabilities (2)
 
11,110

 
—

Legal and other administrative costs
 
11,066

 
9,189

Contract liabilities
 
6,728

 
3,304

Research and development costs
 
5,160

 
1,841

Restructuring related liabilities (3)
 
4,315

 
9,393

Provisions for agents, returns and other
 
3,922

 
4,934

Product remediation (4)
 
3,251

 
13,945

Derivative contract liabilities (5)
 
3,173

 
5,063

Other amounts payable to MicroPort Scientific Corporation
 
1,340

 
9,319

Other accrued expenses
 
32,191

 
33,876

 
 
$
120,100

 
$
124,285


(1)
Refer to “Note 10. Fair Value Measurements.”
(2)
Refer to “Note 13. Leases.”
(3)
Refer to “Note 6. Restructuring.”
(4)
Refer to “Note 7. Product Remediation Liability.”
(5)
Refer to “Note 12. Derivatives and Risk Management.”
Note 22. Quarterly Financial Information (unaudited)
The tables below present the quarterly results for the years ended December 31, 2019 and 2018 (in thousands except for share data):
Year Ended December 31, 2019
 
First
Quarter
 
Second
Quarter
 
Third 
Quarter
 
Fourth
Quarter
Net sales
 
$
250,801

 
$
277,169

 
$
268,610

 
$
287,590

Gross profit (1)
 
163,600

 
197,114

 
179,406

 
204,638

Operating income (loss) from continuing operations (2)
 
(20,779
)
 
(29,876
)
 
25,761

 
(143,976
)
Net (loss) income from continuing operations (2)
 
(14,849
)
 
(29,393
)
 
32,118

 
(143,417
)
Net income from discontinued operations, net of tax
 
—

 
178

 
—

 
187

Net (loss) income (2)
 
$
(14,849
)
 
$
(29,215
)
 
$
32,118

 
$
(143,230
)
Diluted (loss) earnings per share:
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.31
)
 
$
(0.61
)
 
$
0.66

 
$
(2.96
)
Discontinued operations
 
—

 
0.01

 
—

 
—

 
 
$
(0.31
)
 
$
(0.60
)
 
$
0.66

 
$
(2.96
)
Year Ended December 31, 2018
 
First
Quarter
 
Second
Quarter
 
Third 
Quarter
 
Fourth
Quarter
Net sales
 
$
250,398

 
$
287,498

 
$
272,082

 
$
296,983

Gross profit (1)
 
162,085

 
193,963

 
174,348

 
204,073

Operating income (loss) from continuing operations (3)
 
12,530

 
21,607

 
(5,757
)
 
(276,452
)
Net income (loss) from continuing operations (3)
 
17,822

 
19,528

 
(6,273
)
 
(209,539
)
Net loss from discontinued operations, net of tax
 
(4,549
)
 
(4,462
)
 
(904
)
 
(1,022
)
Net income (loss) (3)
 
$
13,273

 
$
15,066

 
$
(7,177
)
 
$
(210,561
)
Diluted earnings (loss) per share:
 
 
 
 
 
 
 
 
Continuing operations
 
$
0.36

 
$
0.40

 
$
(0.13
)
 
$
(4.32
)
Discontinued operations
 
(0.09
)
 
(0.09
)
 
(0.02
)
 
(0.02
)
 
 
$
0.27

 
$
0.31

 
$
(0.15
)
 
$
(4.34
)
(1)
Gross profit excludes amortization of developed technology intangible assets of approximately $3.7 million, $5.5 million and $3.6 million for the first and second quarters in 2019, the third and fourth quarters in 2019 and for each quarter in 2018, respectively.
(2)
The second quarter of 2019 includes a $50.3 million impairment of the ImThera IPR&D asset arising from the ImThera acquisition. The fourth quarter of 2019 includes a $42.4 million impairment of Caisson’s goodwill arising from the Caisson acquisition and a $89.0 million impairment of Caisson’s IPR&D asset arising from the Caisson acquisition. For further information, please refer to “Note 8. Goodwill and Intangible Assets.”
(3)
The fourth quarter of 2018 includes a $294.1 million litigation provision associated with our 3T devices. For further information, please refer to “Note 14. Commitments and Contingencies.”