| Summary of Details of Loss, Asset and Liabilities, Significant Non-Cash Operating Activities and Capital Expenditures from Discontinued Operations |
Details of loss from discontinued operations included in our consolidated statement of operations are as follows (in thousands):
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For the Years Ended December 31, |
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2023 |
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2022 |
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|
2021 |
|
Net Sales |
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|
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|
Third party, net |
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$ |
409,181 |
|
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$ |
449,806 |
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$ |
540,348 |
|
Related party, net |
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|
103 |
|
|
|
764 |
|
|
|
1,993 |
|
Total Net Sales |
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|
409,284 |
|
|
|
450,570 |
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|
542,341 |
|
Cost of products sold, excluding intangible asset amortization |
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|
(113,867 |
) |
|
|
(130,719 |
) |
|
|
(209,069 |
) |
Related party cost of products sold, excluding intangible asset amortization |
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|
(97 |
) |
|
|
(721 |
) |
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|
(777 |
) |
Intangible asset amortization |
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|
(52,840 |
) |
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|
(53,885 |
) |
|
|
(57,923 |
) |
Research and development |
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(26,559 |
) |
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|
(31,544 |
) |
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|
(34,043 |
) |
Selling, general and administrative |
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|
(247,926 |
) |
|
|
(270,812 |
) |
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|
(346,801 |
) |
Restructuring and other cost reduction initiatives |
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(13,068 |
) |
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|
(8,795 |
) |
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(3,005 |
) |
Acquisition, integration, divestiture and related |
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(175 |
) |
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(2,850 |
) |
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(13,041 |
) |
Other (expense) income, net |
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|
(457 |
) |
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|
746 |
|
|
|
366 |
|
Interest (expense) income, net (1) |
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(16,422 |
) |
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(7,409 |
) |
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|
113 |
|
Loss from discontinued operations before income taxes |
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(62,127 |
) |
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|
(55,419 |
) |
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(121,839 |
) |
Write-down of spine disposal group to fair value (2) |
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(289,456 |
) |
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— |
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|
— |
|
Benefit for income taxes from discontinued operations |
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|
14,350 |
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|
38,442 |
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|
10,188 |
|
Loss from discontinued operations, net of tax |
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$ |
(337,233 |
) |
|
$ |
(16,977 |
) |
|
$ |
(111,651 |
) |
(1)A portion of the interest on our Term Loan (as defined and described in Note 9) has been allocated to discontinued operations consistent with the amount of proceeds expected to be used to repay a portion of the amounts outstanding under our Term Loan in accordance with our Credit Agreement (as defined and described in Note 9). (2)We performed an impairment analysis of the spine segment in December 2023 on a held-for-sale basis. The fair value of consideration to be received upon closure of the transaction was less than the carrying value of the spine segment's net assets and the difference represents the amount of the write-down. Details of assets and liabilities of discontinued operations are as follows (in thousands):
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As of December 31, |
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2023 |
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2022 |
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Cash and cash equivalents |
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$ |
16,257 |
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$ |
21,326 |
|
Accounts receivable, less allowance for credit losses |
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|
83,871 |
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|
101,930 |
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Related party receivable |
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— |
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|
5,329 |
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Inventories |
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|
130,430 |
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|
156,429 |
|
Prepaid expenses and other current assets |
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12,215 |
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|
8,624 |
|
Total Current Assets of Discontinued Operations |
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242,773 |
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|
293,638 |
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Property, plant and equipment, net |
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|
62,692 |
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|
89,939 |
|
Intangible assets, net |
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|
477,110 |
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|
516,280 |
|
Other assets |
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|
14,743 |
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|
23,413 |
|
Total Noncurrent Assets of Discontinued Operations |
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|
554,545 |
|
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|
629,632 |
|
Accounts payable |
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$ |
24,186 |
|
|
$ |
17,500 |
|
Related party payable |
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|
— |
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|
10,544 |
|
Income taxes payable |
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|
410 |
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|
587 |
|
Other current liabilities |
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|
51,262 |
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|
66,900 |
|
Total Current Liabilities of Discontinued Operations |
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|
75,858 |
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|
95,531 |
|
Deferred income taxes |
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|
86,037 |
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|
95,910 |
|
Lease liability |
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|
8,032 |
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|
12,327 |
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Other long-term liabilities |
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|
972 |
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|
4,636 |
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Total Noncurrent Liabilities of Discontinued Operations |
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$ |
95,041 |
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$ |
112,873 |
|
Write-down of spine disposal group to fair value (1) |
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(289,456 |
) |
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— |
|
(1) This write-down is reflected in Noncurrent assets of discontinued operations in the consolidated balance sheets. Cash flows attributable to our discontinued operations are included on our consolidated statements of cash flows. Significant non-cash operating and investing activities attributable to discontinued operations consisted of the following (in thousands):
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For the Years Ended December 31, |
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2023 |
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2022 |
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|
2021 |
|
Depreciation and amortization |
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$ |
87,179 |
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$ |
85,591 |
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$ |
90,590 |
|
Share-based compensation |
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3,545 |
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|
4,467 |
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|
3,915 |
|
Write-down of spine disposal group to fair value |
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|
289,456 |
|
|
|
— |
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|
— |
|
Additions to instruments |
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|
5,978 |
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|
10,089 |
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28,244 |
|
Additions to other property, plant & equipment |
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|
899 |
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|
1,984 |
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17,433 |
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