Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 29, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | RTIX | |
Entity Registrant Name | RTI SURGICAL, INC. | |
Entity Central Index Key | 1,100,441 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business Company | false | |
Entity Common Stock, Shares Outstanding | 63,461,700 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 10,022 | $ 22,381 |
Accounts receivable-less allowances of $1,811 at September 30, 2018 and $1,471 at December 31, 2017 | 44,141 | 35,081 |
Inventories-net | 103,891 | 111,927 |
Prepaid and other current assets | 8,613 | 16,285 |
Total current assets | 166,667 | 185,674 |
Property, plant and equipment-net | 77,344 | 79,564 |
Deferred tax assets-net | 11,875 | 9,575 |
Goodwill | 62,864 | 46,242 |
Other intangible assets-net | 26,197 | 23,070 |
Other assets-net | 5,150 | 1,781 |
Total assets | 350,097 | 345,906 |
Current Liabilities: | ||
Accounts payable | 19,282 | 18,252 |
Accrued expenses | 22,121 | 25,610 |
Current portion of deferred revenue | 4,990 | 4,868 |
Current portion of short and long-term obligations | 4,268 | |
Total current liabilities | 46,393 | 52,998 |
Long-term obligations-less current portion | 49,021 | 42,076 |
Other long-term liabilities | 5,759 | 1,431 |
Deferred revenue | 1,968 | 3,741 |
Total liabilities | 103,141 | 100,246 |
Preferred stock Series A, $.001 par value: 5,000,000 shares authorized; 50,000 shares issued and outstanding | 66,180 | 63,923 |
Stockholders' equity: | ||
Common stock, $.001 par value: 150,000,000 shares authorized; 63,461,700 and 62,694,441 shares issued and outstanding, respectively | 63 | 63 |
Additional paid-in capital | 432,077 | 429,459 |
Accumulated other comprehensive loss | (6,980) | (6,329) |
Accumulated deficit | (239,515) | (237,066) |
Less treasury stock, 1,221,180 and 1,114,071 shares, respectively, at cost | (4,869) | (4,390) |
Total stockholders' equity | 180,776 | 181,737 |
Total liabilities and stockholders' equity | $ 350,097 | $ 345,906 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 1,811 | $ 1,471 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 50,000 | 50,000 |
Preferred stock, shares outstanding | 50,000 | 50,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 63,461,700 | 62,694,441 |
Common stock, shares outstanding | 63,461,700 | 62,694,441 |
Treasury stock, shares | 1,221,180 | 1,114,071 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenues | $ 69,064 | $ 66,688 | $ 209,639 | $ 208,747 |
Costs of processing and distribution | 31,409 | 33,177 | 108,262 | 102,494 |
Gross profit | 37,655 | 33,511 | 101,377 | 106,253 |
Expenses: | ||||
Marketing, general and administrative | 29,671 | 27,678 | 87,326 | 86,845 |
Research and development | 3,606 | 2,801 | 10,297 | 10,229 |
Severance and restructuring costs | 824 | 2,820 | 1,708 | 10,623 |
Asset impairment and abandonments | 104 | 4,748 | ||
Acquisition and integration expenses | 1,941 | 2,741 | ||
Cardiothoracic closure business divestiture contingency consideration | (3,000) | (3,000) | ||
Gain on cardiothoracic closure business divestiture | (34,090) | (34,090) | ||
Total operating expenses | 33,146 | (791) | 103,820 | 73,607 |
Operating income (loss) | 4,509 | 34,302 | (2,443) | 32,646 |
Other (expense) income: | ||||
Interest expense | (611) | (741) | (2,223) | (2,475) |
Interest income | 14 | 31 | ||
Loss on extinguishment of debt | (309) | |||
Foreign exchange (loss) gain | (1) | 60 | (23) | 5 |
Total other expense-net | (598) | (681) | (2,524) | (2,470) |
Income (loss) before income tax (provision) benefit | 3,911 | 33,621 | (4,967) | 30,176 |
Income tax (provision) benefit | (807) | (16,135) | 1,646 | (16,251) |
Net income (loss) | 3,104 | 17,486 | (3,321) | 13,925 |
Convertible preferred dividend | (173) | (938) | (2,120) | (2,772) |
Net income (loss) applicable to common shares | 2,931 | 16,548 | (5,441) | 11,153 |
Other comprehensive (loss) gain: | ||||
Unrealized foreign currency translation (loss) gain | (130) | 434 | (651) | 1,847 |
Comprehensive (loss) gain | $ 2,801 | $ 16,982 | $ (6,092) | $ 13,000 |
Net income (loss) per common share-basic | $ 0.05 | $ 0.28 | $ (0.09) | $ 0.19 |
Net income (loss) per common share-diluted | $ 0.04 | $ 0.23 | $ (0.09) | $ 0.19 |
Weighted average shares outstanding-basic | 63,495,952 | 59,704,533 | 63,517,958 | 59,045,372 |
Weighted average shares outstanding-diluted | 79,284,315 | 75,188,161 | 63,517,958 | 59,954,964 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Total | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member]Series A Preferred Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] |
Beginning Balance at Dec. 31, 2017 | $ 181,737 | $ 63 | $ 429,459 | $ (6,329) | $ (237,066) | $ (4,390) | ||
Accumulated effect of adoption of the revenue recognition standard | 872 | 872 | ||||||
Net loss | (3,321) | (3,321) | ||||||
Foreign currency translation adjustment | (651) | (651) | ||||||
Exercise of common stock options | 1,225 | 1,225 | ||||||
Stock-based compensation | 3,650 | 3,650 | ||||||
Purchase of treasury stock | (479) | (479) | ||||||
Amortization of preferred stock Series A issuance costs | $ (137) | $ (137) | ||||||
Preferred stock Series A dividend | $ (2,120) | $ (2,120) | ||||||
Ending Balance at Sep. 30, 2018 | $ 180,776 | $ 63 | $ 432,077 | $ (6,980) | $ (239,515) | $ (4,869) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ 3,104 | $ 17,486 | $ (3,321) | $ 13,925 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization expense | 3,726 | 3,575 | 10,794 | 10,704 |
Provision for bad debts and product returns | 351 | 256 | 845 | 816 |
Provision for inventory write-downs | 2,041 | 735 | 12,906 | 4,488 |
Amortization of deferred revenue | (1,217) | (1,141) | (3,652) | (3,601) |
Deferred income tax provision (benefit) | 1,457 | 5,873 | (1,214) | 5,312 |
Stock-based compensation | 1,080 | 2,203 | 3,650 | 4,011 |
Asset impairment and abandonments | 104 | 4,748 | ||
Cardiothoracic closure business divestiture contingency consideration | (3,000) | (3,000) | ||
Gain on cardiothoracic closure business divestiture | (34,090) | (34,090) | ||
Other | 118 | 602 | 728 | 1,475 |
Change in assets and liabilities: | ||||
Accounts receivable | 1,053 | 2,642 | (6,587) | 4,770 |
Inventories | (5,432) | (998) | (5,843) | (831) |
Accounts payable | 4,629 | (6,725) | 826 | (5,727) |
Accrued expenses | (1,825) | (728) | (4,417) | (2,112) |
Deferred revenue | 2,000 | 2,000 | ||
Other operating assets and liabilities | (4,560) | (3,161) | 2,544 | (3,998) |
Net cash provided by (used in) operating activities | 1,629 | (13,471) | 11,007 | (2,858) |
Cash flows from investing activities: | ||||
Purchases of property, plant and equipment | (3,250) | (3,198) | (7,106) | (10,358) |
Patent and acquired intangible asset costs | (2,070) | (279) | (2,798) | (2,124) |
Acquisition of Zyga Technology | (21,000) | |||
Cardiothoracic closure business divestiture | 3,000 | 51,000 | 3,000 | 51,000 |
Net cash (used in) provided by investing activities | (2,320) | 47,523 | (27,904) | 38,518 |
Cash flows from financing activities: | ||||
Proceeds from exercise of common stock options | 905 | 297 | 2,334 | 1,872 |
Proceeds from long-term obligations | 2,000 | 74,425 | 6,000 | |
Payments on long-term obligations | (4,421) | (32,000) | (71,171) | (39,375) |
Other financing activities | (9) | (315) | (1,035) | (457) |
Net cash (used in) provided by financing activities | (3,525) | (30,018) | 4,553 | (31,960) |
Effect of exchange rate changes on cash and cash equivalents | (8) | 35 | (15) | 195 |
Net increase (decrease) in cash and cash equivalents | (4,224) | 4,069 | (12,359) | 3,895 |
Cash and cash equivalents, beginning of period | 14,246 | 13,675 | 22,381 | 13,849 |
Cash and cash equivalents, end of period | 10,022 | 17,744 | 10,022 | 17,744 |
Supplemental cash flow disclosure: | ||||
Cash paid for interest | 543 | 329 | 2,517 | 2,632 |
Cash paid for income taxes (refunds received) | 39 | 12,000 | (6,659) | 12,032 |
Non-cash acquisition of property, plant and equipment | 455 | 473 | 471 | 498 |
Stock-based compensation related to sale of CT business | 102 | 102 | ||
Increase in accrual for dividend payable | $ 173 | $ 938 | $ 2,120 | $ 2,772 |
Operations and Organization
Operations and Organization | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operations and Organization | 1. Operations and Organization RTI Surgical is a global surgical implant company that designs, develops, manufactures and distributes biologic, metal and synthetic implants. The Company’s implants are used in orthopedic, spine, sports medicine, plastic surgery, trauma and other surgical procedures to repair and promote the natural healing of human bone and other human tissues and improve surgical outcomes. The Company manufactures metal and synthetic implants and processes donated human musculoskeletal and other tissue and bovine and porcine animal tissue in producing allograft and xenograft implants using its proprietary BIOCLEANSE®, TUTOPLAST® and CANCELLE® SP sterilization processes. The Company processes tissue at its facilities in Alachua, Florida and Neunkirchen, Germany and manufactures metal and synthetic implants in Marquette, Michigan and Greenville, North Carolina, respectively. The Company is accredited in the U.S. by the American Association of Tissue Banks and the Company is a member of AdvaMed. The Company’s implants are distributed directly to hospitals and free-standing surgery centers throughout the U.S. and in more than 40 countries worldwide with the support of both its and third-party representatives as well as through larger purchasing companies. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, which the Company considers necessary for a fair presentation of the results of operations for the periods shown. The condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q 10-01 S-X, 10-K The condensed consolidated financial statements include the accounts of RTI Surgical, Inc. and its wholly owned subsidiaries, Pioneer Surgical Technology, Inc. (“Pioneer”), Tutogen Medical, Inc. (“TMI”), Zyga Technology, Inc. (“Zyga”), RTI Surgical, Inc. – Cardiovascular (inactive), Biological Recovery Group, Inc. (inactive) and RTI Services, Inc. (inactive). The condensed consolidated financial statements also include the accounts of RTI Donor Services, Inc. (“RTIDS”), which is a controlled entity. |
Recently Issued and Adopted Acc
Recently Issued and Adopted Accounting Standards | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued and Adopted Accounting Standards | 3. Recently Issued and Adopted Accounting Standards Fair Value Measurement 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. ” 2018-13 2018-13 Compensation—Stock Compensation 2017-09, “Compensation—Stock Compensation” 2017-09 Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets 2017-05, “Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets” 610-20): 2017-05 Business Combinations – Clarifying the Definition of a Business No. 2017-01, Business Combinations – Clarifying the Definition of a Business” No. 2017-01”). 2017-01 2017-01 2017-01 2017-01 Leases No. 2016-02 2016-02”), Leases (Topic 842) “Leases (Topic 840)” right-of-use 2016-02 2016-02, 2016-02 right-of-use Revenue from Contracts with Customers Adoption Impact The Company identified three contracts which previously resulted in revenue recognition occurring at the time of shipment; however, under the new revenue recognition standard, the Company is required to recognize revenue over time. The assessment of our January 1, 2018, condensed consolidated balance sheet under ASC Topic 606 resulted in a cumulative-effect adjustment to opening retained earnings, unbilled accounts receivable and costs incurred for inventory. The effects of the adoption under ASC Topic 606 are outlined in the following table: Year Ended Impact January 1, Accounts receivable $ 35,081 $ 3,243 $ 38,324 Inventories—net 111,927 (995 ) 110,932 Accrued expenses — 1,110 1,110 Deferred tax assets 9,575 (266 ) 9,309 Accumulated deficit (237,066 ) 872 (236,194 ) The impact of adoption of Topic 606 to the Company’s condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2018, was as follows: For the Three Months Ended For the Nine Months Ended As Reported Excluding Impact As Reported Excluding Impact Total revenues $ 69,064 $ 67,644 $ 209,639 $ 206,886 Cost of processing and distribution 31,409 30,374 108,262 107,063 Income tax (provision) benefit (807 ) (686 ) 1,646 2,134 Net income (loss) 2,931 2,667 (5,441 ) (6,507 ) Disaggregation of revenue The Company operates in one reportable segment composed of four lines of business. Effective January 1, 2018, the reporting of the Company’s lines of business are composed primarily of four franchises: spine; sports; OEM and international. The following table presents revenues from these four categories for the three and nine months ended September 30, 2018: For the Three Months Ended For the Nine Months Ended Revenues: Spine $ 20,741 $ 58,938 Sports 12,271 39,896 OEM 30,092 91,382 International 5,960 19,423 Total revenues from contracts with customers $ 69,064 $ 209,639 The following table presents revenues recognized at a point in time and over time for the three and nine months ended September 30, 2018: For the Three Months Ended For the Nine Months Ended Revenue recognized at a point in time $ 58,423 $ 183,543 Revenue recognized over time 10,641 26,096 Total revenues from contracts with customers $ 69,064 $ 209,639 Performance Obligations The Company’s performance obligations consist mainly of transferring control of implants identified in the contracts. Some of the Company’s contracts offer assurance-type warranties in connection with the sale of a product to a customer. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation and are not material to the condensed consolidated financial statements. When Performance Obligations Are Satisfied The Company typically transfers control at a point in time upon shipment or delivery of the implants for direct sales, or upon implantation for sales of consigned inventory. The customer is able to direct the use of, and obtain substantially all of the benefits from, the implant at the time the implant is shipped, delivered, or implanted, respectively based on the terms of the contract. For performance obligations related to the aforementioned three contracts with exclusively built inventory clauses, the Company typically satisfies its performance obligations evenly over the contract term as inventory is built. Such exclusively manufactured inventory has no alternative use and the Company has an enforceable right to payment for performance to date. The Company uses the input method to measure the manufacturing activities completed to date, which depicts the progress of the Company’s performance obligation of transferring control of exclusively built inventory. For the contracts with upfront and annual exclusivity fees, revenue related to those fees is recognized over the contract term following a consistent method of measuring progress towards satisfaction of the performance obligation. The Company uses the method and measure of progress that best depicts the transfer of control to the customer of the goods or services to date relative to the remaining goods or services promised under the contract. Significant Payment Terms The contract with the customer states the final terms of the sale, including the description, quantity, and price of each implant distributed. Payment for OEM contracts is typically due in full within 30 days of delivery or the start of the contract term. For the remaining lines of business, payment terms are typically due in full within 30 to 60 days of delivery. The Company performs a review of each specific customer’s credit worthiness and ability to pay prior to acceptance as a customer. Further, the Company performs periodic reviews of its customers’ creditworthiness prospectively. Since the customer agrees to a stated price in the contract that does not vary over the contract, the majority of contracts do not contain variable consideration. Nature of Goods and Services The Company distributes biologic, metal and synthetic implants. In some instances, the Company also enters into contracts with customers for exclusively manufactured inventory based on customer specifications. Returns In the normal course of business, the Company does accept product returns. The amount of consideration the Company ultimately receives varies depending upon the return terms that the Company may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company establishes provisions for estimated returns based on historical experience. The amount recorded on the Company’s balance sheets for product return allowance was $902 and $1,110 at September 30, 2018 and December 31, 2017, respectively. Liabilities for return allowances are included in “Accrued expenses”. Actual product returns have not differed materially from estimated amounts reserved in the accompanying condensed financial statements. Critical Accounting Estimates Estimates are used to determine the amount of variable consideration in contracts, and the measure of progress for contracts where revenue is recognized over time. The Company reviews and updates these estimates regularly. Our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation. Some contracts with customers include variable consideration primarily related to volume rebates. The Company estimates variable consideration at the most likely amount to determine the total consideration which the Company expects to be entitled. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available. Contract Asset and Liability The opening and closing balances of the Company’s accounts receivable, contract asset and current and long-term contract liability are as follows: Accounts Contract Contract Opening 1/1/2018 $ 38,324 $ 5,978 $ 3,741 Closing 9/30/2018 44,141 5,892 1,968 Increase/(decrease) 5,817 (86 ) (1,773 ) Contract liabilities consist primarily of the return allowance described above, and of deferred revenue arising from upfront and annual exclusivity fees. The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the Company’s performance of the Company’s contractual obligations over time. The Company recognizes sales commissions as incurred because the amortization period is less than one year. The Company does not incur other incremental costs relating to obtaining a contract with a customer, and therefore, does not have material contract assets, or impairment losses associated therewith. Revenue recognized for the nine months ended September 30, 2018, from amounts included in contract liabilities at the beginning of the period was $3,651. |
Acquisition of Zyga Technology,
Acquisition of Zyga Technology, Inc. | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition of Zyga Technology, Inc. | 4. Acquisition of Zyga Technology, Inc. On January 4, 2018, the Company acquired Zyga Technology, Inc. (“Zyga”), a leading spine-focused medical device company that develops and produces innovative minimally invasive devices to treat underserved conditions of the lumbar spine. Zyga’s primary product is the SImmetry® Sacroiliac Joint Fusion System. Under the terms of the merger agreement dated January 4, 2018, the Company acquired Zyga for $21,000 in consideration paid at closing (consisting of borrowings of $18,000 on our revolving credit facility and $3,000 cash on hand), $1,000 contingent upon the successful achievement of a clinical milestone, and a revenue based earnout consideration of up to $35,000. Based on a probability weighted model, the Company estimates a contingent liability related to the clinical milestone and revenue based earnout of $4,986. Acquisition related costs were approximately $1,430, of which approximately $800 was incurred during 2018 and is reflected separately in the accompanying Condensed Consolidated Statements of Comprehensive Loss. The Company has accounted for the acquisition of Zyga under ASC 805, Business Combinations The purchase price was financed as follows: (In thousands) Cash proceeds from revolving credit facility $ 18,000 Cash from RTI Surgical 3,000 Total purchase price $ 21,000 The Company is in the process of completing its valuation of the tax accounts associated with the purchase price allocation, which it expects to complete by December 31, 2018. The table below represents an allocation of the total consideration to Zyga’s tangible and intangible assets and liabilities based on management’s estimate of their respective fair values as of January 4, 2018. During the three months ended September 30, 2018, the Company made the following changes to the fair values of acquired assets and liabilities: decreased inventory by $450, decreased deferred tax assets by $1,025, increased acquisition contingencies by $1,286, increased other intangible assets by $4,760 and decreased goodwill by $1,999. As a result of increasing the fair value of intangible assets, the Company recorded additional accumulated amortization of $237 relating to the six months ended June 30, 2018. (In thousands) Inventories $ 1,099 Accounts receivable 573 Other current assets 53 Property, plant and equipment 151 Other assets 26 Deferred tax assets 1,649 Current liabilities (947 ) Acquisition contingencies (4,986 ) Net tangible assets acquired (2,382 ) Other intangible assets 6,760 Goodwill 16,622 Total net assets acquired $ 21,000 Total net assets acquired as of January 4, 2018, are all part of the Company’s only operating segment. Fair values are based on management’s estimates and assumptions including variations of the income approach, the cost approach and the market approach. Other intangible assets include patents, trademarks, and selling and marketing relationships. The Company believes that the acquisition of Zyga has offered and continues to offer the potential for substantial strategic and financial benefits. The transaction further advances our strategic transformation focused on reducing complexity, driving operational excellence and accelerating growth. The Company believes the acquisition will enhance stockholder value through, among other things, enabling the Company to capitalize on the following strategic advantages and opportunities: • Zyga’s innovative minimally invasive treatment should accentuate our spine portfolio and opens significant opportunities to accelerate our Spine-focused expansion strategy. • Zyga should leverage the core competencies of our Spine franchise by pursuing niche differentiated products, to gain scale and customer retention and support portfolio pull-through. These potential benefits resulted in the Company paying a premium for Zyga resulting in the recognition of $16,622 of goodwill assigned to the Company’s only operating segment and reporting unit. The amount of Zyga’s revenues and net loss since the January 4, 2018, acquisition date, included in the Company’s Condensed Consolidated Statement of Comprehensive Income (Loss) for the nine months ended September 30, 2018, excluding acquisition related costs of approximately $800, are $3,543 and $2,228, respectively. The following unaudited pro forma information shows the results of the Company’s operations as though the acquisition had occurred as of the beginning of that period (in thousands, except per share data): For the Nine Months Ended 2018 2017 Revenues $ 3,595 $ 3,323 Net loss applicable to common shares (2,295 ) (3,184 ) Basic net loss per share (0.04 ) (0.05 ) Diluted net loss per share (0.04 ) (0.05 ) The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the acquisition taken place as of the beginning of the periods presented, or the results that may occur in the future. These amounts exclude costs incurred which are directly attributable to the acquisition, and which do not have a continuing impact on the combined companies’ operating results. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 5. Stock-Based Compensation The Company’s policy is to grant stock options at an exercise price equal to 100% of the market value of a share of common stock at closing on the date of the grant. The Company’s stock options generally have five to ten-year 2018 Incentive Compensation Plan – 2015 Incentive Compensation Plan – Stock Options As of September 30, 2018, there was $2,548 of total unrecognized stock-based compensation related to nonvested stock options. The expense related to these stock options is expected to be recognized over a weighted-average period of 1.62 years. Stock options outstanding, exercisable and available for grant at September 30, 2018, are summarized as follows: Number of Weighted Weighted Aggregate Outstanding at January 1, 2018 4,692,037 $ 3.86 Granted 709,746 4.32 Exercised (346,853 ) 3.53 Forfeited or expired (656,378 ) 5.07 Outstanding at September 30, 2018 4,398,552 $ 3.78 5.99 $ 3,461 Vested or expected to vest at September 30, 2018 4,098,099 $ 3.76 5.82 $ 3,301 Exercisable at September 30, 2018 1,069,379 $ 3.99 4.10 $ 678 Available for grant at September 30, 2018 5,494,918 The aggregate intrinsic value in the tables above represents the total pre-tax Other information concerning stock options are as follows: For the Nine Months Ended 2018 2017 Weighted average fair value of stock options granted $ 2.05 $ 1.54 Aggregate intrinsic value of stock options exercised 344 641 The aggregate intrinsic value of stock options exercised in a period represents the pre-tax Restricted Stock Awards The value of restricted stock awards is determined by the market value of the Company’s common stock at the date of grant. For the nine months ended September 30, 2018, restricted stock awards in the amount of 657,798 shares and 141,176 shares were granted to employees and non-employee Number of Weighted Unvested at January 1, 2018 1,120,190 $ 4.15 Granted 798,974 4.28 Vested (393,333 ) 3.95 Forfeited (253,567 ) 4.11 Unvested at September 30, 2018 1,272,264 $ 4.30 For the three and nine months ended September 30, 2018 and 2017, the Company recognized stock-based compensation as follows: For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Stock-based compensation: Costs of processing and distribution $ 33 $ 33 $ 99 $ 78 Marketing, general and administrative 1,032 2,257 3,506 4,001 Research and development 15 15 45 34 Total $ 1,080 $ 2,305 $ 3,650 $ 4,113 |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | 6. Net Income Per Common Share A reconciliation of the number of shares of common stock used in the calculation of basic and diluted net income per common share is presented below: For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Basic shares 63,495,952 59,704,533 63,517,958 59,045,372 Effect of dilutive securities: Stock options 675,028 1,244,082 — 909,592 Preferred stock Series A 15,113,335 14,239,546 — — Diluted shares 79,284,315 75,188,161 63,517,958 59,954,964 For the three months ended September 30, 2018 and 2017, approximately 1,474,375 and 1,418,182, respectively, and for the nine months ended September 30, 2018 and 2017, approximately 1,456,829 and 1,474,461, respectively, of issued stock options were not included in the computation of diluted net income per common share because they were anti-dilutive because their exercise price exceeded the market price. For the nine months ended September 30, 2018, options to purchase 608,390 shares of common stock were not included in the computation of diluted loss per share because dilutive shares are not factored into this calculation when a net loss is reported. For both the three months ended September 30, 2018 and 2017, 50,000 shares of convertible preferred stock or 15,113,335 and 14,239,546, respectively, of converted common stock and accrued but unpaid dividends were dilutive on an as if-converted |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 7. Inventories Inventories by stage of completion are as follows: September 30, December 31, Unprocessed tissue, raw materials and supplies $ 23,203 $ 22,071 Tissue and work in process 31,663 40,481 Implantable tissue and finished goods 49,025 49,375 $ 103,891 $ 111,927 For the three months ended September 30, 2018 and 2017, the Company had inventory write-downs of $2,041 and $735, respectively, and for the nine months ended September 30, 2018 and 2017, the Company had inventory write-downs of $12,906 and $4,488, respectively, relating primarily to product obsolescence. Included in the nine months ended September 30, 2018, are $1,023 of product obsolescence related to the rationalization of our international distribution infrastructure and $6,559 of inventory write-off ® |
Prepaid and Other Current Asset
Prepaid and Other Current Assets | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Prepaid and Other Current Assets | 8. Prepaid and Other Current Assets Prepaid and Other Current Assets are as follows: September 30, December 31, Income tax receivable $ 3,172 $ 9,825 Receivable for executive stock option exercise — 1,234 Prepaid expenses 4,556 3,521 Other 885 1,705 $ 8,613 $ 16,285 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 9. Property, Plant and Equipment Property, plant and equipment are as follows: September 30, December 31, Land $ 2,035 $ 2,020 Buildings and improvements 58,121 57,954 Processing equipment 40,196 44,137 Surgical instruments 23,402 21,256 Office equipment, furniture and fixtures 1,803 1,352 Computer equipment and software 18,646 19,332 Construction in process 8,208 5,980 152,411 152,031 Less accumulated depreciation (75,067 ) (72,467 ) $ 77,344 $ 79,564 For the three months ended September 30, 2018 and 2017, the Company had depreciation expense in connection with property, plant and equipment of $2,577 and $2,623, respectively, and for the nine months ended September 30, 2018 and 2017, the Company had depreciation expense in connection with property, plant and equipment of $7,824 and $7,947, respectively. Included in the nine months ended September 30, 2018, are $1,797 of asset impairment and abandonment charges relating to lower distributions of our map3® implant. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 10. Goodwill Goodwill acquired during the nine months ended September 30, 2018 includes the excess of the Zyga purchase price over the sum of the amounts assigned to assets acquired less liabilities assumed. September 30, December 31, Balance at January 1 $ 46,242 $ 54,887 Goodwill acquired related to Zyga acquisition 16,622 — Goodwill disposed of related to sale of Cardiothoracic closure business — 8,645 Balance at September 30 $ 62,864 $ 46,242 The Company considered the decreased forecasted distributions of our map3® implant to be a triggering event for long-lived asset impairment testing. As a result, the Company performed a goodwill impairment analysis on its sole reporting unit during the quarter ended June 30, 2018, and based on the analysis, the Company concluded its goodwill was not impaired. |
Other Intangible Assets
Other Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | 11. Other Intangible Assets Other intangible assets are as follows: September 30, 2018 December 31, 2017 Gross Accumulated Gross Accumulated Patents $ 17,556 $ 5,457 $ 11,373 $ 4,890 Acquired licensing rights 10,797 6,297 14,747 9,097 Marketing and procurement and other intangible assets 20,698 11,100 20,603 9,666 Total $ 49,051 $ 22,854 $ 46,723 $ 23,653 For the three months ended September 30, 2018 and 2017, the Company had amortization expense of other intangible assets of $1,149 and $952, respectively, and for the nine months ended September 30, 2018 and 2017, the Company had amortization expense of other intangible assets of $2,970 and $2,757, respectively. Included in the nine months ended September 30, 2018, are $2,718 of asset impairment and abandonment charges relating to lower distributions of our map3® implant. At September 30, 2018, management’s estimates of future amortization expense for the next five years are as follows: Amortization 2018 $ 1,050 2019 4,200 2020 4,100 2021 4,100 2022 4,100 2023 1,800 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Accrued Expenses | 12. Accrued Expenses Accrued expenses are as follows: September 30, December 31, Accrued compensation $ 5,718 $ 8,257 Accrued severance and restructuring costs 1,070 3,279 Accrued executive transition costs 301 2,300 Accrued distributor commissions 3,747 3,889 Accrued donor recovery fees 4,529 4,144 Other 6,756 3,741 $ 22,121 $ 25,610 The Company accrues for the estimated donor recovery fees due to third party recovery agencies as tissue is received. |
Short and Long-Term Obligations
Short and Long-Term Obligations | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Short and Long-Term Obligations | 13. Short and Long-Term Obligations Short and long-term obligations are as follows: September 30, December 31, Term loan $ — $ 24,250 Revolving credit facility 50,000 22,500 Less unamortized debt issuance costs (979 ) (406 ) Total 49,021 46,344 Less current portion — (4,268 ) Long-term portion $ 49,021 $ 42,076 On June 5, 2018, the Company, along with our wholly-owned subsidiary, Pioneer Surgical, Inc. (“Pioneer Surgical”), entered into a Credit Agreement (the “2018 Credit Agreement”), as borrowers, with JP Morgan Chase Bank, N.A., as lender (together with the various financial institutions as in the future may become parties thereto, the “Lenders”) and as administrative agent for the Lenders. The 2018 Credit Agreement provides for a revolving credit facility in the aggregate principal amount of up to $100,000 (the “Facility”). The Company and Pioneer Surgical will be able to, at their option, and subject to customary conditions and Lender approval, request an increase to the Facility by up to $50,000. The Facility is guaranteed by the Company’s domestic subsidiaries and is secured by: (i) substantially all of the assets of the Company and Pioneer Surgical; (ii) substantially all of the assets of each of the Company’s domestic subsidiaries; and (iii) 65% of the stock of the Company’s foreign subsidiaries. The initial borrowings made under the 2018 Credit Agreement will bear interest at a rate per annum equal to the monthly REVLIBOR30 Rate (“CBFR Loans”) plus an adjustable margin of up to 2.00% (the “CBFR Rate”). The Company may elect to convert the interest rate for the initial borrowings to a rate per annum equal to the adjusted LIBO Rate (“Eurodollar Loans”) plus an adjustable margin of up to 2.00% (the “Eurodollar Rate”). For all subsequent borrowings, the Company may elect to apply either the CBFR Rate or Eurodollar Rate. The applicable margin is subject to adjustment after the end of each fiscal quarter, based upon the Company’s average quarterly availability. The maturity date of the Facility is June 5, 2023. The Company may make optional prepayments on the Facility without penalty. The Company paid certain customary closing costs and bank fees upon entering into the 2018 Credit Agreement. The Company is subject to certain affirmative and negative covenants, including (but not limited to), covenants limiting the Company’s ability to: incur certain additional indebtedness; create certain liens; enter into sale and leaseback transactions; and consolidate or merge with, or convey, transfer or lease all or substantially all of its assets to another person. The Company is required to maintain a minimum fixed charge coverage ratio of at least 1.00:1.00 (the “Required Minimum Fixed Charge Coverage Ratio”) during either of the following periods (each, a “Covenant Testing Period”): (i) a period beginning on a date that a default has occurred and is continuing under the loan documents entered into by the Company in conjunction with the Credit Agreement (the “Loan Documents”) through the first date on which no default has occurred and is continuing; or (ii) a period beginning on a date that availability under the Facility is less than the specified covenant testing threshold and continuing until availability under the Facility is greater than or equal to the specified covenant testing threshold for thirty (30) consecutive days. The Required Minimum Fixed Charge Coverage Ratio is measured on the last day of each calendar month during the Covenant Testing Period (each a “Calculation Date”), and is calculated using the minimum fixed charge coverage ratio for the twelve (12) consecutive months ending on each Calculation Date. The amounts owed under the 2018 Credit Agreement may be accelerated upon the occurrence of certain events of default customary for facilities for similarly rated borrowers. At September 30, 2018, the interest rate for the Facility was 3.85%. As of September 30, 2018, there was $50,000 outstanding on the Facility and total remaining available credit on the Facility was $41,990. The Company’s ability to access the Facility is subject to and can be limited by the Company’s compliance with the Company’s financial and other covenants. The Company was in compliance with the financial covenants related to the Facility as of September 30, 2018. For the three months ended September 30, 2018 and 2017, interest expense associated with the amortization of debt issuance costs was $53 and $88, respectively, and for the nine months ended September 30, 2018 and 2017, interest expense associated with the amortization of debt issuance costs was $476 and $350, respectively. For the nine months ended September 30, 2018, loss on extinguishment of debt associated with refinancing the Company’s debt was $309. |
Other long-term liabilities
Other long-term liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Other long-term liabilities | 14. Other long-term liabilities Other long-term liabilities are as follows: September 30, December 31, Acquisition contingencies $ 4,986 $ Other 773 1,431 $ 5,759 $ 1,431 Acquisition contingencies represent the Company’s fair value estimate of the Zyga acquisition clinical milestone and revenue earnout contingencies. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. Income Taxes The Company expects its deferred tax assets of $11,875, net of the valuation allowance at September 30, 2018 of $8,200, to be realized through the generation of future taxable income and the reversal of existing taxable temporary differences. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Legislation”). The Tax Legislation makes broad and complex changes to the U.S. tax code including, but not limited to the following: • Reduction of the U.S. federal corporate tax rate from 35% to 21% • Requiring a transition tax on certain unrepatriated earnings of foreign subsidiaries • Bonus depreciation that will allow for full expensing of qualified property • Elimination of the corporate alternative minimum tax • The repeal of the domestic production activity deduction • Limitations on the deductibility of certain executive compensation • Limitations on net operating losses generated after December 31, 2017 In addition, beginning in 2018, the Tax Legislation includes a global intangible low-taxed The SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Legislation. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Legislation enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, the Company must reflect the income tax effects of those aspects of the Tax Legislation for which the accounting under ASC 740 is complete. To the extent that the Company’s accounting for certain income tax effects of the Tax Legislation is incomplete, but the Company is able to determine a reasonable estimate, it must record a provisional estimate in the consolidated financial statements. If the Company cannot determine a provisional estimate, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Legislation. During the three months ended September 30, 2018, the Company completed the accounting of its deferred tax assets revaluation using the reduced corporate tax rate and the transition tax. During the three months ended September 30, 2018, the Company recorded a discrete tax benefit of $650. Analysis and accounting of the remaining aspects of the Tax Legislation may result in adjustments in the consolidated financial statements. The Company evaluates the need for deferred tax asset valuation allowances based on a more likely than not standard. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and negative evidence. It is difficult to conclude a valuation allowance is not required when there is significant objective and verifiable negative evidence, such as cumulative losses in recent years. The Company utilizes a rolling three years of actual results as the primary measure of cumulative losses in recent years. On a rolling three-year basis, the Company’s consolidated U.S. operations are in a cumulative income position. However, one U.S. entity (“Entity”) is in a three-year cumulative loss position. During the three months ended September 30, 2018, the Company established a valuation allowance on the Entity’s separate state deferred tax assets. The Company’s foreign operation is in a three-year cumulative loss position. As a result, the Company has established a full valuation allowance on its foreign subsidiary’s deferred tax assets. As such, valuation allowances of $8,200 and $7,258 have been established at September 30, 2018 and December 31, 2017, respectively, against a portion of the deferred tax assets. The Company will continue to regularly assess the realizability of our deferred tax assets. Changes in historical earnings performance and future earnings projections, among other factors, may cause the Company to adjust its valuation allowance, which would impact the Company’s income tax expense in the period the Company determines that these factors have changed. During the three months ended June 30, 2018, the Internal Revenue Service (“IRS”) completed its examination of the Company’s 2015 U.S. federal income tax return. No material adjustments were recorded to the Company’s condensed consolidated financial statements as a result of the examination. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Preferred Stock | 16. Preferred Stock On June 12, 2013, the Company and WSHP Biologics Holdings, LLC, an affiliate of Water Street Healthcare Partners, a leading healthcare-focused private equity firm (“Water Street”), entered into an investment agreement. Pursuant to the terms of the investment agreement, the Company issued $50,000 of convertible preferred equity to Water Street in a private placement which closed on July 16, 2013, with preferred stock issuance costs of $1,290. Before July 16, 2018, the preferred stock accrued dividends at a rate of 6% per annum. Dividends that were not paid in cash in any quarter accrued on each outstanding share of preferred stock during such three-month period and accumulated. On August 1, 2018, the Company and Water Street, a related party, entered into an Amended and Restated Certificate of Designation of Series A Convertible Preferred Stock of RTI Surgical, Inc. (the “Amended and Restated Certificate of Designation”). Pursuant to the Amended and Restated Certificate of Designation: (1) dividends on the Series A Preferred Stock will not accrue after July 16, 2018 (in the event of a default by the Company, dividends will begin accruing and will continue to accrue until the default is cured); (2) the Company may not force a redemption of the Series A Preferred Stock prior to July 16, 2020; and (3) the holders of the Series A Preferred Stock may not convert the Series A Preferred Stock into common stock prior to July 16, 2021 (with certain exceptions). The Company evaluated and concluded on a qualitative basis the amendment qualifies as modification accounting to the preferred shares, which did not result in a change in the valuation of the shares. Preferred stock is as follows: Preferred Stock Preferred Stock Net Total Balance at January 1, 2018 $ 64,399 $ (476 ) $ 63,923 Accrued dividend payable 2,120 — 2,120 Amortization of preferred stock issuance costs — 137 137 Balance at September 30, 2018 $ 66,519 $ (339 ) $ 66,180 |
Severance and Restructuring Cos
Severance and Restructuring Costs | 9 Months Ended |
Sep. 30, 2018 | |
Employee Severance [Member] | |
Severance and Restructuring Costs | 17. Severance and Restructuring Costs The Company recorded severance and restructuring costs related to the reduction of our organizational structure which resulted in $1,708 of expenses for the nine months ended September 30, 2018. Severance and restructuring payments are made to terminated employees over periods ranging from one month to twelve months and are not expected to have a material impact on cash flows of the Company in any quarterly period. The following table includes a roll-forward of severance and restructuring costs included in accrued expenses, see Note 12. Accrued severance and restructuring costs at January 1, 2018 $ 3,279 Severance and restructuring costs accrued in 2018 1,708 Subtotal severance and restructuring costs 4,987 Severance and restructuring cash payments (3,917 ) Accrued severance and restructuring costs at September 30, 2018 $ 1,070 |
Executive Transition Costs
Executive Transition Costs | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Executive Transition Costs | 18. Executive Transition Costs The Company recorded Chief Executive Officer retirement and transition costs related to the retirement of our former Chief Executive Officer pursuant to the Executive Transition Agreement dated August 29, 2012 (as amended and extended to date), which resulted in $4,404 of expenses for the year ended December 31, 2016. The total Chief Executive Officer retirement and transition costs are expected to be paid in full prior to the first quarter of 2019. In addition, the Company recorded executive transition costs of $2,781 as a result of hiring a new Chief Executive Officer and Chief Financial and Administrative Officer for the year ended December 31, 2017. The total executive transition costs, of which $1,169 is cash basis, was paid in full in the third quarter of 2018. The following table includes a roll-forward of executive transition costs included in accrued expenses, see Note 12. Accrued executive transition costs at January 1, 2018 2,300 Cash payments (1,999 ) Accrued executive transition costs at September 30, 2018 $ 301 |
Legal Actions
Legal Actions | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Actions | 19. Legal Actions The Company is, from time to time, involved in litigation relating to claims arising out of its operations in the ordinary course of business. The Company believes that none of these claims that were outstanding as of September 30, 2018, will have a material adverse impact on its financial position or results of operations. Coloplast — co-defendant In addition to claims made directly against the Company, Coloplast, a distributor of TSM’s and certain allografts processed and private labeled for them under a contract with the Company, has also been named as a defendant in individual TSM cases in various federal and state courts. Coloplast requested that the Company indemnify or defend Coloplast in those claims which allege injuries caused by the Company’s allograft implants, and on April 24, 2014, Coloplast sued RTI Surgical, Inc. in the Fourth Judicial District of Minnesota for declaratory relief and breach of contract. On December 11, 2014, Coloplast entered into a settlement agreement with RTI Surgical, Inc. and Tutogen Medical, Inc. (the “Company Parties”) resulting in dismissal of the case. Under the terms of the settlement agreement, the Company Parties are responsible for the defense and indemnification of two categories of present and future claims: (1) tissue only (where Coloplast is solely the distributor of Company processed allograft tissue and no Coloplast-manufactured or distributed synthetic mesh is identified) (“Tissue Only Claims”), and (2) tissue plus non-Coloplast (“Tissue-Non-Coloplast Tissue-Non-Coloplast Based on the current information available to the Company, the impact that current or any future TSM litigation may have on the Company cannot be reasonably estimated. The Company’s accounting policy is to accrue for legal costs as they are incurred. |
Regulatory Actions
Regulatory Actions | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Regulatory Actions | 20. Regulatory Actions On September 30, 2014, the Company received a letter from the FDA regarding its map3® cellular allogeneic bone graft. The letter addresses some technical aspects of the processing of the map3® allograft, as well as language included on the Company’s website. Following the 2014 letter, the FDA conducted an on-site non-compliance. During the second quarter 2018 the Company, based on its ongoing dialogue with the FDA and the continued negative impact of the warning letter on map3® distributions, reduced its forecasted distributions for map3® allografts. The reduction in the forecasted distributions was considered an impairment triggering event for the related asset group under the guidance per ASC 360 – Property, Plant, and Equipment. As a result, the Company completed an asset group impairment test utilizing revised long-term forecasts and determined the carrying value was not recoverable. As a result of the valuation analysis, an impairment charge of $1,797 was recorded against property, plant and equipment, and an impairment charge of $2,718 was recorded against acquired licensing rights. Additionally, management performed an analysis to assess the amount of map3® inventory which would more likely than not, not be distributed prior to the inventory’s expiring shelf life and should therefore be written down. Based on the analysis a write-off During the third quarter 2018, the Company decided that it would not pursue the more rigorous FDA requirements applicable to biological drug products and concluded that the Company would stop distributing its map3 ® |
Segment Data
Segment Data | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Data | 21. Segment Data The Company distributes human tissue, bovine and porcine animal tissue, metal and synthetic implants through various distribution channels. The Company operates in one reportable segment composed of four lines of business. Effective January 1, 2018, the reporting of the Company’s lines of business are composed primarily of four franchises: spine; sports; OEM and international. The Company’s previous lines of business were composed of: spine; sports medicine and orthopedics; surgical specialties; cardiothoracic; international; and OEM. Effective January 1, 2018, the other revenues category is included in the OEM line of business. The prior year comparable revenue information has been restated to conform to the current year presentation. The Company believes that the change in the reporting of the Company’s lines of business is aligned with our focused strategy of reducing complexity and better understanding of our lines of business. Additionally, on August 3, 2017, we completed the sale of substantially all of the assets related to our CT Business to A&E Advanced Closure Systems, LLC (a subsidiary of A&E Medical Corporation) (“A&E”). In connection with the CT Business sale, we entered into a multi-year Contract Manufacturing Agreement with A&E whereby we continue to support the CT Business under A&E’s ownership through the manufacturing of existing products, which generates revenue for our OEM business. Discrete financial information is not available for these four lines of business. The following table presents revenues from these four categories for the three and nine months ended September 30, 2018 and 2017, respectively: For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Revenues: Spine $ 20,741 $ 18,131 $ 58,938 $ 57,888 Sports 12,271 12,723 39,896 41,852 OEM 30,092 28,779 91,382 81,904 International 5,960 5,715 19,423 18,939 Cardiothoracic — 1,340 — 8,164 Total revenues $ 69,064 $ 66,688 $ 209,639 $ 208,747 The following table presents percentage of total revenues derived from the Company’s largest distributors: For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Percent of revenues derived from: Distributor Zimmer Biomet Holdings, Inc. 22 % 15 % 21 % 17 % Medtronic, PLC 9 % 8 % 8 % 9 % DePuy Synthes 3 % 4 % 5 % 4 % The following table presents property, plant and equipment—net by significant geographic location: September 30, December 31, Property, plant and equipment—net: Domestic $ 71,709 $ 73,363 International 5,635 6,201 Total $ 77,344 $ 79,564 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 22. Subsequent Events The Company evaluated subsequent events as of the issuance date of the condensed consolidated financial statements as defined by FASB ASC 855 Subsequent Events ® ® Under the terms of the agreement, the Company shall pay $100,000 in cash and issue 10,729,614 shares of RTI common stock at closing, and revenue based earnout consideration of up to $150,000 in a combination of cash and RTI common stock. The shares of RTI stock to be issued at closing were valued based on the volume weighted average closing trading price for the five trading days prior to the date of execution of the definitive agreement, representing $50,000 of value. RTI intends to fund the cash portion of the consideration with approximately $100,000 in new, fully-committed debt financing. The Company has not completed its preliminary purchase price allocation, and as such cannot disclose the preliminary purchase price allocation. |
Recently Issued and Adopted A_2
Recently Issued and Adopted Accounting Standards (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Fair Value of Financial Instruments | Fair Value Measurement 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. ” 2018-13 2018-13 |
Compensation - Stock Compensation | Compensation—Stock Compensation 2017-09, “Compensation—Stock Compensation” 2017-09 |
Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets | Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets 2017-05, “Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets” 610-20): 2017-05 |
Business Combinations - Clarifying the Definition of a Business | Business Combinations – Clarifying the Definition of a Business No. 2017-01, Business Combinations – Clarifying the Definition of a Business” No. 2017-01”). 2017-01 2017-01 2017-01 2017-01 |
Leases | Leases No. 2016-02 2016-02”), Leases (Topic 842) “Leases (Topic 840)” right-of-use 2016-02 2016-02, 2016-02 right-of-use |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Adoption Impact The Company identified three contracts which previously resulted in revenue recognition occurring at the time of shipment; however, under the new revenue recognition standard, the Company is required to recognize revenue over time. The assessment of our January 1, 2018, condensed consolidated balance sheet under ASC Topic 606 resulted in a cumulative-effect adjustment to opening retained earnings, unbilled accounts receivable and costs incurred for inventory. The effects of the adoption under ASC Topic 606 are outlined in the following table: Year Ended Impact January 1, Accounts receivable $ 35,081 $ 3,243 $ 38,324 Inventories—net 111,927 (995 ) 110,932 Accrued expenses — 1,110 1,110 Deferred tax assets 9,575 (266 ) 9,309 Accumulated deficit (237,066 ) 872 (236,194 ) The impact of adoption of Topic 606 to the Company’s condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2018, was as follows: For the Three Months Ended For the Nine Months Ended As Reported Excluding Impact As Reported Excluding Impact Total revenues $ 69,064 $ 67,644 $ 209,639 $ 206,886 Cost of processing and distribution 31,409 30,374 108,262 107,063 Income tax (provision) benefit (807 ) (686 ) 1,646 2,134 Net income (loss) 2,931 2,667 (5,441 ) (6,507 ) Disaggregation of revenue The Company operates in one reportable segment composed of four lines of business. Effective January 1, 2018, the reporting of the Company’s lines of business are composed primarily of four franchises: spine; sports; OEM and international. The following table presents revenues from these four categories for the three and nine months ended September 30, 2018: For the Three Months Ended For the Nine Months Ended Revenues: Spine $ 20,741 $ 58,938 Sports 12,271 39,896 OEM 30,092 91,382 International 5,960 19,423 Total revenues from contracts with customers $ 69,064 $ 209,639 The following table presents revenues recognized at a point in time and over time for the three and nine months ended September 30, 2018: For the Three Months Ended For the Nine Months Ended Revenue recognized at a point in time $ 58,423 $ 183,543 Revenue recognized over time 10,641 26,096 Total revenues from contracts with customers $ 69,064 $ 209,639 Performance Obligations The Company’s performance obligations consist mainly of transferring control of implants identified in the contracts. Some of the Company’s contracts offer assurance-type warranties in connection with the sale of a product to a customer. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation and are not material to the condensed consolidated financial statements. When Performance Obligations Are Satisfied The Company typically transfers control at a point in time upon shipment or delivery of the implants for direct sales, or upon implantation for sales of consigned inventory. The customer is able to direct the use of, and obtain substantially all of the benefits from, the implant at the time the implant is shipped, delivered, or implanted, respectively based on the terms of the contract. For performance obligations related to the aforementioned three contracts with exclusively built inventory clauses, the Company typically satisfies its performance obligations evenly over the contract term as inventory is built. Such exclusively manufactured inventory has no alternative use and the Company has an enforceable right to payment for performance to date. The Company uses the input method to measure the manufacturing activities completed to date, which depicts the progress of the Company’s performance obligation of transferring control of exclusively built inventory. For the contracts with upfront and annual exclusivity fees, revenue related to those fees is recognized over the contract term following a consistent method of measuring progress towards satisfaction of the performance obligation. The Company uses the method and measure of progress that best depicts the transfer of control to the customer of the goods or services to date relative to the remaining goods or services promised under the contract. Significant Payment Terms The contract with the customer states the final terms of the sale, including the description, quantity, and price of each implant distributed. Payment for OEM contracts is typically due in full within 30 days of delivery or the start of the contract term. For the remaining lines of business, payment terms are typically due in full within 30 to 60 days of delivery. The Company performs a review of each specific customer’s credit worthiness and ability to pay prior to acceptance as a customer. Further, the Company performs periodic reviews of its customers’ creditworthiness prospectively. Since the customer agrees to a stated price in the contract that does not vary over the contract, the majority of contracts do not contain variable consideration. Nature of Goods and Services The Company distributes biologic, metal and synthetic implants. In some instances, the Company also enters into contracts with customers for exclusively manufactured inventory based on customer specifications. Returns In the normal course of business, the Company does accept product returns. The amount of consideration the Company ultimately receives varies depending upon the return terms that the Company may offer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company establishes provisions for estimated returns based on historical experience. The amount recorded on the Company’s balance sheets for product return allowance was $902 and $1,110 at September 30, 2018 and December 31, 2017, respectively. Liabilities for return allowances are included in “Accrued expenses”. Actual product returns have not differed materially from estimated amounts reserved in the accompanying condensed financial statements. Critical Accounting Estimates Estimates are used to determine the amount of variable consideration in contracts, and the measure of progress for contracts where revenue is recognized over time. The Company reviews and updates these estimates regularly. Our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation. Some contracts with customers include variable consideration primarily related to volume rebates. The Company estimates variable consideration at the most likely amount to determine the total consideration which the Company expects to be entitled. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available. Contract Asset and Liability The opening and closing balances of the Company’s accounts receivable, contract asset and current and long-term contract liability are as follows: Accounts Contract Contract Opening 1/1/2018 $ 38,324 $ 5,978 $ 3,741 Closing 9/30/2018 44,141 5,892 1,968 Increase/(decrease) 5,817 (86 ) (1,773 ) Contract liabilities consist primarily of the return allowance described above, and of deferred revenue arising from upfront and annual exclusivity fees. The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the Company’s performance of the Company’s contractual obligations over time. The Company recognizes sales commissions as incurred because the amortization period is less than one year. The Company does not incur other incremental costs relating to obtaining a contract with a customer, and therefore, does not have material contract assets, or impairment losses associated therewith. Revenue recognized for the nine months ended September 30, 2018, from amounts included in contract liabilities at the beginning of the period was $3,651. |
Recently Issued and Adopted A_3
Recently Issued and Adopted Accounting Standards (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition from Four Categories | The following table presents revenues from these four categories for the three and nine months ended September 30, 2018: For the Three Months Ended For the Nine Months Ended Revenues: Spine $ 20,741 $ 58,938 Sports 12,271 39,896 OEM 30,092 91,382 International 5,960 19,423 Total revenues from contracts with customers $ 69,064 $ 209,639 |
Revenues Recognized at a Point in Time and Over Time | The following table presents revenues recognized at a point in time and over time for the three and nine months ended September 30, 2018: For the Three Months Ended For the Nine Months Ended Revenue recognized at a point in time $ 58,423 $ 183,543 Revenue recognized over time 10,641 26,096 Total revenues from contracts with customers $ 69,064 $ 209,639 |
Contract with Customer, Asset and Liability | The opening and closing balances of the Company’s accounts receivable, contract asset and current and long-term contract liability are as follows: Accounts Contract Contract Opening 1/1/2018 $ 38,324 $ 5,978 $ 3,741 Closing 9/30/2018 44,141 5,892 1,968 Increase/(decrease) 5,817 (86 ) (1,773 ) |
Accounting Standards Update 2014-09 [Member] | |
Schedule of Prior Period Adjustments | The effects of the adoption under ASC Topic 606 are outlined in the following table: Year Ended Impact January 1, Accounts receivable $ 35,081 $ 3,243 $ 38,324 Inventories—net 111,927 (995 ) 110,932 Accrued expenses — 1,110 1,110 Deferred tax assets 9,575 (266 ) 9,309 Accumulated deficit (237,066 ) 872 (236,194 ) |
Impact of Adoption of Topic 606 to Condensed Consolidated Statements of Comprehensive Income (Loss) | The impact of adoption of Topic 606 to the Company’s condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2018, was as follows: For the Three Months Ended For the Nine Months Ended As Reported Excluding Impact As Reported Excluding Impact Total revenues $ 69,064 $ 67,644 $ 209,639 $ 206,886 Cost of processing and distribution 31,409 30,374 108,262 107,063 Income tax (provision) benefit (807 ) (686 ) 1,646 2,134 Net income (loss) 2,931 2,667 (5,441 ) (6,507 ) |
Acquisition of Zyga Technolog_2
Acquisition of Zyga Technology, Inc. (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition Purchase Price | The purchase price was financed as follows: (In thousands) Cash proceeds from revolving credit facility $ 18,000 Cash from RTI Surgical 3,000 Total purchase price $ 21,000 |
Summary of Allocation of Total Consideration to Tangible and Intangible Assets and Liabilities | The table below represents an allocation of the total consideration to Zyga’s tangible and intangible assets and liabilities based on management’s estimate of their respective fair values as of January 4, 2018. During the three months ended September 30, 2018, the Company made the following changes to the fair values of acquired assets and liabilities: decreased inventory by $450, decreased deferred tax assets by $1,025, increased acquisition contingencies by $1,286, increased other intangible assets by $4,760 and decreased goodwill by $1,999. As a result of increasing the fair value of intangible assets, the Company recorded additional accumulated amortization of $237 relating to the six months ended June 30, 2018. (In thousands) Inventories $ 1,099 Accounts receivable 573 Other current assets 53 Property, plant and equipment 151 Other assets 26 Deferred tax assets 1,649 Current liabilities (947 ) Acquisition contingencies (4,986 ) Net tangible assets acquired (2,382 ) Other intangible assets 6,760 Goodwill 16,622 Total net assets acquired $ 21,000 |
Pro Forma Information of Company's Operations | The following unaudited pro forma information shows the results of the Company’s operations as though the acquisition had occurred as of the beginning of that period (in thousands, except per share data): For the Nine Months Ended 2018 2017 Revenues $ 3,595 $ 3,323 Net loss applicable to common shares (2,295 ) (3,184 ) Basic net loss per share (0.04 ) (0.05 ) Diluted net loss per share (0.04 ) (0.05 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options Outstanding, Exercisable and Available for Grant | Stock options outstanding, exercisable and available for grant at September 30, 2018, are summarized as follows: Number of Weighted Weighted Aggregate Outstanding at January 1, 2018 4,692,037 $ 3.86 Granted 709,746 4.32 Exercised (346,853 ) 3.53 Forfeited or expired (656,378 ) 5.07 Outstanding at September 30, 2018 4,398,552 $ 3.78 5.99 $ 3,461 Vested or expected to vest at September 30, 2018 4,098,099 $ 3.76 5.82 $ 3,301 Exercisable at September 30, 2018 1,069,379 $ 3.99 4.10 $ 678 Available for grant at September 30, 2018 5,494,918 |
Other Information Concerning Stock Options | Other information concerning stock options are as follows: For the Nine Months Ended 2018 2017 Weighted average fair value of stock options granted $ 2.05 $ 1.54 Aggregate intrinsic value of stock options exercised 344 641 |
Unvested Restricted Stock Awards | The following table summarizes information about unvested restricted stock awards as of September 30, 2018: Number of Weighted Unvested at January 1, 2018 1,120,190 $ 4.15 Granted 798,974 4.28 Vested (393,333 ) 3.95 Forfeited (253,567 ) 4.11 Unvested at September 30, 2018 1,272,264 $ 4.30 |
Stock-Based Compensation Recognized | For the three and nine months ended September 30, 2018 and 2017, the Company recognized stock-based compensation as follows: For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Stock-based compensation: Costs of processing and distribution $ 33 $ 33 $ 99 $ 78 Marketing, general and administrative 1,032 2,257 3,506 4,001 Research and development 15 15 45 34 Total $ 1,080 $ 2,305 $ 3,650 $ 4,113 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Common Stock used in Calculation of Basic and Diluted Earnings Per Share | A reconciliation of the number of shares of common stock used in the calculation of basic and diluted net income per common share is presented below: For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Basic shares 63,495,952 59,704,533 63,517,958 59,045,372 Effect of dilutive securities: Stock options 675,028 1,244,082 — 909,592 Preferred stock Series A 15,113,335 14,239,546 — — Diluted shares 79,284,315 75,188,161 63,517,958 59,954,964 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories by stage of completion are as follows: September 30, December 31, Unprocessed tissue, raw materials and supplies $ 23,203 $ 22,071 Tissue and work in process 31,663 40,481 Implantable tissue and finished goods 49,025 49,375 $ 103,891 $ 111,927 |
Prepaid and Other Current Ass_2
Prepaid and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Schedule of Prepaid and Other Current Assets | Prepaid and Other Current Assets are as follows: September 30, December 31, Income tax receivable $ 3,172 $ 9,825 Receivable for executive stock option exercise — 1,234 Prepaid expenses 4,556 3,521 Other 885 1,705 $ 8,613 $ 16,285 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Components of Property, Plant and Equipment | Property, plant and equipment are as follows: September 30, December 31, Land $ 2,035 $ 2,020 Buildings and improvements 58,121 57,954 Processing equipment 40,196 44,137 Surgical instruments 23,402 21,256 Office equipment, furniture and fixtures 1,803 1,352 Computer equipment and software 18,646 19,332 Construction in process 8,208 5,980 152,411 152,031 Less accumulated depreciation (75,067 ) (72,467 ) $ 77,344 $ 79,564 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill acquired during the nine months ended September 30, 2018 includes the excess of the Zyga purchase price over the sum of the amounts assigned to assets acquired less liabilities assumed. September 30, December 31, Balance at January 1 $ 46,242 $ 54,887 Goodwill acquired related to Zyga acquisition 16,622 — Goodwill disposed of related to sale of Cardiothoracic closure business — 8,645 Balance at September 30 $ 62,864 $ 46,242 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Other Intangible Assets | Other intangible assets are as follows: September 30, 2018 December 31, 2017 Gross Accumulated Gross Accumulated Patents $ 17,556 $ 5,457 $ 11,373 $ 4,890 Acquired licensing rights 10,797 6,297 14,747 9,097 Marketing and procurement and other intangible assets 20,698 11,100 20,603 9,666 Total $ 49,051 $ 22,854 $ 46,723 $ 23,653 |
Estimates of Future Amortization Expense | At September 30, 2018, management’s estimates of future amortization expense for the next five years are as follows: Amortization 2018 $ 1,050 2019 4,200 2020 4,100 2021 4,100 2022 4,100 2023 1,800 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Accrued Expenses | Accrued expenses are as follows: September 30, December 31, Accrued compensation $ 5,718 $ 8,257 Accrued severance and restructuring costs 1,070 3,279 Accrued executive transition costs 301 2,300 Accrued distributor commissions 3,747 3,889 Accrued donor recovery fees 4,529 4,144 Other 6,756 3,741 $ 22,121 $ 25,610 |
Short and Long-Term Obligatio_2
Short and Long-Term Obligations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Short and Long-Term Obligations | Short and long-term obligations are as follows: September 30, December 31, Term loan $ — $ 24,250 Revolving credit facility 50,000 22,500 Less unamortized debt issuance costs (979 ) (406 ) Total 49,021 46,344 Less current portion — (4,268 ) Long-term portion $ 49,021 $ 42,076 |
Other long-term liabilities (Ta
Other long-term liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Summary of Other long-term liabilities | Other long-term liabilities are as follows: September 30, December 31, Acquisition contingencies $ 4,986 $ Other 773 1,431 $ 5,759 $ 1,431 |
Preferred Stock (Tables)
Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Preferred Stock | Preferred stock is as follows: Preferred Stock Preferred Stock Net Total Balance at January 1, 2018 $ 64,399 $ (476 ) $ 63,923 Accrued dividend payable 2,120 — 2,120 Amortization of preferred stock issuance costs — 137 137 Balance at September 30, 2018 $ 66,519 $ (339 ) $ 66,180 |
Severance and Restructuring C_2
Severance and Restructuring Costs (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Former Chief Executive Officer [Member] | |
Schedule of Restructuring Charges | The following table includes a roll-forward of executive transition costs included in accrued expenses, see Note 12. Accrued executive transition costs at January 1, 2018 2,300 Cash payments (1,999 ) Accrued executive transition costs at September 30, 2018 $ 301 |
Employee Severance [Member] | |
Schedule of Restructuring Charges | The following table includes a roll-forward of severance and restructuring costs included in accrued expenses, see Note 12. Accrued severance and restructuring costs at January 1, 2018 $ 3,279 Severance and restructuring costs accrued in 2018 1,708 Subtotal severance and restructuring costs 4,987 Severance and restructuring cash payments (3,917 ) Accrued severance and restructuring costs at September 30, 2018 $ 1,070 |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Revenues from Tissue Distribution and Other Revenues | The following table presents revenues from these four categories for the three and nine months ended September 30, 2018 and 2017, respectively: For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Revenues: Spine $ 20,741 $ 18,131 $ 58,938 $ 57,888 Sports 12,271 12,723 39,896 41,852 OEM 30,092 28,779 91,382 81,904 International 5,960 5,715 19,423 18,939 Cardiothoracic — 1,340 — 8,164 Total revenues $ 69,064 $ 66,688 $ 209,639 $ 208,747 |
Schedule of Percentage of Total Revenues Derived from Company's Largest Distributors | The following table presents percentage of total revenues derived from the Company’s largest distributors: For the Three Months Ended For the Nine Months Ended 2018 2017 2018 2017 Percent of revenues derived from: Distributor Zimmer Biomet Holdings, Inc. 22 % 15 % 21 % 17 % Medtronic, PLC 9 % 8 % 8 % 9 % DePuy Synthes 3 % 4 % 5 % 4 % |
Schedule of Property, Plant and Equipment - Net by Significant Geographic Location | The following table presents property, plant and equipment—net by significant geographic location: September 30, December 31, Property, plant and equipment—net: Domestic $ 71,709 $ 73,363 International 5,635 6,201 Total $ 77,344 $ 79,564 |
Operations and Organization - A
Operations and Organization - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018Country | |
Accounting Policies [Abstract] | |
Number of countries that receive distribution | 40 |
Recently Issued and Adopted A_4
Recently Issued and Adopted Accounting Standards - Additional Information (Detail) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018USD ($)SegmentContract | Dec. 31, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of reportable segment | Segment | 1 | |
Lines of business | Segment | 4 | |
Product return allowance recorded | $ | $ 902,000 | $ 1,110,000 |
Revenue recognized from amounts included in contract liabilities | $ | $ 3,651 | |
Accounting Standards Update 2014-09 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of contracts affected | Contract | 3 |
Recently Issued and Adopted A_5
Recently Issued and Adopted Accounting Standards - Schedule of Prior Period Adjustments (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | $ 44,141 | $ 38,324 | $ 35,081 |
Inventories-net | 103,891 | 111,927 | |
Accrued expenses | 22,121 | 25,610 | |
Deferred tax assets | 11,875 | 9,575 | |
Accumulated deficit | $ (239,515) | (237,066) | |
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | 35,081 | ||
Inventories-net | 111,927 | ||
Deferred tax assets | 9,575 | ||
Accumulated deficit | $ (237,066) | ||
Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | 38,324 | ||
Inventories-net | 110,932 | ||
Accrued expenses | 1,110 | ||
Deferred tax assets | 9,309 | ||
Accumulated deficit | (236,194) | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | 3,243 | ||
Inventories-net | (995) | ||
Accrued expenses | 1,110 | ||
Deferred tax assets | (266) | ||
Accumulated deficit | $ 872 |
Recently Issued and Adopted A_6
Recently Issued and Adopted Accounting Standards - Impact of Adoption of Topic 606 to Condensed Consolidated Statements of Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | $ 69,064 | $ 66,688 | $ 209,639 | $ 208,747 |
Cost of processing and distribution | 31,409 | 33,177 | 108,262 | 102,494 |
Income tax (provision) benefit | (807) | (16,135) | 1,646 | (16,251) |
Net income (loss) | 2,931 | $ 16,548 | (5,441) | $ 11,153 |
Accounting Standards Update 2014-09 [Member] | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 67,644 | 206,886 | ||
Cost of processing and distribution | 30,374 | 107,063 | ||
Income tax (provision) benefit | (686) | 2,134 | ||
Net income (loss) | $ 2,667 | $ (6,507) |
Recently Issued and Adopted A_7
Recently Issued and Adopted Accounting Standards - Revenue Recognition from Four Categories (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 69,064 | $ 66,688 | $ 209,639 | $ 208,747 |
Spine [Member] | Tissue Distribution [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 20,741 | 58,938 | ||
Sports [Member] | Tissue Distribution [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 12,271 | 39,896 | ||
OEM [Member] | Tissue Distribution [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 30,092 | 91,382 | ||
International [Member] | Tissue Distribution [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 5,960 | $ 19,423 |
Recently Issued and Adopted A_8
Recently Issued and Adopted Accounting Standards - Revenues Recognized at a Point in Time and Over Time (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 69,064 | $ 66,688 | $ 209,639 | $ 208,747 |
Transferred at Point in Time [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 58,423 | 183,543 | ||
Transferred over Time [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 10,641 | $ 26,096 |
Recently Issued and Adopted A_9
Recently Issued and Adopted Accounting Standards - Contract with Customer, Asset and Liability (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Accounting Changes and Error Corrections [Abstract] | |||
Accounts receivable | $ 44,141 | $ 38,324 | $ 35,081 |
Contract Liability (Current) | 5,892 | 5,978 | |
Contract Liability (Long-Term) | 1,968 | $ 3,741 | |
Accounts Receivable, Increase/(decrease) | 5,817 | ||
Contract Liability (Current), Increase/(decrease) | (86) | ||
Contract Liability (Long-Term), Increase/(decrease) | $ (1,773) |
Acquisition of Zyga Technology
Acquisition of Zyga Technology Inc. - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 04, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Combinations [Line Items] | ||||||||
Cash from RTI Surgical | $ 21,000 | |||||||
Acquisition and integration expenses | $ 1,941 | 2,741 | ||||||
Accumulated Amortization, Additions | 1,149 | $ 952 | 2,970 | $ 2,757 | ||||
Goodwill | 62,864 | 62,864 | $ 46,242 | $ 54,887 | ||||
Revolving Credit Facility [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Cash proceeds from revolving credit facility | $ 18,000 | |||||||
Zyga Technology Inc. [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Date of merger agreement | Jan. 4, 2018 | |||||||
Payments to acquire businesses | $ 21,000 | |||||||
Cash from RTI Surgical | 3,000 | |||||||
Acquisition related costs | 1,430 | |||||||
Acquisition and integration expenses | 800 | |||||||
Changes to the preliminary fair values of acquired assets and liabilities, Inventory | (450) | |||||||
Changes to the preliminary fair values of acquired assets and liabilities, Deferred tax assets | (1,025) | |||||||
Changes to the preliminary fair values of acquired assets and liabilities, Acquisition Contingencies | 1,286 | |||||||
Changes to the preliminary fair values of acquired assets and liabilities, Goodwill | (1,999) | |||||||
Changes to the preliminary fair values of acquired assets and liabilities,Intangible assets | 4,760 | |||||||
Accumulated Amortization, Additions | $ 237 | |||||||
Goodwill | 16,622 | $ 16,622 | 16,622 | |||||
Revenue | 3,543 | |||||||
Net loss | $ (2,228) | |||||||
Zyga Technology Inc. [Member] | Clinical Milestones [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Earnout consideration | 1,000 | |||||||
Zyga Technology Inc. [Member] | Earn Out Payment [Member] | ||||||||
Business Combinations [Line Items] | ||||||||
Earnout consideration | 4,986 | |||||||
Revenue based earnout consideration | $ 35,000 |
Acquisition of Zyga Technolog_3
Acquisition of Zyga Technology Inc. - Acquisition Purchase Price (Detail) - USD ($) $ in Thousands | Jan. 04, 2018 | Sep. 30, 2018 |
Business Combinations [Line Items] | ||
Cash from RTI Surgical | $ 21,000 | |
Zyga Technology Inc. [Member] | ||
Business Combinations [Line Items] | ||
Cash from RTI Surgical | $ 3,000 | |
Total purchase price | 21,000 | |
Revolving Credit Facility [Member] | ||
Business Combinations [Line Items] | ||
Cash proceeds from revolving credit facility | $ 18,000 |
Acquisition of Zyga Technolog_4
Acquisition of Zyga Technology Inc. - Summary of Allocation of Total Consideration to Tangible and Intangible Assets and Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 04, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Combinations [Line Items] | ||||
Goodwill | $ 62,864 | $ 46,242 | $ 54,887 | |
Zyga Technology Inc. [Member] | ||||
Business Combinations [Line Items] | ||||
Inventories | $ 1,099 | |||
Accounts receivable | 573 | |||
Other current assets | 53 | |||
Property, plant and equipment | 151 | |||
Other assets | 26 | |||
Deferred tax assets | 1,649 | |||
Current liabilities | (947) | |||
Acquisition contingencies | (4,986) | (4,986) | ||
Net tangible assets acquired | (2,382) | |||
Other intangible assets | 6,760 | |||
Goodwill | $ 16,622 | 16,622 | ||
Total net assets acquired | $ 21,000 |
Acquisition of Zyga Technolog_5
Acquisition of Zyga Technology Inc. - Pro Forma Information of Company's Operations (Detail) - Zyga Technology Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Business Acquisition Pro Forma Information [Line Items] | ||
Revenues | $ 3,595 | $ 3,323 |
Net loss applicable to common shares | $ (2,295) | $ (3,184) |
Basic net loss per share | $ (0.04) | $ (0.05) |
Diluted net loss per share | $ (0.04) | $ (0.05) |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of market value of common stock, stock options exercise price | 100.00% |
Percentage of market value of common stock, restricted stock award granted | 100.00% |
Total unrecognized stock-based compensation | $ | $ 3,764 |
Stock-based compensation awards, weighted-average period recognized | 1 year 9 months 3 days |
2015 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares of common stock allowed to be issued | 4,656,587 |
2018 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares of common stock allowed to be issued | 5,726,035 |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Contractual term of stock options granted | 5 years |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Contractual term of stock options granted | 10 years |
Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted | 798,974 |
Restricted Stock Awards [Member] | Employee Directors [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted | 657,798 |
Restricted Stock Awards [Member] | Non-Employee Directors [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted | 141,176 |
Restricted Stock Awards [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation award, vesting period | 1 year |
Restricted Stock Awards [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation award, vesting period | 3 years |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation | $ | $ 2,548 |
Stock-based compensation awards, weighted-average period recognized | 1 year 7 months 13 days |
Stock Options [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation award, vesting period | 1 year |
Stock Options [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation award, vesting period | 5 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Outstanding, Exercisable and Available for Grant (Detail) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Outstanding, Number of Shares | 4,692,037 |
Granted, Number of Shares | 709,746 |
Exercised, Number of Shares | (346,853) |
Forfeited or expired, Number of Shares | (656,378) |
Outstanding, Number of Shares | 4,398,552 |
Vested or expected to vest, Number of Shares | 4,098,099 |
Exercisable, Number of Shares | 1,069,379 |
Available for grant, Number of Shares | 5,494,918 |
Outstanding, Weighted Average Exercise Price | $ / shares | $ 3.86 |
Granted, Weighted Average Exercise Price | $ / shares | 4.32 |
Exercised, Weighted Average Exercise Price | $ / shares | 3.53 |
Forfeited or expired, Weighted Average Exercise Price | $ / shares | 5.07 |
Outstanding, Weighted Average Exercise Price | $ / shares | 3.78 |
Vested or expected to vest, Weighted Average Exercise Price | $ / shares | 3.76 |
Exercisable, Weighted Average Exercise Price | $ / shares | $ 3.99 |
Outstanding, Weighted Average Remaining Contractual Life (Years) | 5 years 11 months 26 days |
Vested or expected to vest, Weighted Average Remaining Contractual Life (Years) | 5 years 9 months 25 days |
Exercisable, Weighted Average Remaining Contractual Life (Years) | 4 years 1 month 6 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 3,461 |
Vested or expected to vest, Aggregate Intrinsic Value | $ | 3,301 |
Exercisable, Aggregate Intrinsic Value | $ | $ 678 |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other Information Concerning Stock Options (Detail) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Weighted average fair value of stock options granted | $ 2.05 | $ 1.54 |
Aggregate intrinsic value of stock options exercised | $ 344 | $ 641 |
Stock-Based Compensation - Unve
Stock-Based Compensation - Unvested Restricted Stock Awards (Detail) - Restricted Stock Awards [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Beginning Balance, Number of shares | shares | 1,120,190 |
Granted, Number of shares | shares | 798,974 |
Vested, Number of shares | shares | (393,333) |
Forfeited, Number of shares | shares | (253,567) |
Ending Balance, Number of shares | shares | 1,272,264 |
Beginning Balance, Weighted Average Grant Date Fair Value | $ / shares | $ 4.15 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 4.28 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 3.95 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 4.11 |
Ending Balance, Weighted Average Grant Date Fair Value | $ / shares | $ 4.30 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 1,080 | $ 2,305 | $ 3,650 | $ 4,113 |
Costs of Processing and Distribution [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | 33 | 33 | 99 | 78 |
Marketing, General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | 1,032 | 2,257 | 3,506 | 4,001 |
Research and Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 15 | $ 15 | $ 45 | $ 34 |
Net Income Per Common Share - R
Net Income Per Common Share - Reconciliation of Common Stock Used in Calculation of Basic and Diluted Earnings Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Basic shares | 63,495,952 | 59,704,533 | 63,517,958 | 59,045,372 |
Effect of dilutive securities: Stock options | 675,028 | 1,244,082 | 0 | 909,592 |
Effect of dilutive securities: Preferred stock series A | 15,113,335 | 14,239,546 | 0 | |
Diluted shares | 79,284,315 | 75,188,161 | 63,517,958 | 59,954,964 |
Net Income Per Common Share - A
Net Income Per Common Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential Dilutive Securities included in computation of diluted EPS | 15,113,335 | 14,239,546 | 0 | |
Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive stock excluded from the computation of diluted EPS | 608,390 | |||
Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential Dilutive Securities included in computation of diluted EPS | 50,000 | 50,000 | ||
Convertible Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential Dilutive Securities included in computation of diluted EPS | 15,113,335 | 14,239,546 | ||
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive stock excluded from the computation of diluted EPS | 1,474,375 | 1,418,182 | 1,456,829 | 1,474,461 |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Unprocessed tissue, raw materials and supplies | $ 23,203 | $ 22,071 |
Tissue and work in process | 31,663 | 40,481 |
Implantable tissue and finished goods | 49,025 | 49,375 |
Inventory - net | $ 103,891 | $ 111,927 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Inventory [Line Items] | |||||
Provision for inventory write-downs | $ 2,041 | $ 735 | $ 12,906 | $ 4,488 | |
Product obsolescence | 1,023 | ||||
Map3 Inventory [Member] | |||||
Inventory [Line Items] | |||||
Provision for inventory write-downs | $ 6,559 | $ 6,559 |
Prepaid and Other Current Ass_3
Prepaid and Other Current Assets - Schedule of Prepaid and Other Current Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Income tax receivable | $ 3,172 | $ 9,825 |
Receivable for executive stock option exercise | 1,234 | |
Prepaid expenses | 4,556 | 3,521 |
Other | 885 | 1,705 |
Prepaid and other current assets | $ 8,613 | $ 16,285 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 152,411 | $ 152,031 |
Less accumulated depreciation | (75,067) | (72,467) |
Property, plant and equipment, net | 77,344 | 79,564 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,035 | 2,020 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 58,121 | 57,954 |
Processing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 40,196 | 44,137 |
Surgical Instruments [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 23,402 | 21,256 |
Office Equipment, Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,803 | 1,352 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 18,646 | 19,332 |
Construction in Process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 8,208 | $ 5,980 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense in connection with property, plant and equipment | $ 2,577 | $ 2,623 | $ 7,824 | $ 7,947 |
Asset impairment and abandonments | $ 104 | 4,748 | ||
Map3 Inventory [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Asset impairment and abandonments | $ 1,797 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning Balance | $ 46,242 | $ 54,887 |
Goodwill acquired related to Zyga acquisition | 16,622 | |
Goodwill disposed of related to sale of Cardiothoracic closure business | 8,645 | |
Ending Balance | $ 62,864 | $ 46,242 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2018 | Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment loss | $ 0 | $ 0 |
Other Intangible Assets - Compo
Other Intangible Assets - Components of Other Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 49,051 | $ 46,723 |
Accumulated Amortization | 22,854 | 23,653 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 17,556 | 11,373 |
Accumulated Amortization | 5,457 | 4,890 |
Acquired Licensing Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,797 | 14,747 |
Accumulated Amortization | 6,297 | 9,097 |
Marketing and Procurement and Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20,698 | 20,603 |
Accumulated Amortization | $ 11,100 | $ 9,666 |
Other Intangible Assets - Addit
Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense of other intangible assets | $ 1,149 | $ 952 | $ 2,970 | $ 2,757 | |
Map3 Inventory [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment charges of acquiring licensing rights | $ 2,718 | $ 2,718 |
Other Intangible Assets - Estim
Other Intangible Assets - Estimates of Future Amortization Expense (Detail) $ in Thousands | Sep. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 1,050 |
2,019 | 4,200 |
2,020 | 4,100 |
2,021 | 4,100 |
2,022 | 4,100 |
2,023 | $ 1,800 |
Accrued Expenses - Accrued Expe
Accrued Expenses - Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 5,718 | $ 8,257 |
Accrued severance and restructuring cost | 1,070 | 3,279 |
Accrued executive transition costs | 301 | 2,300 |
Accrued distributor commissions | 3,747 | 3,889 |
Accrued donor recovery fees | 4,529 | 4,144 |
Other | 6,756 | 3,741 |
Total accrued expenses | $ 22,121 | $ 25,610 |
Short and Long-Term Obligatio_3
Short and Long-Term Obligations - Short and Long-Term Obligations (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Term loan | $ 24,250 | |
Revolving credit facility | $ 50,000 | 22,500 |
Less unamortized debt issuance costs | (979) | (406) |
Debt and capital lease obligation, total | 49,021 | 46,344 |
Debt and capital lease obligation, total | 49,021 | 46,344 |
Less current portion | (4,268) | |
Long-term portion | $ 49,021 | $ 42,076 |
Short and Long-Term Obligatio_4
Short and Long-Term Obligations - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 05, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | ||||||
Debt instrument, maturity date | Jun. 5, 2023 | |||||
Credit facility, outstanding | $ 50,000 | $ 50,000 | $ 22,500 | |||
Interest expense associated with the amortization of debt issuance costs | $ 53 | $ 88 | 476 | $ 350 | ||
Loss on extinguishment of debt | $ (309) | |||||
Revolving Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate revolving credit facility | 3.85% | 3.85% | ||||
Credit facility, outstanding | $ 50,000 | $ 50,000 | ||||
Current borrowing capacity | $ 41,990 | $ 41,990 | ||||
2018 Loan Agreement [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Percentage of foreign subsidiaries stock held as collateral | 65.00% | |||||
Credit facility guaranteed description | The Facility is guaranteed by the Company's domestic subsidiaries and is secured by (i) substantially all of the assets of the Company and Pioneer Surgical; (ii) substantially all of the assets of each of the Company's domestic subsidiaries; and (iii) 65% of the stock of the Company's foreign subsidiaries. | |||||
Minimum fixed charge coverage ratio | 0.01 | |||||
Covenant Terms of Credit Facility | The Company is required to maintain a minimum fixed charge coverage ratio of at least 1.00:1.00 (the “Required Minimum Fixed Charge Coverage Ratio”) during either of the following periods (each, a “Covenant Testing Period”): (i) a period beginning on a date that a default has occurred and is continuing under the loan documents entered into by the Company in conjunction with the Credit Agreement (the “Loan Documents”) through the first date on which no default has occurred and is continuing; or (ii) a period beginning on a date that availability under the Facility is less than the specified covenant testing threshold and continuing until availability under the Facility is greater than or equal to the specified covenant testing threshold for thirty (30) consecutive days. | |||||
2018 Loan Agreement [Member] | Revolving Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility, original borrowing capacity | $ 100,000 | |||||
Credit facility, additional borrowing capacity | $ 50,000 | |||||
2018 Loan Agreement [Member] | Revolving Credit Facility [Member] | Debt Instrument Variable Rate Base CBFR Using Monthly REVLIBOR30 Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate revolving credit facility | 2.00% |
Summary of Other Long-term Liab
Summary of Other Long-term Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 04, 2018 | Dec. 31, 2017 |
Other | $ 773 | $ 1,431 | |
Total other long-term liabilities | 5,759 | $ 1,431 | |
Zyga Technology Inc. [Member] | |||
Acquisition contingencies | $ 4,986 | $ 4,986 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets | $ 11,875 | $ 11,875 | |
Deferred tax assets, valuation allowances | 8,200 | $ 8,200 | |
Statutory federal rate | 21.00% | 35.00% | |
Discrete tax benefit | 650 | ||
Primary measure of cumulative losses, number of rolling years | 3 years | ||
Domestic Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets, valuation allowances | $ 8,200 | $ 8,200 | $ 7,258 |
Preferred Stock - Additional In
Preferred Stock - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 16, 2013 | Jun. 12, 2013 | Sep. 30, 2018 | Dec. 31, 2017 |
Series A Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Preferred stock issuance cost | $ 339 | $ 476 | ||
Private Placement with WSHP [Member] | Convertible Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Convertible preferred stock issued | $ 50,000 | |||
Preferred stock issuance cost | $ 1,290 | |||
Private Placement with WSHP [Member] | Series A Preferred Stock [Member] | ||||
Temporary Equity [Line Items] | ||||
Preferred stock dividend rate | 6.00% |
Preferred Stock - Schedule of P
Preferred Stock - Schedule of Preferred Stock (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Temporary Equity [Line Items] | ||
Net Total | $ 66,180 | $ 63,923 |
Accrued dividend payable | 2,120 | |
Amortization of preferred stock issuance costs | 137 | |
Series A Preferred Stock [Member] | ||
Temporary Equity [Line Items] | ||
Net Total | 66,519 | 64,399 |
Preferred Stock Issuance Costs | (339) | $ (476) |
Accrued dividend payable | 2,120 | |
Amortization of preferred stock issuance costs | $ 137 |
Severance and Restructuring C_3
Severance and Restructuring Costs - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Restructuring and Related Activities [Abstract] | |
Severance and restructuring costs related to the reduction | $ 1,708 |
Severance and Restructuring C_4
Severance and Restructuring Costs - Schedule of Restructuring Charges (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Accrued severance and restructuring costs, beginning balance | $ 3,279 |
Severance and restructuring costs accrued in 2018 | 1,708 |
Accrued severance and restructuring costs, ending balance | 1,070 |
Employee Severance [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Accrued severance and restructuring costs, beginning balance | 3,279 |
Severance and restructuring costs accrued in 2018 | 1,708 |
Subtotal severance and restructuring costs | 4,987 |
Severance and restructuring cash payments | (3,917) |
Accrued severance and restructuring costs, ending balance | $ 1,070 |
Executive Transition Costs - Ad
Executive Transition Costs - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Former Chief Executive Officer [Member] | |||
Postemployment Benefits Disclosure [Line Items] | |||
Executive transition costs | $ 1,169 | $ 2,781 | $ 4,404 |
Executive Transition Costs - Sc
Executive Transition Costs - Schedule of Restructuring Charges (Detail) - Chief Executive Officer and Chief Financial and Administrative Officer [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Accrued executive transition costs at January 1, 2018 | $ 2,300 |
Cash payments | (1,999) |
Accrued executive transition costs at September 30, 2018 | $ 301 |
Legal Actions - Additional Info
Legal Actions - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018LitigationClaims | |
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding claims | Litigation | 0 |
Claims for which the Company Parties are providing defense and indemnification | Claims | 1,148 |
Regulatory Actions - Additional
Regulatory Actions - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Regulatory Order Considerations And Management Plans [Line Items] | |||||
Provision for inventory write-downs | $ 2,041,000 | $ 735,000 | $ 12,906,000 | $ 4,488,000 | |
Goodwill impairment loss | $ 0 | 0 | |||
Map3 Inventory [Member] | |||||
Regulatory Order Considerations And Management Plans [Line Items] | |||||
Impairment charge of property, plant and equipment | 1,797,000 | ||||
Impairment charges of acquiring licensing rights | 2,718,000 | 2,718,000 | |||
Provision for inventory write-downs | $ 6,559,000 | $ 6,559,000 |
Segment Data - Additional Infor
Segment Data - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Lines of business | 4 |
Segment Data - Revenues from Ti
Segment Data - Revenues from Tissue Distribution and Other Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 69,064 | $ 66,688 | $ 209,639 | $ 208,747 |
Spine [Member] | Tissue Distribution [Member] | Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 20,741 | 18,131 | 58,938 | 57,888 |
Sports [Member] | Tissue Distribution [Member] | Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 12,271 | 12,723 | 39,896 | 41,852 |
OEM [Member] | Tissue Distribution [Member] | Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 30,092 | 28,779 | 91,382 | 81,904 |
International [Member] | Tissue Distribution [Member] | Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 5,960 | 5,715 | $ 19,423 | 18,939 |
Cardiothoracic [Member] | Tissue Distribution [Member] | Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 1,340 | $ 8,164 |
Segment Data - Schedule of Perc
Segment Data - Schedule of Percentage of Total Revenues Derived from Company's Largest Distributors (Detail) - Distributors Concentration Risk [Member] - Sales Revenue, Net [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Zimmer Biomet Holdings, Inc. [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 22.00% | 15.00% | 21.00% | 17.00% |
Medtronic, PLC [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 9.00% | 8.00% | 8.00% | 9.00% |
DePuy Synthes [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 3.00% | 4.00% | 5.00% | 4.00% |
Segment Data - Schedule of Prop
Segment Data - Schedule of Property, Plant and Equipment - Net by Significant Geographic Location (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - net | $ 77,344 | $ 79,564 |
Domestic [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - net | 71,709 | 73,363 |
International [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - net | $ 5,635 | $ 6,201 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - Paradigm Spine [Member] $ in Thousands | Nov. 01, 2018USD ($)shares |
Subsequent Event [Line Items] | |
Agreement to acquire business | $ 300 |
Cash to be paid at closing | $ 100 |
Number of common stock to be issued at closing, shares | shares | 10,729,614 |
Revenue based earnout considerations | $ 150 |
Number of common stock to be issued at closing, value | 50 |
Potential debt to finance business combination | $ 100 |