RTI SURGICAL, INC.

CIK:0001100441|SEC Filings

Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Revenues	$ 280,855	$ 279,563	$ 272,865
Costs of processing and distribution	140,732	137,042	140,516
Gross profit	140,123	142,521	132,349
Expenses:
Marketing, general and administrative	119,217	115,103	116,125
Research and development	14,410	13,375	16,090
Severance and restructuring costs	2,280	12,173	2,146
Strategic review costs			1,150
Executive transition costs		2,781	4,404
Contested proxy expenses			2,680
Asset impairment and abandonments	4,774	3,739	5,435
Acquisition and integration expenses	4,943	630
Cardiothoracic closure business divestiture contingency consideration	(3,000)
Gain on cardiothoracic closure business divestiture		(34,090)
Total operating expenses	142,624	113,711	148,030
Operating (loss) income	(2,501)	28,810	(15,681)
Other (expense) income:
Interest expense	(2,771)	(3,180)	(1,655)
Interest income	35	8	8
Loss on extinguishment of debt	(309)
Foreign exchange (loss) gain	(35)	87	(132)
Total other expense - net	(3,080)	(3,085)	(1,779)
(Loss) income before income tax (provision) benefit	(5,581)	25,725	(17,460)
Income tax benefit (provision)	4,331	(19,453)	3,061
Net (loss) income	(1,250)	6,272	(14,399)
Convertible preferred dividend	(2,120)	(3,723)	(3,508)
Net (loss) income applicable to common shares	(3,370)	2,549	(17,907)
Other comprehensive (loss) income:
Unrealized foreign currency translation loss	(941)	1,987	(1,274)
Comprehensive (loss) income	$ (4,311)	$ 4,536	$ (19,181)
Net (loss) income per common share - basic	$ (0.05)	$ 0.04	$ (0.31)
Net (loss) income per common share - diluted	$ (0.05)	$ 0.04	$ (0.31)
Weighted average shares outstanding - basic	63,521,703	59,684,289	58,236,745
Weighted average shares outstanding - diluted	63,521,703	60,599,952	58,236,745

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net (loss) income	$ (1,250)	$ 6,272	$ (14,399)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization expense	14,569	14,226	16,510
Provision for bad debts and product returns	1,195	946	895
Provision for inventory write-downs	15,122	5,066	13,880
Amortization of deferred revenue	(4,958)	(4,744)	(4,867)
Deferred income tax provision	(4,322)	13,329	(3,395)
Stock-based compensation	4,745	6,660	3,590
Asset impairment and abandonments	4,774	3,739	5,435
Cardiothoracic closure business divestiture contingency consideration	(3,000)
Gain on cardiothoracic closure business divestiture		(34,090)
Other	1,330	2,392	603
Change in assets and liabilities:
Accounts receivable	(11,201)	5,784	4,756
Inventories	(11,790)	1,375	(15,369)
Accounts payable	8,054	(12,899)	4,583
Accrued expenses	(1,812)	2,599	(6,536)
Deferred revenue	2,000	2,000	2,000
Other operating assets and liabilities	3,318	(10,200)	7,637
Net cash provided by operating activities	16,774	2,455	15,323
Cash flows from investing activities:
Purchases of property, plant and equipment	(11,042)	(12,301)	(15,337)
Patent and acquired intangible asset costs	(3,695)	(2,266)	(2,615)
Proceeds from sale of building		1,818
Acquisition of Zyga Technology	(21,000)
Cardiothoracic closure business divestiture	3,000	51,000
Net cash provided by (used in) investing activities	(32,737)	38,251	(17,952)
Cash flows from financing activities:
Proceeds from exercise of common stock options	2,356	5,060	57
Proceeds from long-term obligations	74,425	6,000	17,000
Net (payments) proceeds from short-term obligations			(1,511)
Payments on long-term obligations	(71,171)	(43,000)	(11,424)
Other financing activities	(1,039)	(458)	(458)
Net cash provided by (used in) financing activities	4,571	(32,398)	3,664
Effect of exchange rate changes on cash and cash equivalents	(40)	224	200
Net (decrease) increase in cash and cash equivalents	(11,432)	8,532	1,235
Cash and cash equivalents, beginning of period	22,381	13,849	12,614
Cash and cash equivalents, end of period	10,949	22,381	13,849
Supplemental cash flow disclosure:
Cash paid for interest	3,047	3,023	1,224
Cash paid for income taxes, net of refunds	(6,403)	12,142	(238)
Non-cash acquisition of property, plant and equipment	496	593	952
Receivable for executive stock option exercise		1,234
Stock-based compensation related to sale of CT business		102
Change in accrual for dividend payable	$ 2,120	$ 3,723	$ 3,508

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 10,949	$ 22,381
Accounts receivable-less allowances of $2,380 at December 31, 2018 and $1,471 at December 31, 2017	48,351	35,081
Inventories - net	107,471	111,927
Prepaid and other current assets	8,791	16,285
Total current assets	175,562	185,674
Property, plant and equipment - net	77,954	79,564
Deferred tax assets - net	17,510	9,575
Goodwill	59,798	46,242
Other intangible assets - net	26,359	23,070
Other assets - net	4,003	1,781
Total assets	361,186	345,906
Current Liabilities:
Accounts payable	26,309	18,252
Accrued expenses	24,683	25,610
Current portion of deferred revenue	4,908	4,868
Current portion of short and long-term obligations		4,268
Total current liabilities	55,900	52,998
Long-term obligations - less current portion	49,073	42,076
Acquisition contingencies	4,986
Other long-term liabilities	633	1,431
Deferred revenue	744	3,741
Total liabilities	111,336	100,246
Commitments and contingencies (Note 22)
Preferred stock Series A, $.001 par value: 5,000,000 shares authorized; 50,000 shares issued and outstanding	66,226	63,923
Stockholders' equity:
Common stock, $.001 par value: 150,000,000 shares authorized; 63,469,185 and 62,694,441 shares issued and outstanding, respectively	64	63
Additional paid-in capital	433,143	429,459
Accumulated other comprehensive loss	(7,270)	(6,329)
Accumulated deficit	(237,444)	(237,066)
Less treasury stock, 1,221,180 and 1,114,071 shares, respectively, at cost	(4,869)	(4,390)
Total stockholders' equity	183,624	181,737
Total liabilities and stockholders' equity	$ 361,186	$ 345,906