Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 23, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | NUVASIVE INC | |
Entity Central Index Key | 1,142,596 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | NUVA | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 49,097,008 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 141,328 | $ 142,387 |
Short-term marketable securities | 196,037 | 220,329 |
Accounts receivable, net of allowances of $5,849 and $5,844, respectively | 115,579 | 118,959 |
Inventory, net | 164,867 | 154,638 |
Deferred and prepaid taxes | 73,420 | 59,233 |
Prepaid expenses and other current assets | 7,279 | 10,325 |
Total current assets | 698,510 | 705,871 |
Property and equipment, net | 140,474 | 128,565 |
Long-term marketable securities | 113,793 | 43,042 |
Intangible assets, net | 86,190 | 96,555 |
Goodwill | 154,324 | 154,443 |
Deferred tax assets, non-current | 49,614 | 65,330 |
Restricted cash and investments | 5,615 | 123,233 |
Other assets | 23,444 | 26,420 |
Total assets | 1,271,964 | 1,343,459 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 63,545 | 133,324 |
Accrued payroll and related expenses | 32,767 | 38,032 |
Litigation liabilities | 937 | 30,000 |
Deferred and income tax liabilities | 2,066 | 13,543 |
Total current liabilities | 99,315 | 214,899 |
Senior convertible notes | 372,485 | 360,746 |
Deferred and income tax liabilities, non-current | 8,177 | 12,526 |
Non-current litigation liabilities | 87,553 | 93,700 |
Other long-term liabilities | $ 12,742 | $ 13,230 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized, none outstanding | ||
Common stock, $0.001 par value; 120,000,000 shares authorized at September 30, 2015 and December 31, 2014, 52,099,475 and 47,691,744 issued and outstanding at September 30, 2015 and December 31, 2014, respectively | $ 52 | $ 48 |
Additional paid-in capital | 973,481 | 847,145 |
Accumulated other comprehensive loss | (11,323) | (9,670) |
Accumulated deficit | (132,150) | (186,938) |
Treasury stock at cost; 3,015,033 shares and 233,369 shares at September 30, 2015 and December 31, 2014, respectively | (146,077) | (10,537) |
Total NuVasive, Inc. stockholders’ equity | 683,983 | 640,048 |
Non-controlling interests | 7,709 | 8,310 |
Total equity | 691,692 | 648,358 |
Total liabilities and equity | $ 1,271,964 | $ 1,343,459 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 5,849 | $ 5,844 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 52,099,475 | 47,691,744 |
Common stock, shares outstanding | 52,099,475 | 47,691,744 |
Treasury stock at cost, shares | 3,015,033 | 233,369 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenue | $ 200,538 | $ 189,918 | $ 595,831 | $ 558,090 |
Cost of goods sold (excluding below amortization of intangible assets) | 49,167 | 47,719 | 143,246 | 135,849 |
Gross profit | 151,371 | 142,199 | 452,585 | 422,241 |
Operating expenses: | ||||
Sales, marketing and administrative | 111,384 | 113,746 | 342,797 | 348,820 |
Research and development | 9,199 | 9,068 | 27,245 | 28,590 |
Amortization of intangible assets | 3,067 | 3,071 | 9,037 | 10,541 |
Impairment of intangible assets | 10,708 | |||
Litigation liability (gain) loss | (500) | (42,507) | 30,000 | |
Business transition costs | 110 | 6,474 | ||
Total operating expenses | 123,260 | 125,885 | 343,046 | 428,659 |
Interest and other expense, net: | ||||
Interest income | 362 | 241 | 1,125 | 691 |
Interest expense | (7,307) | (6,965) | (21,675) | (20,809) |
Other income (expense), net | 387 | (2,489) | 530 | (2,318) |
Total interest and other expense, net | (6,558) | (9,213) | (20,020) | (22,436) |
Income (loss) before income taxes | 21,553 | 7,101 | 89,519 | (28,854) |
Income tax (expense) benefit | (8,803) | (9,088) | (35,332) | 4,065 |
Consolidated net income (loss) | 12,750 | (1,987) | 54,187 | (24,789) |
Add back net loss attributable to non-controlling interests | (210) | (157) | (601) | (595) |
Net income (loss) attributable to NuVasive, Inc. | $ 12,960 | $ (1,830) | $ 54,788 | $ (24,194) |
Net income (loss) per share attributable to NuVasive, Inc.: | ||||
Basic | $ 0.26 | $ (0.04) | $ 1.13 | $ (0.52) |
Diluted | $ 0.24 | $ (0.04) | $ 1.05 | $ (0.52) |
Weighted average shares outstanding: | ||||
Basic | 48,993 | 46,990 | 48,513 | 46,546 |
Diluted | 53,199 | 46,990 | 52,202 | 46,546 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Consolidated net income (loss) | $ 12,750 | $ (1,987) | $ 54,187 | $ (24,789) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on marketable securities, net of tax | 57 | (29) | 201 | (103) |
Translation adjustments, net of tax | (410) | (2,579) | (1,854) | (566) |
Other comprehensive (loss) | (353) | (2,608) | (1,653) | (669) |
Total consolidated comprehensive income (loss) | 12,397 | (4,595) | 52,534 | (25,458) |
Net loss attributable to non-controlling interests | 210 | 157 | 601 | 595 |
Comprehensive income (loss) attributable to NuVasive, Inc. | $ 12,607 | $ (4,438) | $ 53,135 | $ (24,863) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities: | ||
Consolidated net income (loss) | $ 54,187 | $ (24,789) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 49,006 | 46,521 |
Amortization of non-cash interest | 13,255 | 12,244 |
Stock-based compensation | 20,570 | 24,779 |
Impairment of intangible assets | 10,708 | |
Deferred income taxes | 37,047 | |
Reserves on current assets | 7,232 | 4,062 |
Other non-cash adjustments | 13,127 | 11,317 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | 2,163 | (5,519) |
Inventory | (19,768) | (27,190) |
Prepaid expenses and other current assets | 2,512 | (1,837) |
Accounts payable and accrued liabilities | 8,828 | 11,485 |
Income taxes | (52,739) | (7,898) |
Accrued royalties | (46,999) | 12,450 |
Litigation liability | (35,333) | 30,000 |
Accrued payroll and related expenses | (5,080) | 151 |
Net cash provided by operating activities | 48,008 | 96,484 |
Investing activities: | ||
Acquisitions and other investments | (1,357) | (59) |
Purchases of intangible assets | (28,589) | |
Purchases of property and equipment | (59,905) | (45,692) |
Proceeds from sales of property and equipment | 40 | |
Purchases of marketable securities | (320,177) | (177,850) |
Proceeds from sales of marketable securities | 272,666 | 142,051 |
Purchases of restricted investments | (62,625) | |
Proceeds from sales of restricted investments | 180,694 | |
Net cash used in investing activities | (19,253) | (81,550) |
Financing activities: | ||
Incremental tax benefits related to stock-based compensation awards | 15,185 | |
Proceeds from the issuance of common stock | 9,040 | 15,341 |
Payment of contingent consideration | (514) | (498) |
Purchase of treasury stock | (52,532) | (664) |
Other financing activities | (131) | (668) |
Net cash (used in) provided by financing activities | (28,952) | 13,511 |
Effect of exchange rate changes on cash | (862) | (613) |
(Decrease) increase in cash and cash equivalents | (1,059) | 27,832 |
Cash and cash equivalents at beginning of period | 142,387 | 102,825 |
Cash and cash equivalents at end of period | $ 141,328 | $ 130,657 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business NuVasive, Inc. (the “Company” or “NuVasive”) was incorporated in Delaware on July 21, 1997, and began commercializing its products in 2001. The Company is focused on developing minimally-disruptive surgical products and procedurally-integrated solutions for the spine. NuVasive’s principal product offering includes a minimally-disruptive surgical platform called Maximum Access Surgery, or MAS ® ® ® ® The Company’s spine surgery product line offerings The Company also recently launched integrated global alignment (“iGA™”), in which products and computer assisted technology under its MAS platform help achieve more precise spinal alignment. The Company’s biologic product line offerings used to aid the spinal fusion process or bone healing process include Osteocel ® ® , a collagen synthetic product, and AttraX ® The Company has dedicated and continues to dedicate significant resources toward training spine surgeons around the world; both those who are new to its MAS product platform as well as previously MAS-trained surgeons attending advanced courses. The Company’s primary business model is to loan its MAS systems to surgeons and hospitals who use those systems to perform individual procedures, with the hospitals purchasing implants, biologics and disposables in each such case. In addition, for larger customers, the Company’s proprietary nerve monitoring systems, MaXcess and surgical instrument sets are placed with hospitals for an extended period at no up-front cost to them, facilitating the hospital’s purchase of disposables for those machines from the Company. The Company also offers a range of bone allograft in patented saline packaging, disposables and spine implants, which include its branded CoRoent ® The Company’s implants, biologics and disposables are currently sold and shipped from its primary distribution and warehousing operations facility located in Memphis, Tennessee. The Company sells MAS instrument sets, MaXcess devices and its proprietary software-driven nerve monitoring systems, however this does not make up a material part of its business. Basis of Presentation and Principles of Consolidation The accompanying Unaudited Consolidated Financial Statements include the financial information of the Company and its majority-owned or controlled subsidiaries, collectively referred to as either NuVasive or the Company. The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the respective parent entity (entity having common control), the Company records the fair value of the non-controlling interests at the acquisition date and classifies the amounts attributable to non-controlling interests separately in equity in the Company’s Consolidated Financial Statements. Any subsequent changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary are accounted for as equity transactions. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying Unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for any other interim period or for the full year. These Unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the SEC. In the opinion of management, the Unaudited Consolidated Financial Statements include all adjustments that are of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented. The Company has reclassified historically presented product offerings revenue to conform to the current year presentation. The reclassification had no impact on previously reported results of operations or financial position. Change in Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recently Adopted Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers The FASB permits early adoption of the new standard by one year (i.e., the original effective date). Business Transition Costs The Company incurs costs related to integration and business transition activities which include severance, relocation, consulting, and other costs directly associated to such activities. During the nine months ended September 30, 2015, the Company incurred $6.5 million of such costs, which included a $3.4 million charge associated with the resignation of the Company’s former Chief Executive Officer and Chairman of the Board, which occurred in the first quarter 2015. The $3.4 million charge includes certain severance and compensation-related charges, net of certain forfeitures of previously recognized equity-based compensation. Restructuring Charges The Company exited its New Jersey location and terminated the respective lease to reduce its footprint on the east coast of the United States as part of a company-wide efficiency effort in order to match its business needs without adversely impacting its ability to deliver surgeon education and local customer fulfillment. As a result of this undertaking, the Company recognized restructuring and associated impairment charges of $2.3 million during the nine months ended September 30, 2015 in addition to the $6.4 million recognized during 2014. The restructuring and impairment charges mainly consist of the future rental payments through 2017, net of estimated future sublease income, and elimination of related leasehold improvements and deferred rent liabilities. These charges are recorded As of September 30, 2015, the total recorded liability associated with this early lease termination was $3.9 million and consists of future rental payments net of estimated sublease income through 2017. The current portion of the liability is recorded within accounts payable and accrued liabilities and the long-term portion is recorded within other long-term liabilities in the Consolidated Balance Sheets at September 30, 2015. Litigation Liability Gain (Loss) During the nine months ended September 30, 2015, the Company recorded a litigation liability gain of $42.5 million resulting primarily from the recognition of a $56.4 million gain stemming from a favorable appeal in Phase 1 of the Medtronic litigation and a gain of $2.8 million in litigation accrual change related to the settlement of the NeuroVision trademark litigation, partially offset by litigation losses of $13.8 million in connection with the OIG investigation and $2.8 million in a general litigation matter. Settlement of the aforementioned NeuroVision trademark litigation totaling $27.2 million was funded out of restricted cash during the third quarter 2015, and at September 30, 2015 the Company no longer maintains short-term restricted funds related to that matter. The March 2, 2015 Court of Appeals decision in the Company’s Medtronic litigation upheld the jury’s findings of liability as to all patents, but overturned the damage award against the Company as improper, and as a result the Company was no longer required to escrow funds related to Phase 1 of that litigation matter. During the third quarter 2015, the Company transferred all of the escrow funds related to this matter, of approximately $114.1 million, from its long-term restricted cash and investments account to its unrestricted investment accounts. The Company has no restricted funds related to this matter at September 30, 2015. See Note 11 and Note 12 to the Unaudited Consolidated Financial Statements for further discussion. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) includes unrealized gains or losses on the Company’s marketable securities and foreign currency translation adjustments. The cumulative translation adjustments included in accumulated other comprehensive income (loss) were a net cumulative loss of $11.4 million and $9.5 million at September 30, 2015 and December 31, 2014, respectively. Long-Lived Assets Long-lived assets include surgical instruments, which are loaned to surgeons and hospitals who purchase implants, biologics and disposables for use in individual procedures, leasehold improvements, software, and intangible assets. The Company periodically re-evaluates the original assumptions and rationale utilized in the establishment of the carrying value and estimated lives of its long-lived assets. The criteria used for these evaluations include management’s estimate of the asset’s continuing ability to generate income from operations and positive cash flow in future periods as well as the strategic significance of the asset to the Company’s business objectives. If assets are considered to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets, which is determined by applicable market prices when available or other methods by utilizing unobservable inputs including discounted cash flow models. See Note 3 to the Unaudited Consolidated Financial Statements for further discussion. Inventories The Company’s inventory consists primarily of purchased finished goods which includes specialized implants and disposables, and is stated at the lower of cost or market determined by utilizing a standard cost method which approximates the weighted average cost. The Company reviews the components of its inventory on a periodic basis for excess, obsolete or impaired inventory, and records a reserve for such identified items. The inventory reserve was $29.9 million and $22.7 million at September 30, 2015 and December 31, 2014, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 2. Net Income (Loss) Per Share The Company computes basic net income (loss) per share using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share assumes the conversion, exercise or issuance of all potential common stock equivalents, unless the effect of inclusion would be anti-dilutive. Common stock equivalents include the Company’s stock options, employee stock purchase plan (“ESPP”), restricted stock units (“RSUs”), including those with performance conditions, warrants, and the shares to be issued upon the conversion of the Senior Convertible Notes (see Note 6 to the Unaudited Consolidated Financial Statements). The following table sets forth the computation of basic and diluted earnings or (loss) per share attributable to the Company: Three Months Ended September 30, Nine Months Ended September 30, ( in thousands, except per share data 2015 2014 2015 2014 Numerator: Net income (loss) available to the Company $ 12,960 $ (1,830 ) $ 54,788 $ (24,194 ) Denominator for basic and diluted net (loss) income per share: Weighted average common shares outstanding for basic 48,993 46,990 48,513 46,546 Dilutive potential common stock outstanding: Stock options and ESPP 895 — 1,224 — RSUs 1,129 — 1,127 — Warrants 417 — 139 — Senior Convertible Notes 1,765 — 1,199 — Weighted average common shares outstanding for diluted 53,199 46,990 52,202 46,546 Basic net income (loss) per share attributable to the Company $ 0.26 $ (0.04 ) $ 1.13 $ (0.52 ) Diluted net income (loss) per share attributable to the Company $ 0.24 $ (0.04 ) $ 1.05 $ (0.52 ) The following weighted outstanding common stock equivalents were not included in the calculation of net income (loss) per diluted share because their effects were anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, ( in thousands 2015 2014 2015 2014 Stock options, ESPP, and RSUs 13 8,777 53 8,999 Warrants — 9,553 6,369 9,553 Senior Convertible Notes — 9,553 — 9,553 Total 13 27,883 6,422 28,105 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Investments Debt And Equity Securities [Abstract] | |
Financial Instruments and Fair Value Measurements | 3. Financial Instruments and Fair Value Measurements The Company invests its excess cash in certificates of deposit, corporate notes, commercial paper, U.S. government treasury securities and securities of government-sponsored entities. The Company classifies all such securities as available-for-sale as the sale of such securities may be required prior to maturity to implement management strategies. These securities are carried at fair value with the unrealized gains and losses reported as a component of other comprehensive income in equity until realized. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense on the Consolidated Statements of Operations and a new accounting cost basis for the security is established in the period in which it occurs. The Company reviews its investments if there is an indicator of possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. As of September 30, 2015, the Company had no investments that were in a significant unrealized loss position and no impairment charges were recorded during the periods presented. Interest and dividends on securities classified as available-for-sale are also included in interest income on the Consolidated Statements of Operations. Realized gains and losses and interest income related to marketable securities were immaterial during all periods presented. The Company maintains an investment policy that requires a diversified investment portfolio in terms of types, maturities, and credit exposure, and invests with institutions that have high credit quality. Annually, the Company reassesses the investment policy to ensure it is reflective of current markets and conditions. The Company does not currently hold financial instruments for speculative purposes. The composition of marketable securities is as follows: ( in thousands, except years Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2015: Classified as current assets Corporate notes Less than 1 $ 103,840 $ 27 $ (10 ) $ 103,857 Securities of government-sponsored entities Less than 1 65,503 9 (3 ) 65,509 U.S. government treasury securities Less than 1 7,506 3 — 7,509 Certificates of deposit Less than 1 3,671 — — 3,671 Commercial paper Less than 1 15,491 — — 15,491 Short-term marketable securities 196,011 39 (13 ) 196,037 Classified as non-current assets Certificates of deposit 1 to 2 8,106 — — 8,106 Securities of government-sponsored entities 1 to 2 46,624 38 (2 ) 46,660 U.S. government treasury securities 1 to 2 11,042 4 (1 ) 11,045 Corporate notes 1 to 2 47,948 48 (14 ) 47,982 Long-term marketable securities 113,720 90 (17 ) 113,793 Total marketable securities at September 30, 2015 $ 309,731 $ 129 $ (30 ) $ 309,830 December 31, 2014: Classified as current assets Certificates of deposit Less than 1 $ 282 $ — $ — $ 282 Corporate notes Less than 1 129,037 8 (105 ) 128,940 Commercial paper Less than 1 11,290 — — 11,290 U.S. government treasury securities Less than 1 1,500 1 — 1,501 Securities of government-sponsored entities Less than 1 78,333 12 (29 ) 78,316 Short-term marketable securities 220,442 21 (134 ) 220,329 Classified as non-current assets Corporate notes 1 to 2 14,082 — (13 ) 14,069 Securities of government-sponsored entities 1 to 2 28,996 — (23 ) 28,973 Long-term marketable securities 43,078 — (36 ) 43,042 Classified as restricted investments U.S. government treasury securities Less than 2 51,331 13 (13 ) 51,331 Securities of government-sponsored entities Less than 2 42,862 2 (54 ) 42,810 Restricted investments 94,193 15 (67 ) 94,141 Total marketable securities at December 31, 2014 $ 357,713 $ 36 $ (237 ) $ 357,512 Foreign Currency and Derivative Financial Instruments The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. Some of the Company’s reporting entities conduct a portion of their business in currencies other than the entity’s functional currency. These transactions give rise to receivables and payables that are denominated in currencies other than the entity’s functional currency. The value of these receivables and payables is subject to changes in currency exchange rates from the point at which the transactions are originated until the settlement in cash. Both realized and unrealized gains and losses in the value of these receivables and payables are included in the determination of net income (loss). Net foreign currency exchange gains (losses), which includes gains and losses from derivative instruments, were $0.4 million and $0.4 million, for the three and nine months ended September 30, 2015, respectively, and $(2.6) million and $(2.5) million for the three and nine months ended September 30, 2014, respectively, and are included in other income (expense) in the Consolidated Statements of Operations. The Company maintains a foreign currency risk management strategy that uses derivative instruments to protect against fluctuations in earnings and cash flows that may rise from volatility in currency exchange rates. The Company uses foreign currency forward exchange contracts to hedge the currency exchange rate exposure from short-term intercompany receivables and payables denominated in a currency other than the reporting entity’s functional currency. Realized and unrealized gains or losses forward contracts are included in the determination of net income as the forward contracts are not designated for hedge accounting under ASC Topic 815, Derivatives and Hedging. A . The Company did not have notional principal amounts outstanding as of September 30, 2014. The Company’s currency exposures vary, but are primarily concentrated in the pound sterling the Australian dollar, the Singapore dollar, and the yen The Company does not use derivative financial instruments for speculation or trading purposes or for activities other than risk management. The Company does not require and is not required to pledge collateral for these financial instruments and does not carry any master netting arrangements to mitigate the credit risk. The following table summarizes the fair values of derivative instruments at September 30, 2015 and December 31, 2014: Asset Derivatives Liability Derivatives Fair Value Fair Value Balance Sheet September 30, December 31, Balance Sheet September 30, December 31, ( in thousands Location 2015 2014 Location 2015 2014 Derivative instruments not designated as cash flow hedges Forward exchange contracts Other current assets $ — $ — Other current liabilities * * Total derivatives $ — $ — * * *De minimus amount recognized in the hedge relationship. The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and September 30, 2014: Three Months Ended Three Months Ended September 30, 2015 September 30, 2014 Location of Amount of Location of Amount of (Gain)/Loss (Gain)/Loss (Gain)/Loss (Gain)/Loss Recognized in Recognized in Recognized in Recognized in ( in thousands Income Income Income Income Derivative instruments not designated as cash flow hedges Forward exchange contracts Other (income) expense $ 79 Other (income) expense $ — Total derivatives $ 79 $ — Nine Months Ended Nine Months Ended September 30, 2015 September 30, 2014 Location of Amount of Location of Amount of (Gain)/Loss (Gain)/Loss (Gain)/Loss (Gain)/Loss Recognized in Recognized in Recognized in Recognized in ( in thousands Income Income Income Income Derivative instruments not designated as cash flow hedges Forward exchange contracts Other (income) expense $ (1,585 ) Other (income) expense $ — Total derivatives $ (1,585 ) $ — Fair Value Measurements The Company measures certain assets and liabilities in accordance with authoritative guidance which requires fair value measurements be classified and disclosed in one of the following three categories: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did not have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the three and nine months ended September 30, 2015 or September 30, 2014, respectively. The carrying amounts of certain financial instruments such as cash equivalents, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses, and other current liabilities as of September 30, 2015 and December 31, 2014 approximate their related fair values due to the short-term maturities of these instruments. The carrying values of the Company’s capital lease obligations approximate their related fair values as of September 30, 2015 and December 31, 2014. The fair value, based on a quoted market price (Level 1), of the Company’s outstanding Senior Convertible Notes due 2017 at September 30, 2015 and December 31, 2014 was approximately $506.3 million and $516.1 million, respectively. The carrying value of the Company’s Senior Convertible Notes is discussed in Note 6 to the Unaudited Consolidated Financial Statements. The fair values of the Company’s assets and liabilities, including cash equivalents, marketable securities, restricted investments, derivatives, and contingent considerations are measured at fair value on a recurring basis, and are determined under the fair value categories as follows: Quoted Price in Significant Other Significant Active Market Observable Inputs Unobservable ( in thousands Total (Level 1) (Level 2) Inputs (Level 3) September 30, 2015: Money market funds $ 37,582 $ 37,582 $ — $ — Certificates of deposit 11,777 11,777 — — Corporate notes 157,290 — 157,290 — Commercial paper 15,491 — 15,491 — U.S. government treasury securities 18,554 18,554 — — Securities of government-sponsored entities 112,169 — 112,169 — Total assets $ 352,863 $ 67,913 $ 284,950 $ — December 31, 2014: Money market funds $ 39,963 $ 39,963 $ — $ — Certificates of deposit 282 282 — — Corporate notes 143,009 — 143,009 — Commercial paper 11,290 — 11,290 — U.S. government treasury securities 52,831 52,831 — — Securities of government-sponsored entities 150,101 — 150,101 — Total assets $ 397,476 $ 93,076 $ 304,400 $ — Acquisition-related liabilities, current $ (644 ) $ — $ — $ (644 ) Total liabilities $ (644 ) $ — $ — $ (644 ) Contingent Consideration Liability The fair value of contingent consideration liabilities assumed by a business combination is determined using a discounted cash flow model, the significant inputs of which are not observable in the market. The fair value of such contingent considerations is recorded as part of the purchase consideration of the acquisition. The key assumptions in applying this approach are the projections associated with the applicable milestone, the interest rate and the related probabilities and payment structure in the contingent consideration arrangement. Contingent consideration arrangements assumed by an asset purchase will be measured and accrued when such contingency is resolved. The following table sets forth the changes in the estimated fair value of the Company’s liabilities measured on a recurring basis using significant unobservable inputs (Level 3): Nine Months Ended September 30, ( in thousands 2015 2014 Fair value measurement at beginning of period $ 644 $ 1,212 Change in fair value measurement included in operating expenses (36 ) 8 Contingent consideration paid or settled (608 ) (608 ) Fair value measurement at end of period $ — $ 612 Non-financial assets and liabilities measured on a nonrecurring basis Certain non-financial assets and liabilities are measured at fair value, usually with Level 3 inputs including discounted cash flow method or cost method, on a nonrecurring basis in accordance with authoritative guidance. In general, non-financial assets, including intangible assets and property and equipment, are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. During the first quarter of 2014, the Company exited a portion of its New Jersey property and subsequently, in the first quarter of 2015, made a decision to terminate the respective lease. Based on management’s assessment, during the nine months ended September 30, 2015 and September 30, 2014, the Company recognized impairment charges of $0.9 million and $2.2 million, respectively, in leasehold improvement write-offs associated with the lease termination. See Note 1 to the Unaudited Consolidated Financial Statements for further discussion on impairment analysis and leasehold related charges. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets Goodwill and intangible assets consisted of the following: Weighted- Average Amortization ( in thousands, except years Period Gross Accumulated Intangible September 30, 2015: (in years) Amount Amortization Assets, net Intangible assets subject to amortization: Developed technology 9 $ 79,008 $ (34,602 ) $ 44,406 Manufacturing know-how and trade secrets 12 21,812 (12,928 ) 8,884 Trade name and trademarks 11 9,500 (4,868 ) 4,632 Customer relationships 8 44,500 (26,872 ) 17,628 Total intangible assets subject to amortization 10 $ 154,820 $ (79,270 ) $ 75,550 Intangible assets not subject to amortization: In-process research and development $ 10,640 Goodwill $ 154,324 Weighted- Average Amortization Period Gross Accumulated Intangible December 31, 2014: (in years) Amount Amortization Assets, net Intangible assets subject to amortization: Developed technology 9 $ 79,008 $ (27,760 ) $ 51,248 Manufacturing know-how and trade secrets 12 21,879 (11,640 ) 10,239 Trade name and trademarks 11 9,500 (4,264 ) 5,236 Customer relationships 8 43,153 (23,961 ) 19,192 Total intangible assets subject to amortization 10 $ 153,540 $ (67,625 ) $ 85,915 Intangible assets not subject to amortization: In-process research and development $ 10,640 Goodwill $ 154,443 Total expense related to the amortization of intangible assets, which is recorded in both cost of goods sold and operating expenses in the Consolidated Statements of Operations, was $4.0 million and $3.1 million for the three months ended September 30, 2015 and September 30, 2014, respectively, and $11.7 million and $10.5 million for the nine months ended September 30, 2015 and September 30, 2014, respectively. Intangible assets acquired in a business combination that are used for in-process research and development activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon reaching the end of the relevant research and development project, the Company will amortize the acquired in-process research and development over its estimated useful life or expense the acquired in-process research and development should the research and development project be unsuccessful with no future alternative use . Intangible assets acquired in an asset purchase that are used for in-process research and development are expensed as incurred. The Company made a payment of $27.4 million during the nine months ended September 30, 2015 associated with the intangible assets which were accrued for as of December 31, 2014 in accounts payable and accrued liabilities. Total future amortization expense related to intangible assets subject to amortization at September 30, 2015 is set forth in the table below: ( in thousands Remaining 2015 $ 3,858 2016 15,392 2017 12,187 2018 11,676 2019 10,322 2020 9,911 Thereafter through 2027 12,204 Total future amortization expense $ 75,550 |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2015 | |
Business Combination Description [Abstract] | |
Business Combinations | 5. Business Combinations The Company has completed acquisitions that were not considered individually or collectively material to the overall Consolidated Financial Statements or the results of the Company’s operations. These acquisitions have been included in the Consolidated Financial Statements from the respective dates of the acquisitions. The Company recognizes the assets acquired, liabilities assumed, and any non-controlling interest at fair value at the date of acquisition. Certain acquisitions contained contingent consideration arrangements that required the Company to assess the acquisition date fair value of the contingent consideration liabilities, which was recorded as part of the purchase consideration of the acquisition with subsequent fair value adjustments to the contingent consideration reflected in the line items of the Consolidated Statements of Operations commensurate with the nature of the contingent consideration. Investment in Progentix Orthobiology B.V. In 2009, the Company completed the purchase of 40% of the capital stock of Progentix Concurrently with the Preferred Stock Purchase Agreement, NuVasive, Progentix and the Progentix Shareholders entered into an Option Purchase Agreement (as amended, the “Option Agreement”), whereby NuVasive was obligated under certain circumstances, and had the option under other circumstances, to purchase the remaining 60% of capital stock of Progentix (the “Remaining Shares”) from its shareholders for an amount up to $35.0 million, subject to certain reductions. The Option Agreement expired unexercised in 2013. Also, concurrently with the Preferred Stock Purchase Agreement, NuVasive and Progentix entered into a Distribution Agreement (as amended, the “Distribution Agreement”), whereby Progentix appointed NuVasive as its exclusive distributor for certain Progentix products. The Distribution Agreement is in effect for a term of ten years unless terminated earlier in accordance with its terms. In accordance with authoritative guidance, the Company has determined that Progentix is a variable interest entity (“VIE”), as it does not have the ability to finance its activities without additional subordinated financial support and its equity investors will not absorb their proportionate share of expected losses and will be limited in the receipt of the potential residual returns of Progentix. Additionally, pursuant to this guidance, NuVasive is considered a primary beneficiary as NuVasive has both the power to direct the economically significant activities of Progentix and the obligation to absorb losses of, or the right to receive benefits from, Progentix. Accordingly, the financial position and results of operations of Progentix have been included in the Company’s consolidated financial statements from the date of the Initial Investment. The liabilities recognized as a result of consolidating Progentix do not represent additional claims on the Company’s general assets. The creditors of Progentix have claims only on the assets of Progentix, which are not material, and the assets of Progentix are not available to NuVasive. The equity interests in Progentix not owned by the Company, which includes shares of both common and preferred stock, are reported as non-controlling interests on the consolidated balance sheet of the Company. The preferred stock represents 18% of the non-controlling equity interests and provides for a cumulative 8% dividend, if and when declared by Progentix’s Board of Directors. As the rights of the preferred stock are substantially the same as those of the common stock, the preferred stock is classified as non-controlling interest and shares in the allocation of the losses incurred by Progentix. Losses incurred by Progentix are charged to the Company and to the non-controlling interest holders based on their ownership percentage. Total assets and liabilities of Progentix included in the accompanying Consolidated Balance Sheets are as follows: ( in thousands September 30, 2015 December 31, 2014 Total current assets $ 416 $ 839 Identifiable intangible assets, net 13,585 13,935 Goodwill 12,654 12,654 Other long-term assets 1 1 Accounts payable and accrued expenses 570 542 Deferred tax liabilities, net 2,770 2,770 Non-controlling interests 7,709 8,310 The following is a reconciliation of equity (net assets) attributable to the non-controlling interests: Nine Months Ended September 30, ( in thousands 2015 2014 Non-controlling interests at beginning of period $ 8,310 $ 9,086 Less: Net loss attributable to the non-controlling interests 601 595 Non-controlling interests at end of period $ 7,709 $ 8,491 Impulse Monitoring, Inc. and Physician Practices The Company maintains contractual relationships with several physician practices (“PCs”) which were inherited through the 2011 acquisition of Impulse Monitoring, Inc. Under the respective contracts’ terms, respective PCs provide physician oversight services associated with the IOM service offerings. The Company provides management services to these PCs including all non-medical services, management reporting, billing and collections of all charges for medical services provided as well as administrative support. In turn, the PCs pay the Company a monthly management fee for these services. In accordance with authoritative guidance, the Company has determined that the PCs are VIEs and the Company has controlling financial interests in the PCs as it has both the power to direct the economically significant activities of the PCs, and the obligation to absorb losses of, or the right to receive benefits from, the PCs. Therefore, the accompanying Consolidated Financial Statements include the accounts of the PCs from the date of acquisition. During the periods presented, the result of PCs was immaterial to our financials. The creditors of the PCs have claims only on the assets of the PCs, which are not material, and the assets of the PCs are not available to the Company. |
Senior Convertible Notes
Senior Convertible Notes | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Senior Convertible Notes | 6. Senior Convertible Notes The carrying values of the Company’s Senior Convertible Notes are as follows: ( in thousands September 30, 2015 December 31, 2014 2.75% Senior Convertible Notes due 2017: Principal amount $ 402,500 $ 402,500 Unamortized debt discount (30,015 ) (41,754 ) Total Senior Convertible Notes $ 372,485 $ 360,746 2.75% Senior Convertible Notes due 2017 In June 2011, the Company issued $402.5 million 2.75% July 1, 2017 $359.2 million 23.7344 $1,000 $42.13 The cash conversion feature of the 2017 Notes (the “Embedded Conversion Derivative”) required bifurcation from the 2017 Notes and was initially accounted for as a derivative liability and debt discount of $88.9 million upon issuance of the 2017 Notes without authorization of issuing additional common stock for the conversion. Upon obtaining stockholder approval for the additional authorized shares of the Company’s common stock, the derivative liability was reclassified to stockholders’ equity, which resulted in recognizing cumulatively $39.5 million in other income for change in fair value measurement and $49.4 million in additional paid-in-capital $2.8 million $4.0 million Prior to January 1, 2017, holders may convert their 2017 Notes only under the following conditions: (a) during any calendar quarter beginning October 1, 2011, if the reported sale price of the Company’s common stock for at least 20 30 130% five 98% 2017 Hedge In connection with the offering of the 2017 Notes, the Company entered into the 2017 Hedge with the initial purchasers and/or their affiliates (the “2017 Counterparties”) entitling the Company to purchase up to 9,553,096 $42.13 $80.1 million and accounted for as derivative assets upon issuance of the 2017 Notes additional paid-in-capital effect of inclusion would always be anti-dilutive with respect to the calculation of diluted earnings per share. 2017 Warrants The Company sold warrants to the 2017 Counterparties to acquire up to 477,654 $988.51 20 $47.9 million additional paid-in-capital |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 7. Stock-Based Compensation The Company estimates the fair value of stock options issued under its equity incentive plans and shares issued to shareowners under its employee stock purchase plan using a Black-Scholes option-pricing model on the date of grant. The Black-Scholes option-pricing model incorporates various and highly sensitive assumptions including expected volatility, expected term and risk-free interest rates. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected term of the Company’s stock options and ESPP which is derived from historical experience. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield in effect at the time of grant. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future. The fair value of restricted stock units (“RSUs”) including performance RSU (“PRSUs”) with pre-defined performance criteria pre-defined performance criteria is adjusted with probability of achievements at each period end The Company is required to estimate at the grant date the value of awards that are anticipated to be forfeited prior to their vesting, and thereafter, adjusts the forfeiture rate estimates as necessary through the vesting date so that full compensation cost is recognized only for awards that vest. The Company assesses the reasonableness of the estimated forfeiture rate at least annually, with any change to be made on a cumulative basis in the period the estimated forfeiture rates change. The Company considered its historical experience of pre-vesting forfeitures on awards by each homogenous group of shareowners as the basis to arrive at its estimated annual pre-vesting forfeiture rates for RSUs. The compensation cost that has been included in the Consolidated Statements of Operations for all stock-based compensation arrangements was as follows: Three Months Ended September 30, Nine Months Ended September 30, ( in thousands 2015 2014 2015 2014 Sales, marketing and administrative expense $ 6,725 $ 7,668 $ 19,448 $ 23,105 Research and development expense 288 471 920 1,417 Cost of goods sold 64 92 202 257 Stock-based compensation expense before taxes 7,077 8,231 20,570 24,779 Related income tax benefits (2,831 ) (3,292 ) (8,228 ) (9,912 ) Stock-based compensation expense, net of taxes $ 4,246 $ 4,939 $ 12,342 $ 14,867 At September 30, 2015, there was $44.0 million of unamortized compensation expense for stock options, restricted stock units and performance-based restricted stock units to be recognized over a weighted average period of 2.7 years. Stock Options and Purchase Rights The weighted average assumptions used to estimate the fair value of stock purchase rights under the ESPP are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 ESPP Volatility 40 % 43 % 43 % 46 % Expected term (years) 1.3 1.3 1.3 1.3 Risk free interest rate 0.2 % 0.2 % 0.2 % 0.2 % Expected dividend yield — % — % — % — % Under the terms of the ESPP, shareowners can elect to have up to 15% of their annual compensation, up to a maximum of $21,250 per year, withheld to purchase shares of NuVasive’s common stock for a purchase price equal to 85% of the lower of the fair market value per share (at closing) of NuVasive common stock on (i) the commencement date of the two-year or six-month offering period (depending on the purchase period enrolled), or (ii) the respective purchase date. The Company has not granted any options since 2011. The Company issued approximately 0.7 million and 2.9 million shares of common stock, before net share settlement, upon the exercise of outstanding stock options during the three and nine months ended September 30, 2015, respectively, and issued approximately 1.0 million shares of common stock upon the exercise of outstanding stock options during the year ended December 31, 2014. Restricted Stock Units RSUs represent a right to receive shares of common stock at a future date determined in accordance with the terms and conditions of a participant’s award agreement (issued under either our 2004 Amended and Restated Equity Incentive Plan (as previously amended, the “2004 EIP”) or the 2014 Equity Incentive Plan of NuVasive, Inc. (the “2014 EIP”)). No exercise price or other monetary payment is required for receipt of RSUs or the shares issued in settlement of the respective award; instead, consideration is furnished in the form of the participant’s service to the Company. The Company has granted time-based RSUs with graded vesting terms of up to four years. The Company has also granted PRSUs with up to five year graded or cliff vesting terms (in each case, with service through the date of vesting being required) and for which the ultimate issuance amount is determined by the Company’s Compensation Committee upon its certification of Company performance against a pre-determined matrix, including revenue targets, total shareholder return, or earnings per share over pre-determined periods of time. Share payout levels range from 0 to 250% depending on the respective terms of an award. The Company issued approximately 0.1 million shares and approximately 1.4 million shares of common stock, before net share settlement, upon vesting of RSUs (including PRSUs) during the three and nine months ended September 30, 2015, respectively, and issued approximately 1.4 million shares of common stock in settlement of RSUs (including PRSUs) upon their vesting during the year ended December 31, 2014. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes Income taxes are determined using an estimated annual effective tax rate applied against income, and then adjusted for the tax impacts of certain significant and discrete items. For the nine months ended September 30, 2015, the Company treated the tax impact related to the following as discrete events for which the tax effect was recognized separately from the application of the estimated annual effective tax rate: adjustments in valuation allowances, losses associated with our global initiative, nondeductible compensation, return to provision adjustments, period interest on uncertain tax benefits and disqualifying dispositions of qualified stock grants. The Company’s effective tax rate recorded for the nine months ended September 30, 2015 was 39%. In accordance with the disclosure requirements as described in ASC Topic 740, Income Taxes, the Company has classified unrecognized tax benefits as non-current income tax liabilities, or a reduction in non-current deferred tax assets, unless expected to be paid within one year. The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. In connection with the filing of the 2014 U.S. federal income tax return, the Company reconsidered certain tax positions, which resulted in a decrease to its gross uncertain tax benefits. The Company does not anticipate there will be a significant change in unrecognized tax benefits within the next 12 months. ( in thousands September 30, 2015 December 31, 2014 Gross unrecognized tax benefits at beginning of period $ 12,372 $ 4,504 Increases in tax positions for prior years 270 5,294 Decreases in tax positions for prior years (2,944 ) - Increases in tax positions for current year relating to ongoing operations 176 2,574 Gross unrecognized tax benefits period end $ 9,874 $ 12,372 Of the $9.9 million of gross unrecognized tax benefits, $3.6 million, if recognized, would reduce the Company’s income tax expense and effective tax rate. The only active income tax audit being conducted as of September 30, 2015 is with the state of New York. With few exceptions, the Company is subject to tax examinations by U.S. federal, state and non-U.S. taxing authorities for all years due to loss and tax credit carryforwards. The Company believes that adequate provisions have been recorded for adjustments that may result from tax examinations. The outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with its expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs, though the potential impact on the Consolidated Statements of Operations would not be expected to be material. |
Business Segment, Product, and
Business Segment, Product, and Geographic Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Business Segment, Product and Geographic Information | 9. Business Segment, Product and Geographic Information The Company operates in one segment based upon the Company’s organizational structure, the way in which the operations are managed and evaluated by the chief operating decision maker (“CODM”) and the lack of availability of discrete financial information. The Company’s CODM reviews revenue at the product line offering level, and manufacturing, operating income and expenses, and net income at the Company wide level to allocate resources and assess the Company’s overall performance. The Company shares common, centralized support functions, including finance, human resources, legal, information technology, and corporate marketing, all of which report directly to the CODM. Accordingly, decisions regarding the Company’s overall operating performance and allocation of Company resources are assessed on a consolidated basis. The Company believes it is appropriate to operate as one reporting segment. The Company has disclosed the revenues for each of its product line offerings to allow the reader of the financial statements the ability to gain some transparency into the operations of the Company. The Company operates under two distinct product line offerings for revenue: spine surgery products, and biologics. The Company’s spine surgery product line offerings, which include thoracolumbar product offerings, cervical product offerings, IOM services, and disposables, are primarily used to enable access to the spine and to perform restorative and fusion procedures in a minimally-disruptive fashion. The Company’s biologics product line offerings includes allograft (donated human tissue), FormaGraft (a collagen synthetic product), Osteocel Plus and Osteocel Pro (each an allograft cellular matrix containing viable mesenchymal stem cells, or MSCs), and AttraX (a synthetic bone graft material), all of which are used to aid the spinal fusion or bone healing process. Revenue by product line offerings was as follows: Three Months Ended September 30, Nine Months Ended September 30, ( in thousands 2015 2014 2015 2014 Spine surgery products $ 168,168 $ 157,286 $ 497,194 $ 463,132 Biologics 32,370 32,632 98,637 94,958 Total Revenue $ 200,538 $ 189,918 $ 595,831 $ 558,090 Revenue and property and equipment, net, by geographic area were as follows: Revenue Property and Equipment, Net Three Months Ended September 30, Nine Months Ended September 30, September 30, December 31, ( in thousands 2015 2014 2015 2014 2015 2014 United States $ 176,371 $ 164,805 $ 524,320 $ 490,274 $ 111,979 $ 105,022 International (excludes Puerto Rico) 24,167 25,113 71,511 67,816 28,495 23,543 Total $ 200,538 $ 189,918 $ 595,831 $ 558,090 $ 140,474 $ 128,565 |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | 10. Commitments Licensing and Purchasing Agreements As of September 30, 2015, the Company has obligations under certain consultancy arrangements to pay up to approximately $23.3 million in the aggregate in the event that specified revenue-based milestones are achieved prior to 2024. Any such payment will be made in a combination of cash and the Company’s common shares as provided in the agreements. Any payments in satisfaction of theses contingent obligations are considered a cost of goods sold and are recognized as and if milestones are achieved. In early 2014, the Company paid $6.2 million in aggregate – $3.0 million in cash and $3.2 million in common shares – in connection with these agreements. There was an immaterial amount of accrued liabilities on the Consolidated Balance Sheets associated with these payments as of September 30, 2015 and December 31, 2014. Executive Severance Plans The Company is party to certain agreements with its key executives that provide for certain payments if an executive is terminated for reasons other than cause, as defined in those agreements. At September 30, 2015, the maximum future contractual commitments for such key executives were approximately $24.4 million, excluding the acceleration of equity vesting, which is called for in certain circumstances by the applicable agreements. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Contingencies [Abstract] | |
Contingencies | 11. Contingencies The Company is subject to potential liabilities under government regulations and various claims and legal actions that are pending or may be asserted from time-to-time. These matters arise in the ordinary course and conduct of the Company’s business and include, for example, commercial, intellectual property, environmental, securities and employment matters. The Company intends to continue to defend itself vigorously in such matters. Furthermore, the Company regularly assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. In the first quarter of 2015 and during the nine months ended September 30, 2015, the Company had a gain of $56.4 million related to a litigation accrual change resulting from the legal proceedings in Phase 1 of the Medtronic litigation whereby the damages award by the jury was overturned, and a gain of $2.8 million in litigation accrual change related to settlement of the NeuroVision trademark litigation. These amounts were offset by a litigation charge of $13.8 million related to the Office of the Inspector General of the U.S. Department of Health and Human Services (“OIG”) investigation and a $2.8 million litigation charge in a general litigation matter. Refer to the subsequent section herein titled “Legal Proceedings” for further information. An estimated loss contingency is accrued in the Company’s financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the Company’s assessment, it has adequately accrued an amount for contingent liabilities currently in existence. The Company does not accrue amounts for liabilities that it does not believe are probable or that it considers immaterial to its overall financial position. Litigation is inherently unpredictable, and unfavorable resolutions could occur. As a result, assessing contingencies is highly subjective and requires judgment about future events. The amount of ultimate loss may exceed the Company’s current accruals, and it is possible that its cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies. Legal Proceedings Medtronic Sofamor Danek USA, Inc. Litigation In August 2008, Warsaw Orthopedic, Inc., Medtronic Sofamor Danek USA, Inc. and other Medtronic related entities (collectively, “Medtronic”) filed a patent infringement lawsuit against the Company in the United States District Court for the Southern District of California (the “Medtronic Litigation”), alleging that certain of the Company’s products or methods, including the XLIF ® twelve Three nine The case has been administratively broken into several phases. The first phase (“Phase 1”) of the case included three one three one $101.2 million Both parties filed appeals to the U.S. Court of Appeals for the Federal Circuit. On March 2, 2015, the Court of Appeals issued a decision upholding the jury’s findings of liability as to all patents, but overturning the damage award against the Company as improper (“March 2 nd On March 19, 2012, in connection with these proceedings, the Company entered into an escrow arrangement and transferred $113.3 million nd In accordance with the authoritative guidance on the evaluation of loss contingencies, during the year ended December 31, 2011, the Company recorded an accrual of $101.2 million $7.9 million nd nd With respect to the favorable verdict delivered regarding the one Company patent litigated to verdict, the jury awarded the Company monetary damages of approximately $0.7 million $0.7 million The second phase of the case involved one Medtronic cervical plate patent. On April 25, 2013, the Company and Medtronic entered into a settlement agreement fully resolving the second phase of the case. The settlement also removed from the case the cervical plate patent that was part of the first phase. As part of the settlement, the Company received a broad license to practice (i) the Medtronic patent that was the sole subject of the second phase of the litigation, (ii) the Medtronic cervical plate patent that was part of the first phase of the litigation, and (iii) each of the Medtronic patent families that collectively represent the vast majority of Medtronic’s patent rights related to cervical plate technology. In exchange for these license rights, the Company made a one-time payment to Medtronic of $7.5 million ® ® In August 2012, Medtronic filed additional patent claims in the U.S. District Court for the Northern District of Indiana alleging that various Company spinal implants (including its CoRoent ® Trademark Infringement Litigation On September 25, 2009, Neurovision Medical Products, Inc. (NMP) filed suit against the Company in the U.S. District Court for the Central District of California (Case No. 2:09-cv-06988-R-JEM) alleging trademark infringement and unfair competition. NMP sought cancellation of NuVasive’s “NeuroVision” trademark registrations, injunctive relief and damages based on NMP’s common law use of the “NeuroVision” mark. The matter was tried in October 2010 and an unfavorable jury verdict was delivered against the Company. The verdict awarded damages to NMP of $60.0 million. $62.5 million s recorded in short-term liabilities commensurate with the restricted assets. The $2.8 million gain resulting from the litigation accrual adjustment was recorded in the Consolidated Statement of Operations during the three months ended June 30, 2015. The Company previously escrowed funds totaling $32.5 million to secure the amount of judgment, and cover potential attorney’s fees and costs. Those funds accrued interest and were included in short-term restricted cash and investments in the Consolidated Balance Sheets until funding of the settlement which occurred during the three months ended September 30, 2015. At September 30, 2015, the Company had no remaining liability or restricted cash related to this matter. Securities Litigation On August 28, 2013, a purported securities class action lawsuit was filed in the U.S. District Court for the Southern District of California naming the Company and certain of its current and former executive officers for allegedly making false and materially misleading statements regarding the Company’s business and financial results, specifically relating to the purported improper submission of false claims to Medicare and Medicaid. The complaint asserts a putative class period stemming from October 22, 2008 to July 30, 2013. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder and seeks unspecified monetary relief, interest, and attorneys’ fees. On February 13, 2014, the lead plaintiff (“Plaintiff”) filed an Amended Class Action Complaint for Violations of the Federal Securities Laws. The District Court granted the Company’s motion to dismiss the Amended Complaint and ordered Plaintiff to amend its complaint. Plaintiff filed a Second Amended Complaint on September 8, 2014, and the District Court once again granted the Company’s motion to dismiss the complaint with leave to amend. On December 23, 2014 Plaintiff filed a Third Amended Complaint. The Company filed a motion to dismiss, and while the Company’s motion was pending, Plaintiff sought leave to file a Fourth Amended Complaint. The Company moved to dismiss the Fourth Amended Complaint. On August 28, 2015, the District Court issued an order granting the Company’s motion to dismiss the Fourth Amended Complaint with leave to amend. On September 11, 2015, Plaintiff filed a Fifth Amended Complaint. At September 30, 2015, the probable outcome of this litigation cannot be determined, nor can the Company estimate a range of potential loss. In accordance with authoritative guidance on the evaluation of loss contingencies, the Company has not recorded an accrual related to this litigation. |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2015 | |
Regulatory Matters [Abstract] | |
Regulatory Matters | 12. Regulatory Matters In 2013, the Company received a federal administrative subpoena from the Office of the Inspector General of the U.S. Department of Health and Human Services (OIG) in connection with an investigation into possible false or otherwise improper claims submitted to Medicare and Medicaid. The subpoena sought discovery of documents for the period January 2007 through April 2013. In April 2015, the Company announced that it had reached an agreement in principle with the U.S. Department of Justice (“DOJ”) to settle this matter, and in July 2015, the Company entered into a definitive settlement agreement. Under the terms of the agreement, the Company agreed to pay $13.5 million plus fees and accrued interest of approximately $0.3 million to resolve this matter. The settlement was not an admission of liability or wrongdoing by the Company, and the Company was not required to enter into a corporate integrity agreement with the OIG as part of the settlement. In accordance with the authoritative guidance on the evaluation of loss contingencies, the Company recorded a $13.8 million litigation charge related to this matter, which is included in the Consolidated Statements of Operations during the nine months ended September 30, 2015, and funded $12.9 million of the settlement during the third quarter 2015, with $0.9 million payable outstanding in the settlement included in current liabilities as of September 30, 2015. On August 31, 2015, the Company received a civil investigative demand (“CID”) issued by the DOJ pursuant to the federal False Claims Act. The CID requires the delivery of a wide range of documents and information related to an investigation by the DOJ concerning allegations that the Company assisted a physician group customer in submitting improper claims for reimbursement and made improper payments to the physician group in violation of the Anti-Kickback Statute. The Company is cooperating with the DOJ. No assurance can be given as to the timing or outcome of this investigation. At September 30, 2015, the probable outcome of this matter cannot be determined, nor can the Company estimate a range of potential loss. In accordance with authoritative guidance on the evaluation of loss contingencies, the Company has not recorded an accrual related to this matter. |
Description of Business and B19
Description of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | Description of Business NuVasive, Inc. (the “Company” or “NuVasive”) was incorporated in Delaware on July 21, 1997, and began commercializing its products in 2001. The Company is focused on developing minimally-disruptive surgical products and procedurally-integrated solutions for the spine. NuVasive’s principal product offering includes a minimally-disruptive surgical platform called Maximum Access Surgery, or MAS ® ® ® ® The Company’s spine surgery product line offerings The Company also recently launched integrated global alignment (“iGA™”), in which products and computer assisted technology under its MAS platform help achieve more precise spinal alignment. The Company’s biologic product line offerings used to aid the spinal fusion process or bone healing process include Osteocel ® ® , a collagen synthetic product, and AttraX ® The Company has dedicated and continues to dedicate significant resources toward training spine surgeons around the world; both those who are new to its MAS product platform as well as previously MAS-trained surgeons attending advanced courses. The Company’s primary business model is to loan its MAS systems to surgeons and hospitals who use those systems to perform individual procedures, with the hospitals purchasing implants, biologics and disposables in each such case. In addition, for larger customers, the Company’s proprietary nerve monitoring systems, MaXcess and surgical instrument sets are placed with hospitals for an extended period at no up-front cost to them, facilitating the hospital’s purchase of disposables for those machines from the Company. The Company also offers a range of bone allograft in patented saline packaging, disposables and spine implants, which include its branded CoRoent ® The Company’s implants, biologics and disposables are currently sold and shipped from its primary distribution and warehousing operations facility located in Memphis, Tennessee. The Company sells MAS instrument sets, MaXcess devices and its proprietary software-driven nerve monitoring systems, however this does not make up a material part of its business. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying Unaudited Consolidated Financial Statements include the financial information of the Company and its majority-owned or controlled subsidiaries, collectively referred to as either NuVasive or the Company. The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the respective parent entity (entity having common control), the Company records the fair value of the non-controlling interests at the acquisition date and classifies the amounts attributable to non-controlling interests separately in equity in the Company’s Consolidated Financial Statements. Any subsequent changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary are accounted for as equity transactions. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying Unaudited Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for any other interim period or for the full year. These Unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the SEC. In the opinion of management, the Unaudited Consolidated Financial Statements include all adjustments that are of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented. The Company has reclassified historically presented product offerings revenue to conform to the current year presentation. The reclassification had no impact on previously reported results of operations or financial position. |
Change in Accounting Estimates | Change in Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers The FASB permits early adoption of the new standard by one year (i.e., the original effective date). |
Business Transition Costs | The Company incurs costs related to integration and business transition activities which include severance, relocation, consulting, and other costs directly associated to such activities. During the nine months ended September 30, 2015, the Company incurred $6.5 million of such costs, which included a $3.4 million charge associated with the resignation of the Company’s former Chief Executive Officer and Chairman of the Board, which occurred in the first quarter 2015. The $3.4 million charge includes certain severance and compensation-related charges, net of certain forfeitures of previously recognized equity-based compensation. |
Restructuring Charges | Restructuring Charges The Company exited its New Jersey location and terminated the respective lease to reduce its footprint on the east coast of the United States as part of a company-wide efficiency effort in order to match its business needs without adversely impacting its ability to deliver surgeon education and local customer fulfillment. As a result of this undertaking, the Company recognized restructuring and associated impairment charges of $2.3 million during the nine months ended September 30, 2015 in addition to the $6.4 million recognized during 2014. The restructuring and impairment charges mainly consist of the future rental payments through 2017, net of estimated future sublease income, and elimination of related leasehold improvements and deferred rent liabilities. These charges are recorded As of September 30, 2015, the total recorded liability associated with this early lease termination was $3.9 million and consists of future rental payments net of estimated sublease income through 2017. The current portion of the liability is recorded within accounts payable and accrued liabilities and the long-term portion is recorded within other long-term liabilities in the Consolidated Balance Sheets at September 30, 2015. |
Litigation Liability Gain (Loss) | Litigation Liability Gain (Loss) During the nine months ended September 30, 2015, the Company recorded a litigation liability gain of $42.5 million resulting primarily from the recognition of a $56.4 million gain stemming from a favorable appeal in Phase 1 of the Medtronic litigation and a gain of $2.8 million in litigation accrual change related to the settlement of the NeuroVision trademark litigation, partially offset by litigation losses of $13.8 million in connection with the OIG investigation and $2.8 million in a general litigation matter. Settlement of the aforementioned NeuroVision trademark litigation totaling $27.2 million was funded out of restricted cash during the third quarter 2015, and at September 30, 2015 the Company no longer maintains short-term restricted funds related to that matter. The March 2, 2015 Court of Appeals decision in the Company’s Medtronic litigation upheld the jury’s findings of liability as to all patents, but overturned the damage award against the Company as improper, and as a result the Company was no longer required to escrow funds related to Phase 1 of that litigation matter. During the third quarter 2015, the Company transferred all of the escrow funds related to this matter, of approximately $114.1 million, from its long-term restricted cash and investments account to its unrestricted investment accounts. The Company has no restricted funds related to this matter at September 30, 2015. See Note 11 and Note 12 to the Unaudited Consolidated Financial Statements for further discussion. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) includes unrealized gains or losses on the Company’s marketable securities and foreign currency translation adjustments. The cumulative translation adjustments included in accumulated other comprehensive income (loss) were a net cumulative loss of $11.4 million and $9.5 million at September 30, 2015 and December 31, 2014, respectively. |
Long-Lived Assets | Long-Lived Assets Long-lived assets include surgical instruments, which are loaned to surgeons and hospitals who purchase implants, biologics and disposables for use in individual procedures, leasehold improvements, software, and intangible assets. The Company periodically re-evaluates the original assumptions and rationale utilized in the establishment of the carrying value and estimated lives of its long-lived assets. The criteria used for these evaluations include management’s estimate of the asset’s continuing ability to generate income from operations and positive cash flow in future periods as well as the strategic significance of the asset to the Company’s business objectives. If assets are considered to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets, which is determined by applicable market prices when available or other methods by utilizing unobservable inputs including discounted cash flow models. See Note 3 to the Unaudited Consolidated Financial Statements for further discussion. |
Inventories | Inventories The Company’s inventory consists primarily of purchased finished goods which includes specialized implants and disposables, and is stated at the lower of cost or market determined by utilizing a standard cost method which approximates the weighted average cost. The Company reviews the components of its inventory on a periodic basis for excess, obsolete or impaired inventory, and records a reserve for such identified items. The inventory reserve was $29.9 million and $22.7 million at September 30, 2015 and December 31, 2014, respectively. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings or (loss) per share attributable to the Company: Three Months Ended September 30, Nine Months Ended September 30, ( in thousands, except per share data 2015 2014 2015 2014 Numerator: Net income (loss) available to the Company $ 12,960 $ (1,830 ) $ 54,788 $ (24,194 ) Denominator for basic and diluted net (loss) income per share: Weighted average common shares outstanding for basic 48,993 46,990 48,513 46,546 Dilutive potential common stock outstanding: Stock options and ESPP 895 — 1,224 — RSUs 1,129 — 1,127 — Warrants 417 — 139 — Senior Convertible Notes 1,765 — 1,199 — Weighted average common shares outstanding for diluted 53,199 46,990 52,202 46,546 Basic net income (loss) per share attributable to the Company $ 0.26 $ (0.04 ) $ 1.13 $ (0.52 ) Diluted net income (loss) per share attributable to the Company $ 0.24 $ (0.04 ) $ 1.05 $ (0.52 ) |
Anti-dilutive common stock equivalents not included in calculation of net income per diluted share | The following weighted outstanding common stock equivalents were not included in the calculation of net income (loss) per diluted share because their effects were anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, ( in thousands 2015 2014 2015 2014 Stock options, ESPP, and RSUs 13 8,777 53 8,999 Warrants — 9,553 6,369 9,553 Senior Convertible Notes — 9,553 — 9,553 Total 13 27,883 6,422 28,105 |
Financial Instruments and Fai21
Financial Instruments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Table [Abstract] | |
Composition of Marketable Securities | The composition of marketable securities is as follows: ( in thousands, except years Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2015: Classified as current assets Corporate notes Less than 1 $ 103,840 $ 27 $ (10 ) $ 103,857 Securities of government-sponsored entities Less than 1 65,503 9 (3 ) 65,509 U.S. government treasury securities Less than 1 7,506 3 — 7,509 Certificates of deposit Less than 1 3,671 — — 3,671 Commercial paper Less than 1 15,491 — — 15,491 Short-term marketable securities 196,011 39 (13 ) 196,037 Classified as non-current assets Certificates of deposit 1 to 2 8,106 — — 8,106 Securities of government-sponsored entities 1 to 2 46,624 38 (2 ) 46,660 U.S. government treasury securities 1 to 2 11,042 4 (1 ) 11,045 Corporate notes 1 to 2 47,948 48 (14 ) 47,982 Long-term marketable securities 113,720 90 (17 ) 113,793 Total marketable securities at September 30, 2015 $ 309,731 $ 129 $ (30 ) $ 309,830 December 31, 2014: Classified as current assets Certificates of deposit Less than 1 $ 282 $ — $ — $ 282 Corporate notes Less than 1 129,037 8 (105 ) 128,940 Commercial paper Less than 1 11,290 — — 11,290 U.S. government treasury securities Less than 1 1,500 1 — 1,501 Securities of government-sponsored entities Less than 1 78,333 12 (29 ) 78,316 Short-term marketable securities 220,442 21 (134 ) 220,329 Classified as non-current assets Corporate notes 1 to 2 14,082 — (13 ) 14,069 Securities of government-sponsored entities 1 to 2 28,996 — (23 ) 28,973 Long-term marketable securities 43,078 — (36 ) 43,042 Classified as restricted investments U.S. government treasury securities Less than 2 51,331 13 (13 ) 51,331 Securities of government-sponsored entities Less than 2 42,862 2 (54 ) 42,810 Restricted investments 94,193 15 (67 ) 94,141 Total marketable securities at December 31, 2014 $ 357,713 $ 36 $ (237 ) $ 357,512 |
Schedule of Derivatives Not Designated as Cash Flow Hedges | The following table summarizes the fair values of derivative instruments at September 30, 2015 and December 31, 2014: Asset Derivatives Liability Derivatives Fair Value Fair Value Balance Sheet September 30, December 31, Balance Sheet September 30, December 31, ( in thousands Location 2015 2014 Location 2015 2014 Derivative instruments not designated as cash flow hedges Forward exchange contracts Other current assets $ — $ — Other current liabilities * * Total derivatives $ — $ — * * *De minimus amount recognized in the hedge relationship. |
Schedule of Derivative Instruments Effect on Statements of Operations | The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and September 30, 2014: Three Months Ended Three Months Ended September 30, 2015 September 30, 2014 Location of Amount of Location of Amount of (Gain)/Loss (Gain)/Loss (Gain)/Loss (Gain)/Loss Recognized in Recognized in Recognized in Recognized in ( in thousands Income Income Income Income Derivative instruments not designated as cash flow hedges Forward exchange contracts Other (income) expense $ 79 Other (income) expense $ — Total derivatives $ 79 $ — Nine Months Ended Nine Months Ended September 30, 2015 September 30, 2014 Location of Amount of Location of Amount of (Gain)/Loss (Gain)/Loss (Gain)/Loss (Gain)/Loss Recognized in Recognized in Recognized in Recognized in ( in thousands Income Income Income Income Derivative instruments not designated as cash flow hedges Forward exchange contracts Other (income) expense $ (1,585 ) Other (income) expense $ — Total derivatives $ (1,585 ) $ — |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The fair values of the Company’s assets and liabilities, including cash equivalents, marketable securities, restricted investments, derivatives, and contingent considerations are measured at fair value on a recurring basis, and are determined under the fair value categories as follows: Quoted Price in Significant Other Significant Active Market Observable Inputs Unobservable ( in thousands Total (Level 1) (Level 2) Inputs (Level 3) September 30, 2015: Money market funds $ 37,582 $ 37,582 $ — $ — Certificates of deposit 11,777 11,777 — — Corporate notes 157,290 — 157,290 — Commercial paper 15,491 — 15,491 — U.S. government treasury securities 18,554 18,554 — — Securities of government-sponsored entities 112,169 — 112,169 — Total assets $ 352,863 $ 67,913 $ 284,950 $ — December 31, 2014: Money market funds $ 39,963 $ 39,963 $ — $ — Certificates of deposit 282 282 — — Corporate notes 143,009 — 143,009 — Commercial paper 11,290 — 11,290 — U.S. government treasury securities 52,831 52,831 — — Securities of government-sponsored entities 150,101 — 150,101 — Total assets $ 397,476 $ 93,076 $ 304,400 $ — Acquisition-related liabilities, current $ (644 ) $ — $ — $ (644 ) Total liabilities $ (644 ) $ — $ — $ (644 ) |
Fair Value Liabilities Measured on Recurring Basis Unobservable Input Reconciliation | The following table sets forth the changes in the estimated fair value of the Company’s liabilities measured on a recurring basis using significant unobservable inputs (Level 3): Nine Months Ended September 30, ( in thousands 2015 2014 Fair value measurement at beginning of period $ 644 $ 1,212 Change in fair value measurement included in operating expenses (36 ) 8 Contingent consideration paid or settled (608 ) (608 ) Fair value measurement at end of period $ — $ 612 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | Goodwill and intangible assets consisted of the following: Weighted- Average Amortization ( in thousands, except years Period Gross Accumulated Intangible September 30, 2015: (in years) Amount Amortization Assets, net Intangible assets subject to amortization: Developed technology 9 $ 79,008 $ (34,602 ) $ 44,406 Manufacturing know-how and trade secrets 12 21,812 (12,928 ) 8,884 Trade name and trademarks 11 9,500 (4,868 ) 4,632 Customer relationships 8 44,500 (26,872 ) 17,628 Total intangible assets subject to amortization 10 $ 154,820 $ (79,270 ) $ 75,550 Intangible assets not subject to amortization: In-process research and development $ 10,640 Goodwill $ 154,324 Weighted- Average Amortization Period Gross Accumulated Intangible December 31, 2014: (in years) Amount Amortization Assets, net Intangible assets subject to amortization: Developed technology 9 $ 79,008 $ (27,760 ) $ 51,248 Manufacturing know-how and trade secrets 12 21,879 (11,640 ) 10,239 Trade name and trademarks 11 9,500 (4,264 ) 5,236 Customer relationships 8 43,153 (23,961 ) 19,192 Total intangible assets subject to amortization 10 $ 153,540 $ (67,625 ) $ 85,915 Intangible assets not subject to amortization: In-process research and development $ 10,640 Goodwill $ 154,443 |
Future amortization expense related to intangible assets | Total future amortization expense related to intangible assets subject to amortization at September 30, 2015 is set forth in the table below: ( in thousands Remaining 2015 $ 3,858 2016 15,392 2017 12,187 2018 11,676 2019 10,322 2020 9,911 Thereafter through 2027 12,204 Total future amortization expense $ 75,550 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combination Description [Abstract] | |
Summary of assets and liabilities included in the accompanying consolidated balance sheets | Total assets and liabilities of Progentix included in the accompanying Consolidated Balance Sheets are as follows: ( in thousands September 30, 2015 December 31, 2014 Total current assets $ 416 $ 839 Identifiable intangible assets, net 13,585 13,935 Goodwill 12,654 12,654 Other long-term assets 1 1 Accounts payable and accrued expenses 570 542 Deferred tax liabilities, net 2,770 2,770 Non-controlling interests 7,709 8,310 |
Reconciliation of equity (net assets) attributable to the non-controlling interests | The following is a reconciliation of equity (net assets) attributable to the non-controlling interests: Nine Months Ended September 30, ( in thousands 2015 2014 Non-controlling interests at beginning of period $ 8,310 $ 9,086 Less: Net loss attributable to the non-controlling interests 601 595 Non-controlling interests at end of period $ 7,709 $ 8,491 |
Senior Convertible Notes (Table
Senior Convertible Notes (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Net carrying amount of the debt component | The carrying values of the Company’s Senior Convertible Notes are as follows: ( in thousands September 30, 2015 December 31, 2014 2.75% Senior Convertible Notes due 2017: Principal amount $ 402,500 $ 402,500 Unamortized debt discount (30,015 ) (41,754 ) Total Senior Convertible Notes $ 372,485 $ 360,746 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Compensation costs included in statement of income for all stock-based compensation arrangements | The compensation cost that has been included in the Consolidated Statements of Operations for all stock-based compensation arrangements was as follows: Three Months Ended September 30, Nine Months Ended September 30, ( in thousands 2015 2014 2015 2014 Sales, marketing and administrative expense $ 6,725 $ 7,668 $ 19,448 $ 23,105 Research and development expense 288 471 920 1,417 Cost of goods sold 64 92 202 257 Stock-based compensation expense before taxes 7,077 8,231 20,570 24,779 Related income tax benefits (2,831 ) (3,292 ) (8,228 ) (9,912 ) Stock-based compensation expense, net of taxes $ 4,246 $ 4,939 $ 12,342 $ 14,867 |
Weighted average assumptions used to estimate fair value of stock options granted and stock purchase rights under ESPP | The weighted average assumptions used to estimate the fair value of stock purchase rights under the ESPP are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 ESPP Volatility 40 % 43 % 43 % 46 % Expected term (years) 1.3 1.3 1.3 1.3 Risk free interest rate 0.2 % 0.2 % 0.2 % 0.2 % Expected dividend yield — % — % — % — % |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Gross Unrecognized Tax Benefits Roll Forward | ( in thousands September 30, 2015 December 31, 2014 Gross unrecognized tax benefits at beginning of period $ 12,372 $ 4,504 Increases in tax positions for prior years 270 5,294 Decreases in tax positions for prior years (2,944 ) - Increases in tax positions for current year relating to ongoing operations 176 2,574 Gross unrecognized tax benefits period end $ 9,874 $ 12,372 |
Business Segment, Product and G
Business Segment, Product and Geographical Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Products and Services | Revenue by product line offerings was as follows: Three Months Ended September 30, Nine Months Ended September 30, ( in thousands 2015 2014 2015 2014 Spine surgery products $ 168,168 $ 157,286 $ 497,194 $ 463,132 Biologics 32,370 32,632 98,637 94,958 Total Revenue $ 200,538 $ 189,918 $ 595,831 $ 558,090 |
Schedule of Revenue from Net Property and Equipment by Geographical Areas | Revenue and property and equipment, net, by geographic area were as follows: Revenue Property and Equipment, Net Three Months Ended September 30, Nine Months Ended September 30, September 30, December 31, ( in thousands 2015 2014 2015 2014 2015 2014 United States $ 176,371 $ 164,805 $ 524,320 $ 490,274 $ 111,979 $ 105,022 International (excludes Puerto Rico) 24,167 25,113 71,511 67,816 28,495 23,543 Total $ 200,538 $ 189,918 $ 595,831 $ 558,090 $ 140,474 $ 128,565 |
Description of Business and B28
Description of Business and Basis of Presentation (Details Textual) - USD ($) | Jul. 20, 2015 | Apr. 25, 2013 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Sep. 30, 2012 |
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | ||||||||
Relocation, consulting, and other costs | $ 6,500,000 | |||||||
Severance Costs | 3,400,000 | |||||||
Total recorded liability associated with early lease termination | $ 3,900,000 | 3,900,000 | ||||||
Litigation accrual adjustment | 500,000 | 42,507,000 | $ (30,000,000) | |||||
Litigation charge | 2,800,000 | |||||||
Translation Adjustment Functional to Reporting Currency, Net of Tax | (11,400,000) | (11,400,000) | $ (9,500,000) | |||||
Inventory Valuation Reserves | 29,900,000 | 29,900,000 | 22,700,000 | |||||
OIG [Member] | ||||||||
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | ||||||||
Litigation accrual adjustment | 13,800,000 | |||||||
Litigation loss offset | 13,800,000 | |||||||
Litigation settlement amount | 12,900,000 | |||||||
Medtronic Litigation [Member] | ||||||||
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | ||||||||
Litigation accrual adjustment | $ 56,400,000 | 56,400,000 | ||||||
Litigation settlement amount | $ 7,500,000 | |||||||
Release of funds from escrow | 114,100,000 | 114,100,000 | ||||||
Restricted cash | 0 | 0 | ||||||
Trademark Infringement [Member] | ||||||||
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | ||||||||
Litigation accrual adjustment | $ 2,800,000 | 2,800,000 | ||||||
Litigation settlement amount | $ 27,200,000 | 27,200,000 | ||||||
Release of funds from escrow | $ 62,500,000 | |||||||
Restricted cash | $ 0 | 0 | ||||||
Sales, Marketing and Administrative Expense [Member] | ||||||||
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | ||||||||
Restructuring and associated impairment charges | 2,300,000 | $ 6,400,000 | ||||||
Chief Executive Officer and Chairman of the Board [Member] | ||||||||
Schedule Of Description Of Business And Basis Of Presentation [Line Items] | ||||||||
Severance Costs | $ 3,400,000 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Net income (loss) available to the Company | $ 12,960 | $ (1,830) | $ 54,788 | $ (24,194) |
Denominator for basic and diluted net (loss) income per share: | ||||
Weighted average common shares outstanding for basic | 48,993 | 46,990 | 48,513 | 46,546 |
Dilutive potential common stock outstanding: | ||||
Weighted average common shares outstanding for diluted | 53,199 | 46,990 | 52,202 | 46,546 |
Basic net income (loss) per share attributable to the Company | $ 0.26 | $ (0.04) | $ 1.13 | $ (0.52) |
Diluted net income (loss) per share attributable to the Company | $ 0.24 | $ (0.04) | $ 1.05 | $ (0.52) |
Warrants [Member] | ||||
Dilutive potential common stock outstanding: | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 417 | 139 | ||
Senior Convertible Notes [Member] | ||||
Dilutive potential common stock outstanding: | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 1,765 | 1,199 | ||
Stock Options and ESPP [Member] | ||||
Dilutive potential common stock outstanding: | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 895 | 1,224 | ||
RSUs [Member] | ||||
Dilutive potential common stock outstanding: | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 1,129 | 1,127 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Anti-dilutive Common Stock Equivalents Not Included in Calculation of Net Income Per Diluted Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 13 | 27,883 | 6,422 | 28,105 |
Stock options, ESPP, and RSUs [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 13 | 8,777 | 53 | 8,999 |
Warrants [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 9,553 | 6,369 | 9,553 | |
Senior Convertible Notes [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share | 9,553 | 9,553 |
Financial Instruments and Fai31
Financial Instruments and Fair Value Measurements (Details Textual) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)investment | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)investment | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Business Acquisition [Line Items] | |||||
Impairment charges recorded for earnings | $ 0 | ||||
Unrealized loss position investment | investment | 0 | 0 | |||
Net foreign currency exchange gains (losses), includes gains and losses from derivatives instruments | $ 400,000 | $ (2,600,000) | $ 400,000 | $ (2,500,000) | |
Leasehold improvement impairment | 900,000 | 2,200,000 | |||
Quoted price in active market (Level 1) [Member] | |||||
Business Acquisition [Line Items] | |||||
Debt instrument, fair value disclosure | 506,300,000 | 506,300,000 | $ 516,100,000 | ||
Foreign Exchange Forward [Member] | |||||
Business Acquisition [Line Items] | |||||
Notional principal amount | $ 16,800,000 | $ 0 | $ 16,800,000 | $ 0 |
Financial Instruments and Fai32
Financial Instruments and Fair Value Measurements - Composition of Marketable Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 309,731 | $ 357,713 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 129 | 36 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (30) | (237) |
Available-for-sale Securities, Fair Value | 309,830 | 357,512 |
Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 196,011 | 220,442 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 39 | 21 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (13) | (134) |
Available-for-sale Securities, Fair Value | 196,037 | 220,329 |
Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 113,720 | 43,078 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 90 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (17) | (36) |
Available-for-sale Securities, Fair Value | 113,793 | 43,042 |
Certificates of deposit [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 3,671 | 282 |
Available-for-sale Securities, Fair Value | 3,671 | $ 282 |
Certificates of deposit [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 8,106 | |
Available-for-sale Securities, Fair Value | $ 8,106 | |
Certificates of deposit [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Certificates of deposit [Member] | Maximum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years | |
Certificates of deposit [Member] | Minimum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | |
Commercial paper [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 15,491 | $ 11,290 |
Available-for-sale Securities, Fair Value | $ 15,491 | $ 11,290 |
Commercial paper [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Restricted Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 94,193 | |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 15 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (67) | |
Available-for-sale Securities, Fair Value | 94,141 | |
Corporate notes [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 103,840 | 129,037 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 27 | 8 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (10) | (105) |
Available-for-sale Securities, Fair Value | 103,857 | 128,940 |
Corporate notes [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 47,948 | 14,082 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 48 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (14) | (13) |
Available-for-sale Securities, Fair Value | $ 47,982 | $ 14,069 |
Corporate notes [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Corporate notes [Member] | Maximum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years | 2 years |
Corporate notes [Member] | Minimum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Securities of government-sponsored entities [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 65,503 | $ 78,333 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 9 | 12 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (3) | (29) |
Available-for-sale Securities, Fair Value | 65,509 | 78,316 |
Securities of government-sponsored entities [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 46,624 | 28,996 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 38 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (2) | (23) |
Available-for-sale Securities, Fair Value | $ 46,660 | $ 28,973 |
Securities of government-sponsored entities [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Securities of government-sponsored entities [Member] | Maximum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years | 2 years |
Securities of government-sponsored entities [Member] | Minimum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Securities of government-sponsored entities [Member] | Restricted Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 42,862 | |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 2 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (54) | |
Available-for-sale Securities, Fair Value | $ 42,810 | |
Securities of government-sponsored entities [Member] | Restricted Investments [Member] | Maximum [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years | |
U.S. government treasury securities [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 7,506 | $ 1,500 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 3 | 1 |
Available-for-sale Securities, Fair Value | 7,509 | $ 1,501 |
U.S. government treasury securities [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 11,042 | |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 4 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (1) | |
Available-for-sale Securities, Fair Value | $ 11,045 | |
U.S. government treasury securities [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
U.S. government treasury securities [Member] | Maximum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years | |
U.S. government treasury securities [Member] | Minimum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | |
U.S. government treasury securities [Member] | Restricted Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 51,331 | |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 13 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (13) | |
Available-for-sale Securities, Fair Value | $ 51,331 | |
U.S. government treasury securities [Member] | Restricted Investments [Member] | Maximum [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years |
Financial Instruments and Fai33
Financial Instruments and Fair Value Measurements - Schedule of Derivative Instruments Effect on Statements of Operations (Details) - Cash Flow Hedges [Member] - Not Designated As Hedging Instrument [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Derivative Instruments Gain Loss [Line Items] | ||
Amount of (Gain)/Loss Recognized in Income | $ 79 | $ (1,585) |
Foreign Exchange Forward [Member] | Other (Income) Expense [Member] | ||
Derivative Instruments Gain Loss [Line Items] | ||
Amount of (Gain)/Loss Recognized in Income | $ 79 | $ (1,585) |
Financial Instruments and Fai34
Financial Instruments and Fair Value Measurements - Fair Value of Assets and Liabilities (Details) - Fair value measurements on recurring basis [Member] - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | $ 352,863 | $ 397,476 |
Contingent Consideration: | ||
Acquisition-related liabilities, current | (644) | |
Acquisition-related liabilities | (644) | |
Money Market Funds [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 37,582 | 39,963 |
Certificates of deposit [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 11,777 | 282 |
Corporate notes [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 157,290 | 143,009 |
Commercial paper [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 15,491 | 11,290 |
U.S. government treasury securities [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 18,554 | 52,831 |
Securities of government-sponsored entities [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 112,169 | 150,101 |
Quoted price in active market (Level 1) [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 67,913 | 93,076 |
Quoted price in active market (Level 1) [Member] | Money Market Funds [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 37,582 | 39,963 |
Quoted price in active market (Level 1) [Member] | Certificates of deposit [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 11,777 | 282 |
Quoted price in active market (Level 1) [Member] | U.S. government treasury securities [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 18,554 | 52,831 |
Significant other observable inputs (Level 2) [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 284,950 | 304,400 |
Significant other observable inputs (Level 2) [Member] | Corporate notes [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 157,290 | 143,009 |
Significant other observable inputs (Level 2) [Member] | Commercial paper [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 15,491 | 11,290 |
Significant other observable inputs (Level 2) [Member] | Securities of government-sponsored entities [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | $ 112,169 | 150,101 |
Significant unobservable inputs (Level 3) [Member] | ||
Contingent Consideration: | ||
Acquisition-related liabilities, current | (644) | |
Acquisition-related liabilities | $ (644) |
Financial Instruments and Fai35
Financial Instruments and Fair Value Measurements - Estimated Fair Value of Liabilities Measured on a Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value Disclosures [Abstract] | ||
Fair value measurement at beginning of period | $ 644 | $ 1,212 |
Change in fair value measurement included in operating expenses | (36) | 8 |
Contingent consideration paid or settled | $ (608) | (608) |
Fair value measurement at end of period | $ 612 |
Goodwill and Intangible Asset36
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 10 years | 10 years |
Gross Amount | $ 154,820 | $ 153,540 |
Accumulated Amortization | (79,270) | (67,625) |
Intangible Assets, net | 75,550 | 85,915 |
Intangible assets not subject to amortization: | ||
In-process research and development | 10,640 | 10,640 |
Goodwill | $ 154,324 | $ 154,443 |
Developed technology [Member] | ||
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 9 years | 9 years |
Gross Amount | $ 79,008 | $ 79,008 |
Accumulated Amortization | (34,602) | (27,760) |
Intangible Assets, net | $ 44,406 | $ 51,248 |
Manufacturing know-how and trade secrets [Member] | ||
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 12 years | 12 years |
Gross Amount | $ 21,812 | $ 21,879 |
Accumulated Amortization | (12,928) | (11,640) |
Intangible Assets, net | $ 8,884 | $ 10,239 |
Trade name and trademarks [Member] | ||
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 11 years | 11 years |
Gross Amount | $ 9,500 | $ 9,500 |
Accumulated Amortization | (4,868) | (4,264) |
Intangible Assets, net | $ 4,632 | $ 5,236 |
Customer relationships [Member] | ||
Intangible assets subject to amortization: | ||
Weighted Average Amortization Period | 8 years | 8 years |
Gross Amount | $ 44,500 | $ 43,153 |
Accumulated Amortization | (26,872) | (23,961) |
Intangible Assets, net | $ 17,628 | $ 19,192 |
Goodwill and Intangible Asset37
Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expense related to intangible assets | $ 4,000 | $ 3,100 | $ 11,700 | $ 10,500 |
Purchase of intangible assets | 28,589 | |||
Accrued for As of December 31, 2014 [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Purchase of intangible assets | $ 27,400 |
Goodwill and Intangible Asset38
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Future amortization expense related to intangible assets | ||
Remaining 2,015 | $ 3,858 | |
2,016 | 15,392 | |
2,017 | 12,187 | |
2,018 | 11,676 | |
2,019 | 10,322 | |
2,020 | 9,911 | |
Thereafter through 2027 | 12,204 | |
Intangible Assets, net | $ 75,550 | $ 85,915 |
Business Combinations (Details
Business Combinations (Details Textual) - Progentix Orthobiology [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2009 | |
Business Acquisition [Line Items] | ||
Advanced loan accordance to loan agreement | $ 5,300,000 | |
Accrued interest rate of loan | 6.00% | |
Preferred Stock Purchase Agreement [Member] | ||
Business Acquisition [Line Items] | ||
Percentage of ownership Interests acquired | 40.00% | |
Cash payment on purchase of outstanding shares | $ 10,000,000 | |
Percentage of cumulative dividend, description | cumulative 8% dividend | |
Preferred Stock Purchase Agreement [Member] | Cumulative Preferred Stock [Member] | ||
Business Acquisition [Line Items] | ||
Percentage of minority interest represented by preferred stock | 18.00% | |
Percentage of cumulative dividend | 8.00% | |
Option Purchase Agreement | ||
Business Acquisition [Line Items] | ||
Call option remaining variable interest entity ownership percentage | 60.00% | |
Amount of remaining shares | $ 35,000,000 | |
Term of distribution agreement years | 10 years |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Total current assets | $ 698,510 | $ 705,871 | ||
Identifiable intangible assets, net | 86,190 | 96,555 | ||
Goodwill | 154,324 | 154,443 | ||
Other long-term assets | 23,444 | 26,420 | ||
Non-controlling interests | 7,709 | 8,310 | ||
Variable Interest Entity [Member] | ||||
Business Acquisition [Line Items] | ||||
Non-controlling interests | 7,709 | 8,310 | $ 8,491 | $ 9,086 |
Variable Interest Entity [Member] | Progentix Orthobiology [Member] | ||||
Business Acquisition [Line Items] | ||||
Total current assets | 416 | 839 | ||
Identifiable intangible assets, net | 13,585 | 13,935 | ||
Goodwill | 12,654 | 12,654 | ||
Other long-term assets | 1 | 1 | ||
Accounts payable and accrued expenses | 570 | 542 | ||
Deferred tax liabilities, net | 2,770 | 2,770 | ||
Non-controlling interests | $ 7,709 | $ 8,310 |
Reconciliation of Equity (Net A
Reconciliation of Equity (Net Assets) Attributable to the Non-controlling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reconciliation of equity (net assets) attributable to the non-controlling interests | ||||
Non-controlling interests at beginning of period | $ 8,310 | |||
Less: Net loss attributable to the non-controlling interests | $ 210 | $ 157 | 601 | $ 595 |
Non-controlling interests at end of period | 7,709 | 7,709 | ||
Variable Interest Entity [Member] | ||||
Reconciliation of equity (net assets) attributable to the non-controlling interests | ||||
Non-controlling interests at beginning of period | 8,310 | 9,086 | ||
Less: Net loss attributable to the non-controlling interests | 601 | 595 | ||
Non-controlling interests at end of period | $ 7,709 | $ 8,491 | $ 7,709 | $ 8,491 |
Senior Convertible Notes (Detai
Senior Convertible Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2011 | Jun. 30, 2011 |
Debt Instrument [Line Items] | ||||
Total Senior Convertible Notes | $ 372,485 | $ 360,746 | ||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 402,500 | 402,500 | $ 402,500 | |
Unamortized debt discount | (30,015) | (41,754) | $ (88,900) | |
Total Senior Convertible Notes | $ 372,485 | $ 360,746 |
Senior Convertible Notes (Paren
Senior Convertible Notes (Parenthetical) (Details) | Sep. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2011 |
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate on convertible notes | 2.75% | 2.75% | 2.75% |
Senior Convertible Notes (Det44
Senior Convertible Notes (Details Textual) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2011USD ($)$ / shares | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2011USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | |
Debt Instrument [Line Items] | |||||||
Contractual coupon interest expense | $ 2,800,000 | $ 2,800,000 | $ 8,300,000 | $ 8,300,000 | |||
Amortization of debt discount (premium) | 4,000,000 | $ 3,700,000 | 11,700,000 | $ 10,900,000 | |||
Derivative, maturity date | Jul. 1, 2017 | ||||||
Initial strike price at which warrants to be acquired | $ / shares | $ 988.51 | ||||||
Number of common stock shares preferred stock convertible into | shares | 20 | ||||||
Cash proceeds from the sale of warrants | $ 47,900,000 | ||||||
2017 Hedge [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Number of common stock to be purchased | shares | 9,553,096 | ||||||
Cost of hedge transaction | $ 80,100,000 | ||||||
Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Class of warrant or rights expiry month and year | 2017-09 | ||||||
Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Class of warrant or rights expiry month and year | 2018-01 | ||||||
Maximum [Member] | Series A Convertible Participating Preferred Stock [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Number of preferred or common stock into which the warrants is converted | shares | 477,654 | ||||||
Other Expense [Member] | 2017 Hedge [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Embedded derivative, gain (loss) reclassified to earnings | $ 37,100,000 | ||||||
Additional Paid-in Capital [Member] | 2017 Hedge [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Embedded derivative, amount reclassified to stockholders' equity | $ 43,000,000 | ||||||
Common Shares [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Number of preferred or common stock into which the warrants is converted | shares | 9,553,080 | ||||||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 402,500,000 | $ 402,500,000 | $ 402,500,000 | $ 402,500,000 | |||
Net proceeds of unsecured senior convertible notes | $ 359,200,000 | ||||||
Interest rate on convertible notes | 2.75% | 2.75% | 2.75% | 2.75% | |||
Debt instrument, maturity date | Jul. 1, 2017 | ||||||
Initial conversion rate adjustment, shares | 23.7344 | ||||||
Principal amount of debt considered for conversion rate | $ 1,000 | ||||||
Initial conversion price of convertible notes | $ / shares | $ 42.13 | ||||||
Fair value of debt conversion cost | $ 30,015,000 | $ 30,015,000 | $ 88,900,000 | $ 41,754,000 | |||
Effective interest rate | 8.00% | ||||||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Scenario Two [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Consecutive trading days considered for debt conversion | 5 days | ||||||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of conversion price | 130.00% | ||||||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Minimum [Member] | Scenario One [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Consecutive trading days considered for debt conversion | 20 days | ||||||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of conversion price | 98.00% | ||||||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Maximum [Member] | Scenario One [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Consecutive trading days considered for debt conversion | 30 days | ||||||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Other Income [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Embedded derivative, gain (loss) reclassified to earnings | $ 39,500,000 | ||||||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Additional Paid-in Capital [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Embedded derivative, amount reclassified to stockholders' equity | $ 49,400,000 |
Stock-Based Compensation, Stock
Stock-Based Compensation, Stock Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | $ 7,077 | $ 8,231 | $ 20,570 | $ 24,779 |
Related income tax benefits | (2,831) | (3,292) | (8,228) | (9,912) |
Stock-based compensation expense, net of taxes | 4,246 | 4,939 | 12,342 | 14,867 |
Sales, Marketing and Administrative Expense [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 6,725 | 7,668 | 19,448 | 23,105 |
Research and development expense [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 288 | 471 | 920 | 1,417 |
Cost of goods sold [Member] | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | $ 64 | $ 92 | $ 202 | $ 257 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unamortized cost related to share-based compensation | $ 44,000,000 | $ 44,000,000 | |||
Weighted average contractual term | 2 years 8 months 12 days | ||||
Employee Stock Purchase Plan Offering Period | 2 years | ||||
Stock options granted | 0 | 0 | 0 | 0 | |
Number of common stock issued to exercise stock options | 700,000 | 2,900,000 | 1,000,000 | ||
Restricted Stock Units (RSUs) [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period for the award | 4 years | ||||
Number of shares of common stock issued upon vesting of RSUs | 100,000 | 1,400,000 | 1,400,000 | ||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share payout levels | 0.00% | 0.00% | |||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share payout levels | 250.00% | 250.00% | |||
Performance Based Restricted Stock Units (PRSUs) [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period for the award | 5 years | ||||
ESPP [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of issuance price of stock under the stock issuance program | 85.00% | ||||
Maximum percentage of annual compensation | 15.00% | 15.00% | |||
Maximum amount withheld to purchase shares of the company | $ 21,250 |
Stock-Based Compensation, Assum
Stock-Based Compensation, Assumptions Table (Details) - ESPP [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Weighted average assumptions used to estimate fair value of stock options granted and stock purchase rights under ESPP | ||||
Volatility | 40.00% | 43.00% | 43.00% | 46.00% |
Expected term (years) | 1 year 3 months 18 days | 1 year 3 months 18 days | 1 year 3 months 18 days | 1 year 3 months 18 days |
Risk free interest rate | 0.20% | 0.20% | 0.20% | 0.20% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 39.00% | ||
Gross unrecognized tax benefit | $ 9,874 | $ 12,372 | $ 4,504 |
Unrecognized tax benefits that would impact effective tax | $ 3,600 |
Income Taxes - Schedule of Gros
Income Taxes - Schedule of Gross Unrecognized Tax Benefits Roll Forward (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Gross unrecognized tax benefits at beginning of period | $ 12,372 | $ 4,504 |
Increases in tax positions for prior years | 270 | 5,294 |
Decreases in tax positions for prior years | (2,944) | |
Increases in tax positions for current year relating to ongoing operations | 176 | 2,574 |
Gross unrecognized tax benefits period end | $ 9,874 | $ 12,372 |
Business Segment, Product and50
Business Segment, Product and Geographic Information (Details Textual) | 9 Months Ended |
Sep. 30, 2015segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Business Segment, Product and51
Business Segment, Product and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Total Revenue | $ 200,538 | $ 189,918 | $ 595,831 | $ 558,090 |
Spine surgery products [Member] | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Total Revenue | 168,168 | 157,286 | 497,194 | 463,132 |
Biologics [Member] | ||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||
Total Revenue | $ 32,370 | $ 32,632 | $ 98,637 | $ 94,958 |
Business Segment, Product and52
Business Segment, Product and Geographic Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Revenues and Net Property and Equipment by Geographical Areas [Line Items] | |||||
Revenue | $ 200,538 | $ 189,918 | $ 595,831 | $ 558,090 | |
Property and equipment, net | 140,474 | 140,474 | $ 128,565 | ||
UNITED STATES | |||||
Revenues and Net Property and Equipment by Geographical Areas [Line Items] | |||||
Revenue | 176,371 | 164,805 | 524,320 | 490,274 | |
Property and equipment, net | 111,979 | 111,979 | 105,022 | ||
International [Member] | |||||
Revenues and Net Property and Equipment by Geographical Areas [Line Items] | |||||
Revenue | 24,167 | $ 25,113 | 71,511 | $ 67,816 | |
Property and equipment, net | $ 28,495 | $ 28,495 | $ 23,543 |
Commitments (Details Textual)
Commitments (Details Textual) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Licensing and Purchasing Agreements [Member] | |
Business Acquisition [Line Items] | |
Obligation under consultancy arrangements | $ 23.3 |
Revenue based milestone period | achieved prior to 2024 |
Total payment for arrangements | $ 6.2 |
Cash payment on purchase of outstanding shares | 3 |
Payment in shares | 3.2 |
Executive Severance Plans [Member] | |
Business Acquisition [Line Items] | |
Commitments future maximum payments, remainder of fiscal year | $ 24.4 |
Contingencies (Details)
Contingencies (Details) | Jul. 20, 2015USD ($) | Dec. 02, 2014USD ($) | Apr. 25, 2013USD ($) | Sep. 20, 2011USD ($)patent | Oct. 31, 2010USD ($) | Aug. 31, 2008patent | Sep. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2015USD ($)patent | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Mar. 02, 2015USD ($) | Sep. 30, 2012USD ($) | Dec. 31, 2011USD ($) |
Loss Contingencies [Line Items] | ||||||||||||||
Litigation accrual adjustment | $ 500,000 | $ 42,507,000 | $ (30,000,000) | |||||||||||
Litigation charge | 2,800,000 | |||||||||||||
Loss contingency, estimate of possible loss | $ 87,600,000 | |||||||||||||
Legal Proceedings (Textual) [Abstract] | ||||||||||||||
Unrecorded royalty damages | 0 | 0 | ||||||||||||
Remaining litigation liability | 937,000 | 937,000 | $ 30,000,000 | |||||||||||
OIG [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Litigation accrual adjustment | 13,800,000 | |||||||||||||
Litigation loss offset | 13,800,000 | |||||||||||||
Legal Proceedings (Textual) [Abstract] | ||||||||||||||
Loss contingency, settlement agreement, consideration | 12,900,000 | |||||||||||||
Remaining litigation liability | 900,000 | 900,000 | ||||||||||||
Medtronic Litigation [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Litigation accrual adjustment | $ 56,400,000 | $ 56,400,000 | ||||||||||||
Number of patents assigned or licensed | patent | 12 | 9 | ||||||||||||
Number of patents withdrawn | patent | 3 | |||||||||||||
Number of patents selected for litigation | patent | 3 | |||||||||||||
Company's patents in initial phase of litigation | patent | 1 | |||||||||||||
Litigation, damages awarded | $ 101,200,000 | |||||||||||||
Loss contingency, settlement agreement, court | On May 15, 2013, the District Court granted the parties’ joint motion to dismiss claims relating to one of the three Medtronic patents pursuant to a settlement agreement, leaving two Medtronic patents remaining in the litigation. On June 11, 2013, the District Court granted the parties ongoing royalties with respect to the two Medtronic patents and the one Company patent remaining in the first phase of the case (the “June 2013 ruling”). | |||||||||||||
Company's cash and investment in escrow | $ 113,300,000 | |||||||||||||
Release of funds from escrow | 114,100,000 | 114,100,000 | ||||||||||||
Litigation liability | $ 101,200,000 | |||||||||||||
Royalty accrual charge | 7,900,000 | |||||||||||||
Legal Proceedings (Textual) [Abstract] | ||||||||||||||
Unrecorded royalty damages | 700,000 | 700,000 | ||||||||||||
Loss contingency, settlement agreement, consideration | $ 7,500,000 | |||||||||||||
Restricted cash | 0 | 0 | ||||||||||||
Trademark Infringement [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Litigation accrual adjustment | $ 2,800,000 | 2,800,000 | ||||||||||||
Company's cash and investment in escrow | $ 32,500,000 | $ 62,500,000 | ||||||||||||
Release of funds from escrow | $ 62,500,000 | |||||||||||||
Litigation liability | 30,000,000 | 30,000,000 | ||||||||||||
Legal Proceedings (Textual) [Abstract] | ||||||||||||||
Loss contingency, settlement agreement, consideration | $ 27,200,000 | 27,200,000 | ||||||||||||
Jury award | $ 60,000,000 | |||||||||||||
Remaining litigation liability | 0 | 0 | ||||||||||||
Restricted cash | $ 0 | $ 0 |
Regulatory Matters (Details Tex
Regulatory Matters (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Jul. 31, 2015 | Dec. 31, 2014 | |
Regulatory Asset [Line Items] | |||||
Liability related to settlement with OIG | $ 500 | $ 42,507 | $ (30,000) | ||
Litigation settlement outstanding amount | 937 | 937 | $ 30,000 | ||
OIG [Member] | |||||
Regulatory Asset [Line Items] | |||||
Liability related to settlement with OIG | 13,800 | ||||
Litigation settlement amount | 12,900 | ||||
Litigation settlement outstanding amount | $ 900 | $ 900 | |||
Definitive settlement agreement payable | $ 13,500 | ||||
Fees and accrued interest | $ 300 |