Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2017 | Feb. 02, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CSII | |
Entity Registrant Name | CARDIOVASCULAR SYSTEMS INC | |
Entity Central Index Key | 1,180,145 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,218,275 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Current assets | ||
Cash and cash equivalents | $ 107,345 | $ 107,912 |
Accounts receivable, net | 27,861 | 28,472 |
Inventories | 17,401 | 16,897 |
Marketable securities | 636 | 704 |
Prepaid expenses and other current assets | 2,556 | 5,074 |
Total current assets | 155,799 | 159,059 |
Property and equipment, net | 28,729 | 29,696 |
Patents, net | 5,386 | 5,056 |
Other assets | 150 | 129 |
Total assets | 190,064 | 193,940 |
Current liabilities | ||
Accounts payable | 9,716 | 10,736 |
Accrued expenses | 22,680 | 30,236 |
Deferred revenue current | 1,095 | 0 |
Total current liabilities | 33,491 | 40,972 |
Long-term liabilities | ||
Financing Obligation, Long Term | 21,088 | 21,100 |
Deferred revenue noncurrent | 8,905 | 10,000 |
Other liabilities | 2,620 | 3,479 |
Total liabilities | 66,104 | 75,551 |
Commitments and contingencies (see Note 7) | ||
Common stock, $0.001 par value; authorized 100,000,000 common shares at December 31, 2017 and June 30, 2017; issued and outstanding 33,213,195 at December 31, 2017 and 32,849,563 at June 30, 2017, respectively | 33 | 33 |
Additional paid in capital | 455,508 | 447,559 |
Accumulated other comprehensive income | 112 | 100 |
Accumulated deficit | (331,693) | (329,303) |
Total stockholders’ equity | 123,960 | 118,389 |
Total liabilities and stockholders’ equity | $ 190,064 | $ 193,940 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Dec. 31, 2017 | Jun. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,213,195 | 32,849,563 |
Common stock, shares outstanding | 33,213,195 | 32,849,563 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||||
Net revenues | $ 52,628 | $ 50,043 | $ 102,304 | $ 99,843 |
Cost of goods sold | 9,499 | 9,163 | 18,701 | 18,629 |
Gross profit | 43,129 | 40,880 | 83,603 | 81,214 |
Expenses: | ||||
Selling, general and administrative | 37,008 | 33,993 | 72,926 | 70,859 |
Research and development | 6,396 | 5,805 | 12,704 | 11,140 |
Total expenses | 43,404 | 39,798 | 85,630 | 81,999 |
Income (loss) from operations | (275) | 1,082 | (2,027) | (785) |
Interest Expense | 430 | 46 | 862 | 46 |
Interest and Other Income | (325) | (31) | (565) | (64) |
Total other (income) expense, net | 105 | 15 | 297 | (18) |
Loss before income taxes | (380) | 1,067 | (2,324) | (767) |
Provision for income taxes | 33 | 24 | 66 | 48 |
Net income (loss) | $ (413) | $ 1,043 | $ (2,390) | $ (815) |
Basic earnings per share | ||||
Earnings Per Share, Basic | $ (0.01) | $ 0.03 | $ (0.07) | $ (0.03) |
Earnings Per Share, Diluted | $ (0.01) | $ 0.03 | $ (0.07) | $ (0.03) |
Basic weighted average shares outstanding | ||||
Weighted Average Number of Shares Outstanding, Basic | 33,112,138 | 32,189,981 | 33,040,425 | 32,060,973 |
Weighted average common shares outstanding – diluted | 33,112,138 | 32,804,305 | 33,040,425 | 32,060,973 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (2,390) | $ (815) |
Adjustments to reconcile net loss to net cash used in operations | ||
Depreciation of property and equipment | 1,988 | 1,940 |
Amortization and write-off of patents | 128 | 831 |
Provision for (recovery of) doubtful accounts | (93) | 190 |
Stock-based compensation | 5,740 | 5,933 |
Changes in assets and liabilities | ||
Accounts receivable | 561 | (2,460) |
Inventories | (504) | 1,271 |
Prepaid expenses and other assets | 2,792 | 1,936 |
Accounts payable | (608) | (1,028) |
Accrued expenses and other liabilities | (8,439) | (3,976) |
Deferred revenue | 0 | 10,000 |
Net cash (used in) provided by operating activities | (825) | 13,822 |
Cash flows from investing activities | ||
Purchases of property and equipment | (1,269) | (481) |
Proceeds from Collection of Notes Receivable | 143 | 0 |
Sales of marketable securities | 96 | 0 |
Costs incurred in connection with patents | (622) | (375) |
Net cash used in investing activities | (1,652) | (856) |
Cash flows from financing activities | ||
Proceeds from Stock Plans | 1,385 | 1,400 |
Exercise of stock options | 513 | 4,275 |
Proceeds from (Payments for) Other Financing Activities | 12 | 0 |
Net cash provided by financing activities | 1,910 | 5,675 |
Net change in cash and cash equivalents | (567) | 18,641 |
Cash and cash equivalents | ||
Beginning of period | 107,912 | 60,638 |
End of period | $ 107,345 | $ 79,279 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (413) | $ 1,043 | $ (2,390) | $ (815) |
Other comprehensive income: | ||||
Unrealized gain on available for sale securities | 16 | 16 | 28 | 37 |
Adjustment for net gain realized and included in other income, net | (8) | 0 | (16) | 0 |
Total change in unrealized gain on available for sale securities | 8 | 16 | 12 | 37 |
Comprehensive income (loss) | $ (405) | $ 1,059 | $ (2,378) | $ (778) |
Business Overview
Business Overview | 6 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview | 1. Business Overview Company Description Cardiovascular Systems, Inc. (the “Company”) develops, manufactures and markets devices for the treatment of vascular diseases. The Company’s peripheral arterial disease (“PAD”) products, the Diamondback 360 ® Peripheral Orbital Atherectomy System (“OAS”) and the Stealth 360° ® Peripheral OAS, are catheter-based platforms capable of treating a broad range of plaque types, including calcified plaque, in leg arteries both above and below the knee, and these products address many of the limitations associated with other surgical, catheter and pharmacological treatment alternatives. These devices use smaller access sheaths that can provide procedural benefits and allow physicians to treat PAD patients in a variety of vessel sizes, including the small and tortuous vessels located below the knee, and facilitate access through alternative sites in the ankle, foot and wrist, as well as in the groin. In October 2013, the Company received premarket approval from the United States Food and Drug Administration (“FDA”) to market the Diamondback 360 Coronary OAS (the “Coronary OAS”) as a treatment for severely calcified coronary arteries. In March 2017, the Company received approval from the FDA to market the Diamondback 360 Coronary OAS Micro Crown (the “Coronary OAS Micro Crown”). The Coronary OAS Micro Crown is the only atherectomy device designed to both pilot tight, calcific lesions and treat 2.5 to 4 mm vessels with a single device. Until February 2018, the Company sold its products only in the United States. In November 2016, the Company signed an exclusive distribution agreement with Medikit Co., Ltd. (“Medikit”) to sell its Coronary and Peripheral OAS in Japan. In March 2017, the Company received approval from Japan’s Ministry of Health, Labor and Welfare for its Coronary OAS Micro Crown. On February 1, 2018, the Coronary OAS Micro Crown received reimbursement approval in Japan, followed by the first commercial sales, making Japan the first international market for any of the Company’s products. The Company is currently evaluating options for additional international markets to expand the coronary and peripheral opportunities. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Interim Financial Statements The Company prepared the unaudited interim consolidated financial statements and related unaudited financial information in the footnotes in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. The year-end consolidated balance sheet was derived from the Company’s audited consolidated financial statements, but does not include all disclosures as required by GAAP. These interim consolidated financial statements reflect all adjustments consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the Company’s consolidated financial position, the results of its operations and its cash flows for the interim periods. These interim consolidated financial statements should be read in conjunction with the consolidated annual financial statements and the notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC on August 24, 2017. The nature of the Company’s business is such that the results of any interim period may not be indicative of the results to be expected for the entire year. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Stock-Based Compensation The Company has stock-based compensation plans, which include stock options, nonvested share awards, and an employee stock purchase plan. Fair value of option awards is determined using option-pricing models, fair value of nonvested share awards with market conditions is determined using the Monte Carlo simulation, and fair value of nonvested share awards that vest based upon service conditions is determined by the closing market price of the Company’s stock on the date of grant. Stock-based compensation expense is recognized ratably over the requisite service period for the awards expected to vest. Revenue Recognition The Company sells the majority of its products via direct shipment to hospitals or clinics. The Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the sales price is fixed or determinable; and collectability is reasonably assured. Revenue recognition may occur upon shipment or upon delivery to the customer site, based on the contract terms. The Company records estimated sales returns, discounts and rebates as a reduction of net sales. Deferred revenue associated with the upfront payment received under the Company’s Japan distribution agreement (see Note 3 for additional details) will be recognized in relation to the estimated future sales under the agreement. The short term portion represents the expected amount of deferred revenue that will be recognized over the next year. The estimate of future sales under contract will continue to be assessed and adjusted accordingly. Costs related to products delivered are recognized in the period revenue is recognized. Cost of goods sold consists primarily of raw materials, direct labor, and manufacturing overhead. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The Company is currently in the process of analyzing the impact of the new standard, which includes reviewing customer contracts, applying the five-step model of the new standard to the customer contracts and comparing the results to the Company’s current accounting. The Company is also evaluating the method of adoption and assessing changes that might be necessary to information technology systems, processes, and internal controls to capture new data and address changes in financial reporting. Effective July 1, 2018, the Company will be revising its revenue recognition accounting policy and expanding revenue disclosures to reflect the requirements of the amended revenue recognition guidance. Because of the nature of the work that remains, at this time the Company is unable to reasonably estimate the impact of adoption on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which revises the accounting requirements related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The update also changes certain disclosure requirements associated with the fair value of financial instruments. These changes will require an entity to measure, at fair value, investments in equity securities and recognize the changes in fair value within net income. ASU 2016-01 will be applied on a modified retrospective basis to all outstanding instruments, with an adjustment recorded to opening retained earnings as of the beginning of the first period in which the guidance becomes effective. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The guidance is effective for the Company on July 1, 2018. The Company does not anticipate a material impact on its financial statements upon adoption. In February 2016, the FASB issued ASU 2016-02, “Leases.” The guidance requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, and should be applied using a modified retrospective approach. Early adoption is permitted. The guidance is effective for the Company on July 1, 2019. The Company is currently evaluating the timing, method of adoption and impact of the new lease guidance on its financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments,” which revises guidance for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted and should be applied as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The guidance is effective for the Company on July 1, 2020. The Company does not anticipate a material impact on its financial statements upon adoption. In May 2017, the FASB issued ASU 2017-09, “Scope of Modification Accounting,” which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance is effective for annual periods, and interim periods within those annual periods beginning after December 15, 2017, with early adoption permitted. The guidance is effective for the Company on July 1, 2018. The Company does not anticipate a material impact on its financial statements upon adoption. |
Selected Consolidated Financial
Selected Consolidated Financial Statement Information | 6 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Consolidated Financial Statement Information | 3. Selected Consolidated Financial Statement Information Accounts Receivable, Net Accounts receivable consists of the following: December 31, June 30, 2017 2017 Accounts receivable $ 28,687 $ 29,336 Less: Allowance for doubtful accounts (826 ) (864 ) Accounts receivable, net $ 27,861 $ 28,472 Inventories Inventories consist of the following: December 31, June 30, 2017 2017 Raw materials $ 9,234 $ 7,898 Work in process 771 1,221 Finished goods 7,396 7,778 Inventories $ 17,401 $ 16,897 Property and Equipment, Net Property and equipment consists of the following: December 31, June 30, 2017 2017 Land $ 500 $ 500 Building 22,420 22,420 Equipment 16,991 16,502 Furniture 2,709 2,709 Leasehold improvements 438 86 Construction in progress 601 421 43,659 42,638 Less: Accumulated depreciation (14,930 ) (12,942 ) Property and equipment, net $ 28,729 $ 29,696 In December, 2016, the Company entered into a Purchase and Sale Agreement, as subsequently amended (collectively, the “Sale Agreement”), with Krishna Holdings, LLC (“Krishna”), providing for the sale to Krishna of the Company’s headquarters facility in St. Paul, Minnesota (the “Facility”) for a cash purchase price of $21,500 . On March 30, 2017, the sale of the Facility under the Sale Agreement closed. The Company received proceeds of approximately $ 20,944 ($21,500, less $556 of transaction expenses). The net proceeds are to be used for working capital and general corporate purposes. Under the Sale Agreement, the Company entered into a Lease Agreement (the “Lease Agreement”) with Krishna Holdings, LLC, Apex Holdings, LLC, Kashi Associates, LLC, Keva Holdings, LLC, S&V Ventures, LLC, Polo Group LLC, SPAV Holdings LLC, Star Associates LLC, and The Global Villa, LLC. As the lease terms resulted in a capital lease classification, the Company accounted for the sale and leaseback of the Facility as a financing transaction where the assets remain on the Company’s balance sheet. See Note 4 for further discussion of future payment obligations under the Lease Agreement. Accrued Expenses Accrued expenses consist of the following: December 31, June 30, 2017 2017 Salaries and bonus $ 6,064 $ 8,247 Commissions 5,600 8,217 Accrued vacation 3,552 3,436 Accrued excise, sales and other taxes 3,407 3,497 Accrued legal — 2,600 Legal settlement 1,831 1,814 Clinical studies 456 657 Other accrued expenses 1,770 1,768 Accrued expenses $ 22,680 $ 30,236 Legal Settlement On June 28, 2016, the Company entered into a Settlement Agreement (the “Settlement Agreement”) with the United States of America, acting through the Department of Justice (the “DOJ”) and on behalf of the Office of Inspector General of the Department of Health and Human Services, and Travis Thams, to resolve the previously disclosed DOJ investigation and the qui tam complaint filed by Thams pursuant to the False Claims Act. Under the Settlement Agreement, the Company agreed to pay $8,000 (the “Settlement Amount”), as follows: an initial payment of $3,000 , paid on July 1, 2016, with the remaining $5,000 , which bears interest at 1.8% per annum, payable in 11 equal quarterly installments, beginning January 1, 2017. The amount payable within the next twelve months is included in accrued expenses (as noted in the table above) with the long-term portion included in other liabilities (as noted in the table below). Under the Settlement Agreement, if the Company makes a single payment in excess of $2,000 , which payment is not covered by an insurance policy, in settlement of any claims before paying the full Settlement Amount, the remaining unpaid balance of the Settlement Amount will become immediately due and payable, with interest accruing on the unpaid principal portion at an interest rate of 1.8% per annum. Other Liabilities Other non-current liabilities consist of the following: December 31, June 30, 2017 2017 Legal settlement $ 1,395 $ 2,314 Deferred compensation 440 519 Deferred grant incentive 467 473 Other non-current liabilities 318 173 Other liabilities $ 2,620 $ 3,479 Deferred Revenue In November 2016, the Company signed an exclusive distribution agreement with Medikit to sell its Diamondback 360 ® Coronary and Peripheral OAS in Japan. To secure exclusive distribution rights, Medikit made an upfront payment of $10,000 to the Company, which is refundable based on performance under the terms of the agreement. On February 1, 2018, the Coronary OAS Micro Crown received reimbursement approval in Japan, followed by the first commercial sales. Accordingly, the Company has classified $1,095 of the upfront payment as current and $8,905 as long-term based on its expected amount of deferred revenue that will be recognized over the next year. The estimate will be assessed and adjusted accordingly on a quarterly basis. |
Debt
Debt | 6 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 4. Debt Revolving Credit Facility In March 2017, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (“SVB”). The Loan Agreement provides for a senior, secured revolving credit facility (the “Revolver”) of $40,000 (the “Maximum Dollar Amount”). Advances under the Revolver may be made from time to time up to the Maximum Dollar Amount, subject to certain borrowing limitations. The Revolver has a maturity date of March 31, 2020 and bears interest at a floating per annum rate equal to the Wall Street Journal prime rate, less 0.25% . Interest on borrowings is due monthly and the principal balance is due at maturity. Borrowings up to $10,000 are available on a non-formula basis. Borrowings above $10,000 are based on (i) 85% of eligible domestic accounts receivable, and (ii) the lesser of 50% of eligible inventory or $5,000 , subject to adjustment as defined in Loan Agreement. Upon the Revolver’s maturity, any outstanding principal balance, unpaid accrued interest, and all other obligations under the Revolver will be due and payable. The Company will incur a fee equal to 1% of the Maximum Dollar Amount upon termination of the Loan Agreement or the Revolver for any reason prior to the maturity date, unless refinanced with SVB. The Company’s obligations under the Loan Agreement are secured by certain of the Company’s assets, including, among other things, accounts receivable, deposit accounts, inventory, equipment, general intangibles and records pertaining to the foregoing. The collateral does not include the Company’s intellectual property, but the Company has agreed not to encumber its intellectual property without the consent of SVB. The Loan Agreement contains customary covenants limiting the Company’s ability to, among other things, incur debt or liens, make certain investments and loans, enter into transactions with affiliates, undergo certain fundamental changes, dispose of assets, or change the nature of its business. In addition, the Loan Agreement contains financial covenants requiring the Company to maintain, at all times when any amounts are outstanding under the Revolver, either (i) minimum unrestricted cash at SVB and unused availability on the Revolver of at least $10,000 or (ii) minimum trailing three-month Adjusted EBITDA of $1,000 . If the Company does not comply with the various covenants under the Loan Agreement, the interest rate on outstanding amounts will increase by 5% and SVB may, subject to various customary cure rights, decline to provide additional advances under the Revolver, require the immediate payment of all amounts outstanding under the Revolver, and foreclose on all collateral. Under the Loan Agreement, the Company paid SVB a non-refundable commitment fee of $80 , which will be amortized to interest expense over the term of the Loan Agreement. The Company is required to pay a fee equal to 0.35% per annum on the unused portion of the Revolver, payable quarterly in arrears. The Company is not obligated to draw any funds under the Revolver and has not done so under the Revolver since entering into the Loan Agreement. No amounts are outstanding as of December 31, 2017 . Financing Obligation In connection with the sale of the Facility, the Company entered into an agreement to lease the Facility. The Lease Agreement has an initial term of fifteen years, with four consecutive renewal options of five years each at the Company’s option, with a base annual rent in the first year of $1,638 and annual escalations of 3% thereafter. Rent during subsequent renewal terms will be at the then fair market rental rate. As the lease terms resulted in a capital lease classification, the Company accounted for the sale and leaseback of the Facility as a financing transaction where the assets remain on the Company’s balance sheet and a financing obligation was recorded for $20,944 . As lease payments are made, they will be allocated between interest expense and a reduction of the financing obligation, resulting in a value of the financing obligation that is equivalent to the net book value of the assets at the end of the lease term. The effective interest rate is 7.89% . At the end of the lease (including any renewal option terms), the Company will remove the assets and financing obligation from its balance sheet. Payments under the initial term of the Lease Agreement as of December 31, 2017 are as follows: Six months ended June 30, 2018 $ 831 Fiscal 2019 1,699 Fiscal 2020 1,750 Fiscal 2021 1,803 Fiscal 2022 1,857 Thereafter 21,288 $ 29,228 |
Deferred Compensation Plan
Deferred Compensation Plan | 6 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Deferred Compensation Plan | 5. Deferred Compensation Plan The Company offers certain members of management and highly compensated employees the opportunity to defer up to 100% of their base salary (after 401(k), payroll tax and other deductions), performance bonus and discretionary bonus and elect to receive the deferred compensation at a fixed future date of participant’s choosing. Each participant may, at the time of his or her deferral election, choose to allocate the deferred compensation into investment alternatives set by the Human Resources and Compensation Committee. The amount payable to each participant under the plan will change in value based upon the investment selected by that participant and is classified as current or long-term on the Company’s balance sheet based on the disbursement elections made by the participants. As of December 31, 2017 , $196 of the amount payable is included in accrued liabilities and $440 is included in other liabilities on the consolidated balance sheet. The available-for-sale marketable securities are comprised of individual mutual funds which invest in fixed income and equity securities and consist of the following: As of December 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Mutual funds $ 524 $ 112 $ — $ 636 Total short-term investments $ 524 $ 112 $ — $ 636 As of June 30, 2017 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Mutual funds $ 604 $ 100 $ — $ 704 Total short-term investments $ 604 $ 100 $ — $ 704 During the three and six months ended December 31, 2017 and 2016 , there were no purchases of available-for-sale securities or other-than-temporary impairments. There was $49 and $96 of available-for-sale securities that were sold during the three and six months ended December 31, 2017 , respectively. There were no sales during the three and six months ended December 31, 2016 . During the three and six months ended December 31, 2017 , there was a realized gain of $8 and $16 , respectively, that was recorded within interest and other, net on the consolidated statement of operations. There were no realized gains or losses in the three and six months ended December 31, 2016 . The following table provides information by level for the Company’s available-for-sale marketable securities that were measured at fair value on a recurring basis: Fair Value Measurements as of December 31, 2017 Using Inputs Considered as Fair Value Level 1 Level 2 Level 3 Mutual funds $ 636 $ 252 $ 384 $ — Total short-term investments $ 636 $ 252 $ 384 $ — Fair Value Measurements as of June 30, 2017 Using Inputs Considered as Fair Value Level 1 Level 2 Level 3 Mutual funds $ 704 $ 281 $ 423 $ — Total short-term investments $ 704 $ 281 $ 423 $ — The Company’s marketable securities classified within Level 1 are valued using real-time quotes for transactions in active exchange markets. Marketable securities within Level 2 are valued using readily available pricing sources. There were no transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy during the six months ended December 31, 2017 . Any transfers between levels would be recognized on the date of the event or when a change in circumstances causes a transfer. |
Stock Options and Restricted St
Stock Options and Restricted Stock Awards | 6 Months Ended |
Dec. 31, 2017 | |
Share-based Arrangements with Employees and Nonemployees [Abstract] | |
Stock Options and Restricted Stock Awards | 6. Stock Options and Restricted Stock Awards On November 15, 2017, the Company’s stockholders approved the 2017 Equity Incentive Plan (the “2017 Plan”), for the purpose of granting equity awards to employees, directors and consultants. The 2017 Plan replaced the 2014 Equity Incentive Plan (the “2014 Plan”), and no further equity awards may be granted under the 2014 Plan or the 2007 Equity Incentive Plan (the “2007 Plan”) (the 2017 Plan, 2014 Plan and the 2007 Plan are collectively referred to as the “Plans”). Stock Options All options granted under the Plans become exercisable over periods established at the date of grant. The option exercise price is generally not less than the estimated fair market value of the Company’s common stock at the date of grant, as determined by the Company’s management and Board of Directors. An employee’s vested options must be exercised at or within 90 days of termination to avoid forfeiture. As of December 31, 2017 , all outstanding options were fully vested. Stock option activity for the six months ended December 31, 2017 is as follows: Number of Options (a) Weighted Average Exercise Price Options outstanding at June 30, 2017 78,201 $ 9.07 Options exercised (55,880 ) $ 9.20 Options outstanding at December 31, 2017 22,321 $ 8.75 (a) Includes the effect of options granted, exercised, forfeited or expired from the 2007 Plan. Restricted Stock The value of each restricted stock award is equal to the fair market value of the Company’s common stock at the date of grant. Vesting of time-based restricted stock awards ranges from one to three years . The estimated fair value of restricted stock awards, including the effect of estimated forfeitures, is recognized on a straight-line basis over the restricted stock’s vesting period. Restricted stock award activity for the six months ended December 31, 2017 is as follows: Number of Shares Weighted Average Fair Value Outstanding at June 30, 2017 486,584 $ 21.26 Granted 209,796 $ 29.64 Forfeited (39,545 ) $ 21.46 Vested (197,052 ) $ 22.74 Outstanding at December 31, 2017 459,783 $ 24.43 Performance-Based Restricted Stock The Company also grants performance-based restricted stock awards to certain executives and other management. In August and November 2017, the Company granted an aggregate maximum of 251,479 and 27,140 shares, respectively, that vest based on the Company’s total shareholder return relative to total shareholder return of the Company’s peer group (a market condition), as measured by the closing prices of the stock of the Company and the peer group members for the 90 trading days preceding July 1, 2017 compared to the closing prices of the stock of the Company and the peer group members for the 90 trading days preceding July 1, 2020. Vesting of these awards will be determined on the date that the Company’s Annual Report on Form 10-K for the fiscal year ending June 30, 2020 is filed. To calculate the estimated fair value of these restricted stock awards with market conditions, the Company uses a Monte Carlo simulation, which uses the expected average stock prices to estimate the expected number of shares that will vest. The Monte Carlo simulation resulted in an aggregate fair value of approximately $3,801 , which the Company will recognize as expense using the straight-line method over the period that the awards are expected to vest. Stock-based compensation expense related to an award with a market condition will be recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided. Performance-based restricted stock awards granted in August 2016 that are outstanding vest based on the Company’s total shareholder return relative to total shareholder return of the Company’s peer group (a market condition), as measured by the closing prices of the stock of the Company and the peer group members for the 90 trading days preceding July 1, 2016 compared to the closing prices of the stock of the Company and the peer group members for the 90 trading days preceding July 1, 2019. Performance-based restricted stock award activity for the six months ended December 31, 2017 is as follows: Number of Shares Weighted Average Fair Value Outstanding at June 30, 2017 318,584 $ 11.97 Granted 278,889 $ 13.63 Forfeited (11,641 ) $ 12.73 Outstanding at December 31, 2017 585,832 $ 12.75 |
Commitment and Contingencies
Commitment and Contingencies | 6 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitment and Contingencies Operating Leases The Company leases manufacturing space, equipment and apartments under lease agreements that expire at various dates through March 2020 . Rental expenses were $177 and $149 for the three months ended December 31, 2017 and 2016 , respectively, and $339 and $321 for the six months ended December 31, 2017 and 2016 , respectively. Future minimum lease payments under the agreements as of December 31, 2017 are as follows: Six months ended June 30, 2018 $ 250 Fiscal 2019 472 Fiscal 2020 354 $ 1,076 Employment Litigation With respect to Steven Babyak v. Cardiovascular Systems, Inc. described in Note 8 of the notes to the consolidated annual financial statements included in the Annual Report on Form 10-K filed by the Company with the SEC on August 24, 2017 and in Note 7 of the notes to the consolidated (unaudited) financial statements included in the Quarterly Report on Form 10-Q filed by the Company with the SEC on November 3, 2017, effective October 24, 2017, the Company entered into a Settlement Agreement with Mr. Babyak that settled all disputes and releases all claims between the Company and Mr. Babyak. The Company paid all amounts due under the Settlement Agreement in the three months ended December 31, 2017. Stockholder Securities Litigation With respect to Shoemaker v. Cardiovascular Systems, Inc. et al. , 0:16-cv-00568 (D. Minn.) described in Note 8 of the notes to the consolidated annual financial statements included in the Annual Report on Form 10-K filed by the Company with the SEC on August 24, 2017 and in Note 7 of the notes to the consolidated (unaudited) financial statements included in the Quarterly Report on Form 10-Q filed by the Company with the SEC on November 3, 2017, the Company filed a motion to dismiss the plaintiffs’ amended complaint on August 11, 2017. On January 10, 2018, the court granted the Company’s motion to dismiss the amended complaint and dismissed the amended complaint with prejudice. Other Matters In the ordinary conduct of business, the Company is subject to various lawsuits and claims covering a wide range of matters including, but not limited to, employment claims and commercial disputes. While the outcome of these matters is uncertain, the Company does not believe there are any significant matters as of December 31, 2017 that are probable or estimable, for which the outcome could have a material adverse impact on its consolidated balance sheets or statements of operations. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 8. Earnings Per Share The following table presents a reconciliation of the numerators and denominators used in the basic and diluted earnings per common share computations (in thousands except share and per share amounts): Three Months Ended Six Months Ended 2017 2016 2017 2016 Numerator Net income (loss) $ (413 ) $ 1,043 $ (2,390 ) $ (815 ) Income allocated to participating securities — (18 ) — — Net income (loss) available to common stockholders $ (413 ) $ 1,025 $ (2,390 ) $ (815 ) Denominator Weighted average common shares outstanding – basic 33,112,138 32,189,981 33,040,425 32,060,973 Effect of dilutive stock options (1) — 111,874 — — Effect of dilutive restricted stock units (2) — 313,820 — — Effect of performance-based restricted stock awards (3) — 188,630 — — Weighted average common shares outstanding – diluted 33,112,138 32,804,305 33,040,425 32,060,973 Earnings per common share – basic $ (0.01 ) $ 0.03 $ (0.07 ) $ (0.03 ) Earnings per common share – diluted $ (0.01 ) $ 0.03 $ (0.07 ) $ (0.03 ) (1) At December 31, 2017 and 2016, 22,321 and 181,040 stock options were outstanding, respectively. The effect of the shares that would be issued upon exercise of these options has been excluded from the calculation of diluted loss per share, for the three and six months ended December 31, 2017 and six months ended December 31, 2016, because those shares are anti-dilutive. (2) At December 31, 2017 and 2016, 335,869 and 350,771 additional shares of common stock, respectively, were issuable upon the settlement of outstanding restricted stock units. The effect of the shares that would be issued upon settlement of these restricted stock units has been excluded from the calculation of diluted loss per share, for the three and six months ended December 31, 2017 and six months ended December 31, 2016, because those shares are anti-dilutive. (3) At December 31, 2017 and 2016, 585,832 and 336,826 performance-based restricted stock awards, respectively, were outstanding. The effect of the shares that would be issued upon vesting of these awards has been excluded from the calculation of diluted loss per share, for the three and six months ended December 31, 2017 and six months ended December 31, 2016, because those shares are anti-dilutive. Unvested time-based restricted stock awards that contain nonforfeitable rights to dividends are participating securities and included in the computation of earnings per share pursuant to the two-class method. Under this method, earnings attributable to the Company are allocated between common stockholders and the participating awards, as if the awards were a second class of stock. During periods of net income, the calculation of earnings per share excludes the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. In the event of a net loss, undistributed earnings are not allocated to participating securities and the denominator excludes the dilutive impact of these securities as they do not share in the losses of the Company. During the three months ended December 31, 2016, undistributed earnings allocated to participating securities were based on 573,016 time-based restricted stock awards. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 9. Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law. Among other provisions, the Tax Act will lower the Federal statutory corporate income tax rate from 35% to 21% . Under ASC 740, Accounting for Income Taxes , the enactment of the Tax Act requires companies to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. The Company has reviewed the provisions that will impact the Company, however, given that its deferred tax assets are offset by a full valuation allowance, the Company does not expect these changes to have a net impact on its financial position and net loss after the revaluation. There is no change to the Company’s assertion on maintaining a full valuation allowance against its deferred tax assets. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | Interim Financial Statements The Company prepared the unaudited interim consolidated financial statements and related unaudited financial information in the footnotes in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. The year-end consolidated balance sheet was derived from the Company’s audited consolidated financial statements, but does not include all disclosures as required by GAAP. These interim consolidated financial statements reflect all adjustments consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the Company’s consolidated financial position, the results of its operations and its cash flows for the interim periods. These interim consolidated financial statements should be read in conjunction with the consolidated annual financial statements and the notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC on August 24, 2017. The nature of the Company’s business is such that the results of any interim period may not be indicative of the results to be expected for the entire year. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Stock-Based Compensation | Stock-Based Compensation The Company has stock-based compensation plans, which include stock options, nonvested share awards, and an employee stock purchase plan. Fair value of option awards is determined using option-pricing models, fair value of nonvested share awards with market conditions is determined using the Monte Carlo simulation, and fair value of nonvested share awards that vest based upon service conditions is determined by the closing market price of the Company’s stock on the date of grant. Stock-based compensation expense is recognized ratably over the requisite service period for the awards expected to vest. |
Revenue Recognition | Revenue Recognition The Company sells the majority of its products via direct shipment to hospitals or clinics. The Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the sales price is fixed or determinable; and collectability is reasonably assured. Revenue recognition may occur upon shipment or upon delivery to the customer site, based on the contract terms. The Company records estimated sales returns, discounts and rebates as a reduction of net sales. Deferred revenue associated with the upfront payment received under the Company’s Japan distribution agreement (see Note 3 for additional details) will be recognized in relation to the estimated future sales under the agreement. The short term portion represents the expected amount of deferred revenue that will be recognized over the next year. The estimate of future sales under contract will continue to be assessed and adjusted accordingly. Costs related to products delivered are recognized in the period revenue is recognized. Cost of goods sold consists primarily of raw materials, direct labor, and manufacturing overhead. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The Company is currently in the process of analyzing the impact of the new standard, which includes reviewing customer contracts, applying the five-step model of the new standard to the customer contracts and comparing the results to the Company’s current accounting. The Company is also evaluating the method of adoption and assessing changes that might be necessary to information technology systems, processes, and internal controls to capture new data and address changes in financial reporting. Effective July 1, 2018, the Company will be revising its revenue recognition accounting policy and expanding revenue disclosures to reflect the requirements of the amended revenue recognition guidance. Because of the nature of the work that remains, at this time the Company is unable to reasonably estimate the impact of adoption on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which revises the accounting requirements related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The update also changes certain disclosure requirements associated with the fair value of financial instruments. These changes will require an entity to measure, at fair value, investments in equity securities and recognize the changes in fair value within net income. ASU 2016-01 will be applied on a modified retrospective basis to all outstanding instruments, with an adjustment recorded to opening retained earnings as of the beginning of the first period in which the guidance becomes effective. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The guidance is effective for the Company on July 1, 2018. The Company does not anticipate a material impact on its financial statements upon adoption. In February 2016, the FASB issued ASU 2016-02, “Leases.” The guidance requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, and should be applied using a modified retrospective approach. Early adoption is permitted. The guidance is effective for the Company on July 1, 2019. The Company is currently evaluating the timing, method of adoption and impact of the new lease guidance on its financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments,” which revises guidance for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted and should be applied as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The guidance is effective for the Company on July 1, 2020. The Company does not anticipate a material impact on its financial statements upon adoption. In May 2017, the FASB issued ASU 2017-09, “Scope of Modification Accounting,” which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance is effective for annual periods, and interim periods within those annual periods beginning after December 15, 2017, with early adoption permitted. The guidance is effective for the Company on July 1, 2018. The Company does not anticipate a material impact on its financial statements upon adoption. |
Selected Consolidated Financi17
Selected Consolidated Financial Statement Information (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Accounts Receivable | December 31, June 30, 2017 2017 Accounts receivable $ 28,687 $ 29,336 Less: Allowance for doubtful accounts (826 ) (864 ) Accounts receivable, net $ 27,861 $ 28,472 |
Schedule of Inventory | December 31, June 30, 2017 2017 Raw materials $ 9,234 $ 7,898 Work in process 771 1,221 Finished goods 7,396 7,778 Inventories $ 17,401 $ 16,897 |
Schedule of Property and Equipment | December 31, June 30, 2017 2017 Land $ 500 $ 500 Building 22,420 22,420 Equipment 16,991 16,502 Furniture 2,709 2,709 Leasehold improvements 438 86 Construction in progress 601 421 43,659 42,638 Less: Accumulated depreciation (14,930 ) (12,942 ) Property and equipment, net $ 28,729 $ 29,696 |
Schedule of Accrued Expenses | December 31, June 30, 2017 2017 Salaries and bonus $ 6,064 $ 8,247 Commissions 5,600 8,217 Accrued vacation 3,552 3,436 Accrued excise, sales and other taxes 3,407 3,497 Accrued legal — 2,600 Legal settlement 1,831 1,814 Clinical studies 456 657 Other accrued expenses 1,770 1,768 Accrued expenses $ 22,680 $ 30,236 |
Schedule of Other Liabilities | December 31, June 30, 2017 2017 Legal settlement $ 1,395 $ 2,314 Deferred compensation 440 519 Deferred grant incentive 467 473 Other non-current liabilities 318 173 Other liabilities $ 2,620 $ 3,479 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of future minimum lease payments | Payments under the initial term of the Lease Agreement as of December 31, 2017 are as follows: Six months ended June 30, 2018 $ 831 Fiscal 2019 1,699 Fiscal 2020 1,750 Fiscal 2021 1,803 Fiscal 2022 1,857 Thereafter 21,288 $ 29,228 |
Deferred Compensation Plan (Tab
Deferred Compensation Plan (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of Investments | As of December 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Mutual funds $ 524 $ 112 $ — $ 636 Total short-term investments $ 524 $ 112 $ — $ 636 As of June 30, 2017 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Mutual funds $ 604 $ 100 $ — $ 704 Total short-term investments $ 604 $ 100 $ — $ 704 |
Schedule of Available-for-sale Marketable Securities at Fair Value on Recurring Basis | The following table provides information by level for the Company’s available-for-sale marketable securities that were measured at fair value on a recurring basis: Fair Value Measurements as of December 31, 2017 Using Inputs Considered as Fair Value Level 1 Level 2 Level 3 Mutual funds $ 636 $ 252 $ 384 $ — Total short-term investments $ 636 $ 252 $ 384 $ — Fair Value Measurements as of June 30, 2017 Using Inputs Considered as Fair Value Level 1 Level 2 Level 3 Mutual funds $ 704 $ 281 $ 423 $ — Total short-term investments $ 704 $ 281 $ 423 $ — |
Stock Options and Restricted 20
Stock Options and Restricted Stock Awards (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Share-based Arrangements with Employees and Nonemployees [Abstract] | |
Stock Option Activity | Number of Options (a) Weighted Average Exercise Price Options outstanding at June 30, 2017 78,201 $ 9.07 Options exercised (55,880 ) $ 9.20 Options outstanding at December 31, 2017 22,321 $ 8.75 (a) Includes the effect of options granted, exercised, forfeited or expired from the 2007 Plan. |
Restricted Stock Award Activity | Number of Shares Weighted Average Fair Value Outstanding at June 30, 2017 486,584 $ 21.26 Granted 209,796 $ 29.64 Forfeited (39,545 ) $ 21.46 Vested (197,052 ) $ 22.74 Outstanding at December 31, 2017 459,783 $ 24.43 |
Performance Based RSA Activity | Number of Shares Weighted Average Fair Value Outstanding at June 30, 2017 318,584 $ 11.97 Granted 278,889 $ 13.63 Forfeited (11,641 ) $ 12.73 Outstanding at December 31, 2017 585,832 $ 12.75 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating Leases | Six months ended June 30, 2018 $ 250 Fiscal 2019 472 Fiscal 2020 354 $ 1,076 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerators and Denominators Used in Basic and Diluted Earnings Per Common Share Computations | The following table presents a reconciliation of the numerators and denominators used in the basic and diluted earnings per common share computations (in thousands except share and per share amounts): Three Months Ended Six Months Ended 2017 2016 2017 2016 Numerator Net income (loss) $ (413 ) $ 1,043 $ (2,390 ) $ (815 ) Income allocated to participating securities — (18 ) — — Net income (loss) available to common stockholders $ (413 ) $ 1,025 $ (2,390 ) $ (815 ) Denominator Weighted average common shares outstanding – basic 33,112,138 32,189,981 33,040,425 32,060,973 Effect of dilutive stock options (1) — 111,874 — — Effect of dilutive restricted stock units (2) — 313,820 — — Effect of performance-based restricted stock awards (3) — 188,630 — — Weighted average common shares outstanding – diluted 33,112,138 32,804,305 33,040,425 32,060,973 Earnings per common share – basic $ (0.01 ) $ 0.03 $ (0.07 ) $ (0.03 ) Earnings per common share – diluted $ (0.01 ) $ 0.03 $ (0.07 ) $ (0.03 ) (1) At December 31, 2017 and 2016, 22,321 and 181,040 stock options were outstanding, respectively. The effect of the shares that would be issued upon exercise of these options has been excluded from the calculation of diluted loss per share, for the three and six months ended December 31, 2017 and six months ended December 31, 2016, because those shares are anti-dilutive. (2) At December 31, 2017 and 2016, 335,869 and 350,771 additional shares of common stock, respectively, were issuable upon the settlement of outstanding restricted stock units. The effect of the shares that would be issued upon settlement of these restricted stock units has been excluded from the calculation of diluted loss per share, for the three and six months ended December 31, 2017 and six months ended December 31, 2016, because those shares are anti-dilutive. (3) At December 31, 2017 and 2016, 585,832 and 336,826 performance-based restricted stock awards, respectively, were outstanding. The effect of the shares that would be issued upon vesting of these awards has been excluded from the calculation of diluted loss per share, for the three and six months ended December 31, 2017 and six months ended December 31, 2016, because those shares are anti-dilutive. |
Business Overview (Details)
Business Overview (Details) | Dec. 31, 2017mm |
Minimum | |
Business Overview | |
Micro Crown treatable vessel length with a single device | 2.5 |
Maximum | |
Business Overview | |
Micro Crown treatable vessel length with a single device | 4 |
Selected Consolidated Financi24
Selected Consolidated Financial Statement Information - Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Accounts Receivable | ||
Accounts receivable | $ 28,687 | $ 29,336 |
Less: Allowance for doubtful accounts | (826) | (864) |
Accounts receivable, net | $ 27,861 | $ 28,472 |
Selected Consolidated Financi25
Selected Consolidated Financial Statement Information - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Inventories | ||
Raw materials | $ 9,234 | $ 7,898 |
Work in process | 771 | 1,221 |
Finished goods | 7,396 | 7,778 |
Inventories | $ 17,401 | $ 16,897 |
Selected Consolidated Financi26
Selected Consolidated Financial Statement Information - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 30, 2017 | Dec. 31, 2017 | Jun. 30, 2017 |
Property and Equipment | |||
Land | $ 500 | $ 500 | |
Building | 22,420 | 22,420 | |
Equipment | 16,991 | 16,502 | |
Furniture | 2,709 | 2,709 | |
Leasehold improvements | 438 | 86 | |
Construction in progress | 601 | 421 | |
Property and equipment, gross | 43,659 | 42,638 | |
Less: Accumulated depreciation | (14,930) | (12,942) | |
Property and equipment, net | $ 28,729 | $ 29,696 | |
Facility Purchase Price | $ 21,500 | ||
Net Proceeds on Sale of the Facility | 20,944 | ||
Transaction costs | $ 556 |
Selected Consolidated Financi27
Selected Consolidated Financial Statement Information - Accrued Expenses (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Jun. 28, 2016 | Dec. 31, 2017 | Jun. 30, 2017 |
Accrued Expenses | ||||
Salaries and bonus | $ 6,064 | $ 8,247 | ||
Commissions | 5,600 | 8,217 | ||
Accrued vacation | 3,552 | 3,436 | ||
Accrued excise, sales and other taxes | 3,407 | 3,497 | ||
Accrued legal | 2,600 | |||
Legal settlement | 1,831 | 1,814 | ||
Clinical studies | 456 | 657 | ||
Other accrued expenses | 1,770 | 1,768 | ||
Accrued expenses | $ 22,680 | $ 30,236 | ||
Litigation Settlement, Amount Awarded to Other Party | $ 8,000 | |||
Payments for Legal Settlements | $ 3,000 | |||
Settlement Payable in Installments | $ 5,000 | |||
Litigation Settlement Interest, Percentage | 1.80% | |||
Litigation Settlement, Number of Quarterly Installment Payment | 11 | |||
Department Of Justice Non Insurance Settlement Maximum Payment Amount | $ 2,000 |
Selected Consolidated Financi28
Selected Consolidated Financial Statement Information - Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Other Liabilities | ||
Legal settlement | $ 1,395 | $ 2,314 |
Deferred compensation | 440 | 519 |
Deferred Grant Incentive | 467 | 473 |
Other non-current liabilities | 318 | 173 |
Other liabilities | $ 2,620 | $ 3,479 |
Selected Consolidated Financi29
Selected Consolidated Financial Statement Information - Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Deferred Revenue and Credits [Abstract] | ||
Deferred Revenue | $ 10,000 | |
Deferred revenue current | 1,095 | $ 0 |
Deferred revenue noncurrent | $ 8,905 | $ 10,000 |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Details) - Silicon Valley Bank [Member] - Revolving Credit Facility [Member] | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000,000 |
Line of Credit Facility, Expiration Date | Mar. 31, 2020 |
Percent Reduction to Prime Interest Rate | 0.25% |
Borrowings Available On A NonFormula Basis | $ 10,000,000 |
Percentage of Eligible Accounts Receivable | 85.00% |
Percent of Eligible Inventory | 50.00% |
Maximum Eligible Inventory Value | $ 5,000,000 |
Early Termination Fee | 1.00% |
Covenant, Unused Availability | $ 10,000,000 |
Covenant, Adjusted EBITDA | $ 1,000,000 |
Interest Rate Increase For Noncompliance | 5.00% |
Line of Credit Facility, Commitment Fee Amount | $ 80,000 |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.35% |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 |
Debt - Financing Obligation (De
Debt - Financing Obligation (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2017USD ($)lease_renewal_option | |
Debt Instrument [Line Items] | |
Lessee, Finance Lease, Term of Contract | 15 years |
Lessee Leasing Arrangements Capital Leases Number Options To Renew | lease_renewal_option | 4 |
Lessee, Finance Lease, Renewal Term | 5 years |
Capital Lease Obligations [Member] | |
Debt Instrument [Line Items] | |
Base Annual Rent Under Facility Lease | $ 1,638 |
Annual Rent Escalation | 3.00% |
Financing Obligation | $ 20,944 |
Effective Interest Rate | 7.89% |
Capital Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 831 |
Capital Leases, Future Minimum Payments Due in Two Years | 1,699 |
Capital Leases, Future Minimum Payments Due in Three Years | 1,750 |
Capital Leases, Future Minimum Payments Due in Four Years | 1,803 |
Capital Leases, Future Minimum Payments Due in Five Years | 1,857 |
Capital Leases, Future Minimum Payments Due Thereafter | 21,288 |
Capital Leases, Future Minimum Payments Due | $ 29,228 |
Deferred Compensation Plan - In
Deferred Compensation Plan - Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | $ 524 | $ 604 |
Unrealized Gains | 112 | 100 |
Unrealized Losses | 0 | |
Fair Value | 636 | 704 |
Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amortized Cost | 524 | 604 |
Unrealized Gains | 112 | 100 |
Fair Value | $ 636 | $ 704 |
Deferred Compensation Plan - Av
Deferred Compensation Plan - Available-for-sale Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jun. 30, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | $ 636 | $ 704 |
Mutual funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | 636 | 704 |
Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | 636 | 704 |
Recurring | Mutual funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | 636 | 704 |
Recurring | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | 252 | 281 |
Recurring | Level 1 | Mutual funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | 252 | 281 |
Recurring | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | 384 | 423 |
Recurring | Level 2 | Mutual funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total short-term investments | $ 384 | $ 423 |
Deferred Compensation Plan - Na
Deferred Compensation Plan - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Deferred Compensation Arrangements [Abstract] | |||||
Deferred Compensation Liability, Current | $ 196,000 | $ 196,000 | |||
Deferred compensation | 440,000 | 440,000 | $ 519,000 | ||
Purchases of available-for-sale securities | 0 | $ 0 | 0 | $ 0 | |
Sale of available-for-sale securities | 49,000 | 0 | 96,000 | 0 | |
Realized Gain (Loss) on Marketable Securities and Cost Method Investments, Excluding Other than Temporary Impairments, and Other Investments | 8,000 | 0 | 16,000 | 0 | |
Other-than-temporary impairments | 0 | $ 0 | 0 | $ 0 | |
Transfers of assets between Level 1 and Level 2 | $ 0 | $ 0 | |||
Maximum | |||||
Deferred Compensation Arrangements [Abstract] | |||||
Deferred compensation plan, maximum percentage of employees' base salary | 100.00% |
Stock Options and Restricted 35
Stock Options and Restricted Stock Awards - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Nov. 30, 2017 | Aug. 31, 2017 | Dec. 31, 2017 | Nov. 15, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of equity awards available to grant under the 2014 and 2007 plans | 0 | |||
Exercise period for employee's vested options | 90 days | |||
Restricted Stock | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Restricted Stock | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance-based awards number preceding trading days | 90 days | |||
Grant Date Fair Value of Restricted Stock Awards, Market Conditions | $ 3,801 | |||
Performance Shares | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate shares based on thresholds measuring total shareholder return | 27,140 | 251,479 |
Stock Options and Restricted 36
Stock Options and Restricted Stock Awards - Stock Option Activity (Details) | 6 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Number of Options | |
Options outstanding, balance at beginning of period (in shares) | shares | 78,201 |
Options exercised (in shares) | shares | (55,880) |
Options outstanding, balance at end of period (in shares) | shares | 22,321 |
Weighted Average Exercise Price | |
Options outstanding at beginning of period (per share) | $ / shares | $ 9.07 |
Options exercised (per share) | $ / shares | 9.20 |
Options outstanding at end of period (per share) | $ / shares | $ 8.75 |
Stock Options and Restricted 37
Stock Options and Restricted Stock Awards - Restricted Stock Award Activity (Details) | 6 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Restricted Stock | |
Number of Shares | |
Awards outstanding, balance at beginning of period (in shares) | shares | 486,584 |
Awards granted (in shares) | shares | 209,796 |
Awards forfeited (in shares) | shares | (39,545) |
Awards vested (in shares) | shares | (197,052) |
Awards outstanding, balance at end of period (in shares) | shares | 459,783 |
Weighted Average Fair Value | |
Awards outstanding, balance at beginning of period (per share) | $ / shares | $ 21.26 |
Awards granted (per share) | $ / shares | 29.64 |
Awards forfeited (per share) | $ / shares | 21.46 |
Awards vested (per share) | $ / shares | 22.74 |
Awards outstanding, balance at end of period (per share) | $ / shares | $ 24.43 |
Performance Shares | |
Number of Shares | |
Awards outstanding, balance at beginning of period (in shares) | shares | 318,584 |
Awards granted (in shares) | shares | 278,889 |
Awards forfeited (in shares) | shares | (11,641) |
Awards outstanding, balance at end of period (in shares) | shares | 585,832 |
Weighted Average Fair Value | |
Awards outstanding, balance at beginning of period (per share) | $ / shares | $ 11.97 |
Awards granted (per share) | $ / shares | 13.63 |
Awards forfeited (per share) | $ / shares | 12.73 |
Awards outstanding, balance at end of period (per share) | $ / shares | $ 12.75 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rental expense | $ 177 | $ 149 | $ 339 | $ 321 |
Future Minimum Lease Payments: | ||||
Six months ended June 30, 2018 | 250 | 250 | ||
Fiscal 2,019 | 472 | 472 | ||
Fiscal 2,020 | 354 | 354 | ||
Future minimum lease payments | $ 1,076 | $ 1,076 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator | ||||
Net loss | $ (413) | $ 1,043 | $ (2,390) | $ (815) |
Income allocated to participating securities | (18) | |||
Net income (loss) available to common stockholders | $ (413) | $ 1,025 | $ (2,390) | $ (815) |
Denominator | ||||
Weighted Average Number of Shares Outstanding, Basic | 33,112,138 | 32,189,981 | 33,040,425 | 32,060,973 |
Weighted average common shares outstanding – diluted | 33,112,138 | 32,804,305 | 33,040,425 | 32,060,973 |
Earnings per share, basic and diluted | ||||
Earnings Per Share, Basic | $ (0.01) | $ 0.03 | $ (0.07) | $ (0.03) |
Earnings Per Share, Diluted | $ (0.01) | $ 0.03 | $ (0.07) | $ (0.03) |
Stock Options | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 22,321 | 181,040 | ||
Denominator | ||||
Effect of dilutive share-based payment arrangements (in shares) | 111,874 | |||
Restricted Stock | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 573,016 | |||
Restricted Stock Units (RSUs) | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 335,869 | 350,771 | ||
Denominator | ||||
Effect of dilutive share-based payment arrangements (in shares) | 313,820 | |||
Performance Shares | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 585,832 | 336,826 | ||
Denominator | ||||
Effect of dilutive share-based payment arrangements (in shares) | 188,630 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | Dec. 22, 2017Rate | Dec. 21, 2017Rate |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% |