Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | GLAUKOS Corp | |
Entity Central Index Key | 1,192,448 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 35,255,010 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 24,941 | $ 24,508 |
Short-term investments | 95,207 | 94,506 |
Accounts receivable, net | 17,089 | 16,656 |
Inventory, net | 13,812 | 11,222 |
Prepaid expenses and other current assets | 4,336 | 2,568 |
Total current assets | 155,385 | 149,460 |
Property and equipment, net | 12,057 | 11,794 |
Intangible asset, net | 1,311 | 3,147 |
Deferred tax asset, net | 235 | 235 |
Deposits and other assets | 2,102 | 1,200 |
Total assets | 171,090 | 165,836 |
Current liabilities: | ||
Accounts payable | 3,611 | 6,244 |
Accrued liabilities | 16,655 | 20,449 |
Deferred rent | 105 | 95 |
Total current liabilities | 20,371 | 26,788 |
Other liabilities | 2,186 | 846 |
Total liabilities | 22,557 | 27,634 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.001 par value; 150,000 shares authorized; 35,166 and 34,647 shares issued and 35,138 and 34,619 shares outstanding at June 30, 2018 and December 31, 2017, respectively | 35 | 35 |
Additional paid-in capital | 348,611 | 331,073 |
Accumulated other comprehensive income (loss) | 311 | (591) |
Accumulated deficit | (200,292) | (192,183) |
Less treasury stock (28 shares as of June 30, 2018 and December 31, 2017) | (132) | (132) |
Total stockholders' equity | 148,533 | 138,202 |
Total liabilities and stockholders' equity | $ 171,090 | $ 165,836 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 35,166,000 | 34,647,000 |
Common stock, shares outstanding | 35,138,000 | 34,619,000 |
Treasury stock, shares | 28,000 | 28,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 43,161,000 | $ 41,285,000 | $ 83,294,000 | $ 77,192,000 |
Cost of sales | 6,160,000 | 5,522,000 | 11,946,000 | 10,702,000 |
Gross profit | 37,001,000 | 35,763,000 | 71,348,000 | 66,490,000 |
Operating expenses: | ||||
Selling, general and administrative | 28,638,000 | 24,675,000 | 55,793,000 | 46,156,000 |
In-process research and development | 5,320,000 | 5,320,000 | ||
Research and development | 12,611,000 | 9,633,000 | 23,517,000 | 18,575,000 |
Total operating expenses | 41,249,000 | 39,628,000 | 79,310,000 | 70,051,000 |
Loss from operations | (4,248,000) | (3,865,000) | (7,962,000) | (3,561,000) |
Non-operating (expense) income: | ||||
Interest income | 505,000 | 311,000 | 978,000 | 603,000 |
Other (expense) income, net | (1,644,000) | 275,000 | (1,109,000) | 612,000 |
Total non-operating (expense) income | (1,139,000) | 586,000 | (131,000) | 1,215,000 |
Loss before taxes | (5,387,000) | (3,279,000) | (8,093,000) | (2,346,000) |
Provision for income taxes | 11,000 | 22,000 | 16,000 | 77,000 |
Net loss | $ (5,398,000) | $ (3,301,000) | $ (8,109,000) | $ (2,423,000) |
Basic net loss per share | $ (0.15) | $ (0.10) | $ (0.23) | $ (0.07) |
Diluted net loss per share | $ (0.15) | $ (0.10) | $ (0.23) | $ (0.07) |
Weighted average shares used to compute basic net loss per share | 34,942 | 34,322 | 34,778 | 34,234 |
Weighted average shares used to compute diluted net loss per share | 34,942 | 34,322 | 34,778 | 34,234 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (5,398) | $ (3,301) | $ (8,109) | $ (2,423) |
Other comprehensive gain (loss): | ||||
Foreign currency translation adjustments | 1,541 | (320) | 1,047 | (660) |
Unrealized gain (loss) on short-term investments, net of tax | 65 | 18 | (145) | 58 |
Other comprehensive gain (loss) | 1,606 | (302) | 902 | (602) |
Total comprehensive loss | $ (3,792) | $ (3,603) | $ (7,207) | $ (3,025) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities | ||
Net loss | $ (8,109) | $ (2,423) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 3,361 | 2,428 |
Loss on disposal of fixed assets | 78 | 5 |
Stock-based compensation | 11,863 | 7,935 |
Unrealized foreign currency losses (gains) | 1,185 | (624) |
Amortization of (discount) premium on short-term investments | (135) | 58 |
Deferred rent | 1,350 | 338 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (644) | (2,289) |
Inventory | (2,726) | (1,368) |
Prepaid expenses and other current assets | (1,801) | 721 |
Restricted cash | 80 | |
Accounts payable and accrued liabilities | (6,149) | 2,145 |
Other assets | (899) | (368) |
Net cash (used in) provided by operating activities | (2,626) | 6,638 |
Investing activities | ||
Purchases of short-term investments | (47,132) | (45,766) |
Proceeds from sales and maturities of short-term investments | 46,422 | 44,580 |
Purchases of property and equipment | (2,006) | (2,071) |
Net cash used in investing activities | (2,716) | (3,257) |
Financing activities | ||
Proceeds from exercise of stock options | 4,606 | 2,782 |
Share purchases under Employee Stock Purchase Plan | 1,388 | 968 |
Payment of employee taxs related to vested restricted stock units | (318) | |
Net cash provided by financing activities | 5,676 | 3,750 |
Effect of exchange rate changes on cash and cash equivalents | 99 | (255) |
Net increase in cash, cash equivalents and restricted cash | 433 | 6,876 |
Cash, cash equivalents and restricted cash at beginning of period | 24,508 | 6,494 |
Cash, cash equivalents and restricted cash at end of period | 24,941 | 13,370 |
Supplemental disclosures of cash flow information | ||
Taxes paid | $ 365 | 64 |
Supplemental schedule of noncash investing and financing activities | ||
Reduction of liability upon vesting of stock options previously exercised for unvested stock | $ 3 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | Note 1. Organization and Basis of Presentation Organization and business Glaukos Corporation (Glaukos or the Company), incorporated in Delaware on July 14, 1998, is an ophthalmic medical technology and pharmaceutical company focused on the development and commercialization of novel surgical devices and sustained pharmaceutical therapies designed to treat glaucoma, one of the world’s leading causes of blindness. The Company developed Micro‑Invasive Glaucoma Surgery (MIGS) to serve as an alternative to the traditional glaucoma treatment and management paradigms. MIGS procedures involve the insertion of a micro‑scale device or drug delivery system from within the eye’s anterior chamber through a small corneal incision. The Company’s MIGS devices are designed to reduce intraocular pressure by restoring the natural outflow pathways for aqueous humor. The Company’s MIGS drug delivery systems are designed to reduce intraocular pressure by continuously eluting a glaucoma drug from within the eye, potentially providing sustained pharmaceutical therapy for extended periods of time. The accompanying condensed consolidated financial statements include the accounts of Glaukos and its wholly owned subsidiaries. All significant intercompany balances and transactions among the consolidated entities have been eliminated in consolidation. Basis of presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited interim financial statements have been prepared on a basis consistent with the audited financial statements. As permitted under those rules, certain footnotes and other financial information that are normally required by GAAP have been condensed or omitted. In the opinion of management, the unaudited interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for the fair presentation of the Company’s financial information contained herein. The condensed consolidated balance sheet at December 31, 2017 has been derived from audited financial statements at that date, but excludes disclosures required by GAAP for complete financial statements. These interim financial statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the fiscal year ended December 31, 2017, which are contained in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (SEC) on February 28, 2018. The results for the period ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other interim period. Acquisition of IOP Sensor System from DOSE Medical On April 12, 2017, the Company entered into an IOP Sensor System Purchase Agreement (the Purchase Agreement), between the Company and DOSE Medical Corporation (DOSE), to purchase from DOSE its intraocular pressure (IOP) sensor system, including all patents, license rights and tangible assets, and to assume certain liabilities related thereto (collectively, the IOP Sensor System), for consideration consisting of an initial cash payment of $5.5 million, plus performance-based consideration of up to $9.5 million upon achievement of certain development, clinical and regulatory milestones. The Company completed the purchase of the IOP Sensor System concurrent with the execution of the Purchase Agreement. The transaction was accounted for as an asset acquisition. Of the $5.5 million initial cash payment, $5.3 million was immediately charged to in-process research and development expense as management determined there was no alternative future use related to the assets purchased. Of the remaining $0.2 million, the majority was capitalized to fixed assets and is being depreciated over the corresponding asset’s useful life, and a small portion was recorded as a prepaid asset and is being amortized to general and administrative expense as the underlying amounts are utilized. DOSE was previously a wholly-owned subsidiary of the Company. In 2010, it was spun-out as a standalone entity and was accounted for as a consolidated variable interest entity. In 2015, the Company acquired the iDose product line and related assets from DOSE and upon the acquisition, the Company derecognized DOSE as a consolidated variable interest entity in the financial statements. Thomas W. Burns, the Company’s President, Chief Executive and a member of its board of directors, and William J. Link, Ph.D., Chairman of the Company’s board of directors, currently serve on the board of directors of DOSE and certain members of the Company’s management and board of directors hold an equity interest in DOSE. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies There have been no significant changes in the Company’s significant accounting policies during the six months ended June 30, 2018, as compared with those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 28, 2018, with the exception of the Company’s adoption of Accounting Standards Codification (ASC) 606, Revenue Recognition – Revenue from Contracts with Customers and its related amendments (ASC 606). See section below entitled “Revenue recognition” and Note 6, Revenue from Contracts with Customers for further discussion of the Company’s adoption of ASC 606 and related disclosures. Use of estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ materially from those estimates and assumptions. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. The most significant estimates in the accompanying condensed consolidated financial statements relate to revenue recognition and stock‑based compensation expense. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, this process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements. Foreign currency translation The accompanying condensed consolidated financial statements are presented in U.S. dollars. The Company considers the local currency to be the functional currency for its international subsidiaries. Accordingly, their assets and liabilities are translated into U.S. dollars using the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at average exchange rates prevailing throughout the periods presented. As a result, currency translation adjustments arising from period to period are charged or credited to accumulated other comprehensive income (loss) in stockholders’ equity. For the three and six months ended June 30, 2018, the Company reported foreign currency translation gains of approximately $1.5 million and $1.0 million, respectively. For the three and six months ended June 30, 2017, the Company reported foreign currency translation losses of approximately $0.3 million and $0.7 million, respectively. Realized gains and losses resulting from foreign currency transactions are included in selling, general and administrative expense in the condensed consolidated statements of operations. For the three and six months ended June 30, 2018, the Company reported foreign currency transaction losses of approximately $0.2 million and $0.3 million, respectively. For each of the three and six month periods ended June 30, 2017, the Company reported foreign currency transaction gains of approximately $0.1 million. Unrealized gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency, primarily gains and losses on intercompany loans, are included in the condensed consolidated statements of operations as a component of other (expense) income, net. For the three and six months ended June 30, 2018, the Company reported net unrealized foreign currency transaction losses of $1.7 million and $1.2 million, respectively. For the three and six months ended June 30, 2017, the Company reported net unrealized foreign currency transaction gains of $0.3 million and $0.6 million, respectively. Cash, cash equivalents and short-term investments The Company invests its excess cash in marketable securities, including money market funds, money market securities, bank certificates of deposits, corporate bonds, corporate commercial paper, U.S. government bonds and U.S. government agency bonds. For financial reporting purposes, liquid investment instruments purchased with an original maturity of three months or less are considered to be cash equivalents. Cash and cash equivalents are recorded at face value or cost, which approximates fair market value. The Company maintains cash balances in excess of amounts insured by the Federal Deposit Insurance Commission. Investments are stated at fair value as determined by quoted market prices. Investments are considered available-for-sale and, accordingly, unrealized gains and losses are included in accumulated other comprehensive income (loss) within stockholders’ equity. The Company’s entire investment portfolio is considered to be available for use in current operations and, accordingly, all such investments are stated at fair value using quoted market prices and classified as current assets, although the stated maturity of individual investments may be one year or more beyond the balance sheet date. The Company did not have any trading securities or restricted investments at June 30, 2018 or December 31, 2017. Realized gains and losses and declines in value, if any, judged to be other-than-temporary on available-for-sale securities are reported in other (expense) income, net. When securities are sold, any associated unrealized gain or loss previously reported as a separate component of stockholders’ equity is reclassified out of stockholders’ equity and recorded in the statements of operations in the period sold using the specific identification method. Accrued interest and dividends are included in other (expense) income, net. The Company periodically reviews its available-for-sale securities for other-than-temporary declines in fair value below the cost basis, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Fair value of financial instruments The carrying amounts of cash equivalents, accounts receivable, accounts payable, and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. The valuation of assets and liabilities is subject to fair value measurements using a three-tiered approach and fair value measurements are classified and disclosed by the Company in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Revenue recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (ASC) 606 , Revenue from Contracts with Customers . The Company adopted the standard by applying the modified retrospective method to contracts that were not complete as of the date of initial application. The Company’s accounting for revenue under ASC 606 is materially consistent with the accounting for revenue under ASC 605 and therefore the cumulative effect of adoption was immaterial. The reported results for the three and six months ended June 30, 2018 reflect the application of ASC 606 guidance while the reported results for periods prior to January 1, 2018 were prepared under the guidance of ASC 605. The Company accounts for revenue in accordance with ASC 606 and applies the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. As part of the Company's adoption of ASC 606, the Company elected to use the following practical expedients: (i) to exclude disclosures of transaction prices allocated to remaining performance obligations when the Company expects to recognize such revenue within one year; (ii) to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less, which mainly includes the Company's internal sales force compensation program; (iii) to account for shipping and handling costs as fulfillment costs (i.e., as an expense) rather than promised service (i.e., a revenue element); and (iv) to exclude from revenue the taxes collected from customers relating to product sales which are remitted to governmental authorities. The Company derives its revenue from sales of its products in the United States and internationally. Customers are primarily comprised of ambulatory surgery centers and hospitals, with distributors being used in certain international locations where the Company does not have a direct commercial presence. The Company concluded that one performance obligation exists for the majority of its contracts with customers which is to deliver products in accordance with the Company’s normal delivery times. Revenue is recognized when this performance obligation is satisfied at a point in time when the Company considers control of a product to have transferred to the customer. Revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those products or services. The Company has determined the transaction price to be the invoice price, net of adjustments, which includes estimates of variable consideration for product returns. The Company offers volume-based rebate agreements to certain customers and, in these instances, the Company provides a rebate (in the form of a credit memo) at the contract’s conclusion, if earned by the customer. In such cases, the transaction price is allocated between the Company’s delivery of product and the issuance of a rebate at the contract’s conclusion for the customer to utilize on prospective purchases. The performance obligation to issue a customer’s rebate, if earned, is transferred over time and the Company’s method of measuring progress is the output method, whereby, the progress is measured by the estimated rebate earned to date over the total rebate estimated to be earned over the contract period. The provision for volume-based rebates is estimated based on customers' contracted rebate programs and the customers’ projected sales levels. The Company periodically monitors its customer rebate programs to ensure the rebate allowance is fairly stated. The Company’s rebate allowance is included in accrued liabilities in the condensed consolidated balance sheets and estimated rebates accrued were not material during the periods presented. Customers are not granted specific rights of return; however, the Company may permit returns of product from customers if such product is returned in a timely manner and in good condition. The Company provides a warranty on its products for one year from the date of shipment, and any product found to be defective or out of specification will be replaced at no charge during the warranty period. Estimated allowances for sales returns and warranty replacements are recorded at the time of sale of the product and are estimated based upon the historical patterns of product returns matched against sales, and an evaluation of specific factors that may increase the risk of product returns. Product returns and warranty replacements to date have been consistent with amounts reserved or accrued and have not been significant. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates which would affect net product revenue and earnings in the period such variances become known. Research and development expenses Major components of research and development expense include personnel costs, preclinical studies, clinical trials and related clinical product manufacturing, materials and supplies, and fees paid to consultants. Research and development costs are expensed as goods are received or services are rendered. Costs to acquire technologies to be used in research and development that have not reached technological feasibility and have no alternative future use are also expensed as incurred. At each financial reporting date, the Company accrues the estimated unpaid costs of clinical study activities performed during a period by third party clinical sites with whom the Company has agreements that provide for fees based upon the quantities of subjects enrolled and clinical evaluation visits that occur over the life of the study. The cost estimates are determined based upon a review of the agreements and data collected by internal and external clinical personnel as to the status of enrollment and subject visits, and are based upon the facts and circumstances known to the Company at each financial reporting date. If the actual performance of activities varies from the assumptions used in the cost estimates, the accruals are adjusted accordingly. There have been no material adjustments to the Company’s prior period accrued estimates for clinical trial activities through June 30, 2018. Stock‑based compensation The Company recognizes compensation expense for all stock-based awards granted to employees and nonemployees, including members of its board of directors. The fair value of stock option awards is estimated at the grant date using the Black-Scholes option pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period using the straight-line method. The determination of the fair value-based measurement of stock options on the date of grant using an option pricing model is affected by the determination of the fair value of the underlying stock as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s stock price volatility over the expected term of the grants, and actual and projected employee stock option exercise behaviors. In the future, as additional empirical evidence regarding these estimates becomes available, the Company may change or refine its approach of deriving them, and these changes could impact the fair value-based measurement of stock options granted in the future. Changes in the fair value-based measurement of stock awards could materially impact the Company’s operating results. The fair values of stock option awards made to nonemployees are re-measured at each reporting period using the Black-Scholes option pricing model. Compensation expense for these stock option awards is determined by applying the re-measured fair values to the shares that have vested during a period. The fair value of restricted stock unit (RSU) awards made to employees and nonemployees is equal to the closing market price of the Company’s common stock on the grant date. Net loss per share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares that were outstanding for the period, without consideration for common stock equivalents. For periods when the Company realizes a net loss, no common stock equivalents are included in the calculation of weighted average number of dilutive common stock equivalents as the effect of applying the treasury stock method is considered anti-dilutive. For periods when the Company realizes net income, diluted net income per share is calculated by dividing the net income by the weighted average number of common shares plus the sum of the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury stock method. Common stock equivalents are comprised of stock options and RSUs outstanding under the Company’s stock option plans and shares issuable under the Company’s Employee Stock Purchase Plan (ESPP). The Company’s computation of net loss per share is as follows (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Numerator: Net loss – basic and diluted $ (5,398) $ (3,301) $ (8,109) $ (2,423) Denominator: Weighted average number of common shares outstanding - basic 34,942 34,322 34,778 34,234 Weighted average number of common shares outstanding - diluted 34,942 34,322 34,778 34,234 Basic net loss per share $ (0.15) $ (0.10) $ (0.23) $ (0.07) Diluted net loss per share $ (0.15) $ (0.10) $ (0.23) $ (0.07) Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Stock options outstanding 5,819 5,632 5,937 5,700 Unvested restricted stock units 141 105 333 105 ESPP 31 19 27 19 5,991 5,756 6,297 5,824 Recently adopted accounting pronouncements In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASC 2016-18), which enhances and clarifies the guidance on the classification and presentation of restricted cash in the statement of cash flows. ASU 2016-18 was effective for the Company beginning on January 1, 2018 and was required to be adopted retrospectively. Historically, the Company’s restricted cash balance has not been significant and the adoption of the guidance did not have a material impact on its condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01). The amendments are intended to help companies evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. When substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business. This introduces an initial required screening that, if met, eliminates the need for further assessment. To be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. To be a business without outputs, there will need to be an organized workforce. The ASU also narrows the definition of the term “outputs” to be consistent with how it is described in ASC 606, Revenue Recognition - Revenue from Contracts with Customers . The amendments were effective for annual periods beginning after December 15, 2017, including interim periods within those periods with early adoption permitted. The Company adopted the guidance effective January 1, 2018 and the guidance did not have a material impact on its condensed consolidated financial statements; however, any prospective impact to the Company’s condensed consolidated financial statements will depend on the terms specified in any future transactions subject to the guidance in ASU 2017-01. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation - Scope of Modification Accounting (ASU 2017-09). The standard provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The standard was effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods and early adoption was permitted. The Company adopted the guidance on a prospective basis effective January 1, 2018 and the adoption of ASU 2017-09 did not have a material impact on its condensed consolidated financial statements; however, any future impact to share-based compensation expense will depend on the terms specified in any new changes to share-based payment awards subsequent to the adoption. Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which amends the existing accounting standards for leases. In September 2017, the FASB issued ASU No. 2017-13 which provides additional clarification and implementation guidance on the previously issued ASU No. 2016-02. Under the new guidance, a lessee will be required to recognize a lease liability and right-of-use asset for all leases with terms in excess of twelve months. The new guidance also modifies the classification criteria and accounting for sales-type and direct financing leases, and requires additional disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. Consistent with current guidance, a lessee’s recognition, measurement, and presentation of expenses and cash flows arising from a lease will continue to depend primarily on its classification. The accounting standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and must be applied using a modified retrospective approach. Early adoption is permitted. While the Company is continuing to assess all potential impacts of the standard, it expects that most of its lease commitments will be subject to the updated standard and recognized as lease liabilities and right-of-use assets upon adoption. In February 2018, the FASB issued ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income that gives entities the option to reclassify to retained earnings tax effects related to items that have been stranded in accumulated other comprehensive income as a result of the Tax Cuts and Jobs Act (the Act). A company that elects to reclassify these amounts must reclassify stranded tax effects related to the Act’s change in U.S. federal tax rate for all items accounted for in other comprehensive income. Companies can also elect to reclassify other stranded effects that relate to the Act but do not directly relate to the change in the federal rate. Companies can choose whether to apply the amendments retrospectively to each period in which the effect of the Act is recognized or to apply the amendments in the period of adoption. The guidance is effective for all companies for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Entities can choose whether to apply the amendments retrospectively to each period in which the effect of the Act is recognized or to apply the amendments in the period of adoption, and the Company is assessing the potential impacts of the standard. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07). ASU 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered, or the service has been rendered, and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The accounting standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and the Company is assessing the potential impacts of the standard. |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Details | |
Balance Sheet Details | Note 3. Balance Sheet Details Short-term investments Short-term investments consisted of the following (in thousands): At June 30, 2018 Maturity Amortized cost Unrealized Unrealized Estimated (in years) or cost gains losses fair value U.S. government bonds less than 1 $ 1,599 $ - $ (13) $ 1,586 U.S. government agency bonds less than 2 3,988 - (22) 3,966 Bank certificates of deposit less than 1 8,702 1 (7) 8,696 Commercial paper less than 1 12,672 1 (2) 12,671 Corporate notes less than 3 47,152 20 (209) 46,963 Asset-backed securities less than 3 21,456 1 (132) 21,325 Total $ 95,569 $ 23 $ (385) $ 95,207 At December 31, 2017 Maturity Amortized cost Unrealized Unrealized Estimated (in years) or cost gains losses fair value U.S. government bonds less than 2 $ 1,799 $ - $ (17) $ 1,782 U.S. government agency bonds less than 2 2,698 - (17) 2,681 Bank certificates of deposit less than 1 10,300 1 (3) 10,298 Commercial paper less than 1 11,598 - (5) 11,593 Corporate notes less than 3 51,532 6 (121) 51,417 Asset-backed securities less than 3 16,796 - (61) 16,735 Total $ 94,723 $ 7 $ (224) $ 94,506 Accounts receivable, net Accounts receivable consisted of the following (in thousands): June 30, December 31, 2018 2017 Accounts receivable $ 17,626 $ 17,248 Less allowance for doubtful accounts (537) (592) $ 17,089 $ 16,656 Inventory, net Inventory consisted of the following (in thousands): June 30, December 31, 2018 2017 Finished goods $ 3,809 $ 4,225 Work in process 3,094 2,368 Raw material 6,909 4,629 $ 13,812 $ 11,222 Accrued liabilities Accrued liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Accrued contract payments (see Note 9) $ 1,078 $ 1,033 Accrued bonuses 4,894 9,106 Accrued vacation benefits 2,285 2,121 Accrued Employee Stock Purchase Plan liability 2,139 1,517 Other accrued liabilities 6,259 6,672 $ 16,655 $ 20,449 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 4. Fair Value Measurements Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The following tables present information about the Company's financial assets measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands). The Company did not have any financial liabilities measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017. At June 30, 2018 Quoted prices Significant in active other Significant markets for observable unobservable June 30, identical assets inputs inputs 2018 (Level 1) (Level 2) (Level 3) Assets Money market funds (i) $ 148 $ 148 $ - $ - U.S. government agency bonds (ii) 3,966 - 3,966 - U.S. government bonds (ii) 1,587 - 1,587 - Bank certificates of deposit (ii) (iv) 10,195 - 10,195 - Commercial paper (ii) (iii) 16,411 - 16,411 - Corporate notes (ii) 46,963 - 46,963 - Asset-backed securities (ii) 21,325 - 21,325 - $ 100,595 $ 148 $ 100,447 $ - At December 31, 2017 Quoted prices Significant in active other Significant markets for observable unobservable December 31, identical assets inputs inputs 2017 (Level 1) (Level 2) (Level 3) Assets Money market funds (i) $ 2,370 $ 2,370 $ - $ - U.S. government agency bonds (ii) 2,681 - 2,681 - U.S. government bonds (ii) 1,782 - 1,782 Bank certificates of deposit (ii) 10,298 - 10,298 - Commercial paper (ii) (iii) 14,593 - 14,593 - Corporate notes (ii) 51,417 - 51,417 - Asset-backed securities (ii) 16,735 - 16,735 - $ 99,876 $ 2,370 $ 97,506 $ - (i) Included in cash and cash equivalents with a maturity of three months or less from date of purchase on the condensed consolidated balance sheets. (ii) Included in short-term investments on the condensed consolidated balance sheets. (iii) As of June 30, 2018 and December 31, 2017, commercial paper investments totaling $3,740 and $3,000 (in thousands), respectively, are included in cash and cash equivalents on the condensed consolidated balance sheets, as each of the investments has a maturity of three months or less from the date of purchase on the condensed consolidated balance sheets. (iv) As of June 30, 2018, one bank certificate of deposit investment totaling $1,500 (in thousands) is included in cash and cash equivalents on the condensed consolidated balance sheets, as the investment has a maturity of three months or less from the date of purchase on the condensed consolidated balance sheets. Money market funds and currency are highly liquid investments and are actively traded. The pricing information on these investment instruments is readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy. U.S. government agency bonds, U.S. government bonds, bank certificates of deposit, commercial paper, corporate notes and asset-backed securities are measured at fair value using Level 2 inputs. The Company reviews trading activity and pricing for these investments as of each measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from third party data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data. This approach results in the classification of these securities as Level 2 of the fair value hierarchy. There were no transfers between levels within the fair value hierarchy during the periods presented. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets | |
Intangible Assets | Note 5. Intangible Assets GMP Vision Solutions intangible asset In January 2007, the Company entered into an agreement (the Original GMP Agreement) with GMP Vision Solutions, Inc. (GMP) to acquire certain in‑process research and development in exchange for periodic royalty payments equal to a single‑digit percentage of revenues received for royalty‑bearing products and periodic royalty payments at a higher royalty rate applied to all amounts received in connection with the grant of licenses or sub-licenses of the related intellectual property. In November 2013, the Company entered into an amended agreement with GMP in which remaining royalties payable to GMP (the Buyout Agreement) were canceled in exchange for the issuance of $17.5 million in promissory notes payable to GMP and a party related to GMP. The Company concluded that the $17.5 million transaction represented the purchase of an intangible asset. The Company estimated a useful life of five years over which the intangible asset is being amortized to cost of sales in the accompanying statements of operations, which amortization period was determined after consideration of the projected outgoing royalty payment stream had the Buyout Agreement not occurred, and the remaining life of the patents obtained in the Original GMP Agreement. After determining that the pattern of future cash flows associated with this intangible asset could not be reliably estimated with a high level of precision, the Company concluded that the intangible asset will be amortized on a straight‑line basis over the estimated useful life. For each of the three months ended June 30, 2018 and June 30, 2017, the Company recorded amortization expense of $0.9 million related to this intangible asset in cost of sales and for each of the six months ended June 30, 2018 and June 30, 2017, the Company recorded amortization expense of $1.8 million related to this intangible asset in cost of sales. Other intangible assets Prior to June 30, 2017, the Company entered into agreements with four international distributors pursuant to which their distribution rights with the Company were terminated. As part of the agreements, the distributors agreed to provide certain services to, and not compete with, the Company for one to two years in exchange for payments calculated based on single-digit percentages of the Company’s future revenues in those years in the respective countries that had comprised the distributors’ territories. Management recorded the estimated fair value of the non-compete provisions as intangible assets. As of June 30, 2018, two of these intangible assets were fully amortized, and the gross non-compete intangible assets for the remaining two agreements totaled $0.3 million and continue to be amortized on a straight-line basis to selling, general and administrative expense over the one to two year periods. For the three months ended June 30, 2018 and June 30, 2017, the Company recorded amortization expense related to the non-compete intangible assets of approximately $43,000 and $66,000, respectively, and for the six months ended June 30, 2018 and June 30, 2017, the Company recorded amortization expense related to the non-compete intangible assets of approximately $86,000 and $129,000, respectively. The following reflects the composition of intangible assets, net (in thousands): June 30, December 31, 2018 2017 GMP royalty buyout $ 17,500 $ 17,500 Non-compete agreements 341 524 17,841 18,024 Accumulated amortization (16,530) (14,877) Total $ 1,311 $ 3,147 Weighted average amortization period (in months) 60 60 The remaining amortization expense for 2018 is $1.3 million, after which point the above mentioned intangible assets will be fully amortized. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customers | |
Revenue from Contracts with Customers | Note 6. Revenue from Contracts with Customers The Company’s net sales are generated primarily from sales of iStent products to customers. Customers are primarily comprised of ambulatory surgery centers and hospitals, with distributors being used in certain international locations where the Company currently does not have a direct commercial presence. Disaggregation of revenue The Company’s disaggregation of revenue is consistent with its operating segments disclosed in Note 10 , Business Segment Information , and all of the Company’s net sales are considered revenue from contracts with customers. Contract balances Amounts are recorded as accounts receivable when the Company’s right to consideration becomes unconditional. As payment terms on invoiced amounts are typically 30 days, consistent with ASC 606 guidance, the Company does not consider any significant financing components in customer contracts given the expected time between transfer of the promised products and the payment of the associated consideration is less than one year. As of June 30, 2018 and December 31, 2017, all amounts included in accounts receivable, net on the condensed consolidated balance sheets are related to contracts with customers. The Company does not have any contract assets given that the Company does not have any unbilled receivables and sales commissions are expensed when incurred as any incremental cost of obtaining contracts with customers would have an amortization period of less than one year. Contract liabilities reflect consideration received from customers’ purchases allocated to the Company’s performance obligation to issue a rebate to customers who may be eligible for a rebate at the conclusion of their contract term. This performance obligation is transferred over time and the Company’s method of measuring progress is the output method, whereby the progress is measured by the estimated rebate earned to date over the total rebate estimated to be earned over the contract period. The Company’s rebate allowance is included in accrued liabilities in the condensed consolidated balance sheets and estimated rebates accrued were not material during the periods presented. During the three and six months ended June 30, 2018, the Company did not recognize any revenue related to changes in transaction prices related to its contracts with customers and did not recognize any changes in revenue related to amounts included in contract liabilities at the beginning of the period. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Stock-Based Compensation. | |
Stock-Based Compensation | Note 7. Stock-Based Compensation The Company has four stock-based compensation plans (collectively, the Stock Plans)—the 2001 Stock Option Plan (the 2001 Stock Plan), the 2011 Stock Plan (the 2011 Stock Plan), the 2015 Omnibus Incentive Compensation Plan (the 2015 Stock Plan) and the 2015 ESPP. The 2015 Stock Plan permits grants of RSU awards. RSU awards vest 25% on each of the first, second, third and fourth anniversaries of the grant date. Stock options The following table summarizes stock option activity under the 2001 Stock Plan, 2011 Weighted- Number of Average Shares Weighted- Remaining Aggregate Underlying Average Contractual Intrinsic Value Options Exercise Price Life (in years) (in thousands) Outstanding at December 31, 2017 7,026 $ 21.36 7.3 $ 69,555 Granted 896 30.83 Exercised (438) 10.49 11,319 Canceled/forfeited/expired (177) 30.53 Outstanding at June 30, 2018 7,307 $ 22.95 7.2 $ 136,362 Vested and expected to vest at June 30, 2018 7,185 $ 22.78 7.2 $ 135,211 Exercisable at June 30, 2018 4,224 $ 15.67 6.1 $ 107,695 The weighted average estimated grant date fair value per share of stock options granted during the three and six months ended June 30, 2018 was $16.9 1 and $15.08, respectively, and the total fair value of stock options that vested during the three and six months ended June 30, 2018 was $ 6.4 million and $15.7 million, respectively. The fair value of each option award is estimated on the date of grant using a Black-Scholes option pricing model applying the assumptions noted in the following table. The weighted average assumptions used to estimate the fair value of options granted to employees were as follows: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Risk-free interest rate 2.65 % 2.01 % 2.67 % 2.13 % Expected dividend yield % % % % Expected volatility % % 44.9 % 46.6 % Expected term (in years) 6.10 6.09 6.10 6.09 Restricted stock units The following table summarizes the activity of unvested RSUs under the Stock Plans during the six months ended June 30, 2018 (in thousands): Weighted- Number of average shares grant date (in thousands) fair value Unvested at December 31, 2017 173 $ 39.10 Granted 258 30.41 Vested (26) 42.14 Canceled/forfeited (9) 32.49 Unvested at June 30, 2018 396 $ 33.39 The fair value of RSU awards made to employees and nonemployees is equal to the closing market price of the Company’s common stock on the grant date. All share-based compensation arrangements Additionally, as of June 30, 2018, total unamortized stock-based compensation expense was $57. 2 million related to unvested share-based compensation arrangements, which is expected to be recognized over a weighted-average vesting term of approximately 3.0 years. Stock-based compensation cost capitalized in inventory was not material for the three or six months ended June 30, 2018. The following table summarizes the allocation of stock-based compensation related to stock options and RSUs in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Cost of sales $ 177 $ 141 $ 351 $ 270 Selling, general and administrative 4,864 3,470 8,880 5,784 Research and development 1,420 1,123 2,632 1,881 Total $ 6,461 $ 4,734 $ 11,863 $ 7,935 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Taxes | |
Income Taxes | Note 8. Income Taxes The provision for income taxes is determined using an effective tax rate. For the three months ended June 30, 2018, the Company’s estimated annual effective tax rate of (0.4)% was lower than the U.S. federal statutory rate primarily due to various permanent items, the impact of the Company’s valuation allowance, and minimum state tax payments. The effective tax rate may be subject to fluctuations during the year as new information is obtained which may affect the assumptions used to estimate the annual effective tax rate, including factors such as expected utilization of net operating loss carryforwards, changes in or the interpretation of tax laws in jurisdictions where the Company conducts business, the Company’s expansion into new states or foreign countries, and the amount of valuation allowances against deferred tax assets. For the three and six months ended June 30, 2018, the Company recorded a provision for income taxes of $11,000 and $16 ,000 , respectively which was primarily comprised of state income taxes. For the three and six month periods ended June 30, 2017, the Company recorded a provision for income taxes of $22,000 and $77,000, respectively. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of its assets and liabilities along with net operating loss and tax credit carryforwards. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period such determination is made. For the three and six months ended June 30, 2018, the Company has established a valuation allowance for all of the deferred tax assets, with the exception of known refundable federal credits. For the three and six months ended June 30, 2017, the Company had established a valuation allowance for all deferred tax assets. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement and classification in the financial statements of tax positions taken or expected to be taken in a tax return. The Tax Cuts and Jobs Act The Act was enacted on December 22, 2017. Among other changes, the Act reduces the US federal corporate tax rate from 34 % to 2 1% for federal tax purposes. In accordance with Staff Accounting Bulletin 118, as of June 30, 2018, the Company has not completed the accounting for the tax effects of enactment of the Act; however, in certain cases, as described below, the Company has made a reasonable estimate of the effects on the existing deferred tax balances. In all cases, the Company will continue to make and refine calculations as additional analysis is completed. In addition, estimates may also be affected as the Company gains a more thorough understanding of the Act. The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the Act and refining calculations, which could potentially affect the measurement of these balances or give rise to new deferred tax amounts based on information available at December 31, 2017. The provisional amount recorded related to the remeasurement of the deferred tax balance was $25.2 million, which was fully offset by a decrease in the valuation allowance. There were no significant changes to any of the balances recorded at December 31, 2017 as a result of the Act during the three and six months ended June 30, 2018. Due to uncertainties which currently exist in the interpretation of the provisions of the Act regarding Internal Revenue Code (IRC) Section 162(m), the Company is still evaluating the potential impacts of IRC Section 162(m) as amended by the Act. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 9. Commitments and Contingencies The Company, from time to time, is involved in legal proceedings or regulatory encounters or other matters in the ordinary course of business that could result in unasserted or asserted claims or litigation. Management is not aware of any legal proceedings where the likelihood of a loss contingency is reasonably possible and the amount or range of reasonably possible losses is material to the Company’s results of operations, financial condition or cash flows. Operating leases The Company leases its main headquarters and manufacturing facility and facilities for some of its foreign subsidiaries. Certain of the Company’s leases contain renewal options, rent escalation clauses, and/or landlord incentives. Rent expense for noncancelable operating leases with scheduled rent increases and/or landlord incentives is recognized on a straight-line basis over the lease term beginning with the lease commencement date, or the date the Company takes control of the leased space, whichever is sooner. The excess of straight-line rent expense over scheduled payment amounts and landlord incentives is recorded as a deferred rent liability. The Company leases two adjacent facilities located in San Clemente, California, both of which are subject to leases that expire on December 31, 2021. The agreements each contain an option to extend the leases for up to two additional three-year periods at market rates. The total square footage of both facilities equals approximately 77,000 and in February 2018, the Company entered into an agreement to increase the leased square footage by approximately 21,000 square feet, effective January 1, 2019. The Company’s remaining U.S.-based and foreign subsidiaries’ leased office space totals less than 14,000 square feet. The Company recorded deferred rent of $0.6 million and $0.3 million as of June 30, 2018 and December 31, 2017, respectively, in conjunction with its facilities lease agreements. For the three months ended June 30, 2018 and June 30, 2017, rent expense was $0.4 million and $0.3 million, respectively, and for the six months ended June 30, 2018 and June 30, 2017, rent expense was $0.8 million and $0.6 million, respectively. Future minimum payments under the aforementioned non-cancelable operating leases for each of the five succeeding years are as follows (in thousands): Remainder of 2018 $ 775 2019 1,539 2020 1,640 2021 1,644 2022 - Thereafter - $ 5,598 Regents of the University of California On December 30, 2014, the Company executed an agreement (the UC Agreement) with the Regents of the University of California (the University) to correct inventorship in connection with a group of the Company’s U.S. patents (the Patent Rights) and to obtain from the University a covenant that it did not and would not claim any right or title to the Patent Rights and will not challenge or assist any others in challenging the Patent Rights. In connection with the UC Agreement, Glaukos agreed to pay to the University a low single-digit percentage of worldwide net sales of certain current and future products, including the Company’s iStent products, with a required minimum annual payment of $0.5 million. This ongoing product payment terminates on the date that the last of the Patent Rights expires, which is currently expected to be in 2022. For the three months ended June 30, 2018 and June 30, 2017, the Company recorded approximately $1.1 million and $1.0 million, respectively, in cost of sales in connection with this product payment obligation and approximately $2.1 million and $1.9 million, respectively, in cost of sales in connection with this product payment obligation for the six month periods ended June 30, 2018 and June 30, 2017. Executive Deferred Compensation Plan Effective April 1, 2017, the Company established a deferred compensation plan (the Deferred Compensation Plan) for eligible senior level employees. The plan is designed to permit eligible employees to make elective deferrals of compensation to which he or she will become entitled in the future. The Company also established a rabbi trust that serves as an investment to shadow the Deferred Compensation Plan liability. The investments of the rabbi trust consist of company-owned life insurance policies (COLIs). The fair value of the Deferred Compensation Plan liability, included in other liabilities on the condensed consolidated balance sheets, was approximately $1.7 million and $0.6 million as of June 30, 2018 and December, 31, 2017, respectively, and the cash surrender value of the COLIs, included in deposits and other assets on the condensed consolidated balance sheets, which reflects the underlying assets at fair value, was approximately $1.7 million and $0.7 million as of June 30, 2018 and December 31, 2017, respectively. |
Business Segment Information
Business Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Business Segment Information | |
Business Segment Information | Note 10. Business Segment Information Operating segments are identified as components of an enterprise about which segment discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. The Company operates its business on the basis of one reportable segment—ophthalmic medical devices. Three months ended Six months ended June 30, June 30, Geographic Net Sales Information (in thousands) 2018 2017 2018 2017 United States $ 36,311 $ 37,075 $ 69,924 $ 68,952 International 6,850 4,210 13,370 8,240 Total net sales $ 43,161 $ 41,285 $ 83,294 $ 77,192 |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies | |
Use of estimates | Use of estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ materially from those estimates and assumptions. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. The most significant estimates in the accompanying condensed consolidated financial statements relate to revenue recognition and stock‑based compensation expense. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, this process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements. |
Foreign currency translation | Foreign currency translation The accompanying condensed consolidated financial statements are presented in U.S. dollars. The Company considers the local currency to be the functional currency for its international subsidiaries. Accordingly, their assets and liabilities are translated into U.S. dollars using the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at average exchange rates prevailing throughout the periods presented. As a result, currency translation adjustments arising from period to period are charged or credited to accumulated other comprehensive income (loss) in stockholders’ equity. For the three and six months ended June 30, 2018, the Company reported foreign currency translation gains of approximately $1.5 million and $1.0 million, respectively. For the three and six months ended June 30, 2017, the Company reported foreign currency translation losses of approximately $0.3 million and $0.7 million, respectively. Realized gains and losses resulting from foreign currency transactions are included in selling, general and administrative expense in the condensed consolidated statements of operations. For the three and six months ended June 30, 2018, the Company reported foreign currency transaction losses of approximately $0.2 million and $0.3 million, respectively. For each of the three and six month periods ended June 30, 2017, the Company reported foreign currency transaction gains of approximately $0.1 million. Unrealized gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency, primarily gains and losses on intercompany loans, are included in the condensed consolidated statements of operations as a component of other (expense) income, net. For the three and six months ended June 30, 2018, the Company reported net unrealized foreign currency transaction losses of $1.7 million and $1.2 million, respectively. For the three and six months ended June 30, 2017, the Company reported net unrealized foreign currency transaction gains of $0.3 million and $0.6 million, respectively. |
Cash, cash equivalents and short-term investments | Cash, cash equivalents and short-term investments The Company invests its excess cash in marketable securities, including money market funds, money market securities, bank certificates of deposits, corporate bonds, corporate commercial paper, U.S. government bonds and U.S. government agency bonds. For financial reporting purposes, liquid investment instruments purchased with an original maturity of three months or less are considered to be cash equivalents. Cash and cash equivalents are recorded at face value or cost, which approximates fair market value. The Company maintains cash balances in excess of amounts insured by the Federal Deposit Insurance Commission. Investments are stated at fair value as determined by quoted market prices. Investments are considered available-for-sale and, accordingly, unrealized gains and losses are included in accumulated other comprehensive income (loss) within stockholders’ equity. The Company’s entire investment portfolio is considered to be available for use in current operations and, accordingly, all such investments are stated at fair value using quoted market prices and classified as current assets, although the stated maturity of individual investments may be one year or more beyond the balance sheet date. The Company did not have any trading securities or restricted investments at June 30, 2018 or December 31, 2017. Realized gains and losses and declines in value, if any, judged to be other-than-temporary on available-for-sale securities are reported in other (expense) income, net. When securities are sold, any associated unrealized gain or loss previously reported as a separate component of stockholders’ equity is reclassified out of stockholders’ equity and recorded in the statements of operations in the period sold using the specific identification method. Accrued interest and dividends are included in other (expense) income, net. The Company periodically reviews its available-for-sale securities for other-than-temporary declines in fair value below the cost basis, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. |
Fair value of financial instruments | Fair value of financial instruments The carrying amounts of cash equivalents, accounts receivable, accounts payable, and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. The valuation of assets and liabilities is subject to fair value measurements using a three-tiered approach and fair value measurements are classified and disclosed by the Company in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). |
Revenue recognition | Revenue recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (ASC) 606 , Revenue from Contracts with Customers . The Company adopted the standard by applying the modified retrospective method to contracts that were not complete as of the date of initial application. The Company’s accounting for revenue under ASC 606 is materially consistent with the accounting for revenue under ASC 605 and therefore the cumulative effect of adoption was immaterial. The reported results for the three and six months ended June 30, 2018 reflect the application of ASC 606 guidance while the reported results for periods prior to January 1, 2018 were prepared under the guidance of ASC 605. The Company accounts for revenue in accordance with ASC 606 and applies the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. As part of the Company's adoption of ASC 606, the Company elected to use the following practical expedients: (i) to exclude disclosures of transaction prices allocated to remaining performance obligations when the Company expects to recognize such revenue within one year; (ii) to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less, which mainly includes the Company's internal sales force compensation program; (iii) to account for shipping and handling costs as fulfillment costs (i.e., as an expense) rather than promised service (i.e., a revenue element); and (iv) to exclude from revenue the taxes collected from customers relating to product sales which are remitted to governmental authorities. The Company derives its revenue from sales of its products in the United States and internationally. Customers are primarily comprised of ambulatory surgery centers and hospitals, with distributors being used in certain international locations where the Company does not have a direct commercial presence. The Company concluded that one performance obligation exists for the majority of its contracts with customers which is to deliver products in accordance with the Company’s normal delivery times. Revenue is recognized when this performance obligation is satisfied at a point in time when the Company considers control of a product to have transferred to the customer. Revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those products or services. The Company has determined the transaction price to be the invoice price, net of adjustments, which includes estimates of variable consideration for product returns. The Company offers volume-based rebate agreements to certain customers and, in these instances, the Company provides a rebate (in the form of a credit memo) at the contract’s conclusion, if earned by the customer. In such cases, the transaction price is allocated between the Company’s delivery of product and the issuance of a rebate at the contract’s conclusion for the customer to utilize on prospective purchases. The performance obligation to issue a customer’s rebate, if earned, is transferred over time and the Company’s method of measuring progress is the output method, whereby, the progress is measured by the estimated rebate earned to date over the total rebate estimated to be earned over the contract period. The provision for volume-based rebates is estimated based on customers' contracted rebate programs and the customers’ projected sales levels. The Company periodically monitors its customer rebate programs to ensure the rebate allowance is fairly stated. The Company’s rebate allowance is included in accrued liabilities in the condensed consolidated balance sheets and estimated rebates accrued were not material during the periods presented. Customers are not granted specific rights of return; however, the Company may permit returns of product from customers if such product is returned in a timely manner and in good condition. The Company provides a warranty on its products for one year from the date of shipment, and any product found to be defective or out of specification will be replaced at no charge during the warranty period. Estimated allowances for sales returns and warranty replacements are recorded at the time of sale of the product and are estimated based upon the historical patterns of product returns matched against sales, and an evaluation of specific factors that may increase the risk of product returns. Product returns and warranty replacements to date have been consistent with amounts reserved or accrued and have not been significant. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates which would affect net product revenue and earnings in the period such variances become known. |
Research and development expenses | Research and development expenses Major components of research and development expense include personnel costs, preclinical studies, clinical trials and related clinical product manufacturing, materials and supplies, and fees paid to consultants. Research and development costs are expensed as goods are received or services are rendered. Costs to acquire technologies to be used in research and development that have not reached technological feasibility and have no alternative future use are also expensed as incurred. At each financial reporting date, the Company accrues the estimated unpaid costs of clinical study activities performed during a period by third party clinical sites with whom the Company has agreements that provide for fees based upon the quantities of subjects enrolled and clinical evaluation visits that occur over the life of the study. The cost estimates are determined based upon a review of the agreements and data collected by internal and external clinical personnel as to the status of enrollment and subject visits, and are based upon the facts and circumstances known to the Company at each financial reporting date. If the actual performance of activities varies from the assumptions used in the cost estimates, the accruals are adjusted accordingly. There have been no material adjustments to the Company’s prior period accrued estimates for clinical trial activities through June 30, 2018. |
Stock-based compensation | Stock‑based compensation The Company recognizes compensation expense for all stock-based awards granted to employees and nonemployees, including members of its board of directors. The fair value of stock option awards is estimated at the grant date using the Black-Scholes option pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period using the straight-line method. The determination of the fair value-based measurement of stock options on the date of grant using an option pricing model is affected by the determination of the fair value of the underlying stock as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s stock price volatility over the expected term of the grants, and actual and projected employee stock option exercise behaviors. In the future, as additional empirical evidence regarding these estimates becomes available, the Company may change or refine its approach of deriving them, and these changes could impact the fair value-based measurement of stock options granted in the future. Changes in the fair value-based measurement of stock awards could materially impact the Company’s operating results. The fair values of stock option awards made to nonemployees are re-measured at each reporting period using the Black-Scholes option pricing model. Compensation expense for these stock option awards is determined by applying the re-measured fair values to the shares that have vested during a period. The fair value of restricted stock unit (RSU) awards made to employees and nonemployees is equal to the closing market price of the Company’s common stock on the grant date. |
Net loss per share | Net loss per share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares that were outstanding for the period, without consideration for common stock equivalents. For periods when the Company realizes a net loss, no common stock equivalents are included in the calculation of weighted average number of dilutive common stock equivalents as the effect of applying the treasury stock method is considered anti-dilutive. For periods when the Company realizes net income, diluted net income per share is calculated by dividing the net income by the weighted average number of common shares plus the sum of the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury stock method. Common stock equivalents are comprised of stock options and RSUs outstanding under the Company’s stock option plans and shares issuable under the Company’s Employee Stock Purchase Plan (ESPP). The Company’s computation of net loss per share is as follows (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Numerator: Net loss – basic and diluted $ (5,398) $ (3,301) $ (8,109) $ (2,423) Denominator: Weighted average number of common shares outstanding - basic 34,942 34,322 34,778 34,234 Weighted average number of common shares outstanding - diluted 34,942 34,322 34,778 34,234 Basic net loss per share $ (0.15) $ (0.10) $ (0.23) $ (0.07) Diluted net loss per share $ (0.15) $ (0.10) $ (0.23) $ (0.07) Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Stock options outstanding 5,819 5,632 5,937 5,700 Unvested restricted stock units 141 105 333 105 ESPP 31 19 27 19 5,991 5,756 6,297 5,824 |
Recent accounting pronouncements | Recently adopted accounting pronouncements In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASC 2016-18), which enhances and clarifies the guidance on the classification and presentation of restricted cash in the statement of cash flows. ASU 2016-18 was effective for the Company beginning on January 1, 2018 and was required to be adopted retrospectively. Historically, the Company’s restricted cash balance has not been significant and the adoption of the guidance did not have a material impact on its condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01). The amendments are intended to help companies evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. When substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business. This introduces an initial required screening that, if met, eliminates the need for further assessment. To be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. To be a business without outputs, there will need to be an organized workforce. The ASU also narrows the definition of the term “outputs” to be consistent with how it is described in ASC 606, Revenue Recognition - Revenue from Contracts with Customers . The amendments were effective for annual periods beginning after December 15, 2017, including interim periods within those periods with early adoption permitted. The Company adopted the guidance effective January 1, 2018 and the guidance did not have a material impact on its condensed consolidated financial statements; however, any prospective impact to the Company’s condensed consolidated financial statements will depend on the terms specified in any future transactions subject to the guidance in ASU 2017-01. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation - Scope of Modification Accounting (ASU 2017-09). The standard provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The standard was effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods and early adoption was permitted. The Company adopted the guidance on a prospective basis effective January 1, 2018 and the adoption of ASU 2017-09 did not have a material impact on its condensed consolidated financial statements; however, any future impact to share-based compensation expense will depend on the terms specified in any new changes to share-based payment awards subsequent to the adoption. Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which amends the existing accounting standards for leases. In September 2017, the FASB issued ASU No. 2017-13 which provides additional clarification and implementation guidance on the previously issued ASU No. 2016-02. Under the new guidance, a lessee will be required to recognize a lease liability and right-of-use asset for all leases with terms in excess of twelve months. The new guidance also modifies the classification criteria and accounting for sales-type and direct financing leases, and requires additional disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. Consistent with current guidance, a lessee’s recognition, measurement, and presentation of expenses and cash flows arising from a lease will continue to depend primarily on its classification. The accounting standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and must be applied using a modified retrospective approach. Early adoption is permitted. While the Company is continuing to assess all potential impacts of the standard, it expects that most of its lease commitments will be subject to the updated standard and recognized as lease liabilities and right-of-use assets upon adoption. In February 2018, the FASB issued ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income that gives entities the option to reclassify to retained earnings tax effects related to items that have been stranded in accumulated other comprehensive income as a result of the Tax Cuts and Jobs Act (the Act). A company that elects to reclassify these amounts must reclassify stranded tax effects related to the Act’s change in U.S. federal tax rate for all items accounted for in other comprehensive income. Companies can also elect to reclassify other stranded effects that relate to the Act but do not directly relate to the change in the federal rate. Companies can choose whether to apply the amendments retrospectively to each period in which the effect of the Act is recognized or to apply the amendments in the period of adoption. The guidance is effective for all companies for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Entities can choose whether to apply the amendments retrospectively to each period in which the effect of the Act is recognized or to apply the amendments in the period of adoption, and the Company is assessing the potential impacts of the standard. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07). ASU 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered, or the service has been rendered, and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The accounting standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and the Company is assessing the potential impacts of the standard. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies | |
Schedule of the Company's net loss per share | The Company’s computation of net loss per share is as follows (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Numerator: Net loss – basic and diluted $ (5,398) $ (3,301) $ (8,109) $ (2,423) Denominator: Weighted average number of common shares outstanding - basic 34,942 34,322 34,778 34,234 Weighted average number of common shares outstanding - diluted 34,942 34,322 34,778 34,234 Basic net loss per share $ (0.15) $ (0.10) $ (0.23) $ (0.07) Diluted net loss per share $ (0.15) $ (0.10) $ (0.23) $ (0.07) |
Schedule of potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders | Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Stock options outstanding 5,819 5,632 5,937 5,700 Unvested restricted stock units 141 105 333 105 ESPP 31 19 27 19 5,991 5,756 6,297 5,824 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Details | |
Schedule of short-term investments | Short-term investments consisted of the following (in thousands): At June 30, 2018 Maturity Amortized cost Unrealized Unrealized Estimated (in years) or cost gains losses fair value U.S. government bonds less than 1 $ 1,599 $ - $ (13) $ 1,586 U.S. government agency bonds less than 2 3,988 - (22) 3,966 Bank certificates of deposit less than 1 8,702 1 (7) 8,696 Commercial paper less than 1 12,672 1 (2) 12,671 Corporate notes less than 3 47,152 20 (209) 46,963 Asset-backed securities less than 3 21,456 1 (132) 21,325 Total $ 95,569 $ 23 $ (385) $ 95,207 At December 31, 2017 Maturity Amortized cost Unrealized Unrealized Estimated (in years) or cost gains losses fair value U.S. government bonds less than 2 $ 1,799 $ - $ (17) $ 1,782 U.S. government agency bonds less than 2 2,698 - (17) 2,681 Bank certificates of deposit less than 1 10,300 1 (3) 10,298 Commercial paper less than 1 11,598 - (5) 11,593 Corporate notes less than 3 51,532 6 (121) 51,417 Asset-backed securities less than 3 16,796 - (61) 16,735 Total $ 94,723 $ 7 $ (224) $ 94,506 |
Schedule of accounts receivable, net | Accounts receivable consisted of the following (in thousands): June 30, December 31, 2018 2017 Accounts receivable $ 17,626 $ 17,248 Less allowance for doubtful accounts (537) (592) $ 17,089 $ 16,656 |
Schedule of inventory | Inventory consisted of the following (in thousands): June 30, December 31, 2018 2017 Finished goods $ 3,809 $ 4,225 Work in process 3,094 2,368 Raw material 6,909 4,629 $ 13,812 $ 11,222 |
Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Accrued contract payments (see Note 9) $ 1,078 $ 1,033 Accrued bonuses 4,894 9,106 Accrued vacation benefits 2,285 2,121 Accrued Employee Stock Purchase Plan liability 2,139 1,517 Other accrued liabilities 6,259 6,672 $ 16,655 $ 20,449 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurements | |
Schedule of the Company's financial assets and financial liabilities measured at fair value on a recurring basis | At June 30, 2018 Quoted prices Significant in active other Significant markets for observable unobservable June 30, identical assets inputs inputs 2018 (Level 1) (Level 2) (Level 3) Assets Money market funds (i) $ 148 $ 148 $ - $ - U.S. government agency bonds (ii) 3,966 - 3,966 - U.S. government bonds (ii) 1,587 - 1,587 - Bank certificates of deposit (ii) (iv) 10,195 - 10,195 - Commercial paper (ii) (iii) 16,411 - 16,411 - Corporate notes (ii) 46,963 - 46,963 - Asset-backed securities (ii) 21,325 - 21,325 - $ 100,595 $ 148 $ 100,447 $ - At December 31, 2017 Quoted prices Significant in active other Significant markets for observable unobservable December 31, identical assets inputs inputs 2017 (Level 1) (Level 2) (Level 3) Assets Money market funds (i) $ 2,370 $ 2,370 $ - $ - U.S. government agency bonds (ii) 2,681 - 2,681 - U.S. government bonds (ii) 1,782 - 1,782 Bank certificates of deposit (ii) 10,298 - 10,298 - Commercial paper (ii) (iii) 14,593 - 14,593 - Corporate notes (ii) 51,417 - 51,417 - Asset-backed securities (ii) 16,735 - 16,735 - $ 99,876 $ 2,370 $ 97,506 $ - (i) Included in cash and cash equivalents with a maturity of three months or less from date of purchase on the condensed consolidated balance sheets. (ii) Included in short-term investments on the condensed consolidated balance sheets. (iii) As of June 30, 2018 and December 31, 2017, commercial paper investments totaling $3,740 and $3,000 (in thousands), respectively, are included in cash and cash equivalents on the condensed consolidated balance sheets, as each of the investments has a maturity of three months or less from the date of purchase on the condensed consolidated balance sheets. (iv) As of June 30, 2018, one bank certificate of deposit investment totaling $1,500 (in thousands) is included in cash and cash equivalents on the condensed consolidated balance sheets, as the investment has a maturity of three months or less from the date of purchase on the condensed consolidated balance sheets. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets | |
Schedule reflecting the composition of intangible assets, net | The following reflects the composition of intangible assets, net (in thousands): June 30, December 31, 2018 2017 GMP royalty buyout $ 17,500 $ 17,500 Non-compete agreements 341 524 17,841 18,024 Accumulated amortization (16,530) (14,877) Total $ 1,311 $ 3,147 Weighted average amortization period (in months) 60 60 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stock-Based Compensation. | |
Schedule summarizing stock option activity under the 2001 Stock Plan, 2011 Stock Plan and 2015 Stock Plan | Stock options The following table summarizes stock option activity under the 2001 Stock Plan, 2011 Weighted- Number of Average Shares Weighted- Remaining Aggregate Underlying Average Contractual Intrinsic Value Options Exercise Price Life (in years) (in thousands) Outstanding at December 31, 2017 7,026 $ 21.36 7.3 $ 69,555 Granted 896 30.83 Exercised (438) 10.49 11,319 Canceled/forfeited/expired (177) 30.53 Outstanding at June 30, 2018 7,307 $ 22.95 7.2 $ 136,362 Vested and expected to vest at June 30, 2018 7,185 $ 22.78 7.2 $ 135,211 Exercisable at June 30, 2018 4,224 $ 15.67 6.1 $ 107,695 |
Schedule of the weighted-average assumptions used to estimate the fair value of options granted to employees | Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Risk-free interest rate 2.65 % 2.01 % 2.67 % 2.13 % Expected dividend yield % % % % Expected volatility % % 44.9 % 46.6 % Expected term (in years) 6.10 6.09 6.10 6.09 |
Schedule summarizing restricted stock unit activity | The following table summarizes the activity of unvested RSUs under the Stock Plans during the six months ended June 30, 2018 (in thousands): Weighted- Number of average shares grant date (in thousands) fair value Unvested at December 31, 2017 173 $ 39.10 Granted 258 30.41 Vested (26) 42.14 Canceled/forfeited (9) 32.49 Unvested at June 30, 2018 396 $ 33.39 |
Schedule summarizing the allocation of stock-based compensation | Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Cost of sales $ 177 $ 141 $ 351 $ 270 Selling, general and administrative 4,864 3,470 8,880 5,784 Research and development 1,420 1,123 2,632 1,881 Total $ 6,461 $ 4,734 $ 11,863 $ 7,935 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies | |
Schedule of future minimum lease payments under noncancelable operating leases | Future minimum payments under the aforementioned non-cancelable operating leases for each of the five succeeding years are as follows (in thousands): Remainder of 2018 $ 775 2019 1,539 2020 1,640 2021 1,644 2022 - Thereafter - $ 5,598 |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Segment Information | |
Schedule of Geographic Net Sales Information | Three months ended Six months ended June 30, June 30, Geographic Net Sales Information (in thousands) 2018 2017 2018 2017 United States $ 36,311 $ 37,075 $ 69,924 $ 68,952 International 6,850 4,210 13,370 8,240 Total net sales $ 43,161 $ 41,285 $ 83,294 $ 77,192 |
Organization and Basis of Pre25
Organization and Basis of Presentation - IOP and DOSE Medical (Details) - USD ($) $ in Thousands | Apr. 12, 2017 | Jun. 30, 2017 | Jun. 30, 2017 |
Acquisition of IOP Sensor System | |||
In-process research and development expensed | $ 5,320 | $ 5,320 | |
Purchase Agreement for an IOP System | DOSE Medical Corporation | |||
Acquisition of IOP Sensor System | |||
Cash payments for the acquisition of certain assets of related party | $ 5,500 | ||
Maximum performance-based consideration | 9,500 | ||
In-process research and development expensed | 5,300 | ||
Capitalized fixed assets | $ 200 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Summary (Details) $ / shares in Units, shares in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2018USD ($)item$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | |
Foreign Currency Translation | |||||
Foreign currency translation adjustments | $ 1,541,000 | $ (320,000) | $ 1,047,000 | $ (660,000) | |
Foreign currency transaction gains (loss) realized | (200,000) | 100,000 | (300,000) | 100,000 | |
Unrealized foreign currency losses (gains) | 1,700,000 | (300,000) | 1,185,000 | (624,000) | |
Trading Securities | |||||
Trading securities | 0 | $ 0 | $ 0 | ||
Revenue Recognition | |||||
Practical expedient of transaction prices allocated to remaining performance obligations | true | ||||
Practical expedient cost of obtaining contract | true | ||||
Number of performance obligations that exist for majority of the contracts with customers | item | 1 | ||||
Warranty period from date of shipment | 1 year | ||||
Numerator: | |||||
Net loss basic and diluted | $ (5,398,000) | $ (3,301,000) | $ (8,109,000) | $ (2,423,000) | |
Denominator: | |||||
Weighted average number of common shares outstanding - basic | shares | 34,942 | 34,322 | 34,778 | 34,234 | |
Weighted average number of common shares outstanding - diluted | shares | 34,942 | 34,322 | 34,778 | 34,234 | |
Basic net loss per share (in dollars per share) | $ / shares | $ (0.15) | $ (0.10) | $ (0.23) | $ (0.07) | |
Diluted net loss per share (in dollars per share) | $ / shares | $ (0.15) | $ (0.10) | $ (0.23) | $ (0.07) |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from computation of earnings per share | 5,991 | 5,756 | 6,297 | 5,824 |
Stock options | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from computation of earnings per share | 5,819 | 5,632 | 5,937 | 5,700 |
RSU | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from computation of earnings per share | 141 | 105 | 333 | 105 |
ESPP | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from computation of earnings per share | 31 | 19 | 27 | 19 |
Balance Sheet Details - Short-T
Balance Sheet Details - Short-Term Investments (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Short-term investments | ||
Amortized cost | $ 95,569 | $ 94,723 |
Unrealized gains | 23 | 7 |
Unrealized losses | (385) | (224) |
Estimated fair value | 95,207 | 94,506 |
U.S. Government bonds | ||
Short-term investments | ||
Amortized cost | 1,599 | 1,799 |
Unrealized losses | (13) | (17) |
Estimated fair value | $ 1,586 | $ 1,782 |
U.S. Government bonds | Maximum | ||
Short-term investments | ||
Maturity | 1 year | 2 years |
U.S. Government agency bonds | ||
Short-term investments | ||
Amortized cost | $ 3,988 | $ 2,698 |
Unrealized losses | (22) | (17) |
Estimated fair value | $ 3,966 | $ 2,681 |
U.S. Government agency bonds | Maximum | ||
Short-term investments | ||
Maturity | 2 years | 2 years |
Bank certificates of deposit | ||
Short-term investments | ||
Amortized cost | $ 8,702 | $ 10,300 |
Unrealized gains | 1 | 1 |
Unrealized losses | (7) | (3) |
Estimated fair value | $ 8,696 | $ 10,298 |
Bank certificates of deposit | Maximum | ||
Short-term investments | ||
Maturity | 1 year | 1 year |
Commercial paper | ||
Short-term investments | ||
Amortized cost | $ 12,672 | $ 11,598 |
Unrealized gains | 1 | |
Unrealized losses | (2) | (5) |
Estimated fair value | $ 12,671 | $ 11,593 |
Commercial paper | Maximum | ||
Short-term investments | ||
Maturity | 1 year | 1 year |
Corporate notes | ||
Short-term investments | ||
Amortized cost | $ 47,152 | $ 51,532 |
Unrealized gains | 20 | 6 |
Unrealized losses | (209) | (121) |
Estimated fair value | $ 46,963 | $ 51,417 |
Corporate notes | Maximum | ||
Short-term investments | ||
Maturity | 3 years | 3 years |
Asset-backed securities | ||
Short-term investments | ||
Amortized cost | $ 21,456 | $ 16,796 |
Unrealized gains | 1 | |
Unrealized losses | (132) | (61) |
Estimated fair value | $ 21,325 | $ 16,735 |
Asset-backed securities | Maximum | ||
Short-term investments | ||
Maturity | 3 years | 3 years |
Balance Sheet Details - Other (
Balance Sheet Details - Other (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts Receivable, Net | ||
Accounts receivable | $ 17,626 | $ 17,248 |
Less allowance for doubtful accounts | (537) | (592) |
Accounts receivable, net | 17,089 | 16,656 |
Inventory | ||
Finished goods | 3,809 | 4,225 |
Work in process | 3,094 | 2,368 |
Raw materials | 6,909 | 4,629 |
Total inventory | 13,812 | 11,222 |
Accrued Liabilities | ||
Accrued contract payments (see Note 9) | 1,078 | 1,033 |
Accrued bonuses | 4,894 | 9,106 |
Accrued vacation benefits | 2,285 | 2,121 |
Accrued Employee Stock Purchase Plan liability | 2,139 | 1,517 |
Other accrued liabilities | 6,259 | 6,672 |
Total accrued liabilities | $ 16,655 | $ 20,449 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) $ in Thousands | Jun. 30, 2018USD ($)item | Dec. 31, 2017USD ($) |
Assets | ||
Total assets | $ 100,595 | $ 99,876 |
Fair Value, Inputs, Level 1 | ||
Assets | ||
Total assets | 148 | 2,370 |
Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 100,447 | 97,506 |
Fair Value, Measurements, Recurring | ||
Liabilities | ||
Total liabilities | 0 | 0 |
Money market funds | ||
Assets | ||
Total assets | 148 | 2,370 |
Money market funds | Fair Value, Inputs, Level 1 | ||
Assets | ||
Total assets | 148 | 2,370 |
U.S. Government agency bonds | ||
Assets | ||
Total assets | 3,966 | 2,681 |
U.S. Government agency bonds | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 3,966 | 2,681 |
U.S. Government bonds | ||
Assets | ||
Total assets | 1,587 | 1,782 |
U.S. Government bonds | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 1,587 | 1,782 |
Bank certificates of deposit | ||
Assets | ||
Cash equivalents | 1,500 | |
Total assets | $ 10,195 | 10,298 |
Number of certificates of deposit | item | 1 | |
Bank certificates of deposit | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | $ 10,195 | 10,298 |
Commercial paper. | ||
Assets | ||
Cash equivalents | 3,740 | 3,000 |
Total assets | 16,411 | 14,593 |
Commercial paper. | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 16,411 | 14,593 |
Corporate notes | ||
Assets | ||
Total assets | 46,963 | 51,417 |
Corporate notes | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | 46,963 | 51,417 |
Asset-backed securities | ||
Assets | ||
Total assets | 21,325 | 16,735 |
Asset-backed securities | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets | $ 21,325 | $ 16,735 |
Fair Value Measurements - Trans
Fair Value Measurements - Transfers (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value Measurements | ||
Amount of transfers of assets and liabilities measured on a recurring basis between Levels 1, 2 and 3 of the fair value hierarchy | $ 0 | $ 0 |
Intangible Assets - Summary and
Intangible Assets - Summary and Other (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2013USD ($) | Jun. 30, 2018USD ($)item | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)item | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016item | |
Composition of intangible assets | |||||||
Total gross amount | $ 17,841,000 | $ 17,841,000 | $ 18,024,000 | ||||
Accumulated amortization | (16,530,000) | (16,530,000) | (14,877,000) | ||||
Total | 1,311,000 | $ 1,311,000 | $ 3,147,000 | ||||
Useful life/amortization period | 60 months | 60 months | |||||
Amortization expense | 900,000 | $ 900,000 | $ 1,800,000 | $ 1,800,000 | |||
Estimated amortization expense | |||||||
Remainder of 2018 | 1,300,000 | 1,300,000 | |||||
GMP royalty buyout | |||||||
Composition of intangible assets | |||||||
Total gross amount | 17,500,000 | 17,500,000 | $ 17,500,000 | ||||
Non-compete agreements | |||||||
Composition of intangible assets | |||||||
Total gross amount | $ 341,000 | $ 341,000 | $ 524,000 | ||||
Number of fully amortized intangible assets | item | 2 | 2 | |||||
Number of intangible assets not fully amortized | item | 2 | 2 | |||||
Amortization expense | $ 43,000 | $ 66,000 | $ 86,000,000 | $ 129,000,000 | |||
Number of international distributors | item | 4 | ||||||
The amount of fair value of the non-compete provisions recorded as intangible asset | $ 300,000 | ||||||
Non-compete agreements | Minimum | |||||||
Composition of intangible assets | |||||||
Useful life/amortization period | 1 year | ||||||
Non-compete agreements | Maximum | |||||||
Composition of intangible assets | |||||||
Useful life/amortization period | 2 years | ||||||
Buy-out Agreement with GMP | GMP royalty buyout | |||||||
Composition of intangible assets | |||||||
Intangible asset purchase amount | $ 17,500,000 | ||||||
Useful life/amortization period | 5 years | ||||||
Buy-out Agreement with GMP | GMP Note Parties | |||||||
Composition of intangible assets | |||||||
Face amount at time of issuance | $ 17,500,000 |
Revenue from Contracts with C33
Revenue from Contracts with Customers (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customers | |
Typical payment terms on invoiced amounts | 30 days |
Practical expedient financing component | true |
Practical expedient cost of obtaining contract | true |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2018USD ($)item$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | |
Stock-based compensation | |||
Number of stock plans | item | 4 | ||
Unvested options | |||
Vesting period | 3 years | ||
Number of Shares Underlying Options | |||
Outstanding at beginning of period (in shares) | shares | 7,026 | ||
Granted (in shares) | shares | 896 | ||
Exercised (in shares) | shares | (438) | ||
Canceled/forfeited/expired (in shares) | shares | (177) | ||
Outstanding at end of period (in shares) | shares | 7,307 | 7,307 | 7,026 |
Vested and expected to vest at end of period (in shares) | shares | 7,185 | 7,185 | |
Exercisable at end of period (in shares) | shares | 4,224 | 4,224 | |
Weighted Average Exercise Price | |||
Outstanding at beginning of period (in dollars per share) | $ 21.36 | ||
Granted (in dollars per share) | 30.83 | ||
Exercised (in dollars per share) | 10.49 | ||
Canceled/forfeited/expired (in dollars per share) | 30.53 | ||
Outstanding at end of period (in dollars per share) | $ 22.95 | 22.95 | $ 21.36 |
Vested and expected to vest at end of period (in dollars per share) | 22.78 | 22.78 | |
Exercisable at end of period (in dollars per share) | $ 15.67 | $ 15.67 | |
Additional disclosures | |||
Unamortized stock-based compensation expense | $ | $ 57,200 | $ 57,200 | |
Weighted Average Remaining Contractual Life | 7 years 2 months 12 days | 7 years 3 months 18 days | |
Weighted Average Remaining Contractual Life, Vested and expected to vest at end of period | 7 years 2 months 12 days | ||
Weighted Average Remaining Contractual Life, Exercisable at end of period | 6 years 1 month 6 days | ||
Weighted average estimated grant date fair value of options granted | $ | 136,362 | $ 136,362 | $ 69,555 |
Exercised, Aggregate Intrinsic Value | $ | 11,319 | ||
Vested and expected to vest, Aggregate Intrinsic Value | $ | 135,211 | 135,211 | |
Exercisable, Aggregate Intrinsic Value | $ | $ 107,695 | $ 107,695 | |
Weighted average estimated grant date fair value of options granted (in dollars per share) | $ 16.91 | $ 15.08 | |
Fair value of stock options vested | $ | $ 6,400 | $ 15,700 | |
First anniversary | RSU | |||
Stock-based compensation | |||
Vesting (as a percent) | 25.00% | ||
Second anniversary | RSU | |||
Stock-based compensation | |||
Vesting (as a percent) | 25.00% | ||
Third anniversary | RSU | |||
Stock-based compensation | |||
Vesting (as a percent) | 25.00% | ||
Fourth anniversary | RSU | |||
Stock-based compensation | |||
Vesting (as a percent) | 25.00% |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions (Details) - Employee stock options | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock-based awards to employees - weighted average assumptions used to estimate fair value of options granted | ||||
Risk-free interest rate (as a percent) | 2.65% | 2.01% | 2.67% | 2.13% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility rate (as a percent) | 44.80% | 46.60% | 44.90% | 46.60% |
Expected term | 6 years 1 month 6 days | 6 years 1 month 2 days | 6 years 1 month 6 days | 6 years 1 month 2 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - RSU shares in Thousands | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of shares | |
Unvested at beginning of period (in shares) | shares | 173 |
Granted (in shares) | shares | 258 |
Vested (in shares) | shares | (26) |
Canceled/forfeited (in shares) | shares | (9) |
Unvested at end of period (in shares) | shares | 396 |
Weighted average grant date fair value | |
Unvested at beginning of period (in dollar per share) | $ / shares | $ 39.10 |
Granted (in dollar per share) | $ / shares | 30.41 |
Vested (in dollar per share) | $ / shares | 42.14 |
Canceled/forfeited (in dollar per share) | $ / shares | 32.49 |
Unvested at end of period (in dollar per share) | $ / shares | $ 33.39 |
Stock-Based Compensation - Allo
Stock-Based Compensation - Allocation of Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Allocation of stock-based compensation | ||||
Stock-based compensation expense | $ 6,461 | $ 4,734 | $ 11,863 | $ 7,935 |
Cost of sales | ||||
Allocation of stock-based compensation | ||||
Stock-based compensation expense | 177 | 141 | 351 | 270 |
Selling, general and administrative | ||||
Allocation of stock-based compensation | ||||
Stock-based compensation expense | 4,864 | 3,470 | 8,880 | 5,784 |
Research and development | ||||
Allocation of stock-based compensation | ||||
Stock-based compensation expense | $ 1,420 | $ 1,123 | $ 2,632 | $ 1,881 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Taxes | |||||
Effective tax rate (as a percent) | (0.40%) | ||||
Provision for income taxes | $ 11,000 | $ 22,000 | $ 16,000 | $ 77,000 | |
Statutory rate (as a percent) | 21.00% | 34.00% | |||
Deferred tax assets from Tax Cuts and Jobs Act of 2017 | $ 25,200,000 | $ 25,200,000 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018USD ($)ft² | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)ft²item | Jun. 30, 2017USD ($) | Jan. 31, 2019ft² | Dec. 31, 2017USD ($) | |
Operating Leases | ||||||
Deferred rent | $ 600 | $ 600 | $ 300 | |||
Rent expense | 400 | $ 300 | 800 | $ 600 | ||
Future minimum lease payments under noncancelable operating leases | ||||||
Reminder of 2018 | 775 | 775 | ||||
2,019 | 1,539 | 1,539 | ||||
2,020 | 1,640 | 1,640 | ||||
2,021 | 1,644 | 1,644 | ||||
Total future minimum payments | $ 5,598 | $ 5,598 | ||||
Domestic Office Leases | ||||||
Operating Leases | ||||||
The number of adjacent facilities rented | item | 2 | |||||
Number of lease renewal periods | item | 2 | |||||
Optional lease extension term | 3 years | |||||
Area of leased space | ft² | 77,000 | 77,000 | ||||
Domestic Office Leases | Forecast | ||||||
Operating Leases | ||||||
Area of leased space | ft² | 21,000 | |||||
Foreign Subsidiaries Office Leases | ||||||
Operating Leases | ||||||
Area of leased space | ft² | 14,000 | 14,000 |
Commitments and Contingencies40
Commitments and Contingencies - Other (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Other commitments | |||||
Deferred compensation plan liability | $ 1.7 | $ 1.7 | $ 0.6 | ||
Deferred compensation plan assets | 1.7 | 1.7 | $ 0.7 | ||
Agreement with the Regents | |||||
Other commitments | |||||
Minimum required annual payment of the commitment obligation, based on net sales of current and future products | 0.5 | 0.5 | |||
Cost of sales | Agreement with the Regents | |||||
Other commitments | |||||
Commitment obligation payments | $ 1.1 | $ 1 | $ 2.1 | $ 1.9 |
Business Segment Information (D
Business Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | |
Business Segment Information | ||||
Number of Reportable Segments | segment | 1 | |||
Total net sales | $ 43,161 | $ 41,285 | $ 83,294 | $ 77,192 |
United States | ||||
Business Segment Information | ||||
Total net sales | 36,311 | 37,075 | 69,924 | 68,952 |
International | ||||
Business Segment Information | ||||
Total net sales | $ 6,850 | $ 4,210 | $ 13,370 | $ 8,240 |