Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 23, 2015 | |
Document Information | ||
Entity Registrant Name | GLOBUS MEDICAL INC | |
Entity Central Index Key | 1,237,831 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 95,235,193 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $ 50,501 | $ 82,265 |
Restricted cash | 25,385 | 23,370 |
Short-term marketable securities | 188,101 | 146,439 |
Accounts receivable, net of allowances of $2,224 and $1,647, respectively | 77,596 | 75,430 |
Inventories | 105,705 | 90,945 |
Prepaid expenses and other current assets | 7,107 | 5,742 |
Income taxes receivable | 7,995 | 5,772 |
Deferred income taxes | 43,918 | 40,062 |
Total current assets | 506,308 | 470,025 |
Property and equipment, net of accumulated depreciation of $134,108 and $118,544, respectively | 106,180 | 69,475 |
Long-term marketable securities | 61,525 | 75,347 |
Intangible assets, net | 33,635 | 34,529 |
Goodwill | 91,964 | 53,196 |
Other assets | 1,049 | 975 |
Total assets | 800,661 | 703,547 |
LIABILITIES AND EQUITY | ||
Accounts payable | 16,358 | 15,904 |
Accounts payable to related-party | 0 | 5,359 |
Accrued expenses | 64,169 | 61,499 |
Income taxes payable | 550 | 569 |
Business acquisition liabilities, current | 13,342 | 6,081 |
Total current liabilities | 94,419 | 89,412 |
Business acquisition liabilities, net of current portion | 20,732 | 20,195 |
Deferred income taxes | 8,193 | 5,166 |
Other liabilities | 3,400 | 3,320 |
Total liabilities | $ 126,744 | $ 118,093 |
Commitments and contingencies (Note 12) | ||
Equity: | ||
Additional paid-in capital | $ 188,603 | $ 175,242 |
Accumulated other comprehensive loss | (1,738) | (1,657) |
Retained earnings | 486,957 | 411,774 |
Total equity | 673,917 | 585,454 |
Total liabilities and equity | 800,661 | 703,547 |
Class A Common | ||
Equity: | ||
Common stock | 71 | 71 |
Class B Common | ||
Equity: | ||
Common stock | $ 24 | $ 24 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Allowance for doubtful accounts | $ 2,224 | $ 1,647 |
Property, Plant and Equipment, Net | ||
Accumulated depreciation | $ 134,108 | $ 118,544 |
Equity: | ||
Common stock, shares authorized | 785,000,000 | |
Common stock, shares issued | 95,225,155 | 94,705,743 |
Common stock, shares outstanding | 95,225,155 | 94,705,743 |
Class A Common | ||
Equity: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 71,347,599 | 70,828,187 |
Common stock, shares outstanding | 71,347,599 | 70,828,187 |
Class B Common | ||
Equity: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 275,000,000 | 275,000,000 |
Common stock, shares issued | 23,877,556 | 23,877,556 |
Common stock, shares outstanding | 23,877,556 | 23,877,556 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Sales | $ 136,992 | $ 117,787 | $ 402,166 | $ 345,570 |
Cost of goods sold | 33,052 | 27,686 | 97,738 | 79,581 |
Gross profit | 103,940 | 90,101 | 304,428 | 265,989 |
Operating expenses: | ||||
Research and development | 9,409 | 8,146 | 27,146 | 23,283 |
Selling, general and administrative | 53,829 | 46,986 | 160,624 | 140,089 |
Provision for litigation | 27 | 46 | 433 | 3,899 |
Total operating expenses | 63,265 | 55,178 | 188,203 | 167,271 |
Operating Income | 40,675 | 34,923 | 116,225 | 98,718 |
Other income, net | ||||
Interest income, net | 342 | 181 | 898 | 577 |
Foreign currency transaction loss | (205) | (388) | (869) | (444) |
Other income | 116 | 83 | 318 | 313 |
Total other income/(expense), net | 253 | (124) | 347 | 446 |
Income before income taxes | 40,928 | 34,799 | 116,572 | 99,164 |
Income tax provision | 14,447 | 11,738 | 41,389 | 34,317 |
Net Income | $ 26,481 | $ 23,061 | $ 75,183 | $ 64,847 |
Earnings per share: | ||||
Basic | $ 0.28 | $ 0.24 | $ 0.79 | $ 0.69 |
Diluted | $ 0.28 | $ 0.24 | $ 0.78 | $ 0.68 |
Weighted average shares outstanding: | ||||
Basic | 95,138 | 94,399 | 94,970 | 94,111 |
Dilutive stock options | 981 | 1,076 | 1,056 | 1,267 |
Diluted | 96,119 | 95,475 | 96,026 | 95,378 |
Anti-dilutive stock equivalents excluded from weighted average calculation | 3,234 | 1,660 | 3,118 | 1,518 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 26,481 | $ 23,061 | $ 75,183 | $ 64,847 |
Other comprehensive income/(loss): | ||||
Unrealized gain/(loss) on marketable securities, net of tax | 75 | (18) | 103 | (8) |
Foreign currency translation loss | (124) | (422) | (184) | (290) |
Total other comprehensive loss | (49) | (440) | (81) | (298) |
Comprehensive Income | $ 26,432 | $ 22,621 | $ 75,102 | $ 64,549 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 75,183 | $ 64,847 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 17,669 | 16,057 |
Amortization of premium on marketable securities | 2,352 | 2,073 |
Write-down for excess and obsolete inventories | 7,122 | 5,439 |
Stock-based compensation expense | 6,935 | 5,211 |
Excess tax benefit related to nonqualified stock options | (1,973) | (4,044) |
Allowance for doubtful accounts | 957 | 236 |
Change in deferred income taxes | (4,115) | (5,115) |
Increase in: | ||
Restricted cash | (2,015) | 0 |
Accounts receivable | (3,468) | (886) |
Inventories | (16,998) | (12,535) |
Prepaid expenses and other assets | (1,368) | (1,325) |
Increase/(decrease) in: | ||
Accounts payable | (2,812) | (2,253) |
Accounts payable to related-party | (5,359) | 1,289 |
Accrued expenses and other liabilities | 6,042 | 3,855 |
Income taxes payable/receivable | (275) | 4,378 |
Net cash provided by operating activities | 77,877 | 77,227 |
Cash flows from investing activities: | ||
Purchases of marketable securities | (207,407) | (161,149) |
Maturities of marketable securities | 131,318 | 144,207 |
Sales of marketable securities | 46,064 | 24,028 |
Purchases of property and equipment | (36,606) | (15,659) |
Acquisition of businesses, net of cash acquired | (48,513) | 0 |
Net cash used in investing activities | (115,144) | (8,573) |
Cash flows from financing activities: | ||
Payment of business acquisition liabilities | (900) | (900) |
Proceeds from exercise of stock options | 4,313 | 7,644 |
Excess tax benefit related to nonqualified stock options | 1,973 | 4,044 |
Net cash provided by financing activities | 5,386 | 10,788 |
Effect of foreign exchange rate on cash | 117 | 45 |
Net increase/(decrease) in cash and cash equivalents | (31,764) | 79,487 |
Cash and cash equivalents, beginning of period | 82,265 | 89,962 |
Cash and cash equivalents, end of period | 50,501 | 169,449 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 9 | 32 |
Income taxes paid | $ 45,955 | $ 36,362 |
BACKGROUND AND SUMMARY OF SIGNI
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Background and Summary of Significant Accounting Policies | BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) The Company Globus Medical, Inc., together with its subsidiaries, is a medical device company focused on the design, development and commercialization of musculoskeletal implants. We are currently focused on implants that promote healing in patients with spine disorders. We are an engineering-driven company with a history of rapidly developing and commercializing advanced products and procedures that assist surgeons in effectively treating their patients, respond to evolving surgeon needs and address new treatment options. Since our inception in 2003, we have launched over 150 products and offer a product portfolio addressing a broad array of spinal pathologies. We are headquartered in Audubon, Pennsylvania, and market and sell our products through our exclusive sales force in the United States, as well as within North, Central & South America, Europe, Asia, Africa and Australia. Our sales force consists of direct sales representatives and distributor sales representatives employed by exclusive independent distributors. The terms “the Company,” “Globus,” “we,” “us” and “our” refer to Globus Medical, Inc. and, where applicable, our consolidated subsidiaries. (b) Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in complete financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2014 . In the opinion of management, the statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of our financial position and of the results for the three- and nine- month periods presented. The results of operations for any interim period are not indicative of results for the full year. Certain reclassifications have been made to prior period statements to conform to the current year presentation. (c) Principles of Consolidation The accompanying consolidated financial statements include the accounts of Globus and its wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. (d) Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates, in part, on historical experience that management believes to be reasonable under the circumstances. Actual results could differ materially from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Significant areas that require management’s estimates include intangible assets, contingent payment liabilities, allowance for doubtful accounts, stock-based compensation, write-down for excess and obsolete inventory, useful lives of assets, the outcome of litigation, and income taxes. We are subject to risks and uncertainties due to changes in the healthcare environment, regulatory oversight, competition, and legislation that may cause actual results to differ from estimated results. (e) Restricted Cash In December 2014, we set aside cash for the payment of a portion of the Synthes and Bianco litigations. We classified this cash as restricted, as the amount was placed in escrow to be used for payment of the litigation obligations, should we not be successful with our appeals. As of September 30, 2015 , we have $25.4 million of restricted cash related to these matters. See “Note 12. Commitments and Contingencies” below for more details regarding these litigations. (f) Marketable Securities Our marketable securities include municipal bonds, corporate debt securities, commercial paper, securities of U.S. government-sponsored agencies and asset-backed securities, and are classified as available-for-sale as of September 30, 2015 . Available-for-sale securities are recorded at fair value in both short-term and long-term marketable securities on our consolidated balance sheets. The change in fair value for available-for-sale securities is recorded, net of taxes, as a component of accumulated other comprehensive loss on our consolidated balance sheets. Premiums and discounts are recognized over the life of the related security as an adjustment to yield using the straight-line method. Realized gains or losses from the sale of our marketable securities are determined on a specific identification basis. Realized gains and losses, along with interest income and the amortization/accretion of premiums/discounts are included as a component of other income, net, on our consolidated statements of income. Interest receivable is recorded as a component of prepaid expenses and other current assets on our consolidated balance sheets. We maintain a portfolio of various holdings, types and maturities, though most of the securities in our portfolio could be liquidated at minimal cost at any time. We invest in securities that meet or exceed standards as defined in our investment policy. Our policy also limits the amount of credit exposure to any one issue, issuer or type of security. We review our securities for other-than-temporary impairment at each reporting period. If an unrealized loss for any security is considered to be other-than-temporary, the loss will be recognized in our consolidated statement of income in the period the determination is made. (g) Inventories Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis. The majority of our inventories are finished goods as we mainly utilize third-party suppliers to source our products. We periodically evaluate the carrying value of our inventories in relation to our estimated forecast of product demand, which takes into consideration the estimated life cycle of product releases. When quantities on hand exceed estimated sales forecasts, we record a write-down for such excess inventories. (h) Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, product delivery has occurred, pricing is fixed or determinable, and collection is reasonably assured. A significant portion of our revenue is generated from consigned inventory maintained at hospitals or with sales representatives. For these products, revenue is recognized at the time the product is used or implanted. For all other transactions, we recognize revenue when title to the goods and risk of loss transfer to customers, provided there are no remaining performance obligations that will affect the customer’s final acceptance of the sale. Our policy is to classify shipping and handling costs billed to customers as sales and the related expenses as cost of goods sold. (i) Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board released Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) . ASU 2014-09 is designed to create greater comparability for financial statement users across industries and jurisdictions. Under the new standard, an entity will recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the payment to which the entity expects to be entitled in exchange for those goods or services. The standard also will require enhanced disclosures and provide more comprehensive guidance for transactions such as service revenue and contract modifications. The standard was to take effect for public companies for annual reporting periods beginning after December 15, 2016, and early adoption was prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. In August 2015, the FASB released ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), which defers the effective date of ASU 2014-09 by one year while providing the option to early adopt the standard on the original effective date. We are currently evaluating the timing and impact of the new standard on our financial position, results of operations, and disclosures. In July 2015, the FASB released ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330) (“ASU 2015-11”) as part of the FASB’s Simplification Initiative. This update is intended to more closely align the measurement of inventory under GAAP with the measurement of inventory under International Financial Reporting Standards. Within the scope of the update, an entity is required to measure inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonable and predictable costs of completion, disposal and transportation. ASU 2015-11 is effective for all public entities for fiscal years beginning after December 31, 2016, including interim reporting periods within that period, and is required to be applied prospectively, with early adoption permitted. We are currently evaluating the impact of the new standard on our financial position, results of operations, and disclosures. In September 2015, the FASB released ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”). ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Prior to the issuance of the standard, entities were required to retrospectively apply adjustments made to provisional amounts recognized in a business combination. The amendments in ASU 2015-16 require an entity to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The update is not expected to have a material impact on our financial position, results of operations, and disclosures. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | ACQUISITIONS Branch Medical Group, Inc. On February 25, 2015, we entered into an agreement to acquire Branch Medical Group, Inc. (“BMG”), a related-party manufacturer of high precision medical devices located in Audubon, PA. We closed this acquisition on March 11, 2015, for $57.0 million in cash, $5.3 million in deferred consideration, and $0.9 million of closing working capital adjustments. The amount payable to BMG on the date of acquisition of $5.2 million was also settled in connection with the acquisition. As previously disclosed in our definitive proxy statement, BMG had been a related-party supplier since 2005. As of February 24, 2015, David C. Paul's wife, David D. Davidar's wife, and David M. Demski collectively owned approximately 49% of the outstanding stock of BMG. In addition, since February 2010, Mr. Paul's wife and Mr. Davidar's wife had served as directors of BMG. Prior to the acquisition, we purchased products and services from BMG pursuant to a standard Supplier Quality Agreement entered into in September 2010. We accounted for the acquisition under the purchase method of accounting, and as a result, recorded goodwill of $39.0 million . The results of operations of BMG have been included in our results of operations from the date of acquisition. Amounts recognized for assets acquired and liabilities assumed are based on purchase price allocations and on certain management judgments. These allocations are based on an analysis of the estimated fair values of assets acquired and liabilities assumed, including identifiable tangible assets, and estimates of the useful lives of tangible assets. We completed our final purchase price allocations during September 2015. The goodwill from this acquisition is not deductible for tax purposes. As of September 30, 2015 , we recorded the following purchase price allocation for the identifiable tangible and intangible assets and liabilities of BMG: (In thousands) Consideration: Cash paid at closing $ 57,042 Deferred consideration 5,290 Closing adjustments payable 944 Fair value of consideration $ 63,276 Identifiable assets acquired and liabilities assumed: Cash acquired $ 9,026 Accounts receivable 88 Inventory 4,753 Other assets 444 Property and equipment 14,862 Accounts payable and accrued expenses (1,585 ) Deferred tax liability, net (3,280 ) Total identifiable net assets 24,308 Goodwill 38,968 Total allocated purchase price $ 63,276 The following updated unaudited pro forma information is based on historical data, and gives effect to our acquisition of BMG as if the acquisition had occurred on January 1, 2014. These unaudited pro forma results include adjustments having a continuing impact on our consolidated statements of income. These adjustments consist of: elimination of intercompany sales/purchase transactions and the related profit, adjustments to depreciation for the fair value and depreciable lives of property and equipment, adjustments in the capitalization of overhead costs and adjustments to tax expense based on consolidated pro forma results. These results have been prepared using assumptions our management believes are reasonable, but not necessarily indicative of the actual results that would have occurred if the acquisition had occurred on January 1, 2014, and are not necessarily indicative of the results that may be achieved in the future, including but not limited to operating synergies that we may realize as a result of the acquisition. Three Months Ended Nine Months Ended (pro forma, in thousands, except per share amounts) September 30, September 30, September 30, September 30, Net sales $ 136,953 $ 117,802 $ 401,993 $ 345,743 Net income 27,191 23,226 77,358 65,011 Earnings per share: Basic $ 0.29 $ 0.25 $ 0.81 $ 0.69 Diluted $ 0.28 $ 0.24 $ 0.81 $ 0.68 Transplant Technologies of Texas, Ltd. On October 23, 2014, we entered into an equity interest purchase agreement with Transplant Technologies of Texas, Ltd. (“TTOT”), an allograft tissue processor located in San Antonio, Texas, pursuant to which we acquired 100% of the equity interests for $36.1 million . In addition to the initial purchase price, we may be obligated to make milestone payments of up to $15.0 million over the next three years based primarily on sales thresholds from the product lines we acquired. We accounted for the acquisition under the purchase method of accounting in the fourth quarter of 2014. We completed our final purchase price allocation during March 2015 and the final purchase price adjustments subsequent to December 31, 2014 were not material. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2015 | |
Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure | INTANGIBLE ASSETS A summary of intangible assets is presented below: September 30, 2015 (In thousands) Weighted Gross Accumulated Amortization Intangible In-process research & development — $ 24,560 $ — $ 24,560 Supplier network 10.0 4,000 (367 ) 3,633 Customer relationships & other intangibles 7.3 5,525 (2,127 ) 3,398 Patents 17.0 2,495 (451 ) 2,044 Total intangible assets $ 36,580 $ (2,945 ) $ 33,635 December 31, 2014 (In thousands) Weighted Gross Accumulated Amortization Intangible In-process research & development — $ 24,560 $ — $ 24,560 Supplier network 10.0 3,800 (88 ) 3,712 Customer relationships & other intangibles 7.3 5,525 (1,344 ) 4,181 Patents 17.0 2,420 (344 ) 2,076 Total intangible assets $ 36,305 $ (1,776 ) $ 34,529 |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 9 Months Ended |
Sep. 30, 2015 | |
Marketable Securities [Abstract] | |
Marketable Securities | MARKETABLE SECURITIES The composition of our short-term and long-term marketable securities is as follows: September 30, 2015 (In thousands) Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term: Municipal bonds Less than 1 $ 85,582 $ 36 $ (9 ) $ 85,609 Corporate debt securities Less than 1 55,019 9 (10 ) 55,018 Commercial paper Less than 1 42,454 12 — 42,466 Securities of U.S. government-sponsored agencies Less than 1 3,000 2 — 3,002 Asset-backed securities Less than 1 2,007 — (1 ) 2,006 Total short-term marketable securities $ 188,062 $ 59 $ (20 ) $ 188,101 Long-term: Municipal bonds 1-2 $ 23,858 $ 25 $ (16 ) $ 23,867 Corporate debt securities 1-2 11,532 7 (4 ) 11,535 Asset-backed securities 1-2 24,092 9 (4 ) 24,097 Securities of U.S. government-sponsored agencies 1-2 2,022 4 — 2,026 Total long-term marketable securities $ 61,504 $ 45 $ (24 ) $ 61,525 December 31, 2014 (In thousands) Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term: Municipal bonds Less than 1 $ 28,684 $ 2 $ (3 ) $ 28,683 Corporate debt securities Less than 1 73,066 7 (42 ) 73,031 Commercial paper Less than 1 44,663 8 — 44,671 Asset-backed securities Less than 1 54 — — 54 Total short-term marketable securities $ 146,467 $ 17 $ (45 ) $ 146,439 Long-term: Municipal bonds 1-2 $ 26,005 $ 3 $ (36 ) $ 25,972 Corporate debt securities 1-2 19,617 3 (22 ) 19,598 Asset-backed securities 1-2 21,236 1 (8 ) 21,229 Securities of U.S. government-sponsored agencies 1-2 8,564 — (16 ) 8,548 Total long-term marketable securities $ 75,422 $ 7 $ (82 ) $ 75,347 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Under the accounting for fair value measurements and disclosures, fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or the liability in an orderly transaction between market participants on the measurement date. Additionally, a fair value hierarchy was established that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Our assets and liabilities measured at fair value on a recurring basis are classified and disclosed in one of the following three categories: Level 1—quoted prices (unadjusted) in active markets for identical assets and liabilities; Level 2—observable inputs other than quoted prices in active markets for identical assets and liabilities; and Level 3—unobservable inputs in which there is little or no market data available, which require the reporting entity to use significant unobservable inputs or valuation techniques. The fair value of our assets and liabilities measured at fair value on a recurring basis was as follows: Balance at (In thousands) September 30, Level 1 Level 2 Level 3 Assets Cash equivalents $ 22,707 $ 5,959 $ 16,748 $ — Municipal bonds 109,476 — 109,476 — Corporate debt securities 66,553 — 66,553 — Commercial paper 42,466 — 42,466 — Asset-backed securities 26,103 — 26,103 — Securities of U.S. government-sponsored agencies 5,028 — 5,028 — Liabilities Contingent consideration 27,980 — — 27,980 Balance at (In thousands) December 31, Level 1 Level 2 Level 3 Assets Cash equivalents $ 9,802 $ 1,302 $ 8,500 $ — Municipal bonds 54,655 — 54,655 — Corporate debt securities 92,629 — 92,629 — Commercial paper 44,671 — 44,671 — Asset-backed securities 21,283 — 21,283 — Securities of U.S. government-sponsored agencies 8,548 — 8,548 — Liabilities Contingent consideration 24,335 — — 24,335 Contingent consideration represents our contingent milestone, performance and revenue-sharing payment obligations related to our acquisitions and is measured at fair value, based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions we believe would be made by a market participant. We assess these estimates on an ongoing basis as additional data impacting the assumptions is obtained. Changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within research and development and selling, general and administrative expenses in the consolidated statements of income. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES (In thousands) September 30, December 31, 2014 Raw materials $ 10,649 $ 8,847 Work in process 7,569 2,490 Finished goods 87,487 79,608 Total inventories $ 105,705 $ 90,945 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | ACCRUED EXPENSES (In thousands) September 30, December 31, Compensation and other employee-related costs $ 19,647 $ 19,933 Legal and other settlements and expenses 26,172 27,686 Accrued non-income taxes 6,059 4,720 Royalties 6,378 3,872 Other 5,913 5,288 Total accrued expenses $ 64,169 $ 61,499 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Line of Credit In May 2011 , we entered into a credit agreement with Wells Fargo Bank related to a revolving credit facility that provided for borrowings up to $50.0 million . At our request, and with the approval of the bank, the amount of borrowings available under the revolving credit facility can be increased to $75.0 million . The revolving credit facility includes up to a $25.0 million sub-limit for letters of credit. As amended to date, the revolving credit facility expires in May 2016. Cash advances bear interest at our option either at a fluctuating rate per annum equal to the daily LIBOR in effect for a one -month period plus 0.75% , or a fixed rate for a one - or three -month period equal to LIBOR plus 0.75% . The credit agreement governing the revolving credit facility also subjects us to various restrictive covenants, including the requirement to maintain maximum consolidated leverage. The covenants also include limitations on our ability to repurchase shares, to pay cash dividends or to enter into a sale transaction. As of September 30, 2015 , we were in compliance with all covenants under the credit agreement, there were no outstanding borrowings under the revolving credit facility and available borrowings were $50.0 million . We may terminate the credit agreement at any time on ten days’ notice without premium or penalty. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Equity | EQUITY Our amended and restated Certificate of Incorporation provides for a total of 785,000,000 authorized shares of common stock. Of the authorized number of shares of common stock, 500,000,000 shares are designated as Class A common stock (“Class A Common”), 275,000,000 shares are designated as Class B common stock (“Class B Common”) and 10,000,000 shares are designated as Class C common stock (“Class C Common”). Our issued and outstanding common shares by Class were as follows: (Shares) Class A Common Class B Common Total September 30, 2015 71,347,599 23,877,556 95,225,155 December 31, 2014 70,828,187 23,877,556 94,705,743 The following table summarizes changes in total equity: Nine Months Ended (In thousands) September 30, Total equity, beginning of period $ 585,454 Net income 75,183 Stock-based compensation cost 7,075 Exercise of stock options 4,313 Excess tax benefit of nonqualified stock options 1,973 Other comprehensive loss (81 ) Total equity, end of period $ 673,917 The tables below present the changes in each component of accumulated other comprehensive income/(loss), including current period other comprehensive income/(loss) and reclassifications out of accumulated other comprehensive income/(loss): (In thousands) Unrealized gain/(loss) on marketable securities, net of tax Foreign currency translation adjustments Accumulated other comprehensive loss Accumulated other comprehensive loss, net of tax, at December 31, 2014 $ (64 ) $ (1,593 ) $ (1,657 ) Other comprehensive income/(loss) before reclassifications 100 (184 ) (84 ) Amounts reclassified from accumulated other comprehensive income, net of tax 3 — 3 Other comprehensive income/(loss), net of tax 103 (184 ) (81 ) Accumulated other comprehensive income/(loss), net of tax, at September 30, 2015 $ 39 $ (1,777 ) $ (1,738 ) (In thousands) Unrealized gain/(loss) on marketable securities, net of tax Foreign currency translation adjustments Accumulated other comprehensive loss Accumulated other comprehensive income/(loss), net of tax, at December 31, 2013 $ 32 $ (1,041 ) $ (1,009 ) Other comprehensive loss before reclassifications (15 ) (290 ) (305 ) Amounts reclassified from accumulated other comprehensive income, net of tax 7 — 7 Other comprehensive loss, net of tax (8 ) (290 ) (298 ) Accumulated other comprehensive income/(loss), net of tax, at September 30, 2014 $ 24 $ (1,331 ) $ (1,307 ) |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION We have three stock plans: our Amended and Restated 2003 Stock Plan, our 2008 Stock Plan, and our 2012 Equity Incentive Plan (the “2012 Plan”). The 2012 Plan is the only remaining active stock plan. The purpose of these stock plans was, and the 2012 Plan is, to provide incentive to employees, directors, and consultants of Globus. The Plans are administered by the Board of Directors of Globus (the “Board”) or its delegates. The number, type of option, exercise price, and vesting terms are determined by the Board or its delegates in accordance with the terms of the Plans. The options granted expire on a date specified by the Board, but generally not more than ten years from the grant date. Option grants to employees generally vest in varying installments over a four -year period. The 2012 Plan was approved by our Board in March 2012, and by our stockholders in June 2012. Under the 2012 Plan, the aggregate number of shares of Class A Common stock that may be issued subject to options and other awards is equal to the sum of (i) 3,076,923 shares, (ii) any shares available for issuance under the 2008 Plan as of March 13, 2012, (iii) any shares underlying awards outstanding under the 2008 Plan as of March 13, 2012 that, on or after that date, are forfeited, terminated, expired or lapse for any reason, or are settled for cash without delivery of shares and (iv) starting January 1, 2013, an annual increase in the number of shares available under the 2012 Plan equal to up to 3% of the number of shares of our common and preferred stock outstanding at the end of the previous year, as determined by our Board. The number of shares that may be issued or transferred pursuant to incentive stock options under the 2012 Plan is limited to 10,769,230 shares. The shares of Class A Common stock issuable under the 2012 Plan include authorized but unissued shares, treasury shares or shares of common stock purchased on the open market. As of September 30, 2015 , there were 3,782,796 shares of Class A Common stock available for future grants under the 2012 Plan. The weighted average grant date per share fair values of the options awarded to employees were as follows: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Weighted average grant date per share fair value $ 8.23 $ 7.73 $ 8.73 $ 9.88 Stock option activity during the nine months ended September 30, 2015 is summarized as follows: Option Shares(thousands) Weighted average exercise price Weighted average remaining contractual life (years) Aggregate intrinsic value (thousands) Outstanding at December 31, 2014 4,854 $ 14.50 Granted 2,514 24.82 Exercised (519 ) 8.30 Forfeited (311 ) 16.80 Outstanding at September 30, 2015 6,538 $ 18.85 7.7 $ 26,096 Exercisable at September 30, 2015 2,647 $ 12.34 5.8 $ 23,309 Expected to vest at September 30, 2015 3,891 $ 23.28 9.1 $ 2,787 The intrinsic value of stock options exercised and the compensation cost related to stock options granted to employees and non-employees under our stock plans was as follows: Three Months Ended Nine Months Ended (In thousands) September 30, September 30, September 30, September 30, Intrinsic value of stock options exercised $ 2,757 $ 853 $ 8,696 $ 16,750 Stock-based compensation expense $ 2,266 $ 1,661 $ 6,935 $ 5,211 Net stock-based compensation capitalized into inventory 140 — 140 — Total stock-based compensation cost $ 2,406 $ 1,661 $ 7,075 $ 5,211 As of September 30, 2015 , there was $28.7 million of unrecognized compensation expense related to unvested employee stock options that are expected to vest over a weighted average period of three years. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES In computing our income tax provision, we make certain estimates and management judgments, such as estimated annual taxable income or loss, annual effective tax rate, the nature and timing of permanent and temporary differences between taxable income for financial reporting and tax reporting, and the recoverability of deferred tax assets. Our estimates and assumptions may change as new events occur, additional information is obtained, or as the tax environment changes. Should facts and circumstances change during a quarter causing a material change to the estimated effective income tax rate, a cumulative adjustment is recorded. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Effective income tax rate 35.3 % 33.7 % 35.5 % 34.6 % The change in the effective income tax rate between the current year and prior year periods is due primarily to the 2014 reduction in uncertain tax positions related to Internal Revenue Service (“IRS”) audits of our 2011 and 2012 tax years, resulting in no adjustments, offset partially by the research and experimentation credit not being extended as of and for the periods ended September 30, 2014 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES We are involved in a number of proceedings, legal actions, and claims. Such matters are subject to many uncertainties, and the outcomes of these matters are not within our control and may not be known for prolonged periods of time. In some actions, the claimants seek damages, as well as other relief, including injunctions prohibiting us from engaging in certain activities, which, if granted, could require significant expenditures and/or result in lost revenues. We record a liability in the consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded. While it is not possible to predict the outcome for most of the matters discussed, we believe it is possible that costs associated with them could have a material adverse impact on our consolidated earnings, financial position or cash flows. N-Spine, Synthes and DePuy Synthes Litigation In April 2010, N-Spine, Inc. and Synthes USA Sales, LLC filed suit against us in the U.S. District Court for the District of Delaware for patent infringement. N-Spine, the patent owner, and Synthes USA, a licensee of the subject patent, allege that we infringe one or more claims of the patent by making, using, offering for sale or selling our TRANSITION ® stabilization system product. N-Spine and Synthes USA seek injunctive relief and an unspecified amount in damages. We intend to defend our rights vigorously. This matter was stayed on July 14, 2011 pending the resolution of an inter partes reexamination on the asserted patent granted by the U.S. Patent and Trademark Office (“USPTO”) in February 2011. In December 2011, the examiner withdrew the original grounds of rejection of the asserted patent and we have appealed the examiner’s decision. In January 2014, the USPTO ruled on the appeal finding certain claims rejected in view of the prior art and affirming certain other claims. The probable outcome of this litigation cannot be determined, nor can we estimate a range of potential loss. Therefore, in accordance with authoritative guidance on the evaluation of loss contingencies, we have not recorded an accrual related to this litigation. In a related matter, on January 8, 2014, Depuy Synthes Products, LLC (“Depuy Synthes”) filed suit against us in the U.S. District Court for the District of Delaware for patent infringement. Depuy Synthes alleges that we infringe one or more claims of the asserted patent by making, using, offering for sale or selling our TRANSITION ® stabilization system product. Depuy Synthes seeks injunctive relief and an unspecified amount in damages. We intend to defend our rights vigorously. The probable outcome of this litigation cannot be determined, nor can we estimate a range of potential loss. Therefore, in accordance with authoritative guidance on the evaluation of loss contingencies, we have not recorded an accrual related to this litigation. Synthes USA, LLC, Synthes USA Products, LLC and Synthes USA Sales, LLC Litigation In July 2011, Synthes USA, LLC, Synthes USA Products, LLC and Synthes USA Sales, LLC filed suit against us in the U.S. District Court for the District of Delaware for patent infringement. Synthes USA LLC, the patent owner, Synthes USA Products, LLC, a licensee to manufacture products of the subject patents, and Synthes USA Sales LLC, a licensee to sell products of the subject patents, allege that we infringed one or more claims of three patents by making, using, offering for sale or selling our COALITION ® , INDEPENDENCE ® and INTERCONTINENTAL ® products. As a result of the acquisition of Synthes, Inc. by Johnson & Johnson, a motion was filed to change the plaintiff in this matter to DePuy Synthes in February 2013. On June 14, 2013, the jury in this case returned a verdict, finding that prior versions of the three products we previously sold did infringe on DePuy Synthes’ patents and awarding monetary damages in the amount of $16.0 million . The jury also upheld the validity of DePuy Synthes’ patents. There was no finding of willful infringement by Globus. This verdict does not impact our ability to conduct our business or have any material impact on our future revenues. As this lawsuit involved only three products that are no longer part of our product portfolio, this verdict is not expected to impair our ability to sell any of our future products. We believe the facts and the law do not support the jury’s findings of infringement and patent validity and are seeking to overturn the verdict through the appeals process. For the year ended December 31, 2013, we recorded $19.5 million in damages and other litigation-related costs related to this case, of which $1.3 million was included in provision for litigation - cost of goods sold (due to a write off of certain inventory which will not be sold due to the verdict) and $18.2 million was included in provision for litigation (operating expense). During the year ended December 31, 2014, we accrued an additional $0.6 million in interest included in provision for litigation related to this litigation. L5 Litigation In December 2009, we filed suit in the Court of Common Pleas of Montgomery County, Pennsylvania against our former exclusive independent distributor L5 Surgical, LLC and its principals, seeking an injunction and declaratory judgment concerning certain restrictive covenants made to L5 by its sales representatives. L5 brought counterclaims against us alleging tortious interference, unfair competition and conspiracy. The injunction phase was resolved in September 2010, and this matter is now in the discovery phase of litigation on the underlying damages claims. We intend to defend our rights vigorously. The probable outcome of this litigation cannot be determined, nor can we estimate a range of potential loss. Therefore, in accordance with authoritative guidance on the evaluation of loss contingencies, we have not recorded an accrual related to this litigation. NuVasive Litigation In October 2010, NuVasive, Inc. filed suit against us in the U.S. District Court for the District of Delaware for patent infringement. NuVasive, the patent owner, alleges that we infringe one or more claims of three patents by making, using, offering for sale or selling our MARS 3V™ retractor for use in certain lateral fusion procedures. NuVasive sought injunctive relief and an unspecified amount in damages. This matter was settled on February 12, 2015 for an undisclosed amount that was not material. NuVasive Employee Litigation We have hired several employees who were formerly employed by NuVasive, Inc. In July 2011, NuVasive filed suit against us in the District Court of Travis County, Texas alleging that our hiring of one named former employee and other unnamed former employees constitutes tortious interference with its contracts with those employees, and with prospective business relationships, as well as aiding and abetting the breach of fiduciary duty. NuVasive sought compensatory damages, permanent injunction, punitive damages and attorneys’ fees. This matter was settled on February 12, 2015 for an undisclosed amount that was not material. Bianco Litigation On March 21, 2012, Sabatino Bianco filed suit against us in the Federal District Court for the Eastern District of Texas claiming that we misappropriated his trade secret and confidential information and improperly utilized it in developing our CALIBER ® product. Bianco alleges that we engaged in misappropriation of trade secrets, breach of contract, unfair competition, fraud and theft and seeks correction of inventorship, injunctive relief and exemplary damages. On April 20, 2012, Bianco filed a motion for a preliminary injunction, seeking to enjoin us from making, using, selling, importing or offering for sale our CALIBER ® product. On November 15, 2012, the court denied Bianco’s motion for preliminary injunction. On October 1, 2013, Bianco amended his complaint to claim that his trade secrets and confidential information were also used improperly in developing our RISE ® and CALIBER-L ® products. On January 17, 2014, the jury in this case returned a verdict in favor of Bianco on a claim of misappropriation of trade secret. We accrued the verdict amount of $4.3 million as of December 31, 2013. The jury found against Bianco on the claims of breach of contract and disgorgement of profits. The court granted our motion for judgment as a matter of law and dismissed Bianco’s claims for unfair competition, fraud, and exemplary damages, and Bianco abandoned the claim of misappropriation of confidential information. Bianco’s claims of correction of inventorship, unjust enrichment, and permanent injunctive relief were not submitted to the jury. On March 7, 2014, the court denied Bianco’s claim for correction of inventorship and ruled he is not entitled to be named as a co-inventor on any of the patents at issue, and also denied his claim for unjust enrichment. On March 17, 2014, the court denied Bianco’s claim for permanent injunctive relief. On July 2, 2014, the court awarded Bianco an ongoing royalty of 5% of the net sales of the CALIBER ® , CALIBER ® -L, and RISE ® products, or products that are not colorably different from those products, for a fifteen year period on sales starting on January 18, 2014. The court entered final judgment on the jury verdict on July 17, 2014. On October 19, 2015, the United States Federal Circuit Court of Appeals affirmed the judgment without opinion. We are considering our options for further appeal. We do not expect the judgment to impact our ability to conduct our business or to have any material impact on our future revenues. Altus Partners, LLC Litigation On February 20, 2013, Altus Partners, LLC filed suit against us in the U.S. District Court for the Eastern District of Pennsylvania for patent infringement. On April 7, 2014, we settled the litigation with Altus Partners and recognized a provision for litigation of $2.0 million . Bonutti Skeletal Innovations, LLC Litigation On November 19, 2014, Bonutti Skeletal Innovations, LLC filed suit against us in the U.S. District Court for the Eastern District of Pennsylvania for patent infringement. Bonutti Skeletal, a non-practicing entity, alleges that Globus willfully infringes one or more claims of six patents by making, using, offering for sale or selling the CALIBER ® , CALIBER ® -L, COALITION ® , CONTINENTAL ® , FORGE ® , FORTIFY ® , INDEPENDENCE ® , INTERCONTINENTAL ® , MONUMENT ® , NIKO ® , RISE ® , SIGNATURE ® , SUSTAIN ® , and TRANSCONTINENTAL ® products. Bonutti Skeletal seeks an unspecified amount in damages and injunctive relief. This matter was stayed on June 26, 2015 pending the resolution of inter partes reviews on the asserted patents by the USPTO. The probable outcome of this litigation cannot be determined, nor can we estimate a range of potential loss. Therefore, in accordance with authoritative guidance on the evaluation of loss contingencies, we have not recorded an accrual related to this litigation. Flexuspine, Inc. Litigation On March 11, 2015, Flexuspine, Inc. filed suit against us in the U.S. District Court for the Eastern District of Texas for patent infringement. Flexuspine, Inc. alleges that Globus willfully infringes one or more claims of five patents by making, using, offering for sale or selling the CALIBER ® , CALIBER ® -L, RISE ® , RISE ® -L, RISE ® INTRALIF ® , and ALTERA ® products. Flexuspine seeks an unspecified amount in damages and injunctive relief. The probable outcome of this litigation cannot be determined, nor can we estimate a range of potential loss. Therefore, in accordance with authoritative guidance on the evaluation of loss contingencies, we have not recorded an accrual related to this litigation. Silverstein Litigation On September 28, 2015, a putative securities class action lawsuit was filed against us and certain of our officers in the U.S. District Court for the Eastern District of Pennsylvania. Plaintiff in the lawsuit purports to represent a class of our stockholders who purchased shares between February 26, 2014 and August 5, 2014. The complaint purports to assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and seeks damages in an unspecified amount, attorney’s fees and other relief. We believe the allegations to be unfounded, and intend to defend our rights vigorously. The probable outcome of this litigation cannot be determined, nor can we estimate a range of potential loss. Therefore, in accordance with authoritative guidance on the evaluation of loss contingencies, we have not recorded an accrual related to this litigation. In addition, we are subject to legal proceedings arising in the ordinary course of business. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | RELATED-PARTY TRANSACTIONS Prior to March 11, 2015, we had contracted with BMG, which at the time was a related-party manufacturer. We have purchased the following amounts of products and services from BMG: Period Three Months Ended Nine Months Ended (In thousands) March 11, September 30, September 30, Purchases from related-party supplier $ 5,304 $ 5,163 $ 15,954 On March 11, 2015, BMG was acquired by Globus, and therefore as of March 31, 2015, there were no further purchases from nor amounts payable to BMG. As of December 31, 2014 , we had $5.4 million of accounts payable due to BMG. The amount payable to BMG on the date of acquisition of $5.2 million was settled in connection with the acquisition. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment And Geographic Information | SEGMENT AND GEOGRAPHIC INFORMATION Operating segments are defined as components of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. We globally manage the business within one reportable segment. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. Products are sold principally in the United States. The following table represents total sales by geographic area, based on the location of the customer: Three Months Ended Nine Months Ended (In thousands) September 30, September 30, September 30, September 30, United States $ 125,670 $ 106,601 $ 367,140 $ 309,937 International 11,322 11,186 35,026 35,633 Total sales $ 136,992 $ 117,787 $ 402,166 $ 345,570 We classify our products into two categories: innovative fusion products and disruptive technology products. The following table represents total sales by product category: Three Months Ended Nine Months Ended (In thousands) September 30, September 30, September 30, September 30, Innovative Fusion $ 72,490 $ 67,726 $ 214,431 $ 200,356 Disruptive Technology 64,502 50,061 187,735 145,214 Total sales $ 136,992 $ 117,787 $ 402,166 $ 345,570 |
BACKGROUND AND SUMMARY OF SIG21
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Globus and its wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates, in part, on historical experience that management believes to be reasonable under the circumstances. Actual results could differ materially from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Significant areas that require management’s estimates include intangible assets, contingent payment liabilities, allowance for doubtful accounts, stock-based compensation, write-down for excess and obsolete inventory, useful lives of assets, the outcome of litigation, and income taxes. We are subject to risks and uncertainties due to changes in the healthcare environment, regulatory oversight, competition, and legislation that may cause actual results to differ from estimated results. |
Marketable Securities | Marketable Securities Our marketable securities include municipal bonds, corporate debt securities, commercial paper, securities of U.S. government-sponsored agencies and asset-backed securities, and are classified as available-for-sale as of September 30, 2015 . Available-for-sale securities are recorded at fair value in both short-term and long-term marketable securities on our consolidated balance sheets. The change in fair value for available-for-sale securities is recorded, net of taxes, as a component of accumulated other comprehensive loss on our consolidated balance sheets. Premiums and discounts are recognized over the life of the related security as an adjustment to yield using the straight-line method. Realized gains or losses from the sale of our marketable securities are determined on a specific identification basis. Realized gains and losses, along with interest income and the amortization/accretion of premiums/discounts are included as a component of other income, net, on our consolidated statements of income. Interest receivable is recorded as a component of prepaid expenses and other current assets on our consolidated balance sheets. We maintain a portfolio of various holdings, types and maturities, though most of the securities in our portfolio could be liquidated at minimal cost at any time. We invest in securities that meet or exceed standards as defined in our investment policy. Our policy also limits the amount of credit exposure to any one issue, issuer or type of security. We review our securities for other-than-temporary impairment at each reporting period. If an unrealized loss for any security is considered to be other-than-temporary, the loss will be recognized in our consolidated statement of income in the period the determination is made. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis. The majority of our inventories are finished goods as we mainly utilize third-party suppliers to source our products. We periodically evaluate the carrying value of our inventories in relation to our estimated forecast of product demand, which takes into consideration the estimated life cycle of product releases. When quantities on hand exceed estimated sales forecasts, we record a write-down for such excess inventories. |
Revenue Recognition | Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, product delivery has occurred, pricing is fixed or determinable, and collection is reasonably assured. A significant portion of our revenue is generated from consigned inventory maintained at hospitals or with sales representatives. For these products, revenue is recognized at the time the product is used or implanted. For all other transactions, we recognize revenue when title to the goods and risk of loss transfer to customers, provided there are no remaining performance obligations that will affect the customer’s final acceptance of the sale. Our policy is to classify shipping and handling costs billed to customers as sales and the related expenses as cost of goods sold. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board released Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) . ASU 2014-09 is designed to create greater comparability for financial statement users across industries and jurisdictions. Under the new standard, an entity will recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the payment to which the entity expects to be entitled in exchange for those goods or services. The standard also will require enhanced disclosures and provide more comprehensive guidance for transactions such as service revenue and contract modifications. The standard was to take effect for public companies for annual reporting periods beginning after December 15, 2016, and early adoption was prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. In August 2015, the FASB released ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), which defers the effective date of ASU 2014-09 by one year while providing the option to early adopt the standard on the original effective date. We are currently evaluating the timing and impact of the new standard on our financial position, results of operations, and disclosures. In July 2015, the FASB released ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330) (“ASU 2015-11”) as part of the FASB’s Simplification Initiative. This update is intended to more closely align the measurement of inventory under GAAP with the measurement of inventory under International Financial Reporting Standards. Within the scope of the update, an entity is required to measure inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonable and predictable costs of completion, disposal and transportation. ASU 2015-11 is effective for all public entities for fiscal years beginning after December 31, 2016, including interim reporting periods within that period, and is required to be applied prospectively, with early adoption permitted. We are currently evaluating the impact of the new standard on our financial position, results of operations, and disclosures. In September 2015, the FASB released ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”). ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Prior to the issuance of the standard, entities were required to retrospectively apply adjustments made to provisional amounts recognized in a business combination. The amendments in ASU 2015-16 require an entity to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The update is not expected to have a material impact on our financial position, results of operations, and disclosures. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | As of September 30, 2015 , we recorded the following purchase price allocation for the identifiable tangible and intangible assets and liabilities of BMG: (In thousands) Consideration: Cash paid at closing $ 57,042 Deferred consideration 5,290 Closing adjustments payable 944 Fair value of consideration $ 63,276 Identifiable assets acquired and liabilities assumed: Cash acquired $ 9,026 Accounts receivable 88 Inventory 4,753 Other assets 444 Property and equipment 14,862 Accounts payable and accrued expenses (1,585 ) Deferred tax liability, net (3,280 ) Total identifiable net assets 24,308 Goodwill 38,968 Total allocated purchase price $ 63,276 |
Business Acquisition, Pro Forma Information | These results have been prepared using assumptions our management believes are reasonable, but not necessarily indicative of the actual results that would have occurred if the acquisition had occurred on January 1, 2014, and are not necessarily indicative of the results that may be achieved in the future, including but not limited to operating synergies that we may realize as a result of the acquisition. Three Months Ended Nine Months Ended (pro forma, in thousands, except per share amounts) September 30, September 30, September 30, September 30, Net sales $ 136,953 $ 117,802 $ 401,993 $ 345,743 Net income 27,191 23,226 77,358 65,011 Earnings per share: Basic $ 0.29 $ 0.25 $ 0.81 $ 0.69 Diluted $ 0.28 $ 0.24 $ 0.81 $ 0.68 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Intangible Assets Disclosure [Abstract] | |
Intangible Assets Acquired as Part of Business Combination | A summary of intangible assets is presented below: September 30, 2015 (In thousands) Weighted Gross Accumulated Amortization Intangible In-process research & development — $ 24,560 $ — $ 24,560 Supplier network 10.0 4,000 (367 ) 3,633 Customer relationships & other intangibles 7.3 5,525 (2,127 ) 3,398 Patents 17.0 2,495 (451 ) 2,044 Total intangible assets $ 36,580 $ (2,945 ) $ 33,635 December 31, 2014 (In thousands) Weighted Gross Accumulated Amortization Intangible In-process research & development — $ 24,560 $ — $ 24,560 Supplier network 10.0 3,800 (88 ) 3,712 Customer relationships & other intangibles 7.3 5,525 (1,344 ) 4,181 Patents 17.0 2,420 (344 ) 2,076 Total intangible assets $ 36,305 $ (1,776 ) $ 34,529 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Marketable Securities [Abstract] | |
Marketable Securities | The composition of our short-term and long-term marketable securities is as follows: September 30, 2015 (In thousands) Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term: Municipal bonds Less than 1 $ 85,582 $ 36 $ (9 ) $ 85,609 Corporate debt securities Less than 1 55,019 9 (10 ) 55,018 Commercial paper Less than 1 42,454 12 — 42,466 Securities of U.S. government-sponsored agencies Less than 1 3,000 2 — 3,002 Asset-backed securities Less than 1 2,007 — (1 ) 2,006 Total short-term marketable securities $ 188,062 $ 59 $ (20 ) $ 188,101 Long-term: Municipal bonds 1-2 $ 23,858 $ 25 $ (16 ) $ 23,867 Corporate debt securities 1-2 11,532 7 (4 ) 11,535 Asset-backed securities 1-2 24,092 9 (4 ) 24,097 Securities of U.S. government-sponsored agencies 1-2 2,022 4 — 2,026 Total long-term marketable securities $ 61,504 $ 45 $ (24 ) $ 61,525 December 31, 2014 (In thousands) Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term: Municipal bonds Less than 1 $ 28,684 $ 2 $ (3 ) $ 28,683 Corporate debt securities Less than 1 73,066 7 (42 ) 73,031 Commercial paper Less than 1 44,663 8 — 44,671 Asset-backed securities Less than 1 54 — — 54 Total short-term marketable securities $ 146,467 $ 17 $ (45 ) $ 146,439 Long-term: Municipal bonds 1-2 $ 26,005 $ 3 $ (36 ) $ 25,972 Corporate debt securities 1-2 19,617 3 (22 ) 19,598 Asset-backed securities 1-2 21,236 1 (8 ) 21,229 Securities of U.S. government-sponsored agencies 1-2 8,564 — (16 ) 8,548 Total long-term marketable securities $ 75,422 $ 7 $ (82 ) $ 75,347 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The fair value of our assets and liabilities measured at fair value on a recurring basis was as follows: Balance at (In thousands) September 30, Level 1 Level 2 Level 3 Assets Cash equivalents $ 22,707 $ 5,959 $ 16,748 $ — Municipal bonds 109,476 — 109,476 — Corporate debt securities 66,553 — 66,553 — Commercial paper 42,466 — 42,466 — Asset-backed securities 26,103 — 26,103 — Securities of U.S. government-sponsored agencies 5,028 — 5,028 — Liabilities Contingent consideration 27,980 — — 27,980 Balance at (In thousands) December 31, Level 1 Level 2 Level 3 Assets Cash equivalents $ 9,802 $ 1,302 $ 8,500 $ — Municipal bonds 54,655 — 54,655 — Corporate debt securities 92,629 — 92,629 — Commercial paper 44,671 — 44,671 — Asset-backed securities 21,283 — 21,283 — Securities of U.S. government-sponsored agencies 8,548 — 8,548 — Liabilities Contingent consideration 24,335 — — 24,335 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | (In thousands) September 30, December 31, 2014 Raw materials $ 10,649 $ 8,847 Work in process 7,569 2,490 Finished goods 87,487 79,608 Total inventories $ 105,705 $ 90,945 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | (In thousands) September 30, December 31, Compensation and other employee-related costs $ 19,647 $ 19,933 Legal and other settlements and expenses 26,172 27,686 Accrued non-income taxes 6,059 4,720 Royalties 6,378 3,872 Other 5,913 5,288 Total accrued expenses $ 64,169 $ 61,499 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Schedule of Issued and Outstanding Shares by Class | Our issued and outstanding common shares by Class were as follows: (Shares) Class A Common Class B Common Total September 30, 2015 71,347,599 23,877,556 95,225,155 December 31, 2014 70,828,187 23,877,556 94,705,743 |
Schedule of Stockholders Equity | The following table summarizes changes in total equity: Nine Months Ended (In thousands) September 30, Total equity, beginning of period $ 585,454 Net income 75,183 Stock-based compensation cost 7,075 Exercise of stock options 4,313 Excess tax benefit of nonqualified stock options 1,973 Other comprehensive loss (81 ) Total equity, end of period $ 673,917 |
EQUITY Accumulated Other Compre
EQUITY Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income/(Loss), Net of Tax | The tables below present the changes in each component of accumulated other comprehensive income/(loss), including current period other comprehensive income/(loss) and reclassifications out of accumulated other comprehensive income/(loss): (In thousands) Unrealized gain/(loss) on marketable securities, net of tax Foreign currency translation adjustments Accumulated other comprehensive loss Accumulated other comprehensive loss, net of tax, at December 31, 2014 $ (64 ) $ (1,593 ) $ (1,657 ) Other comprehensive income/(loss) before reclassifications 100 (184 ) (84 ) Amounts reclassified from accumulated other comprehensive income, net of tax 3 — 3 Other comprehensive income/(loss), net of tax 103 (184 ) (81 ) Accumulated other comprehensive income/(loss), net of tax, at September 30, 2015 $ 39 $ (1,777 ) $ (1,738 ) (In thousands) Unrealized gain/(loss) on marketable securities, net of tax Foreign currency translation adjustments Accumulated other comprehensive loss Accumulated other comprehensive income/(loss), net of tax, at December 31, 2013 $ 32 $ (1,041 ) $ (1,009 ) Other comprehensive loss before reclassifications (15 ) (290 ) (305 ) Amounts reclassified from accumulated other comprehensive income, net of tax 7 — 7 Other comprehensive loss, net of tax (8 ) (290 ) (298 ) Accumulated other comprehensive income/(loss), net of tax, at September 30, 2014 $ 24 $ (1,331 ) $ (1,307 ) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Grants in Period, Weighted Average Grant Date Fair Value | The weighted average grant date per share fair values of the options awarded to employees were as follows: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Weighted average grant date per share fair value $ 8.23 $ 7.73 $ 8.73 $ 9.88 |
Summary of Stock Option Activity | Stock option activity during the nine months ended September 30, 2015 is summarized as follows: Option Shares(thousands) Weighted average exercise price Weighted average remaining contractual life (years) Aggregate intrinsic value (thousands) Outstanding at December 31, 2014 4,854 $ 14.50 Granted 2,514 24.82 Exercised (519 ) 8.30 Forfeited (311 ) 16.80 Outstanding at September 30, 2015 6,538 $ 18.85 7.7 $ 26,096 Exercisable at September 30, 2015 2,647 $ 12.34 5.8 $ 23,309 Expected to vest at September 30, 2015 3,891 $ 23.28 9.1 $ 2,787 |
Intrinsic Value and Stock-based Compensation Schedule | Three Months Ended Nine Months Ended (In thousands) September 30, September 30, September 30, September 30, Intrinsic value of stock options exercised $ 2,757 $ 853 $ 8,696 $ 16,750 Stock-based compensation expense $ 2,266 $ 1,661 $ 6,935 $ 5,211 Net stock-based compensation capitalized into inventory 140 — 140 — Total stock-based compensation cost $ 2,406 $ 1,661 $ 7,075 $ 5,211 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Effective income tax rate | Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Effective income tax rate 35.3 % 33.7 % 35.5 % 34.6 % |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related-Party Transactions | We have purchased the following amounts of products and services from BMG: Period Three Months Ended Nine Months Ended (In thousands) March 11, September 30, September 30, Purchases from related-party supplier $ 5,304 $ 5,163 $ 15,954 |
SEGMENT AND GEOGRAPHIC INFORM33
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers by Geographical Area | The following table represents total sales by geographic area, based on the location of the customer: Three Months Ended Nine Months Ended (In thousands) September 30, September 30, September 30, September 30, United States $ 125,670 $ 106,601 $ 367,140 $ 309,937 International 11,322 11,186 35,026 35,633 Total sales $ 136,992 $ 117,787 $ 402,166 $ 345,570 |
Revenue from External Customers by Products and Services | The following table represents total sales by product category: Three Months Ended Nine Months Ended (In thousands) September 30, September 30, September 30, September 30, Innovative Fusion $ 72,490 $ 67,726 $ 214,431 $ 200,356 Disruptive Technology 64,502 50,061 187,735 145,214 Total sales $ 136,992 $ 117,787 $ 402,166 $ 345,570 |
BACKGROUND AND SUMMARY OF SIG34
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Summary of Significant Accounting Policies | ||
Restricted cash | $ 25,385 | $ 23,370 |
Minimum | ||
Summary of Significant Accounting Policies | ||
Number of Products Launched Since Inception | 150 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Mar. 11, 2015 | Oct. 23, 2014 | |
Business Acquisition | ||||
Accounts payable to related-party | $ 0 | $ 5,359 | ||
Goodwill | 91,964 | 53,196 | ||
Acquisition 2,014 | ||||
Business Acquisition | ||||
Payments to Acquire Businesses, Gross | $ 36,100 | |||
Range of undiscounted aggregate contingent consideration from acquisitions, maximum | $ 15,000 | |||
Acquisition 2,015 | ||||
Business Acquisition | ||||
Payments to Acquire Businesses, Gross | 57,042 | |||
Deferred consideration | 5,290 | |||
Closing adjustments payable | 944 | |||
Business Combination, Consideration Transferred | $ 63,276 | |||
Accounts payable to related-party | $ 5,200 | |||
Related party ownership percentage | 49.00% | |||
Cash acquired | $ 9,026 | |||
Accounts receivable | 88 | |||
Inventory | 4,753 | |||
Other assets | 444 | |||
Property and equipment | 14,862 | |||
Accounts payable and accrued expenses | (1,585) | |||
Deferred tax liability, net | (3,280) | |||
Total identifiable net assets | 24,308 | |||
Goodwill | 38,968 | |||
Total allocated purchase price | $ 63,276 |
ACQUISITIONS Proforma (Details)
ACQUISITIONS Proforma (Details) - Acquisition 2015 - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net sales | $ 136,953 | $ 117,802 | $ 401,993 | $ 345,743 |
Net income | $ 27,191 | $ 23,226 | $ 77,358 | $ 65,011 |
Basic | $ 0.29 | $ 0.25 | $ 0.81 | $ 0.69 |
Diluted | $ 0.28 | $ 0.24 | $ 0.81 | $ 0.68 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Acquired Intangible Assets | ||
Intangible assets, gross | $ 36,580 | $ 36,305 |
Accumulated amortization | (2,945) | (1,776) |
Intangible assets, net | $ 33,635 | $ 34,529 |
Supplier Network | ||
Acquired Intangible Assets | ||
Weighted average amortization period | 10 years | 10 years |
Gross carrying amount | $ 4,000 | $ 3,800 |
Accumulated amortization | (367) | (88) |
Finite-lived intangible assets, net | $ 3,633 | $ 3,712 |
Customer Relationships & Other Intangibles | ||
Acquired Intangible Assets | ||
Weighted average amortization period | 7 years 3 months | 7 years 3 months |
Gross carrying amount | $ 5,525 | $ 5,525 |
Accumulated amortization | (2,127) | (1,344) |
Finite-lived intangible assets, net | $ 3,398 | $ 4,181 |
Patents | ||
Acquired Intangible Assets | ||
Weighted average amortization period | 17 years | 17 years |
Gross carrying amount | $ 2,495 | $ 2,420 |
Accumulated amortization | (451) | (344) |
Finite-lived intangible assets, net | 2,044 | 2,076 |
In-Process Research & Development | ||
Acquired Intangible Assets | ||
Indefinite-lived intangible assets | $ 24,560 | $ 24,560 |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Short-term Marketable Securities | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 188,062 | $ 146,467 |
Gross Unrealized Gains | 59 | 17 |
Gross Unrealized Losses | (20) | (45) |
Fair Value | 188,101 | 146,439 |
Short-term Marketable Securities | Municipal Bonds | ||
Schedule of Marketable Securities | ||
Amortized Cost | 85,582 | 28,684 |
Gross Unrealized Gains | 36 | 2 |
Gross Unrealized Losses | (9) | (3) |
Fair Value | $ 85,609 | $ 28,683 |
Short-term Marketable Securities | Municipal Bonds | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Short-term Marketable Securities | Corporate Debt Securities | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 55,019 | $ 73,066 |
Gross Unrealized Gains | 9 | 7 |
Gross Unrealized Losses | (10) | (42) |
Fair Value | $ 55,018 | $ 73,031 |
Short-term Marketable Securities | Corporate Debt Securities | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Short-term Marketable Securities | Commercial Paper | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 42,454 | $ 44,663 |
Gross Unrealized Gains | 12 | 8 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 42,466 | $ 44,671 |
Short-term Marketable Securities | Commercial Paper | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Short-term Marketable Securities | Asset-backed Securities | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 2,007 | $ 54 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | 0 |
Fair Value | $ 2,006 | $ 54 |
Short-term Marketable Securities | Asset-backed Securities | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Short-term Marketable Securities | Securities of U.S. government-sponsored agencies | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 3,000 | |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | 0 | |
Fair Value | $ 3,002 | |
Short-term Marketable Securities | Securities of U.S. government-sponsored agencies | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | |
Long-term Marketable Securities | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 61,504 | $ 75,422 |
Gross Unrealized Gains | 45 | 7 |
Gross Unrealized Losses | (24) | (82) |
Fair Value | 61,525 | 75,347 |
Long-term Marketable Securities | Municipal Bonds | ||
Schedule of Marketable Securities | ||
Amortized Cost | 23,858 | 26,005 |
Gross Unrealized Gains | 25 | 3 |
Gross Unrealized Losses | (16) | (36) |
Fair Value | $ 23,867 | $ 25,972 |
Long-term Marketable Securities | Municipal Bonds | Minimum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Long-term Marketable Securities | Municipal Bonds | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 2 years | 2 years |
Long-term Marketable Securities | Corporate Debt Securities | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 11,532 | $ 19,617 |
Gross Unrealized Gains | 7 | 3 |
Gross Unrealized Losses | (4) | (22) |
Fair Value | $ 11,535 | $ 19,598 |
Long-term Marketable Securities | Corporate Debt Securities | Minimum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Long-term Marketable Securities | Corporate Debt Securities | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 2 years | 2 years |
Long-term Marketable Securities | Asset-backed Securities | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 24,092 | $ 21,236 |
Gross Unrealized Gains | 9 | 1 |
Gross Unrealized Losses | (4) | (8) |
Fair Value | $ 24,097 | $ 21,229 |
Long-term Marketable Securities | Asset-backed Securities | Minimum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Long-term Marketable Securities | Asset-backed Securities | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 2 years | 2 years |
Long-term Marketable Securities | Securities of U.S. government-sponsored agencies | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 2,022 | $ 8,564 |
Gross Unrealized Gains | 4 | 0 |
Gross Unrealized Losses | 0 | (16) |
Fair Value | $ 2,026 | $ 8,548 |
Long-term Marketable Securities | Securities of U.S. government-sponsored agencies | Minimum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Long-term Marketable Securities | Securities of U.S. government-sponsored agencies | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 2 years | 2 years |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Cash equivalents | $ 22,707 | $ 9,802 |
Contingent consideration | 27,980 | 24,335 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Cash equivalents | 5,959 | 1,302 |
Contingent consideration | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Cash equivalents | 16,748 | 8,500 |
Contingent consideration | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Cash equivalents | 0 | 0 |
Contingent consideration | 27,980 | 24,335 |
Municipal Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 109,476 | 54,655 |
Municipal Bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 0 | 0 |
Municipal Bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 109,476 | 54,655 |
Municipal Bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 0 | 0 |
Corporate Debt Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 66,553 | 92,629 |
Corporate Debt Securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 0 | 0 |
Corporate Debt Securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 66,553 | 92,629 |
Corporate Debt Securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 0 | 0 |
Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 42,466 | 44,671 |
Commercial Paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 0 | 0 |
Commercial Paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 42,466 | 44,671 |
Commercial Paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 0 | 0 |
Asset-backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 26,103 | 21,283 |
Asset-backed Securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 0 | 0 |
Asset-backed Securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 26,103 | 21,283 |
Asset-backed Securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 0 | 0 |
Securities of U.S. government-sponsored agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 5,028 | 8,548 |
Securities of U.S. government-sponsored agencies | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 0 | 0 |
Securities of U.S. government-sponsored agencies | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | 5,028 | 8,548 |
Securities of U.S. government-sponsored agencies | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||
Marketable Securities | $ 0 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 10,649 | $ 8,847 |
Work in process | 7,569 | 2,490 |
Finished goods | 87,487 | 79,608 |
Total inventories | $ 105,705 | $ 90,945 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Compensation and other employee-related costs | $ 19,647 | $ 19,933 |
Legal and other settlements and expenses | 26,172 | 27,686 |
Accrued non-income taxes | 6,059 | 4,720 |
Royalties | 6,378 | 3,872 |
Other | 5,913 | 5,288 |
Total accrued expenses | $ 64,169 | $ 61,499 |
DEBT (Details)
DEBT (Details) - Revolving Credit Facility $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Debt Instrument | |
Credit facility, current borrowing capacity | $ 50 |
Credit facility, maximum borrowing capacity | 75 |
Credit facility, outstanding borrowings | $ 0 |
Credit facility, termination period without penalty | 10 days |
Fluctuating Rate Per Annum | |
Debt Instrument | |
Credit facility, variable rate | LIBOR |
Credit facility, period of variable rate | 1 month |
Credit facility, basis spread on variable rate | 0.75% |
Fixed Rate | |
Debt Instrument | |
Credit facility, variable rate | LIBOR |
Credit facility, basis spread on variable rate | 0.75% |
Fixed Rate | Minimum | |
Debt Instrument | |
Credit facility, period of variable rate | 1 month |
Fixed Rate | Maximum | |
Debt Instrument | |
Credit facility, period of variable rate | 3 months |
Letter of Credit | |
Debt Instrument | |
Credit facility, maximum borrowing capacity | $ 25 |
EQUITY (Textuals) (Details)
EQUITY (Textuals) (Details) - shares | Sep. 30, 2015 | Dec. 31, 2014 |
Class of Stock | ||
Common stock, shares authorized | 785,000,000 | |
Class A Common | ||
Class of Stock | ||
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Class B Common | ||
Class of Stock | ||
Common stock, shares authorized | 275,000,000 | 275,000,000 |
Class C Common | ||
Class of Stock | ||
Common stock, shares authorized | 10,000,000 |
EQUITY (Schedule of Issued and
EQUITY (Schedule of Issued and Outstanding Shares) (Details) - shares | Sep. 30, 2015 | Dec. 31, 2014 |
Class of Stock | ||
Common stock, shares issued | 95,225,155 | 94,705,743 |
Common stock, shares outstanding | 95,225,155 | 94,705,743 |
Class A Common | ||
Class of Stock | ||
Common stock, shares issued | 71,347,599 | 70,828,187 |
Common stock, shares outstanding | 71,347,599 | 70,828,187 |
Class B Common | ||
Class of Stock | ||
Common stock, shares issued | 23,877,556 | 23,877,556 |
Common stock, shares outstanding | 23,877,556 | 23,877,556 |
EQUITY Stockholders' Equity Rol
EQUITY Stockholders' Equity Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Increase (Decrease) in Stockholders' Equity | ||||
Total equity, beginning of period | $ 585,454 | |||
Net income | $ 26,481 | $ 23,061 | 75,183 | $ 64,847 |
Stock-based compensation cost | 7,075 | |||
Exercise of stock options | 4,313 | |||
Excess tax benefit of nonqualified stock options | 1,973 | |||
Other comprehensive loss | (49) | $ (440) | (81) | $ (298) |
Total equity, end of period | $ 673,917 | $ 673,917 |
EQUITY Accumulated Other Comp46
EQUITY Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated other comprehensive income/(loss), net of tax | $ (1,738) | $ (1,307) | $ (1,738) | $ (1,307) | $ (1,657) | $ (1,009) |
Other comprehensive income/(loss) before reclassifications | (84) | (305) | ||||
Amounts reclassified from accumulated other comprehensive income, net of tax | 3 | 7 | ||||
Other comprehensive income/(loss), net of tax | (49) | (440) | (81) | (298) | ||
Foreign Currency Translation Adjustment | ||||||
Accumulated other comprehensive income/(loss), net of tax | (1,777) | (1,331) | (1,777) | (1,331) | (1,593) | (1,041) |
Other comprehensive income/(loss) before reclassifications | (184) | (290) | ||||
Amounts reclassified from accumulated other comprehensive income, net of tax | 0 | 0 | ||||
Other comprehensive income/(loss), net of tax | (184) | (290) | ||||
Unrealized Gain/(Loss) on Marketable Securities, Net of Tax | ||||||
Accumulated other comprehensive income/(loss), net of tax | $ 39 | $ 24 | 39 | 24 | $ (64) | $ 32 |
Other comprehensive income/(loss) before reclassifications | 100 | (15) | ||||
Amounts reclassified from accumulated other comprehensive income, net of tax | 3 | 7 | ||||
Other comprehensive income/(loss), net of tax | $ 103 | $ (8) |
STOCK-BASED COMPENSATION (Textu
STOCK-BASED COMPENSATION (Textuals) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($)Stock_Plansshares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Number of stock plans | Stock_Plans | 3 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Maximum contractual term | 10 years |
Unrecognized compensation expense, unvested stock options | $ | $ 28.7 |
Weighted average period of recognition, unvested stock options | 3 years |
Stock Options | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Award vesting period | 4 years |
2012 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Base number of shares that may be issuable under stock plan | 3,076,923 |
2012 Equity Incentive Plan | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Number of shares available for grant | 10,769,230 |
Annual percentage limit for incremental shares that may be issued | 3.00% |
2012 Equity Incentive Plan | Class A Common | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Number of shares available for grant | 3,782,796 |
STOCK-BASED COMPENSATION (Grant
STOCK-BASED COMPENSATION (Grant Date Fair Values of Options Awarded to Employees) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Weighted average grant date per share fair value | $ 8.23 | $ 7.73 | $ 8.73 | $ 9.88 |
STOCK-BASED COMPENSATION (Stock
STOCK-BASED COMPENSATION (Stock Option Activity) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding | |
Number of shares outstanding beginning balance | 4,854 |
Number of shares granted | 2,514 |
Number of shares exercised | (519) |
Number of shares forfeited | (311) |
Number of shares outstanding ending balance | 6,538 |
Number of shares exercisable | 2,647 |
Number of shares expected to vest | 3,891 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | |
Weighted average exercise price per share outstanding beginning balance | $ / shares | $ 14.50 |
Weighted average exercise price per share granted | $ / shares | 24.82 |
Weighted average exercise price per share exercised | $ / shares | 8.30 |
Weighted average exercise price per share forfeited | $ / shares | 16.80 |
Weighted average exercise price per share outstanding ending balance | $ / shares | 18.85 |
Weighted average exercise price per share exercisable | $ / shares | 12.34 |
Weighted average exercise price per share expected to vest | $ / shares | $ 23.28 |
Weighted average remaining contractual life outstanding | 7 years 8 months 12 days |
Weighted average remaining contractual life exercisable | 5 years 9 months 18 days |
Weighted average remaining contractual life expected to vest | 9 years 1 month 6 days |
Aggregate intrinsic value outstanding | $ | $ 26,096 |
Aggregate intrinsic value exercisable | $ | 23,309 |
Aggregate intrinsic value expected to vest | $ | $ 2,787 |
STOCK-BASED COMPENSATION (Compe
STOCK-BASED COMPENSATION (Compensation Expense Related to Stock Options and Their Intrinsic Values) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Intrinsic value of stock options exercised | $ 2,757 | $ 853 | $ 8,696 | $ 16,750 |
Stock-based compensation expense | 2,266 | 1,661 | 6,935 | 5,211 |
Net stock-based compensation capitalized into inventory | 140 | 0 | 140 | 0 |
Total stock-based compensation cost | $ 2,406 | $ 1,661 | $ 7,075 | $ 5,211 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 35.30% | 33.70% | 35.50% | 34.60% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($)claim | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($)claim | Mar. 11, 2015claim | Nov. 19, 2014claim | Jul. 31, 2011claim | Oct. 31, 2010claim | |
Loss Contingencies | ||||||||||||
Provision for litigation | $ | $ 27 | $ 46 | $ 433 | $ 3,899 | ||||||||
Synthes USA, LLC, Synthes USA Products, LLC, and Synthes USA Sales, LLC Litigation | ||||||||||||
Loss Contingencies | ||||||||||||
Loss Contingency, Pending Claims, Number | 3 | |||||||||||
Damages awarded | $ | $ 16,000 | |||||||||||
Combined litigation loss | $ | 19,500 | |||||||||||
Provision for litigation - cost of goods sold | $ | 1,300 | |||||||||||
Provision for litigation | $ | $ 600 | $ 18,200 | ||||||||||
Synthes USA, LLC, Synthes USA Products, LLC, and Synthes USA Sales, LLC Litigation | Minimum | ||||||||||||
Loss Contingencies | ||||||||||||
Loss Contingency, Pending Claims, Number | 1 | |||||||||||
NuVasive, Inc. Litigation | ||||||||||||
Loss Contingencies | ||||||||||||
Loss Contingency, Pending Claims, Number | 3 | |||||||||||
NuVasive, Inc. Litigation | Minimum | ||||||||||||
Loss Contingencies | ||||||||||||
Loss Contingency, Pending Claims, Number | 1 | |||||||||||
Bianco Litigation | ||||||||||||
Loss Contingencies | ||||||||||||
Combined litigation loss | $ | $ 4,300 | |||||||||||
Royalty Rate | 5.00% | |||||||||||
Altus Partners, LLC Litigation | ||||||||||||
Loss Contingencies | ||||||||||||
Provision for litigation | $ | $ 2,000 | |||||||||||
N-Spine and Synthes Litigation | Minimum | ||||||||||||
Loss Contingencies | ||||||||||||
Loss Contingency, Pending Claims, Number | 1 | 1 | ||||||||||
Bonutti Skeletal Innovations LLC Litigation | ||||||||||||
Loss Contingencies | ||||||||||||
Loss Contingency, Pending Claims, Number | 6 | |||||||||||
Bonutti Skeletal Innovations LLC Litigation | Minimum | ||||||||||||
Loss Contingencies | ||||||||||||
Loss Contingency, Pending Claims, Number | 1 | |||||||||||
Flexuspine Inc. Litigation | ||||||||||||
Loss Contingencies | ||||||||||||
Loss Contingency, Pending Claims, Number | 5 | |||||||||||
Flexuspine Inc. Litigation | Minimum | ||||||||||||
Loss Contingencies | ||||||||||||
Loss Contingency, Pending Claims, Number | 1 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||
Mar. 11, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||||
Accounts payable to related-party | $ 0 | $ 5,359 | |||
Purchases from related-party supplier | $ 5,304 | $ 5,163 | $ 15,954 |
SEGMENT AND GEOGRAPHIC INFORM54
SEGMENT AND GEOGRAPHIC INFORMATION (Geographic Location) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues from External Customers | ||||
Total sales | $ 136,992 | $ 117,787 | $ 402,166 | $ 345,570 |
United States | ||||
Revenues from External Customers | ||||
Total sales | 125,670 | 106,601 | 367,140 | 309,937 |
International | ||||
Revenues from External Customers | ||||
Total sales | $ 11,322 | $ 11,186 | $ 35,026 | $ 35,633 |
SEGMENT AND GEOGRAPHIC INFORM55
SEGMENT AND GEOGRAPHIC INFORMATION (Products) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)categoriessegments | Sep. 30, 2014USD ($) | |
Revenue from External Customer | ||||
Total sales | $ 136,992 | $ 117,787 | $ 402,166 | $ 345,570 |
Textuals [Abstract] | ||||
Number of reportable segments | segments | 1 | |||
Number of product categories | categories | 2 | |||
Innovative Fusion | ||||
Revenue from External Customer | ||||
Total sales | 72,490 | 67,726 | $ 214,431 | 200,356 |
Disruptive Technology | ||||
Revenue from External Customer | ||||
Total sales | $ 64,502 | $ 50,061 | $ 187,735 | $ 145,214 |