Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 25, 2018 | |
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 | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 97,466,724 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 119,836 | $ 118,817 |
Short-term marketable securities | 249,341 | 254,890 |
Accounts receivable, net of allowances of $4,129 and $3,963, respectively | 122,581 | 116,676 |
Inventories | 107,580 | 108,409 |
Prepaid expenses and other current assets | 12,998 | 11,166 |
Notes, Loans and Financing Receivable, Gross, Current | 2,500 | 1,667 |
Income taxes receivable | 89 | 8,717 |
Total current assets | 614,925 | 620,342 |
Property and equipment, net of accumulated depreciation of $196,921 and $191,760, respectively | 149,193 | 143,167 |
Long-term marketable securities | 104,399 | 56,133 |
Note receivable | 27,500 | 28,333 |
Intangible assets, net | 78,935 | 78,659 |
Goodwill | 124,780 | 123,890 |
Other assets | 7,454 | 7,947 |
Deferred income taxes | 20,474 | 20,031 |
Total assets | 1,127,660 | 1,078,502 |
LIABILITIES AND EQUITY | ||
Accounts payable | 28,161 | 25,039 |
Accrued expenses | 43,975 | 52,594 |
Income taxes payable | 2,178 | 3,274 |
Business acquisition liabilities | 6,659 | 11,411 |
Deferred Revenue, Current | 1,579 | 755 |
Total current liabilities | 82,552 | 93,073 |
Business acquisition liabilities, net of current portion | 4,195 | 4,508 |
Deferred income taxes | 11,504 | 10,669 |
Other liabilities | 2,541 | 2,474 |
Total liabilities | 100,792 | 110,724 |
Commitments and contingencies (Note 13) | ||
Equity: | ||
Additional paid-in capital | 253,758 | 238,341 |
Accumulated other comprehensive loss | (2,772) | (6,907) |
Retained earnings | 775,785 | 736,247 |
Total equity | 1,026,868 | 967,778 |
Total liabilities and equity | 1,127,660 | 1,078,502 |
Class A Common | ||
Equity: | ||
Common stock | 73 | 73 |
Class B Common | ||
Equity: | ||
Common stock | $ 24 | $ 24 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Allowance for doubtful accounts | $ 4,129 | $ 3,963 |
Property, Plant and Equipment, Net | ||
Accumulated depreciation | $ 196,921 | $ 191,760 |
Equity: | ||
Common stock, shares authorized | 785,000,000 | |
Common stock, shares issued | 97,163,573 | 96,657,881 |
Common stock, shares outstanding | 97,163,573 | 96,657,881 |
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 | 73,286,017 | 72,780,325 |
Common stock, shares outstanding | 73,286,017 | 72,780,325 |
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 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Sales | $ 174,411 | $ 155,809 |
Cost of goods sold | 37,970 | 35,600 |
Gross profit | 136,441 | 120,209 |
Operating expenses: | ||
Research and development | 12,689 | 10,666 |
Selling, general and administrative | 75,694 | 67,059 |
Amortization of intangibles | 2,187 | 1,782 |
Acquisition related costs | 238 | 388 |
Total operating expenses | 90,808 | 79,895 |
Operating Income | 45,633 | 40,314 |
Other income, net | ||
Interest income, net | 2,291 | 1,418 |
Foreign currency transaction gain/(loss) | (5) | 548 |
Other income | 158 | 134 |
Total other income, net | 2,444 | 2,100 |
Income before income taxes | 48,077 | 42,414 |
Income tax provision | 8,539 | 13,700 |
Net Income | $ 39,538 | $ 28,714 |
Earnings per share: | ||
Basic | $ 0.41 | $ 0.30 |
Diluted | $ 0.39 | $ 0.30 |
Weighted average shares outstanding: | ||
Basic | 96,840 | 95,996 |
Dilutive stock options | 3,656 | 1,152 |
Diluted | 100,496 | 97,148 |
Anti-dilutive stock options excluded from weighted average calculation | 1,917 | 5,758 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 39,538 | $ 28,714 |
Other comprehensive income/(loss): | ||
Unrealized gain on marketable securities, net of tax | (236) | 120 |
Foreign currency translation gain/(loss) | 4,371 | 2,441 |
Total other comprehensive income/(loss) | 4,135 | 2,561 |
Comprehensive Income | $ 43,673 | $ 31,275 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Cash Flows [Abstract] | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 119,836 | $ 107,262 |
Cash flows from operating activities: | ||
Net income | 39,538 | 28,714 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 9,476 | 12,240 |
Amortization of premium on marketable securities | 785 | 1,008 |
Write-down for excess and obsolete inventories | 2,483 | 1,671 |
Stock-based compensation expense | 6,053 | 3,491 |
Allowance for doubtful accounts | 217 | 794 |
Change in fair value of contingent consideration | 234 | 478 |
Change in deferred income taxes | (124) | (2,399) |
(Increase)/decrease in: | ||
Accounts receivable | (5,080) | (2,225) |
Inventories | (1,206) | (2,102) |
Prepaid expenses and other assets | (1,234) | 8,628 |
Increase/(decrease) in: | ||
Accounts payable | 728 | (172) |
Accrued expenses and other liabilities | (7,072) | (10,170) |
Income taxes payable/receivable | 7,497 | 13,493 |
Net cash provided by operating activities | 52,295 | 53,449 |
Cash flows from investing activities: | ||
Purchases of marketable securities | (118,403) | (70,305) |
Maturities of marketable securities | 73,330 | 55,405 |
Proceeds from Sale of Available-for-sale Securities | 1,333 | 15,505 |
Purchases of property and equipment | (12,374) | (11,533) |
Net cash used in investing activities | (56,114) | (10,928) |
Cash flows from financing activities: | ||
Payment of business acquisition liabilities | (5,440) | (5,001) |
Proceeds from exercise of stock options | 9,307 | 1,990 |
Net cash provided by financing activities | 3,867 | (3,011) |
Effect of foreign exchange rate on cash | 971 | 321 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Excluding Exchange Rate Effect | 1,019 | 39,831 |
Cash and cash equivalents, beginning of period | 118,817 | 66,954 |
Cash and cash equivalents, end of period | 119,836 | 106,785 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 0 | 8 |
Income taxes paid | $ 1,197 | $ 2,656 |
BACKGROUND AND SUMMARY OF SIGNI
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
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 that develops and commercializes solutions for the treatment of musculoskeletal disorders. We are primarily focused on implants that promote healing in patients with spine disorders, but recently launched a robotic guidance and navigation system and products to treat patients who have experienced orthopedic traumas. 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 180 products and offer a comprehensive portfolio of innovative and differentiated products addressing a broad array of spinal pathologies, anatomies and surgical approaches. 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. The 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, 2017 . 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 month periods presented. The results of operations for any interim period are not indicative of results for the full year. During the fourth quarter of 2017, the Company identified and recorded an adjustment to its December 31, 2016 consolidated balance sheet to correct the presentation of $65.8 million of its Variable Rate Demand Notes (“VRDNs”) as short-term marketable securities instead of cash and cash equivalents. Accordingly, the statement of cash flows for the year ended December 31, 2016 has been adjusted to appropriately increase purchases of marketable securities by $63.3 million , resulting in an increase in net cash used in investing activities and a decrease to cash and cash equivalents, end of period of $63.3 million . The statement of cash flows for the year ended December 31, 2015 has been adjusted to appropriately increase purchases of marketable securities by $2.5 million , resulting in an increase in net cash used in investing activities and a decrease to cash and cash equivalents, end of period of $2.5 million . The statement of cash flows for the three months ended March 31, 2017 has been adjusted to appropriately increase purchases of marketable securities, maturities of marketable securities and sales of marketable securities by $19.1 million , $0.1 million and $9.0 million respectively, resulting in an increase in net cash used in investing activities and a decrease to cash and cash equivalents, end of period of $10.0 million . In accordance with FASB Topic ASC 320, Investments-Debt and Equity Securities, based on our ability to market and sell these instruments and our intent to not hold such instruments until maturity, we account for VRDNs as available-for-sale, and carry them at their fair value. VRDNs are similar to short-term debt instruments because their interest rates are reset periodically. Investments in these securities can be sold for cash on the auction date. We classified VRDNs at March 31, 2017 as short-term based on the reset dates. The Company did not own VRDNs as of December 31, 2017 and does not own VRDNs as of March 31, 2018 . (c) Principles of Consolidation The accompanying condensed 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 condensed 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 condensed 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 from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the condensed consolidated financial statements in the period they are determined to be necessary. Significant areas that require management’s estimates include intangible assets, business acquisition liabilities, allowance for doubtful accounts, stock-based compensation, write-down for excess and obsolete inventory, useful lives of assets, the outcome of litigation, recoverability of intangible assets 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. During fourth quarter of 2017, we completed a review of the estimated useful life of our Instruments and Modules and cases. Based on historical useful life information, forecasted product life cycles and demand expectations, the useful life of Instruments and Modules and cases was extended from three to five years. This was accounted for as a change in accounting estimate and was made on a prospective basis effective October 1, 2017. For the three months ended March 31, 2018, depreciation expense was lower by approximately $1.6 million than it would have been had the useful life of these assets not been extended. The effect of this change on basic and diluted earnings per share for the three months ended March 31, 2018 was $0.01 per share. (e) Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows: (In thousands) March 31, 2018 December 31, 2017 March 31, 2017 December 31, 2016 Cash and cash equivalents $ 119,836 $ 118,817 $ 106,785 $ 66,954 Restricted cash — — 477 477 Total cash, cash equivalents, and restricted cash as presented in the condensed consolidated statement of cash flows $ 119,836 $ 118,817 $ 107,262 $ 67,431 (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 March 31, 2018 . Available-for-sale securities are recorded at fair value in both short-term and long-term marketable securities on our condensed 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 income or loss on our condensed 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 condensed consolidated statements of income. Interest receivable is recorded as a component of prepaid expenses and other current assets on our condensed 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 condensed consolidated statement of income in the period the determination is made. (g) Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. The majority of our inventories are finished goods and we utilize both in-house manufacturing and 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) Property and Equipment Purchases of property and equipment included in accounts payable and accrued expenses were $7.7 million and $6.9 million during the three months ended March 31, 2018 and March 31, 2017 , respectively. (i) Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. For purposes of disclosing disaggregated revenue, we disaggregate our revenue, into two categories, Spine and Emerging Technologies, based on the timing of revenue recognition. Our Spine products are comprised of our entire spinal implant portfolio, including traditional interbody fusion devices, our expandable cages, products designed for minimally invasive surgical techniques, motion preservation devices, regenerative biologics technologies and interventional pain management solutions. The majority of our Spine contracts have a single performance obligation and revenue is recognized at a point in time. Our Emerging Technology products consist of our imaging, navigational and robotic (“INR”) technologies and orthopedic trauma devices. The majority of our Emerging Technology product contracts typically contain multiple performance obligations, including maintenance and support, and revenue is recognized as we fulfill each performance obligation. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. Our policy is to classify shipping and handling costs billed to customers as sales and the related expenses as cost of goods sold. Nature of Products and Services A significant portion of our Spine product revenue is generated from consigned inventory maintained at hospitals or with sales representatives. Revenue from the sale of consigned Spine products is recognized when we transfer control, which occurs at the time the product is used or implanted. For all other Spine product transactions, we recognize revenue when we transfer title to the goods, provided there are no remaining performance obligations that will affect the customer’s final acceptance of the sale. We use an observable price to determine the stand-alone selling price for the identified performance obligation. Revenue from the sale of Emerging Technology products is generally recognized when title transfers to the customer which occurs at the time the product is delivered. Depending on the terms of the arrangement, we may also defer the recognition of a portion of the consideration received as we have to satisfy a future performance obligation to provide maintenance and support. We use an observable price to determine the stand-alone selling price for each separate performance obligation. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Deferred revenue is comprised mainly of unearned revenue related to the sales of certain Emerging Technology products, which includes maintenance and support services. Deferred revenue is generally invoiced annually at the beginning of each contract period and recognized ratably over the coverage period. For the three months ended March 31, 2018, there was an immaterial amount of revenue recognized from previously deferred revenue. Disaggregation of Revenue The following table represents total sales by revenue stream: Three Months Ended (In thousands) March 31, March 31, Spine products $ 161,627 $ 155,809 Emerging Technology products 12,784 — Total sales $ 174,411 $ 155,809 (j) Recently Issued Accounting Pronouncements In February 2016, the FASB released ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases with terms greater than 12 months, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted, and requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. We are currently evaluating the impact of this update on our financial position, results of operations, and disclosures. In January 2017, the FASB released ASU 2017-04, Intangibles - Goodwill and Other (Topic 805): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates the Step 2 calculation for the implied fair value of goodwill to measure a goodwill impairment charge. Under the updated standard, an entity will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-04 does not change the guidance on completing Step 1 of the goodwill impairment test and still allows an entity to perform the optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. This update is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted for any impairment test performed on testing dates after January 1, 2017. We are currently evaluating the timing and impact of the new standard on our financial position, results of operations and disclosures. In February 2018, the FASB released ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) , Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”). Prior to ASU 2018-02, GAAP required the remeasurement of deferred tax assets and liabilities as a result of a change in tax laws or rates to be presented in net income from continuing operations, even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income. As a result, such items, referred to as stranded tax effects, did not reflect the appropriate tax rate. Under ASU 2018-02, entities are permitted, but not required, to reclassify from accumulated other comprehensive income to retained earnings those stranded tax effects resulting from the Tax Act. ASU 2018-02 is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the timing and impact of the new standard on our financial position, results of operations and disclosures. (k) Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) . ASU 2014-09 amends the guidance in former Topic 605, Revenue Recognition , and most other existing revenue guidance in US GAAP. 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 and provide additional disclosures. As amended, the effective date for public entities is annual reporting periods beginning after December 15, 2017 and interim periods therein. We adopted the standard on January 1, 2018, using the modified retrospective method. We implemented internal controls and key system functionality to enable the preparation of financial information upon adoption. The adoption of this standard did not have a material impact on our financial position, results of operations, and disclosures. In October 2016, the FASB released ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 removes the current exception in US GAAP prohibiting entities from recognizing current and deferred income tax expenses or benefits related to transfer of assets, other than inventory, within the consolidated entity. The current exception to defer the recognition of any tax impact on the transfer of inventory within the consolidated entity until it is sold to a third party remains unaffected. This update is effective for public entities for annual reporting periods beginning after December 15, 2017. We adopted ASU 2016-16 on January 1, 2018. This standard does not have a material impact on our financial position, results of operations, and disclosures. In November 2016, the FASB released ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. Transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented in the statement of cash flows. The amendments in this update should be applied using a retrospective transition method to each period presented. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years; early adoption is permitted, including adoption in an interim period. We adopted ASU 2016-18 on January 1, 2018. This standard does not have a material impact on our financial position, results of operations, and disclosures. In January 2017, the FASB released ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this ASU should be applied prospectively and are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early application permitted. No disclosures are required at transition. We adopted ASU 2017-01 on January 1, 2018. This standard does not have a material impact on our financial position, results of operations, and disclosures. In May 2017, the FASB released ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which clarifies the changes to terms or conditions of a share based payment award that requires application of modification accounting under Topic 718. A change to an award should be accounted for as a modification unless the fair value of the modified award is the same as the original award, the vesting conditions do not change, and the classification as an equity or liability instrument does not change. This update is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. Early application is permitted and prospective application is required for awards modified on or after the adoption date. We adopted ASU 2017-09 on January 1, 2018. This standard does not have a material impact on our financial position, results of operations, and disclosures. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | NOTE 2. ACQUISITIONS KB Medical On June 13, 2017, we acquired KB Medical SA (“KB Medical”), a Swiss-based robotic developer, to further bolster our development team, intellectual property, and product portfolio (the “KB Medical Acquisition”). We have included the financial results of KB Medical in our condensed consolidated financial statements from the acquisition date, and the results from KB Medical were not material to our condensed consolidated financial statements. We accounted for the KB Medical Acquisition under the purchase method of accounting. Amounts recognized for assets acquired and liabilities assumed are based on our 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. The fair value of the consideration for the KB Medical Acquisition was approximately $31.5 million of cash paid at closing, plus a potential $4.9 million contingent consideration payment based on product development milestones. We recorded $20.2 million of identifiable net assets, based on their estimated fair values, and goodwill of $16.2 million . None of the goodwill is expected to be deductible for tax purposes. As of March 31, 2018 , the maximum aggregate undiscounted amount of contingent consideration potentially payable related to the KB Medical Acquisition is $5.3 million . The table below represents the final purchase price allocation for the identifiable tangible and intangible assets and liabilities of KB Medical: (In thousands) Consideration: Cash paid at closing $ 31,501 Purchase price contingent consideration 4,871 Fair value of consideration $ 36,372 Identifiable assets acquired and liabilities assumed: Cash acquired $ 1,557 Prepaid and other current assets 168 Intangible assets, gross 24,500 Other assets 18 Accounts payable and accrued expenses (1,312 ) Deferred tax liabilities (4,727 ) Total identifiable net assets 20,204 Goodwill 16,168 Total allocated purchase price $ 36,372 |
NOTE RECEIVABLE
NOTE RECEIVABLE | 3 Months Ended |
Mar. 31, 2018 | |
Note Receivable [Abstract] | |
Note Receivable Disclosure | NOTE RECEIVABLE On September 1, 2016 (the “Closing Date”), in connection with the acquisition of the international operations and distribution channel of Alphatec Holdings, Inc. (“Alphatec International”), we entered into a Credit, Security and Guaranty Agreement (the “Credit Agreement”) with Alphatec Holdings, Inc. (“Alphatec”) and Alphatec Spine, Inc. (“Alphatec Spine” and together with Alphatec, the “Alphatec Borrowers”), pursuant to which we made available to the Alphatec Borrowers a senior secured term loan facility in an amount not to exceed $30.0 million . On the Closing Date, we made an initial loan of $25.0 million and the Alphatec Borrowers issued a note for such amount to us. On December 20, 2016, the remaining $5.0 million was drawn by the Alphatec Borrowers and added to the note. The Credit Agreement contains customary operational and financial covenants, including a fixed charge coverage ratio to be maintained by the Alphatec Borrowers, and provides us with a security interest in all of the assets of the Alphatec Borrowers. The Credit Agreement has a scheduled maturity date five years from the Closing Date. The term loan interest rate for the first two years following the Closing Date is priced at the London Interbank Offered Rate (“ LIBOR ”) plus 8.0% , subject to a 9.5% floor. The term loan interest rate thereafter will be LIBOR plus 13.0% . On March 30, 2017, we entered into a First Amendment to the Credit Agreement which modified the time periods during which the Alphatec Borrowers are required to calculate the fixed charge coverage ratio in order to determine compliance with the Credit Agreement. On March 8, 2018, we entered into a Consent, Joinder and Second Amendment pursuant to which, among other things, (i) we consented to the acquisition by Alphatec of SafeOp Surgical, Inc. (“SafeOp”), (ii) SafeOp joined the Credit Agreement as a “Borrower” thereunder, and (iii) we modified the time periods during which the Alphatec Borrowers (including SafeOp) are required to calculate the fixed charge coverage ratio in order to determine compliance with the Credit Agreement. The first period subject to compliance of the fixed charge coverage ratio is the month ended April 30, 2019. Interest accrues on the note receivable based on the contractual terms of the note. We consider a note to be impaired when, based on current information or factors (such as payment history, value of collateral and assessment of the borrower’s current creditworthiness), it is probable that the principal and interest payments will not be collected according to the note agreement. As of March 31, 2018 , we do not consider this note to be impaired. We believe that the note’s carrying value approximates its fair value. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure | A summary of intangible assets is presented below: March 31, 2018 (In thousands) Weighted Gross Accumulated Amortization Intangible In-process research & development — $ 20,612 $ — $ 20,612 Supplier network 10.0 4,000 (1,367 ) 2,633 Customer relationships & other intangibles 6.8 43,423 (13,512 ) 29,911 Developed Technology 10.0 20,460 (1,194 ) 19,266 Patents 16.7 7,590 (1,077 ) 6,513 Total intangible assets $ 96,085 $ (17,150 ) $ 78,935 December 31, 2017 (In thousands) Weighted Gross Accumulated Amortization Intangible In-process research & development — $ 20,003 $ — $ 20,003 Supplier network 10.0 4,000 (1,267 ) 2,733 Customer relationships & other intangibles 6.8 41,345 (11,589 ) 29,756 Developed Technology 10.0 20,460 (682 ) 19,778 Patents 16.9 7,389 (1,000 ) 6,389 Total intangible assets $ 93,197 $ (14,538 ) $ 78,659 A summary of the net carrying value of goodwill is presented below: (In thousands) December 31, 2016 $ 105,926 Additions and adjustments 17,907 Foreign exchange 57 December 31, 2017 123,890 Additions and adjustments — Foreign exchange 890 March 31, 2018 $ 124,780 |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 3 Months Ended |
Mar. 31, 2018 | |
Marketable Securities [Abstract] | |
Marketable Securities | MARKETABLE SECURITIES The composition of our short-term and long-term marketable securities is as follows: March 31, 2018 (In thousands) Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term: Municipal bonds Less than 1 $ 107,294 $ — $ (95 ) $ 107,199 Corporate debt securities Less than 1 87,807 7 (218 ) 87,596 Commercial paper Less than 1 40,154 1 (20 ) 40,135 U.S. government and agency securities Less than 1 14,441 — (30 ) 14,411 Total short-term marketable securities $ 249,696 $ 8 $ (363 ) $ 249,341 Long-term: Municipal bonds 1-2 $ 15,195 $ 3 $ (44 ) $ 15,154 Corporate debt securities 1-2 38,390 6 (78 ) 38,318 Asset-backed securities 1-2 51,097 — (170 ) 50,927 Total long-term marketable securities $ 104,682 $ 9 $ (292 ) $ 104,399 December 31, 2017 (In thousands) Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term: Municipal bonds Less than 1 $ 124,817 $ 1 $ (141 ) $ 124,677 Corporate debt securities Less than 1 64,599 5 (68 ) 64,536 Commercial paper Less than 1 55,768 — (27 ) 55,741 U.S. government and agency securities Less than 1 9,960 — (24 ) 9,936 Total short-term marketable securities $ 255,144 $ 6 $ (260 ) $ 254,890 Long-term: Municipal bonds 1-2 $ 15,285 $ — $ (48 ) $ 15,237 Corporate debt securities 1-2 17,155 3 (39 ) 17,119 Asset-backed securities 1-2 23,841 — (64 ) 23,777 Total long-term marketable securities $ 56,281 $ 3 $ (151 ) $ 56,133 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2018 | |
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) March 31, Level 1 Level 2 Level 3 Assets Cash equivalents $ 19,441 $ 84 $ 19,357 $ — Municipal bonds 122,353 — 122,353 — Corporate debt securities 125,914 — 125,914 — Commercial paper 40,135 — 40,135 — Asset-backed securities 50,927 — 50,927 — U.S. government and agency securities 14,411 — 14,411 — Liabilities Business acquisition liabilities 10,854 — — 10,854 Balance at (In thousands) December 31, Level 1 Level 2 Level 3 Assets Cash equivalents $ 31,549 $ 5,927 $ 25,622 $ — Municipal bonds 139,914 — 139,914 — Corporate debt securities 81,655 — 81,655 — Commercial paper 55,741 — 55,741 — Asset-backed securities 23,777 — 23,777 — U.S. government and agency securities 9,936 — 9,936 — Liabilities Business acquisition liabilities 15,919 — — 15,919 Our marketable securities are classified as Level 2 within the fair value hierarchy, as we measure their fair value using market prices for similar instruments and inputs such as actual trade data, benchmark yields, broker/dealer quotes and other similar data obtained from quoted market prices or independent pricing vendors. Assets and Liabilities That Are Measured at Fair Value on a Nonrecurring Basis The purchase price of business acquisitions is primarily allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates, with the excess recorded as goodwill. We utilize Level 3 inputs in the determination of the initial fair value. Non-financial assets such as goodwill, intangible assets, and property, plant, and equipment are subsequently measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment is recognized. We assess the impairment of intangible assets annually or whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. The fair value of our goodwill and intangible assets is not estimated if there is no change in events or circumstances that indicate the carrying amount of an intangible asset may not be recoverable. Business acquisition liabilities 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 business acquisition liabilities 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. The balances of the fair value of contingent consideration are recognized within business acquisition liabilities on our condensed consolidated balance sheets, and the changes in the fair value of business acquisition liabilities are recognized within acquisition related costs in the condensed consolidated statements of income. The recurring Level 3 fair value measurements of our business acquisition liabilities include the following significant unobservable inputs, which have not materially changed since December 31, 2017 : Fair Value at (In thousands) March 31, Valuation technique Unobservable input Range Discount rate 8.5% Revenue-based payments $ 5,990 Discounted cash flow Probability of payment 87.0% - 100.0% Projected year of payment 2018 - 2029 Discount rate 4.4% Milestone-based payments $ 4,864 Discounted cash flow Probability of payment 100.0% Projected year of payment 2018 The following table provides a reconciliation of the beginning and ending balances of business acquisition liabilities: Three Months Ended (In thousands) March 31, March 31, Beginning balance $ 15,919 $ 19,849 Changes resulting from foreign currency fluctuations 141 — Contingent payments (5,440 ) (5,001 ) Changes in fair value of business acquisition liabilities 234 478 Ending balance $ 10,854 $ 15,326 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES (In thousands) March 31, December 31, 2017 Raw materials $ 18,925 $ 19,984 Work in process 9,817 10,012 Finished goods 78,838 78,413 Total inventories $ 107,580 $ 108,409 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | ACCRUED EXPENSES (In thousands) March 31, December 31, Compensation and other employee-related costs $ 22,737 $ 29,006 Legal and other settlements and expenses 1,251 1,177 Accrued non-income taxes 6,095 6,325 Royalties 2,409 2,139 Other 11,483 13,947 Total accrued expenses $ 43,975 $ 52,594 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2018 | |
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 provides 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 2018. 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 March 31, 2018 , we were in compliance with all financial 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 Class C Common Total March 31, 2018 73,286,017 23,877,556 — 97,163,573 December 31, 2017 72,780,325 23,877,556 — 96,657,881 The following table summarizes changes in total equity: Three Months Ended (In thousands) March 31, Total equity, at December 31, 2017 $ 967,778 Net income 39,538 Stock-based compensation cost 6,110 Exercise of stock options 9,307 Other comprehensive income 4,135 Total equity, at March 31, 2018 $ 1,026,868 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) Three Months 2018 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, 2017 $ (313 ) $ (6,594 ) $ (6,907 ) Other comprehensive (loss)/income before reclassifications (237 ) 4,371 4,134 Amounts reclassified from accumulated other comprehensive income, net of tax 1 — 1 Other comprehensive (loss)/income, net of tax (236 ) 4,371 4,135 Accumulated other comprehensive loss, net of tax, at March 31, 2018 $ (549 ) $ (2,223 ) $ (2,772 ) (In thousands) Three Months 2017 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, 2016 $ (167 ) $ (8,475 ) $ (8,642 ) Other comprehensive income before reclassifications 166 2,441 2,607 Amounts reclassified from accumulated other comprehensive income, net of tax (46 ) — (46 ) Other comprehensive income, net of tax 120 2,441 2,561 Accumulated other comprehensive loss, net of tax, at March 31, 2017 $ (47 ) $ (6,034 ) $ (6,081 ) |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
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 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 March 31, 2018 , pursuant to the 2012 Plan, there were 14,889,882 shares of Class A Common stock reserved and 3,863,548 shares of Class A Common stock available for future grants. The weighted average grant date fair value per share of the options awarded to employees were as follows: Three Months Ended March 31, March 31, Weighted average grant date fair value per share $ 13.74 $ 8.34 Stock option activity during the three months ended March 31, 2018 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, 2017 9,041 $ 23.40 Granted 1,777 44.96 Exercised (506 ) 19.43 Forfeited (67 ) 27.66 Outstanding at March 31, 2018 10,245 $ 27.31 7.7 $ 230,646 Exercisable at March 31, 2018 4,458 $ 21.07 6.2 $ 128,157 Expected to vest at March 31, 2018 5,786 $ 32.11 8.8 $ 102,490 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 (In thousands) March 31, March 31, Intrinsic value of stock options exercised $ 14,848 $ 1,890 Stock-based compensation expense $ 6,053 $ 3,491 Net stock-based compensation capitalized into inventory 57 51 Total stock-based compensation cost $ 6,110 $ 3,542 As of March 31, 2018 , there was $51.8 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 | 3 Months Ended |
Mar. 31, 2018 | |
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. The following table provides a summary of our effective tax rate: Three Months Ended March 31, March 31, Effective income tax rate 17.8 % 32.3 % The period over period change in the effective income tax rate for the three months ended March 31, 2018 is primarily driven by the reduction of the federal income tax rate from 35% to 21% as well as benefits from the adoption of ASU 2016-09 and foreign tax credits, which are offset by the repeal of the domestic production activities deduction as part of the U.S. Tax Cuts and Jobs Act (“Tax Reform Act”). The Company recognized the income tax effects of the Tax Reform Act in its 2017 financial statements in accordance with Staff Accounting Bulletin No. 118. As of March 31, 2018 no changes have been made to the previously recognized amounts. Due to the complexity of the new Global Intangible Low-Taxed Income (“GILTI”) tax rules, Base Erosion and Anti-Abuse Tax (“BEAT”) and Foreign Derived Intangible Income (“FDII”), the Company continues to evaluate these provisions of the Tax Reform Act and the application of ASC Topic 740 and therefore has not made any adjustments or estimates related to potential GILTI, BEAT or FDII tax in its financial statements as of March 31, 2018 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
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 condensed 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 reasonably 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. 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 pre-trial phase of litigation on the underlying damages claims. We intend to defend our rights vigorously. The outcome of this litigation cannot be determined, nor can we estimate a range of potential loss. 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. 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 September 13, 2017, we settled this matter with Bianco for $11.5 million in cash, which resulted in the reversal of a previously recorded accrual of $2.5 million and the recording of $9.0 million in other assets that will be amortized through June 30, 2022, as a component of cost of goods sold. 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. alleged that Globus willfully infringed one or more claims of five patents by making, using, offering for sale or selling the CALIBER ® , CALIBER ® -L, and ALTERA ® products. On August 19, 2016, a jury returned a verdict in our favor finding no infringement of the asserted patents. On January 19, 2018 the United States Court of Appeals for the Federal Circuit affirmed the decisions of the lower court. On February 19, 2018, Flexuspine, Inc. filed a petition for panel rehearing in the United States Court of Appeals for the Federal Circuit. On March 7, 2018, the United States Court of Appeals for the Federal Circuit denied Flexuspine Inc.’s petition for panel rehearing. In addition, we are subject to legal proceedings arising in the ordinary course of business. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 3 Months Ended |
Mar. 31, 2018 | |
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 operating segment. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. The following table represents total sales by geographic area, based on the location of the customer: Three Months Ended (In thousands) March 31, March 31, United States $ 145,618 $ 129,663 International 28,793 26,146 Total sales $ 174,411 $ 155,809 |
BACKGROUND AND SUMMARY OF SIG21
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed 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 condensed 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 condensed 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 from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the condensed consolidated financial statements in the period they are determined to be necessary. Significant areas that require management’s estimates include intangible assets, business acquisition liabilities, allowance for doubtful accounts, stock-based compensation, write-down for excess and obsolete inventory, useful lives of assets, the outcome of litigation, recoverability of intangible assets 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. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows: (In thousands) March 31, 2018 December 31, 2017 March 31, 2017 December 31, 2016 Cash and cash equivalents $ 119,836 $ 118,817 $ 106,785 $ 66,954 Restricted cash — — 477 477 Total cash, cash equivalents, and restricted cash as presented in the condensed consolidated statement of cash flows $ 119,836 $ 118,817 $ 107,262 $ 67,431 |
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 March 31, 2018 . Available-for-sale securities are recorded at fair value in both short-term and long-term marketable securities on our condensed 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 income or loss on our condensed 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 condensed consolidated statements of income. Interest receivable is recorded as a component of prepaid expenses and other current assets on our condensed 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 condensed consolidated statement of income in the period the determination is made. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. The majority of our inventories are finished goods and we utilize both in-house manufacturing and 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. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB released ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases with terms greater than 12 months, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted, and requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. We are currently evaluating the impact of this update on our financial position, results of operations, and disclosures. In January 2017, the FASB released ASU 2017-04, Intangibles - Goodwill and Other (Topic 805): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates the Step 2 calculation for the implied fair value of goodwill to measure a goodwill impairment charge. Under the updated standard, an entity will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-04 does not change the guidance on completing Step 1 of the goodwill impairment test and still allows an entity to perform the optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. This update is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted for any impairment test performed on testing dates after January 1, 2017. We are currently evaluating the timing and impact of the new standard on our financial position, results of operations and disclosures. In February 2018, the FASB released ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) , Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”). Prior to ASU 2018-02, GAAP required the remeasurement of deferred tax assets and liabilities as a result of a change in tax laws or rates to be presented in net income from continuing operations, even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income. As a result, such items, referred to as stranded tax effects, did not reflect the appropriate tax rate. Under ASU 2018-02, entities are permitted, but not required, to reclassify from accumulated other comprehensive income to retained earnings those stranded tax effects resulting from the Tax Act. ASU 2018-02 is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the timing and impact of the new standard on our financial position, results of operations and disclosures. (k) Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) . ASU 2014-09 amends the guidance in former Topic 605, Revenue Recognition , and most other existing revenue guidance in US GAAP. 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 and provide additional disclosures. As amended, the effective date for public entities is annual reporting periods beginning after December 15, 2017 and interim periods therein. We adopted the standard on January 1, 2018, using the modified retrospective method. We implemented internal controls and key system functionality to enable the preparation of financial information upon adoption. The adoption of this standard did not have a material impact on our financial position, results of operations, and disclosures. In October 2016, the FASB released ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 removes the current exception in US GAAP prohibiting entities from recognizing current and deferred income tax expenses or benefits related to transfer of assets, other than inventory, within the consolidated entity. The current exception to defer the recognition of any tax impact on the transfer of inventory within the consolidated entity until it is sold to a third party remains unaffected. This update is effective for public entities for annual reporting periods beginning after December 15, 2017. We adopted ASU 2016-16 on January 1, 2018. This standard does not have a material impact on our financial position, results of operations, and disclosures. In November 2016, the FASB released ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. Transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented in the statement of cash flows. The amendments in this update should be applied using a retrospective transition method to each period presented. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years; early adoption is permitted, including adoption in an interim period. We adopted ASU 2016-18 on January 1, 2018. This standard does not have a material impact on our financial position, results of operations, and disclosures. In January 2017, the FASB released ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this ASU should be applied prospectively and are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early application permitted. No disclosures are required at transition. We adopted ASU 2017-01 on January 1, 2018. This standard does not have a material impact on our financial position, results of operations, and disclosures. In May 2017, the FASB released ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which clarifies the changes to terms or conditions of a share based payment award that requires application of modification accounting under Topic 718. A change to an award should be accounted for as a modification unless the fair value of the modified award is the same as the original award, the vesting conditions do not change, and the classification as an equity or liability instrument does not change. This update is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. Early application is permitted and prospective application is required for awards modified on or after the adoption date. We adopted ASU 2017-09 on January 1, 2018. This standard does not have a material impact on our financial position, results of operations, and disclosures. |
Revenue from Contract with Customer [Text Block] | Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. For purposes of disclosing disaggregated revenue, we disaggregate our revenue, into two categories, Spine and Emerging Technologies, based on the timing of revenue recognition. Our Spine products are comprised of our entire spinal implant portfolio, including traditional interbody fusion devices, our expandable cages, products designed for minimally invasive surgical techniques, motion preservation devices, regenerative biologics technologies and interventional pain management solutions. The majority of our Spine contracts have a single performance obligation and revenue is recognized at a point in time. Our Emerging Technology products consist of our imaging, navigational and robotic (“INR”) technologies and orthopedic trauma devices. The majority of our Emerging Technology product contracts typically contain multiple performance obligations, including maintenance and support, and revenue is recognized as we fulfill each performance obligation. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. Our policy is to classify shipping and handling costs billed to customers as sales and the related expenses as cost of goods sold. Nature of Products and Services A significant portion of our Spine product revenue is generated from consigned inventory maintained at hospitals or with sales representatives. Revenue from the sale of consigned Spine products is recognized when we transfer control, which occurs at the time the product is used or implanted. For all other Spine product transactions, we recognize revenue when we transfer title to the goods, provided there are no remaining performance obligations that will affect the customer’s final acceptance of the sale. We use an observable price to determine the stand-alone selling price for the identified performance obligation. Revenue from the sale of Emerging Technology products is generally recognized when title transfers to the customer which occurs at the time the product is delivered. Depending on the terms of the arrangement, we may also defer the recognition of a portion of the consideration received as we have to satisfy a future performance obligation to provide maintenance and support. We use an observable price to determine the stand-alone selling price for each separate performance obligation. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Deferred revenue is comprised mainly of unearned revenue related to the sales of certain Emerging Technology products, which includes maintenance and support services. Deferred revenue is generally invoiced annually at the beginning of each contract period and recognized ratably over the coverage period. For the three months ended March 31, 2018, there was an immaterial amount of revenue recognized from previously deferred revenue. Disaggregation of Revenue The following table represents total sales by revenue stream: Three Months Ended (In thousands) March 31, March 31, Spine products $ 161,627 $ 155,809 Emerging Technology products 12,784 — Total sales $ 174,411 $ 155,809 |
BACKGROUND AND SUMMARY OF SIG22
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Disaggregation of Revenue [Table Text Block] | Disaggregation of Revenue The following table represents total sales by revenue stream: Three Months Ended (In thousands) March 31, March 31, Spine products $ 161,627 $ 155,809 Emerging Technology products 12,784 — Total sales $ 174,411 $ 155,809 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | (In thousands) March 31, 2018 December 31, 2017 March 31, 2017 December 31, 2016 Cash and cash equivalents $ 119,836 $ 118,817 $ 106,785 $ 66,954 Restricted cash — — 477 477 Total cash, cash equivalents, and restricted cash as presented in the condensed consolidated statement of cash flows $ 119,836 $ 118,817 $ 107,262 $ 67,431 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | (In thousands) Consideration: Cash paid at closing $ 31,501 Purchase price contingent consideration 4,871 Fair value of consideration $ 36,372 Identifiable assets acquired and liabilities assumed: Cash acquired $ 1,557 Prepaid and other current assets 168 Intangible assets, gross 24,500 Other assets 18 Accounts payable and accrued expenses (1,312 ) Deferred tax liabilities (4,727 ) Total identifiable net assets 20,204 Goodwill 16,168 Total allocated purchase price $ 36,372 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets Disclosure [Abstract] | |
Intangible Assets Acquired as Part of Business Combination | A summary of intangible assets is presented below: March 31, 2018 (In thousands) Weighted Gross Accumulated Amortization Intangible In-process research & development — $ 20,612 $ — $ 20,612 Supplier network 10.0 4,000 (1,367 ) 2,633 Customer relationships & other intangibles 6.8 43,423 (13,512 ) 29,911 Developed Technology 10.0 20,460 (1,194 ) 19,266 Patents 16.7 7,590 (1,077 ) 6,513 Total intangible assets $ 96,085 $ (17,150 ) $ 78,935 December 31, 2017 (In thousands) Weighted Gross Accumulated Amortization Intangible In-process research & development — $ 20,003 $ — $ 20,003 Supplier network 10.0 4,000 (1,267 ) 2,733 Customer relationships & other intangibles 6.8 41,345 (11,589 ) 29,756 Developed Technology 10.0 20,460 (682 ) 19,778 Patents 16.9 7,389 (1,000 ) 6,389 Total intangible assets $ 93,197 $ (14,538 ) $ 78,659 |
INTANGIBLE ASSETS Schedule of G
INTANGIBLE ASSETS Schedule of Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill [Line Items] | |
Schedule of Goodwill [Table Text Block] | A summary of the net carrying value of goodwill is presented below: (In thousands) December 31, 2016 $ 105,926 Additions and adjustments 17,907 Foreign exchange 57 December 31, 2017 123,890 Additions and adjustments — Foreign exchange 890 March 31, 2018 $ 124,780 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Marketable Securities [Abstract] | |
Marketable Securities | The composition of our short-term and long-term marketable securities is as follows: March 31, 2018 (In thousands) Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term: Municipal bonds Less than 1 $ 107,294 $ — $ (95 ) $ 107,199 Corporate debt securities Less than 1 87,807 7 (218 ) 87,596 Commercial paper Less than 1 40,154 1 (20 ) 40,135 U.S. government and agency securities Less than 1 14,441 — (30 ) 14,411 Total short-term marketable securities $ 249,696 $ 8 $ (363 ) $ 249,341 Long-term: Municipal bonds 1-2 $ 15,195 $ 3 $ (44 ) $ 15,154 Corporate debt securities 1-2 38,390 6 (78 ) 38,318 Asset-backed securities 1-2 51,097 — (170 ) 50,927 Total long-term marketable securities $ 104,682 $ 9 $ (292 ) $ 104,399 December 31, 2017 (In thousands) Contractual Maturity (in years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term: Municipal bonds Less than 1 $ 124,817 $ 1 $ (141 ) $ 124,677 Corporate debt securities Less than 1 64,599 5 (68 ) 64,536 Commercial paper Less than 1 55,768 — (27 ) 55,741 U.S. government and agency securities Less than 1 9,960 — (24 ) 9,936 Total short-term marketable securities $ 255,144 $ 6 $ (260 ) $ 254,890 Long-term: Municipal bonds 1-2 $ 15,285 $ — $ (48 ) $ 15,237 Corporate debt securities 1-2 17,155 3 (39 ) 17,119 Asset-backed securities 1-2 23,841 — (64 ) 23,777 Total long-term marketable securities $ 56,281 $ 3 $ (151 ) $ 56,133 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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) March 31, Level 1 Level 2 Level 3 Assets Cash equivalents $ 19,441 $ 84 $ 19,357 $ — Municipal bonds 122,353 — 122,353 — Corporate debt securities 125,914 — 125,914 — Commercial paper 40,135 — 40,135 — Asset-backed securities 50,927 — 50,927 — U.S. government and agency securities 14,411 — 14,411 — Liabilities Business acquisition liabilities 10,854 — — 10,854 Balance at (In thousands) December 31, Level 1 Level 2 Level 3 Assets Cash equivalents $ 31,549 $ 5,927 $ 25,622 $ — Municipal bonds 139,914 — 139,914 — Corporate debt securities 81,655 — 81,655 — Commercial paper 55,741 — 55,741 — Asset-backed securities 23,777 — 23,777 — U.S. government and agency securities 9,936 — 9,936 — Liabilities Business acquisition liabilities 15,919 — — 15,919 |
Significant unobservable inputs | The recurring Level 3 fair value measurements of our business acquisition liabilities include the following significant unobservable inputs, which have not materially changed since December 31, 2017 : Fair Value at (In thousands) March 31, Valuation technique Unobservable input Range Discount rate 8.5% Revenue-based payments $ 5,990 Discounted cash flow Probability of payment 87.0% - 100.0% Projected year of payment 2018 - 2029 Discount rate 4.4% Milestone-based payments $ 4,864 Discounted cash flow Probability of payment 100.0% Projected year of payment 2018 |
Rollforward of contingent consideration | The following table provides a reconciliation of the beginning and ending balances of business acquisition liabilities: Three Months Ended (In thousands) March 31, March 31, Beginning balance $ 15,919 $ 19,849 Changes resulting from foreign currency fluctuations 141 — Contingent payments (5,440 ) (5,001 ) Changes in fair value of business acquisition liabilities 234 478 Ending balance $ 10,854 $ 15,326 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | (In thousands) March 31, December 31, 2017 Raw materials $ 18,925 $ 19,984 Work in process 9,817 10,012 Finished goods 78,838 78,413 Total inventories $ 107,580 $ 108,409 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | (In thousands) March 31, December 31, Compensation and other employee-related costs $ 22,737 $ 29,006 Legal and other settlements and expenses 1,251 1,177 Accrued non-income taxes 6,095 6,325 Royalties 2,409 2,139 Other 11,483 13,947 Total accrued expenses $ 43,975 $ 52,594 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 Class C Common Total March 31, 2018 73,286,017 23,877,556 — 97,163,573 December 31, 2017 72,780,325 23,877,556 — 96,657,881 |
Schedule of Stockholders Equity | The following table summarizes changes in total equity: Three Months Ended (In thousands) March 31, Total equity, at December 31, 2017 $ 967,778 Net income 39,538 Stock-based compensation cost 6,110 Exercise of stock options 9,307 Other comprehensive income 4,135 Total equity, at March 31, 2018 $ 1,026,868 |
EQUITY Accumulated Other Compre
EQUITY Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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) Three Months 2018 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, 2017 $ (313 ) $ (6,594 ) $ (6,907 ) Other comprehensive (loss)/income before reclassifications (237 ) 4,371 4,134 Amounts reclassified from accumulated other comprehensive income, net of tax 1 — 1 Other comprehensive (loss)/income, net of tax (236 ) 4,371 4,135 Accumulated other comprehensive loss, net of tax, at March 31, 2018 $ (549 ) $ (2,223 ) $ (2,772 ) (In thousands) Three Months 2017 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, 2016 $ (167 ) $ (8,475 ) $ (8,642 ) Other comprehensive income before reclassifications 166 2,441 2,607 Amounts reclassified from accumulated other comprehensive income, net of tax (46 ) — (46 ) Other comprehensive income, net of tax 120 2,441 2,561 Accumulated other comprehensive loss, net of tax, at March 31, 2017 $ (47 ) $ (6,034 ) $ (6,081 ) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Grants in Period, Weighted Average Grant Date Fair Value | The weighted average grant date fair value per share of the options awarded to employees were as follows: Three Months Ended March 31, March 31, Weighted average grant date fair value per share $ 13.74 $ 8.34 |
Summary of Stock Option Activity | Stock option activity during the three months ended March 31, 2018 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, 2017 9,041 $ 23.40 Granted 1,777 44.96 Exercised (506 ) 19.43 Forfeited (67 ) 27.66 Outstanding at March 31, 2018 10,245 $ 27.31 7.7 $ 230,646 Exercisable at March 31, 2018 4,458 $ 21.07 6.2 $ 128,157 Expected to vest at March 31, 2018 5,786 $ 32.11 8.8 $ 102,490 |
Intrinsic Value and Stock-based Compensation Schedule | 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 (In thousands) March 31, March 31, Intrinsic value of stock options exercised $ 14,848 $ 1,890 Stock-based compensation expense $ 6,053 $ 3,491 Net stock-based compensation capitalized into inventory 57 51 Total stock-based compensation cost $ 6,110 $ 3,542 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Effective income tax rate | The following table provides a summary of our effective tax rate: Three Months Ended March 31, March 31, Effective income tax rate 17.8 % 32.3 % |
SEGMENT AND GEOGRAPHIC INFORM34
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 (In thousands) March 31, March 31, United States $ 145,618 $ 129,663 International 28,793 26,146 Total sales $ 174,411 $ 155,809 |
BACKGROUND AND SUMMARY OF SIG35
BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies | |||||
Cash and cash equivalents | $ 119,836 | $ 106,785 | $ 66,954 | $ 118,817 | |
Restricted Cash | 0 | 477 | 477 | 0 | |
Capital Expenditures Incurred but Not yet Paid | 7,700 | 6,900 | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 119,836 | 107,262 | 67,431 | 118,817 | |
Payments to Acquire Investments | 118,403 | 70,305 | |||
Proceeds from Sale of Available-for-sale Securities | $ 1,333 | 15,505 | |||
Minimum | |||||
Summary of Significant Accounting Policies | |||||
Number of Products Launched Since Inception | 180 | ||||
Restatement Adjustment [Member] | |||||
Summary of Significant Accounting Policies | |||||
Payments to Acquire Investments | 19,100 | ||||
Proceeds from Maturities, Prepayments and Calls of Held-to-maturity Securities | 100 | ||||
Proceeds from Sale of Available-for-sale Securities | 9,000 | ||||
Earnings Per Share Policy, Basic | 0.01 | ||||
Available-for-sale Securities [Member] | Restatement Adjustment [Member] | |||||
Summary of Significant Accounting Policies | |||||
Marketable Securities | 10,000 | 65,800 | $ 2,500 | ||
Payments to Acquire Investments | 63,300 | ||||
Adjustments for New Accounting Pronouncement [Member] | |||||
Summary of Significant Accounting Policies | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 119,836 | 107,262 | $ 67,431 | $ 118,817 | |
Cost of Goods, Total [Member] | Restatement Adjustment [Member] | |||||
Summary of Significant Accounting Policies | |||||
Depreciation | 1,600 | ||||
Spine [Member] | |||||
Summary of Significant Accounting Policies | |||||
Disaggregation of Revenue [Table Text Block] | 161,627 | 155,809 | |||
Emerging Technology [Member] | |||||
Summary of Significant Accounting Policies | |||||
Disaggregation of Revenue [Table Text Block] | $ 12,784 | $ 0 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Mar. 31, 2018 | Jun. 13, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition | |||||
Goodwill | $ 123,890 | $ 124,780 | $ 105,926 | ||
Business Combination, Contingent Consideration, Liability | 15,919 | 10,854 | $ 15,326 | $ 19,849 | |
Acquisition 2,017 | |||||
Business Acquisition | |||||
Payments to Acquire Businesses, Gross | 31,501 | ||||
Business Combination, Consideration Transferred | $ 36,372 | ||||
Cash acquired | $ 1,557 | ||||
Accounts receivable | 168 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 24,500 | ||||
Other assets | 18 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (1,312) | ||||
Deferred tax liabilities | (4,727) | ||||
Total identifiable net assets | 20,204 | ||||
Goodwill | 16,168 | ||||
Total allocated purchase price | 36,372 | ||||
Business Combination, Contingent Consideration, Liability | $ 5,300 | $ 4,871 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 20, 2016 | Sep. 01, 2016 | |
Note Receivable | ||||
Note receivable, variable rate basis | LIBOR | |||
Note Receivable, gross, noncurrent | $ 27,500 | $ 28,333 | ||
Maximum | ||||
Note Receivable | ||||
Note Receivable, gross, noncurrent | $ 30,000 | |||
Minimum | ||||
Note Receivable | ||||
Note receivable, basis spread on variable rate | 9.50% | |||
Initial | ||||
Note Receivable | ||||
Note Receivable, gross, noncurrent | $ 25,000 | |||
Final | ||||
Note Receivable | ||||
Note Receivable, gross, noncurrent | $ 5,000 | |||
First Two Years | ||||
Note Receivable | ||||
Note receivable, basis spread on variable rate | 8.00% | |||
Last Three Years | ||||
Note Receivable | ||||
Note receivable, basis spread on variable rate | 13.00% |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Acquired Intangible Assets | ||
Intangible assets, gross | $ 96,085 | $ 93,197 |
Accumulated amortization | (17,150) | (14,538) |
Intangible assets, net | $ 78,935 | $ 78,659 |
Supplier Network | ||
Acquired Intangible Assets | ||
Weighted average amortization period | 10 years | 10 years |
Gross carrying amount | $ 4,000 | $ 4,000 |
Accumulated amortization | (1,367) | (1,267) |
Finite-lived intangible assets, net | $ 2,633 | $ 2,733 |
Customer Relationships & Other Intangibles | ||
Acquired Intangible Assets | ||
Weighted average amortization period | 6 years 9 months 18 days | 6 years 9 months 18 days |
Gross carrying amount | $ 43,423 | $ 41,345 |
Accumulated amortization | (13,512) | (11,589) |
Finite-lived intangible assets, net | $ 29,911 | $ 29,756 |
Developed Technology Rights [Member] | ||
Acquired Intangible Assets | ||
Weighted average amortization period | 10 years | 10 years |
Gross carrying amount | $ 20,460 | $ 20,460 |
Accumulated amortization | (1,194) | (682) |
Finite-lived intangible assets, net | $ 19,266 | $ 19,778 |
Patents | ||
Acquired Intangible Assets | ||
Weighted average amortization period | 16 years 8 months 1 day | 16 years 10 months 24 days |
Gross carrying amount | $ 7,590 | $ 7,389 |
Accumulated amortization | (1,077) | (1,000) |
Finite-lived intangible assets, net | 6,513 | 6,389 |
In-Process Research & Development | ||
Acquired Intangible Assets | ||
Indefinite-lived intangible assets | $ 20,612 | $ 20,003 |
INTANGIBLE ASSETS Goodwill roll
INTANGIBLE ASSETS Goodwill rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||
Goodwill | $ 124,780 | $ 123,890 | $ 105,926 |
Goodwill, Period Increase (Decrease) | 0 | 17,907 | |
Goodwill, Foreign Currency Translation Gain (Loss) | $ 890 | $ 57 |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Short-term Marketable Securities | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 249,696 | $ 255,144 |
Gross Unrealized Gains | 8 | 6 |
Gross Unrealized Losses | (363) | (260) |
Fair Value | 249,341 | 254,890 |
Short-term Marketable Securities | Municipal Bonds | ||
Schedule of Marketable Securities | ||
Amortized Cost | 107,294 | 124,817 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (95) | (141) |
Fair Value | $ 107,199 | $ 124,677 |
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 | $ 87,807 | $ 64,599 |
Gross Unrealized Gains | 7 | 5 |
Gross Unrealized Losses | (218) | (68) |
Fair Value | $ 87,596 | $ 64,536 |
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 | $ 40,154 | $ 55,768 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (20) | (27) |
Fair Value | $ 40,135 | $ 55,741 |
Short-term Marketable Securities | Commercial Paper | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Short-term Marketable Securities | Asset-backed Securities | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | |
Short-term Marketable Securities | Securities of U.S. government-sponsored agencies | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 14,441 | $ 9,960 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (30) | (24) |
Fair Value | $ 14,411 | $ 9,936 |
Short-term Marketable Securities | Securities of U.S. government-sponsored agencies | Maximum | ||
Schedule of Marketable Securities | ||
Contractual Maturity | 1 year | 1 year |
Long-term Marketable Securities | ||
Schedule of Marketable Securities | ||
Amortized Cost | $ 104,682 | $ 56,281 |
Gross Unrealized Gains | 9 | 3 |
Gross Unrealized Losses | (292) | (151) |
Fair Value | 104,399 | 56,133 |
Long-term Marketable Securities | Municipal Bonds | ||
Schedule of Marketable Securities | ||
Amortized Cost | 15,195 | 15,285 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | (44) | (48) |
Fair Value | $ 15,154 | $ 15,237 |
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 | $ 38,390 | $ 17,155 |
Gross Unrealized Gains | 6 | 3 |
Gross Unrealized Losses | (78) | (39) |
Fair Value | $ 38,318 | $ 17,119 |
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 | $ 51,097 | $ 23,841 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (170) | (64) |
Fair Value | $ 50,927 | $ 23,777 |
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 | 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) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Contingent consideration | $ 15,919 | $ 19,849 | $ 10,854 | $ 15,919 |
Contingent Consideration Payment [Roll Forward] | ||||
Contingent consideration, beginning balance | 15,919 | 19,849 | ||
Contingent consideration currency translation loss/(gain) | 141 | 0 | ||
Contingent Payments | 5,440 | 5,001 | ||
Changes in fair value of contingent consideration | 234 | 478 | ||
Contingent consideration, ending balance | 10,854 | $ 15,326 | ||
Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Cash equivalents | 19,441 | 31,549 | ||
Contingent consideration | 15,919 | 10,854 | 15,919 | |
Contingent Consideration Payment [Roll Forward] | ||||
Contingent consideration, beginning balance | 15,919 | |||
Contingent consideration, ending balance | 10,854 | |||
Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Cash equivalents | 84 | 5,927 | ||
Contingent consideration | 0 | 0 | 0 | |
Contingent Consideration Payment [Roll Forward] | ||||
Contingent consideration, beginning balance | 0 | |||
Contingent consideration, ending balance | 0 | |||
Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Cash equivalents | 19,357 | 25,622 | ||
Contingent consideration | 0 | 0 | 0 | |
Contingent Consideration Payment [Roll Forward] | ||||
Contingent consideration, beginning balance | 0 | |||
Contingent consideration, ending balance | 0 | |||
Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Cash equivalents | 0 | 0 | ||
Contingent consideration | 15,919 | 10,854 | 15,919 | |
Contingent Consideration Payment [Roll Forward] | ||||
Contingent consideration, beginning balance | 15,919 | |||
Contingent consideration, ending balance | 10,854 | |||
Municipal Bonds | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 122,353 | 139,914 | ||
Municipal Bonds | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | 0 | ||
Municipal Bonds | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 122,353 | 139,914 | ||
Municipal Bonds | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | 0 | ||
Corporate Debt Securities | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 125,914 | 81,655 | ||
Corporate Debt Securities | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | 0 | ||
Corporate Debt Securities | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 125,914 | 81,655 | ||
Corporate Debt Securities | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | 0 | ||
Commercial Paper | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 40,135 | 55,741 | ||
Commercial Paper | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | 0 | ||
Commercial Paper | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 40,135 | 55,741 | ||
Commercial Paper | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | 0 | ||
Asset-backed Securities | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 50,927 | 23,777 | ||
Asset-backed Securities | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | 0 | ||
Asset-backed Securities | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 50,927 | 23,777 | ||
Asset-backed Securities | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | 0 | ||
Securities of U.S. government-sponsored agencies | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 14,411 | 9,936 | ||
Securities of U.S. government-sponsored agencies | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | 0 | ||
Securities of U.S. government-sponsored agencies | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 14,411 | 9,936 | ||
Securities of U.S. government-sponsored agencies | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Marketable Securities | 0 | $ 0 | ||
Revenue-based payments | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Contingent consideration | 5,990 | 5,990 | ||
Contingent Consideration Payment [Roll Forward] | ||||
Contingent consideration, ending balance | $ 5,990 | |||
Revenue-based payments | Fair Value, Measurements, Recurring | Level 3 | Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Probability of Payment | 87.00% | |||
Revenue-based payments | Fair Value, Measurements, Recurring | Level 3 | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Discount Rate | 8.50% | |||
Probability of Payment | 100.00% | |||
Milestone-based payments | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Contingent consideration | $ 4,864 | $ 4,864 | ||
Contingent Consideration Payment [Roll Forward] | ||||
Contingent consideration, ending balance | $ 4,864 | |||
Milestone-based payments | Fair Value, Measurements, Recurring | Level 3 | Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Discount Rate | 4.40% | |||
Milestone-based payments | Fair Value, Measurements, Recurring | Level 3 | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||
Probability of Payment | 100.00% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 18,925 | $ 19,984 |
Work in process | 9,817 | 10,012 |
Finished goods | 78,838 | 78,413 |
Total inventories | $ 107,580 | $ 108,409 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Compensation and other employee-related costs | $ 22,737 | $ 29,006 |
Legal and other settlements and expenses | 1,251 | 1,177 |
Accrued non-income taxes | 6,095 | 6,325 |
Royalties | 2,409 | 2,139 |
Other | 11,483 | 13,947 |
Total accrued expenses | $ 43,975 | $ 52,594 |
DEBT (Details)
DEBT (Details) - Revolving Credit Facility $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
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 | Mar. 31, 2018 | Dec. 31, 2017 |
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 | Mar. 31, 2018 | Dec. 31, 2017 |
Class of Stock | ||
Common stock, shares issued | 97,163,573 | 96,657,881 |
Common stock, shares outstanding | 97,163,573 | 96,657,881 |
Class A Common | ||
Class of Stock | ||
Common stock, shares issued | 73,286,017 | 72,780,325 |
Common stock, shares outstanding | 73,286,017 | 72,780,325 |
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 |
Class C Common | ||
Class of Stock | ||
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
EQUITY Stockholders' Equity Rol
EQUITY Stockholders' Equity Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Increase (Decrease) in Stockholders' Equity | ||
Total equity, beginning of period | $ 967,778 | |
Net income | 39,538 | $ 28,714 |
Stock-based compensation cost | 6,110 | |
Exercise of stock options | 9,307 | |
Other comprehensive income | 4,135 | $ 2,561 |
Total equity, end of period | $ 1,026,868 |
EQUITY Accumulated Other Comp48
EQUITY Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated other comprehensive income/(loss), net of tax | $ (2,772) | $ (6,081) | $ (6,907) | $ (8,642) |
Other comprehensive income before reclassifications | 4,134 | 2,607 | ||
Amounts reclassified from accumulated other comprehensive income, net of tax | 1 | (46) | ||
Other comprehensive income/(loss), net of tax | 4,135 | 2,561 | ||
Foreign Currency Translation Adjustment | ||||
Accumulated other comprehensive income/(loss), net of tax | (2,223) | (6,034) | (6,594) | (8,475) |
Other comprehensive income before reclassifications | 4,371 | 2,441 | ||
Amounts reclassified from accumulated other comprehensive income, net of tax | 0 | 0 | ||
Other comprehensive income/(loss), net of tax | 4,371 | 2,441 | ||
Unrealized Gain/(Loss) on Marketable Securities, Net of Tax | ||||
Accumulated other comprehensive income/(loss), net of tax | (549) | (47) | $ (313) | $ (167) |
Other comprehensive income before reclassifications | (237) | 166 | ||
Amounts reclassified from accumulated other comprehensive income, net of tax | 1 | (46) | ||
Other comprehensive income/(loss), net of tax | $ (236) | $ 120 |
STOCK-BASED COMPENSATION (Textu
STOCK-BASED COMPENSATION (Textuals) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Number of 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 | $ | $ 51.8 |
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 | 3,863,548 |
Shares reserved under the 2012 Equity Incentive Plan | 14,889,882 |
STOCK-BASED COMPENSATION (Grant
STOCK-BASED COMPENSATION (Grant Date Fair Values of Options Awarded to Employees) (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Weighted average grant date fair value per share | $ 13.74 | $ 8.34 |
STOCK-BASED COMPENSATION (Stock
STOCK-BASED COMPENSATION (Stock Option Activity) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding | |
Number of shares outstanding beginning balance | shares | 9,041 |
Number of shares granted | shares | 1,777 |
Number of shares exercised | shares | (506) |
Number of shares forfeited | shares | (67) |
Number of shares outstanding ending balance | shares | 10,245 |
Number of shares exercisable | shares | 4,458 |
Number of shares expected to vest | shares | 5,786 |
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 | $ 23.40 |
Weighted average exercise price per share granted | $ / shares | 44.96 |
Weighted average exercise price per share exercised | $ / shares | 19.43 |
Weighted average exercise price per share forfeited | $ / shares | 27.66 |
Weighted average exercise price per share outstanding ending balance | $ / shares | 27.31 |
Weighted average exercise price per share exercisable | $ / shares | 21.07 |
Weighted average exercise price per share expected to vest | $ / shares | $ 32.11 |
Weighted average remaining contractual life outstanding | 7 years 8 months 12 days |
Weighted average remaining contractual life exercisable | 6 years 2 months 12 days |
Weighted average remaining contractual life expected to vest | 8 years 9 months 18 days |
Aggregate intrinsic value outstanding | $ | $ 230,646 |
Aggregate intrinsic value exercisable | $ | 128,157 |
Aggregate intrinsic value expected to vest | $ | $ 102,490 |
STOCK-BASED COMPENSATION (Compe
STOCK-BASED COMPENSATION (Compensation Expense Related to Stock Options and Their Intrinsic Values) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Intrinsic value of stock options exercised | $ 14,848 | $ 1,890 |
Stock-based compensation expense | 6,053 | 3,491 |
Net stock-based compensation capitalized into inventory | 57 | 51 |
Total stock-based compensation cost | $ 6,110 | $ 3,542 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 17.80% | 32.30% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($) | Mar. 11, 2015claim | |
Commitments and Contingencies Disclosure [Abstract] | ||
prepaid royalty | $ 9 | |
Accrual Reversal | 2.5 | |
Bianco Litigation | ||
Loss Contingencies | ||
Payments for Legal Settlements | $ 11.5 | |
Flexuspine Inc. Litigation | ||
Loss Contingencies | ||
Loss Contingency, Pending Claims, Number | claim | 5 | |
Flexuspine Inc. Litigation | Minimum | ||
Loss Contingencies | ||
Loss Contingency, Pending Claims, Number | claim | 1 |
SEGMENT AND GEOGRAPHIC INFORM55
SEGMENT AND GEOGRAPHIC INFORMATION (Geographic Location) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)segments | Mar. 31, 2017USD ($) | |
Revenues from External Customers | ||
Number of Reportable Segments | segments | 1 | |
Total sales | $ 174,411 | $ 155,809 |
United States | ||
Revenues from External Customers | ||
Total sales | 145,618 | 129,663 |
International | ||
Revenues from External Customers | ||
Total sales | $ 28,793 | $ 26,146 |
SEGMENT AND GEOGRAPHIC INFORM56
SEGMENT AND GEOGRAPHIC INFORMATION (Products) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue from External Customer | ||
Total sales | $ 174,411 | $ 155,809 |