Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
31-May-14 | Dec. 31, 2014 | Nov. 29, 2013 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | ANGIODYNAMICS INC | ||
Entity Central Index Key | 1275187 | ||
Document Type | 10-K | ||
Document Period End Date | 31-May-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -26 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $545,465,788 | ||
Entity Common Stock, Shares Outstanding | 35,821,165 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Income Statement [Abstract] | |||
Net sales | $354,425 | $341,916 | $221,917 |
Cost of sales | 174,757 | 173,402 | 96,608 |
Gross profit | 179,668 | 168,514 | 125,309 |
Operating expenses | |||
Research and development | 27,486 | 26,319 | 20,511 |
Sales and marketing | 83,200 | 76,121 | 64,505 |
General and administrative | 26,639 | 26,186 | 19,033 |
Amortization of intangibles | 16,622 | 16,617 | 9,309 |
Change in fair value of contingent consideration | -1,808 | 1,583 | 0 |
Acquisition, restructuring and other items, net | 10,760 | 13,800 | 15,859 |
Medical device excise tax | 3,829 | 1,600 | 0 |
Total operating expenses | 166,728 | 162,226 | 129,217 |
Operating income (loss) | 12,940 | 6,288 | -3,908 |
Other (expenses) income | |||
Interest income | 0 | 103 | 1,090 |
Interest expense | -3,656 | -5,271 | -508 |
Other expense | -3,544 | -2,707 | -2,096 |
Total other expenses, net | -7,200 | -7,875 | -1,514 |
Income (loss) before income tax expense (benefit) | 5,740 | -1,587 | -5,422 |
Income tax expense (benefit) | 3,074 | -376 | -239 |
Net income (loss) | $2,666 | ($1,211) | ($5,183) |
Earnings per share | |||
Basic (usd per share) | $0.08 | ($0.03) | ($0.20) |
Diluted (usd per share) | $0.08 | ($0.03) | ($0.20) |
Basic weighted average shares outstanding (in shares) | 35,135,689 | 34,817,279 | 25,382,293 |
Diluted weighted average shares outstanding (in shares) | 35,439,850 | 34,817,279 | 25,382,293 |
Consolidated_Statements_Compre
Consolidated Statements Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $2,666 | ($1,211) | ($5,183) |
Other comprehensive (loss) income, before tax: | |||
Unrealized gain (loss) on marketable securities | -16 | 184 | -103 |
Unrealized gain (loss) on interest rate swap | -32 | -522 | 327 |
Foreign currency translation gain (loss) | 295 | -47 | -142 |
Other comprehensive income (loss), before tax | 247 | -385 | 82 |
Income tax benefit (expense) related to items of other comprehensive income | 18 | 125 | -83 |
Other comprehensive income (loss), net of tax | 265 | -260 | -1 |
Total comprehensive income (loss), net of tax | $2,931 | ($1,471) | ($5,184) |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | 31-May-14 | 31-May-13 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $16,105 | $21,802 |
Marketable securities, at fair value | 1,809 | 2,153 |
Accounts receivable, net of allowances of $1,736 and $1,272, respectively | 61,968 | 47,681 |
Inventories | 61,234 | 55,079 |
Deferred income taxes | 4,625 | 6,591 |
Prepaid income taxes | 510 | 563 |
Prepaid expenses and other | 5,471 | 7,285 |
Total current assets | 151,722 | 141,154 |
PROPERTY, PLANT AND EQUIPMENT, net | 66,590 | 62,391 |
OTHER ASSETS | 3,926 | 4,908 |
INTANGIBLE ASSETS, net | 205,256 | 214,673 |
GOODWILL | 360,473 | 355,637 |
DEFERRED INCOME TAXES, long term | 10,403 | 11,425 |
PREPAID ROYALTIES | 521 | 546 |
TOTAL ASSETS | 798,891 | 790,734 |
CURRENT LIABILITIES | ||
Accounts payable | 32,895 | 24,470 |
Accrued liabilities | 16,652 | 16,356 |
Income taxes payable | 689 | 0 |
Current portion of long-term debt | 5,000 | 7,500 |
Current portion of contingent consideration | 10,918 | 9,207 |
Other current liabilities | 599 | 5,782 |
Total current liabilities | 66,753 | 63,315 |
LONG-TERM DEBT, revolving credit facility | 46,410 | 0 |
LONG-TERM DEBT, term loan, net of current portion | 91,250 | 135,000 |
DEFERRED INCOME TAXES, long term | 1,146 | 0 |
CONTINGENT CONSIDERATION, net of current portion | 56,413 | 65,842 |
OTHER LONG TERM LIABILITIES | 84 | 475 |
Total liabilities | 262,056 | 264,632 |
COMMITMENTS AND CONTINGENCIES (NOTE N) | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, par value $.01 per share, 5,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, par value $.01 per share, 45,000,000 shares authorized; issued and outstanding 35,442,004 and 35,060,351 shares, respectively | 353 | 351 |
Additional paid-in capital | 508,354 | 500,554 |
Retained earnings | 31,501 | 28,835 |
Treasury stock, 142,305 shares, at cost | -2,104 | -2,104 |
Accumulated other comprehensive loss | -1,269 | -1,534 |
Total stockholders’ equity | 536,835 | 526,102 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $798,891 | $790,734 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | 31-May-14 | 31-May-13 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $1,736 | $1,272 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Shares of common stock | 45,000,000 | 45,000,000 |
Common stock, shares issued | 35,442,004 | 35,442,004 |
Common stock, shares outstanding | 35,060,351 | 35,060,351 |
Treasury stock, shares | 142,305 | 142,305 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive loss | Treasury Stock |
In Thousands, except Share data | ||||||
Beginning Balance at May. 31, 2011 | $405,637 | $250 | $371,380 | ($1,273) | $0 | |
Beginning Balance, Shares at May. 31, 2011 | 24,985,657 | 0 | ||||
Net income | -5,183 | -5,183 | ||||
Exercise of stock options | 2,157 | 2 | 2,155 | |||
Exercise of stock options, Shares | 193,684 | 193,684 | ||||
Tax effect of exercise of stock options | -295 | -295 | ||||
Issuance of performance shares, net | 0 | |||||
Issuance of performance shares, net, Shares | 64,221 | |||||
Purchase of common stock under Employee Stock Purchase Plan | 1,202 | 1 | 1,201 | |||
Purchase of common stock under Employee Stock Purchase Plan, Shares | 103,362 | |||||
Shares issued pursuant to acquisition | 117,926 | 95 | 117,831 | |||
Shares issued pursuant to acquisition, shares | 9,479,607 | |||||
Purchase of common stock for treasury | -2,104 | -2,104 | ||||
Purchase of common stock for treasury, shares | -142,305 | -142,305 | ||||
Stock-based compensation | 4,052 | 4,103 | ||||
Other comprehensive loss, net of tax | -1 | -1 | ||||
Ending Balance at May. 31, 2012 | 523,391 | 348 | 496,375 | 30,046 | -1,274 | -2,104 |
Ending Balance, Shares at May. 31, 2012 | 34,826,531 | -142,305 | ||||
Net income | -1,211 | -1,211 | ||||
Exercise of stock options | 5 | 5 | ||||
Exercise of stock options, Shares | 16,835 | 16,835 | ||||
Tax effect of exercise of stock options | -1,644 | -1,644 | ||||
Issuance of performance shares, net | 1 | 1 | ||||
Issuance of performance shares, net, Shares | 93,429 | |||||
Purchase of common stock under Employee Stock Purchase Plan | 1,211 | 2 | 1,209 | |||
Purchase of common stock under Employee Stock Purchase Plan, Shares | 123,556 | |||||
Purchase of common stock for treasury, shares | 0 | |||||
Stock-based compensation | 4,609 | 4,609 | ||||
Other comprehensive loss, net of tax | -260 | -260 | ||||
Ending Balance at May. 31, 2013 | 526,102 | 351 | 500,554 | 28,835 | -1,534 | -2,104 |
Ending Balance, Shares at May. 31, 2013 | 35,060,351 | -142,305 | ||||
Net income | 2,666 | 2,666 | ||||
Exercise of stock options | 1,085 | 1,085 | ||||
Exercise of stock options, Shares | 105,676 | 105,676 | ||||
Tax effect of exercise of stock options | -146 | -146 | ||||
Issuance of performance shares, net | -1,357 | 1 | ||||
Issuance of performance shares, net, Shares | 129,702 | |||||
Purchase of common stock under Employee Stock Purchase Plan | 2,718 | 1 | 2,717 | |||
Purchase of common stock under Employee Stock Purchase Plan, Shares | 146,275 | |||||
Purchase of common stock for treasury, shares | 0 | |||||
Stock-based compensation | 5,502 | 5,502 | ||||
Other comprehensive loss, net of tax | 265 | 265 | ||||
Ending Balance at May. 31, 2014 | $536,835 | $353 | $508,354 | $31,501 | ($1,269) | ($2,104) |
Ending Balance, Shares at May. 31, 2014 | 35,442,004 | -142,305 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Cash flows from operating activities: | |||
Net income (loss) | $2,666 | ($1,211) | ($5,183) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 28,157 | 27,227 | 14,676 |
Amortization of bond discount | 0 | 0 | 707 |
Amortization of acquired inventory basis step-up | 150 | 3,845 | 431 |
Tax effect of exercise of stock options and issuance of performance shares | -146 | -1,644 | -309 |
Deferred income tax provision | 2,951 | 666 | -703 |
Stock based compensation | 5,502 | 4,609 | 4,052 |
Changes in accounts receivable allowances | 465 | 338 | 118 |
Gain on sales of assets | 0 | -711 | 0 |
Change in fair value of contingent consideration | -1,808 | 1,583 | 0 |
Loss on discontinuance of product offering | 0 | 1,416 | 0 |
Other | -17 | 157 | 1,148 |
Changes in operating assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable | -14,786 | 1,020 | -2,395 |
Inventories | -5,608 | -1,909 | -1,522 |
Prepaid expenses and other | 497 | 977 | -6,000 |
Accounts payable and accrued liabilities | 6,658 | -9,711 | 6,582 |
Net cash provided by operating activities | 24,681 | 26,652 | 11,602 |
Cash flows from investing activities: | |||
Additions to property, plant and equipment | -11,172 | -12,120 | -2,492 |
Acquisition of businesses, net of cash acquired | -4,169 | -24,474 | -237,191 |
Acquisition of intangible assets, net of cash acquired | -1,435 | -800 | -550 |
Other cash flows from investing activities | 0 | 801 | -4,000 |
Change in escrow receivable | 0 | 2,500 | -2,500 |
Purchases of marketable securities | -25 | -5,134 | -123,614 |
Proceeds from sale or maturity of marketable securities | 353 | 16,989 | 194,113 |
Net cash used in investing activities | -16,448 | -22,238 | -176,234 |
Cash flows from financing activities: | |||
Repayment of long-term debt | -146,250 | -7,500 | -6,550 |
Proceeds from borrowings on revolving credit facility | 46,410 | 0 | 0 |
Proceeds from issuance of long-term debt | 100,000 | 0 | 150,000 |
Proceeds from exercise of stock options and ESPP | 2,444 | 1,214 | 3,356 |
Payment of contingent consideration previously established in purchase accounting | -15,943 | 0 | 0 |
Deferred financing costs on long-term debt | -677 | 0 | -2,378 |
Repurchase of common stock for treasury | 0 | 0 | -2,104 |
Tax effect of the exercise of stock options and issuance of performance shares | 0 | 0 | 14 |
Net cash (used in) provided by financing activities | -14,016 | -6,286 | 142,338 |
Effect of exchange rate changes on cash and cash equivalents | 86 | -65 | 49 |
Decrease in cash and cash equivalents | -5,697 | -1,937 | -22,245 |
Cash and cash equivalents | |||
Beginning of year | 21,802 | 23,739 | 45,984 |
End of year | 16,105 | 21,802 | 23,739 |
Supplemental disclosure of non-cash operating, investing and financing activities: | |||
Contractual obligations for acquisition of fixed assets | 4,970 | 1,549 | 217 |
Contractual obligations for acquisition of intangibles and business | 2,249 | 78,286 | 117,926 |
Cash paid during the period for: | |||
Interest | 3,591 | 4,936 | 438 |
Income taxes | $182 | $200 | $2,832 |
Basis_of_Presentation_Business
Basis of Presentation, Business Description and Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||||
31-May-14 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
BASIS OF PRESENTATION, BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION, BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||
1. Basis of Presentation and Description of Business | ||||||||||||||||
The consolidated financial statements include the accounts of AngioDynamics, Inc. and its wholly owned subsidiaries, RITA Medical Systems, LLC, AngioDynamics UK Limited, AngioDynamics Netherlands B.V., NM Holding Company, Inc. (Navilyst) since May 22, 2012 and Vortex Medical, Inc. since October 15, 2012, and Clinical Devices B.V. since August 15, 2013, (collectively, the “Company”). We design, manufacture and sell a wide range of medical, surgical and diagnostic devices used by professional healthcare providers for vascular access, for the treatment of peripheral vascular disease and in oncology and surgical settings. Our devices are generally used in minimally invasive, image-guided procedures. Most of our products are intended to be used once and then discarded, or they may be temporarily implanted for short- or long-term use. All intercompany balances and transactions have been eliminated. | ||||||||||||||||
Effective June 1, 2012, we consider our business to be a single segment entity – the development, manufacture and sale on a global basis of medical devices for vascular access, surgery, peripheral vascular disease and oncology. Our chief operating decision maker (CEO) evaluates the various global product portfolios on a net sales basis. Executives reporting in to the CEO include those responsible for operations and supply chain management, research and development, sales, franchise marketing and certain corporate functions. The CEO evaluates profitability, investment and cash flow metrics on a consolidated worldwide basis due to shared infrastructure and resources. Prior to fiscal year 2013, our business was organized as two segments: Vascular and Oncology/Surgery, each under the direction of a general manager with direct responsibility for all sales, marketing and product development activities. | ||||||||||||||||
Regulatory Matters | ||||||||||||||||
On May 27, 2011, we received a Warning Letter from the U.S. Food and Drug Administration ("FDA") in connection with its inspection of our Queensbury, NY manufacturing facility. In the Warning Letter, FDA cited deficiencies in the response letter we provided FDA pertaining to the inspection that occurred from January 4 to January 13, 2011. The deficiencies related to our internal procedures for medical device reporting, corrections and removals and complaint handling. We responded to the Warning Letter and completed corrective and preventive actions to address the observations noted. | ||||||||||||||||
In December 2011, we initiated a comprehensive Quality Call to Action Program to review and augment our Quality Management Systems at our Queensbury facility. To accelerate implementation of the program, we engaged a team of external regulatory and quality experts and reallocated a significant number of engineering and product development resources to support this corporate initiative. From inception of the Quality Call to Action Program through fiscal 2014, we have incurred $3.2 million in direct costs associated with the program. | ||||||||||||||||
On February 10, 2012, we received from FDA a Form 483, List of Investigational Observations, in connection with its inspection of our Queensbury facility from November 14, 2011 to February 10, 2012. The Form 483 contained 12 observations related to, among other things, our CAPA (Corrective and Preventive Action) system, MDR (Medical Device Reporting), complaint investigation, corrections and removals, acceptance criteria and training. Some of the observations contained in the Form 483 were repeat observations from the May 27, 2011 Warning Letter described above. | ||||||||||||||||
On February 13, 2012, we received from FDA a Form 483 in connection with its inspection of our Fremont facility from January 12, 2012 to February 13, 2012. The Form 483 contained six observations related to, among other things, our CAPA system, design controls, risk management and training. We provided responses to FDA within 15 business days of our receipt of the Form 483s. | ||||||||||||||||
On September 24, 2012, we received from FDA a Form 483 in connection with its subsequent inspection of our Queensbury, NY facility from September 6 to September 14, and September 19 to September 24. This re-inspection followed our response to the original Form 483 issued by FDA on February 13, 2012. The Form 483 contained 5 observations related to 510(k) decisions, complaint investigations, acceptance criteria, corrective and preventive actions and training. All but one of the observations in the Form 483 related to events that occurred before the date that we had indicated to FDA in our previous responses that our corrective and remediation activities related to our Quality Call to Action would be completed. We provided responses to FDA within 15 business days of our receipt of the Form 483. | ||||||||||||||||
On February 4, 2014, FDA completed a comprehensive follow-up inspection of our Queensbury facility. The inspection began on January 14, 2014 and resulted in FDA issuing a Form 483 containing one observation. The observation related to the inconsistency of certain complaint investigation elements in certain devices that have hardware and disposable components. The Form 483 observation was annotated to reflect that during the inspection we had corrected the issue, and this correction was verified by the inspector. In addition, we provided a response to FDA within 15 business days of our receipt of the Form 483. We believe that the results of this inspection validate that all of the Quality System and current Good Manufacturing Practice issues raised in the 483s described above have been fully addressed. | ||||||||||||||||
On March 31, 2014, FDA completed an inspection of our Glens Falls, NY facility. The inspection began on March 17, 2014 and resulted in FDA issuing a form 483 containing 3 observations. The observations were related to 1) inconsistency of a manufacturing product test process used among similar products, 2) a particular verification test of a product, and 3) non-conforming product control procedure. We responded to the FDA within 15 business days of the receipt of the Form 483. | ||||||||||||||||
During the fourth quarter of our fiscal year ended May 31, 2014, we received Certificate to Foreign Governments ("CFGs") from the FDA covering all Vascular Access and Peripheral Vascular products manufactured in our Queensbury facility. | ||||||||||||||||
On November 5, 2014, we received a Warning Letter from the FDA relating to observations noted during FDA’s inspection of our Navilyst Medical facilities located in Marlborough, Massachusetts and Glens Falls, New York in 2014. The matters raised in the Warning Letter and observations focused on design control processes related to packaging validations and accelerated and real time aging testing in connection with our fluid management and PICC families of products, inconsistency of a manufacturing product test process used among similar valved PICC products, a particular verification test of valved PICC products and non-conforming product control procedures. We take these matters seriously and are committed to complying with all applicable laws, regulations and rules in connection with the manufacturing, sale and marketing of our products. We made a comprehensive response to the issues raised in the letter and are committed to working with FDA to resolve all outstanding issues. | ||||||||||||||||
We will continue to work closely with FDA to resolve any outstanding issues. Unless the items raised in the previously disclosed Warning Letters and Form 483s are corrected to FDA’s satisfaction or we come to some other arrangement with FDA finally resolving such matters, we may be subject to additional regulatory or legal action, including the issuance of warning letters, injunction, seizure or recall of products, imposition of fines or penalties or operating restrictions on our facilities. Such actions could significantly disrupt our ongoing business and operations and have a material adverse impact on our financial position and operating results. | ||||||||||||||||
Fiscal Year | ||||||||||||||||
We report on a fiscal year ending May 31. | ||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||
We consider all unrestricted highly liquid investments purchased with an initial maturity of less than three months to be cash equivalents. We maintain cash and cash equivalent balances with financial institutions in the United States in excess of amounts insured by the Federal Deposit Insurance Corporation. | ||||||||||||||||
Marketable Securities | ||||||||||||||||
Marketable securities, which are principally government agency bonds, auction rate investments and corporate commercial paper, are classified as “available-for-sale securities” and are reported at fair value, with unrealized gains and losses excluded from operations and reported as a component of accumulated other comprehensive income (loss), net of the related tax effects, in stockholders’ equity. Cost is determined using the specific identification method. We hold investments in auction rate securities in order to generate higher than typical money market rate investment returns. Auction rate securities typically are high credit quality, generally achieved with municipal bond insurance. Credit risks are eased by the historical track record of bond insurers, which back a majority of this market. Sell orders for any security traded through an auction process could exceed bids and, in such cases, the auction fails and we may be unable to liquidate our position in the securities in the near term. During fiscal years 2014 and 2013, we had 1.8 million in investments in two auction rate securities issued by New York state and local government authorities that failed auctions. The authorities are current in their interest payments on the securities. | ||||||||||||||||
Accounts Receivable | ||||||||||||||||
Accounts receivable, principally trade, are generally due within 30 to 90 days and are stated at amounts due from customers, net of an allowance for sales returns and doubtful accounts. We perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and the customer’s current creditworthiness, as determined by a review of their current credit information. We continuously monitor aging reports, collections and payments from customers, and a provision for estimated credit losses is maintained based upon our historical experience and any specific customer collection issues that have been identified. While such credit losses have historically been within our expectations and the provisions established, we cannot guarantee that the same credit loss rates will be experienced in the future. We write off accounts receivable when they are determined to be uncollectible. | ||||||||||||||||
Inventories | ||||||||||||||||
Inventories are stated at the lower of cost (using the first-in, first-out method) or market. Appropriate consideration is given to deterioration, obsolescence and other factors in evaluating net realizable value. | ||||||||||||||||
Property, Plant and Equipment | ||||||||||||||||
Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. We evaluate these assets for impairment periodically or as changes in circumstances or the occurrence of events suggest the remaining value is not recoverable. Expenditures for repairs and maintenance are charged to expense as incurred. Renewals and betterments are capitalized. | ||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||
Intangible assets other than goodwill, indefinite-lived trademarks and acquired IPR&D are amortized over their estimated useful lives, which range between three and twenty years, on either a straight-line basis over the expected period of benefit or as revenues are earned from the sales of the related products. We periodically review the estimated useful lives of our intangible assets and review such assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets is not recoverable. Our determination of impairment is based on estimates of future cash flows. If an intangible asset is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset. | ||||||||||||||||
Acquired IPR&D has an indefinite life and is not amortized until completion and development of the project, at which time the IPR&D becomes an amortizable asset. If the related project is not completed in a timely manner or the project is terminated or abandoned, we may have an impairment related to the IPR&D, calculated as the excess of the asset’s carrying value over its fair value. As of May 31, 2014, we have one IPR&D asset which was acquired as part of the Clinical Devices acquisition with a value of $3.6 million. | ||||||||||||||||
Our policy defines IPR&D as the value assigned to those projects for which the related products have not received regulatory approval and have no alternative future use. Determining the portion of the purchase price allocated to IPR&D requires us to make significant estimates. The amount of the purchase price allocated to IPR&D is determined by estimating the future cash flows of each project or technology and discounting the net cash flows back to their present values. The discount rate used is determined at the time of measurement in accordance with accepted valuation methods. These methodologies include consideration of the risk of the project not achieving commercial feasibility. | ||||||||||||||||
At the time of acquisition, we expect that all acquired IPR&D will reach technological feasibility, but there can be no assurance that the commercial viability of these products will actually be achieved. The nature of the efforts to develop the acquired technologies into commercially viable products consists principally of planning, designing, and conducting clinical trials necessary to obtain regulatory approvals. The risks associated with achieving commercialization include, but are not limited to, delay or failure to obtain regulatory approvals to conduct clinical trials, delay or failure to obtain required market clearances, or delays or issues with patent issuance, or validity and litigation. If commercial viability were not achieved, we would likely look to other alternatives to provide these therapies. | ||||||||||||||||
Goodwill and other intangible assets that have indefinite useful lives are not amortized, but rather, are tested for impairment annually or more frequently if impairment indicators arise. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. Goodwill and intangible assets have been recorded at either incurred or allocated cost. Allocated costs were based on respective fair market values at the date of acquisition. We have one intangible asset which has been assigned an indefinite life, the NAMIC trademark that was acquired as part of our acquisition of Navilyst, and is valued at $28.6 million. | ||||||||||||||||
For goodwill, the impairment test requires a comparison of the estimated fair value of the reporting unit to which the goodwill is assigned to the sum of the carrying value of the assets and liabilities of that unit. If the sum of the carrying value of the assets and liabilities of a reporting unit exceeds the fair value of the reporting unit, the carrying value of the reporting unit’s goodwill is reduced to its implied fair value through an adjustment to the goodwill balance, resulting in an impairment charge. Our determination of impairment is based on estimates of future cash flows. | ||||||||||||||||
Revenue Recognition | ||||||||||||||||
We recognize revenue when the following four basic criteria has been met: (i) persuasive evidence that an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is reasonably assured; and (iv) product delivery has occurred or services have been rendered. We recognize revenue, net of sales taxes assessed by any governmental authority, as products are shipped, based on shipping terms, and when title and risk of loss passes to customers. We negotiate shipping and credit terms on a customer-by-customer basis and products are shipped at an agreed upon price. All product returns must be pre-approved by us and customers may be subject to a 20% restocking charge. To be accepted, a returned product must be unadulterated, undamaged and have at least twelve months remaining prior to its expiration date. | ||||||||||||||||
Research and Development | ||||||||||||||||
Research and development costs, including salaries, consulting fees, building costs, utilities and administrative expenses are related to developing new products, enhancing existing products, validating new and enhanced products, managing clinical, regulatory and medical affairs and our intellectual property and are expensed as incurred. | ||||||||||||||||
Shipping and Handling Costs | ||||||||||||||||
Shipping and handling costs, associated with the distribution of finished products to customers, are recorded in costs of goods sold and are recognized when the related finished product is shipped to the customer. Amounts charged to customers for shipping are recorded in net sales. | ||||||||||||||||
Income Taxes | ||||||||||||||||
Deferred income taxes are recognized for temporary differences between financial statement and income tax bases of assets and liabilities and loss carryforwards and tax credit carryforwards for which income tax benefits are expected to be realized in future years. A valuation allowance has been established to reduce deferred tax assets, if it is more likely than not that all, or some portion, of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period which includes the enactment date. The deferred tax asset includes net operating losses acquired as part of the acquisitions of Rita, Vortex and Navilyst. These losses could be significantly limited under Internal Revenue Code (“IRC”) Section 382. An analysis of RITA’s ownership changes as defined in IRC Section 382 shows that approximately $15.8 million (of which $7.1 million had expired as of May 31, 2014) of federal net operating losses will not be utilized due to limitations. In addition, it is estimated that $13.6 million of Rita state net operating losses will expire prior to utilization. An analysis of Vortex’s ownership changes as defined in IRC Section 382 shows that all net operating losses will be utilized prior to expiration. A similar analysis of Navilyst’s ownership changes as defined in IRS Section 382 shows that approximately $17.5 million of federal net operating losses will not be utilized due to limitations. In addition, it is estimated that $13.0 million of Navilyst’s state net operating losses will expire prior to utilization. The gross deferred tax asset related to the net operating losses reflects these limitations. | ||||||||||||||||
We intend to reinvest indefinitely any of our unrepatriated foreign earnings as of May 31, 2014, therefore, we have not provided for U.S. income taxes on these undistributed earnings of our foreign subsidiaries. If these earnings were distributed, we may be subject to both foreign withholding taxes and U.S. income taxes. Determination of the amount of this unrecognized deferred income tax liability is not practical. | ||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||
Our financial instruments include cash and cash equivalents, accounts receivable, marketable securities, accounts payable, interest rate swap agreement and contingent earn outs related to the acquisitions of Vortex, Microsulis and Clinical Devices. The carrying amount of cash and cash equivalents, accounts receivable, marketable securities and accounts payable approximates fair value due to the immediate or short-term maturities. The interest rate swap agreement has been recorded at its fair value based on a valuation received from an independent third party. Marketable securities, with the exception of one auction rate security, are carried at their fair value as determined by quoted market prices. The contingent earn out has been recorded at fair value using the income approach. | ||||||||||||||||
Our accounting policy defines fair value as the exchange 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 liability in an orderly transaction between market participants on the measurement date. This policy establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy describes three levels of inputs that may be used to measure fair value which are provided in the table below. | ||||||||||||||||
Level 1 | Quoted prices in active markets for identical assets or liabilities. Level 1 assets include bank time deposits, money market funds, mutual funds and U.S. Treasury securities that are traded in an active exchange market. | |||||||||||||||
Level 2 | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include US government securities and corporate bonds. When quoted market prices are unobservable, we obtain pricing information from an independent pricing vendor. The pricing vendor uses various pricing models for each asset class that are consistent with what other market participants would use. The inputs and assumptions to the model of the pricing vendor are derived from market observable sources including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and other market-related data. Since many fixed income securities do not trade on a daily basis, the methodology of the pricing vendor uses available information as applicable such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. The pricing vendor considers all available market observable inputs in determining the evaluation for a security. Thus, certain securities may not be priced using quoted prices, but rather determined from market observable information. These investments are included in Level 2 and primarily comprise our portfolio of corporate and government fixed income securities. Additionally included in Level 2 are interest rate swap agreements which are valued using a mid-market valuation model. | |||||||||||||||
Level 3 | Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category currently includes the auction rate securities where independent pricing information was not able to be obtained and the contingent Earn out related to the acquisition of Vortex and Microsulis. Our investments in auction-rate securities were classified as Level 3 as quoted prices were unavailable since these auction rate securities issued by New York state and local government authorities failed auction. Due to limited market information, we utilized a discounted cash flow (“DCF”) model to derive an estimate of fair value for all periods presented. The assumptions used in preparing the DCF model included estimates with respect to the amount and timing of future interest and principal payments, forward projections of the interest rate benchmarks, the probability of full repayment of the principal considering the credit quality and guarantees in place, and the rate of return required by investors to own such securities given the current liquidity risk associated with auction-rate securities. The contingent earn outs were valued utilizing a discounted cash flow method as detailed below. | |||||||||||||||
The following tables provide information by level for assets and liabilities that are measured at fair value (in thousands): | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||
using inputs considered as: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at May 31, 2014 | |||||||||||||
Financial Assets | ||||||||||||||||
Cash equivalents | ||||||||||||||||
Money market funds | $ | 445 | $ | — | $ | — | $ | 445 | ||||||||
Total | 445 | — | — | 445 | ||||||||||||
Marketable securities | ||||||||||||||||
U.S. government agency obligations | — | — | 1,809 | 1,809 | ||||||||||||
Total | — | — | 1,809 | 1,809 | ||||||||||||
Total Financial Assets | $ | 445 | $ | — | $ | 1,809 | $ | 2,254 | ||||||||
Financial Liabilities | ||||||||||||||||
Interest rate swap agreements | $ | — | $ | 555 | $ | — | $ | 555 | ||||||||
Contingent liability for acquisition earn out | — | — | 67,331 | 67,331 | ||||||||||||
Total Financial Liabilities | $ | — | $ | 555 | $ | 67,331 | $ | 67,886 | ||||||||
Fair Value Measurements | ||||||||||||||||
using inputs considered as: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at May 31, 2013 | |||||||||||||
Financial Assets | ||||||||||||||||
Cash equivalents | ||||||||||||||||
Money market funds | $ | 114 | $ | — | $ | — | $ | 114 | ||||||||
Total | 114 | — | — | 114 | ||||||||||||
Marketable securities | ||||||||||||||||
Corporate bond securities | — | 303 | — | 303 | ||||||||||||
U.S. government agency obligations | — | — | 1,850 | 1,850 | ||||||||||||
Total | — | 303 | 1,850 | 2,153 | ||||||||||||
Total Financial Assets | $ | 114 | $ | 303 | $ | 1,850 | $ | 2,267 | ||||||||
Financial Liabilities | ||||||||||||||||
Interest rate swap agreements | $ | — | $ | 522 | $ | — | $ | 522 | ||||||||
Contingent liability for acquisition earn out | — | — | 75,049 | 75,049 | ||||||||||||
Total Financial Liabilities | $ | — | $ | 522 | $ | 75,049 | $ | 75,571 | ||||||||
There were no transfers in and out of Level 1 and 2 measurements for the year ended May 31, 2014. During the year ended May 31, 2013, the Vortex and Microsulis contingent earn outs discussed below were added to Level 3 fair value instruments. | ||||||||||||||||
The components of Level 3 fair value instruments as of May 31, 2014 are shown below (in thousands): | ||||||||||||||||
Financial Assets | Financial Liabilities | |||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||
Using Significant | Using Significant | |||||||||||||||
Unobservable Inputs | Unobservable Inputs | |||||||||||||||
(Level 3) | ||||||||||||||||
Balance at May 31, 2013 | $ | 1,850 | $ | 75,049 | ||||||||||||
Total gains or losses (realized/unrealized): | ||||||||||||||||
Earnings revaluation gain - Included in earnings | — | (5,084 | ) | |||||||||||||
Earnings revaluation expense - Included in earnings | — | 3,276 | ||||||||||||||
Included in other comprehensive income | (16 | ) | — | |||||||||||||
Purchases, issuances and settlements | (25 | ) | (10,880 | ) | ||||||||||||
Transfers in and/or (out) of Level 3 | — | — | ||||||||||||||
Contingent consideration - Clinical Devices | — | 4,970 | ||||||||||||||
Balance at May 31, 2014 | $ | 1,809 | $ | 67,331 | ||||||||||||
Contingent Liability for Acquisition Earn Outs | ||||||||||||||||
Certain of our business combinations involve the potential for the payment of future contingent consideration upon the achievement of certain product development milestones and/or various other favorable operating conditions. Payment of the additional consideration is generally contingent on the acquired company reaching certain performance milestones, including attaining specified revenue levels or achieving product development targets. Contingent consideration is recorded at the estimated fair value of the contingent milestone payments on the acquisition date. The fair value of the contingent milestone consideration is remeasured at the estimated fair value at each reporting period with the change in fair value recognized as income or expense within change in fair value of contingent consideration in the consolidated statements of income. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. | ||||||||||||||||
Contingent consideration liabilities will be remeasured to fair value each reporting period using projected net sales, discount rates, probabilities of payment and projected payment dates. Projected contingent payment amounts are discounted back to the current period using a discounted cash flow model. Projected net sales are based on our internal projections and extensive analysis of the target market and the sales potential. Increases in projected net sales and probabilities of payment may result in higher fair value measurements in the future. Increases in discount rates and the projected time to payment may result in lower fair value measurements in the future. Increases or decreases in any valuation inputs in isolation may result in a significantly lower or higher fair value measurement in the future. | ||||||||||||||||
The recurring Level 3 fair value measurements of the contingent consideration liability related to the Vortex and Microsulis acquisitions include the following significant unobservable inputs ($ in thousands): | ||||||||||||||||
Fair value at | Valuation | Unobservable | Range | |||||||||||||
May 31, 2014 | Technique | Input | ||||||||||||||
Revenue based payments | $ | 63,961 | Discounted cash flow | Discount rate | 4% - 10% | |||||||||||
Probability of payment | 75% - 100% | |||||||||||||||
Projected fiscal year of payment | 2015 - 2022 | |||||||||||||||
Milestone based payments | 3,370 | Discounted cash flow | Discount rate | 16% | ||||||||||||
Probability of payment | 75% - 100% | |||||||||||||||
Projected fiscal year of payment | 2015 | |||||||||||||||
$ | 67,331 | |||||||||||||||
At May 31, 2014, the estimated potential amount of undiscounted future contingent consideration that we expect to pay as a result of all completed acquisitions is approximately $78.1 million. The milestones associated with the contingent consideration must be reached in future periods ranging from fiscal years 2015 to 2022 in order for the consideration to be paid. | ||||||||||||||||
The fair value of contingent milestone payments associated with the acquisitions was remeasured as of May 31, 2014 and $56.4 million was reflected in “Contingent consideration, net of current portion” and $10.9 million was reflected in “Current portion of contingent consideration” on the consolidated balance sheet. | ||||||||||||||||
The following table provides a reconciliation of the beginning and ending balances of contingent milestone payments associated with the Vortex, Microsulis and Clinical Devices acquisitions measured at fair value that used significant unobservable inputs (Level 3) (in thousands): | ||||||||||||||||
Balance at May 31, 2013 | $ | 75,049 | ||||||||||||||
Purchase price contingent consideration | 4,970 | |||||||||||||||
Contingent payments | (10,880 | ) | ||||||||||||||
Earnings revaluation gain | (5,084 | ) | ||||||||||||||
Earnings revaluation expense | 3,276 | |||||||||||||||
Balance at May 31, 2014 | $ | 67,331 | ||||||||||||||
Derivative Financial Instruments | ||||||||||||||||
We are exposed to market risk due to changes in interest rates. We periodically enter into certain derivative financial instruments to hedge the underlying economic exposure. The derivative instruments used are floating-to-fixed rate interest rate swaps, which are subject to cash flow hedge accounting treatment. The cash flow hedge was terminated in May 2012 in conjunction with the early payoff of the related debt. We recognized interest expense of $61,000 in fiscal 2012, on the cash flow hedge. | ||||||||||||||||
In accordance with authoritative guidance on Accounting for Derivatives and Hedging Activities, as amended, our 2002 interest rate swap agreement qualified for hedge accounting under GAAP and the 2006 interest rate swap agreement did not. Both were presented in the consolidated financial statements at their fair value. Changes in the fair value of derivative financial instruments were either recognized periodically in income or in stockholders’ equity as a component of accumulated other comprehensive income (loss) depending on whether the derivative financial instrument qualifies for hedge accounting and, if so, whether it qualifies as a fair value or cash flow hedge. Generally, the changes in the fair value of derivatives accounted for as fair value hedges are recorded in income along with the portions of the changes in the fair value of hedged items that relate to the hedged risks. Changes in the fair value of derivatives accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in accumulated other comprehensive income (loss). Both the 2002 and the 2006 swap agreements were terminated in May 2012 in conjunction with the early payoff of the related debt. | ||||||||||||||||
In June 2012, we entered in an interest rate swap agreement, with an initial notional amount of $100 million, to limit the effect of variability due to interest rates on the loan. The Swap Agreement, which qualifies for hedge accounting under authoritative guidance, is a contract to exchange floating interest rate payments for fixed interest rate payments of 3.26% of the outstanding balance of the loan over the life of the agreement without the exchange of the underlying notional amounts. | ||||||||||||||||
Stock-Based Compensation | ||||||||||||||||
We recognize compensation expense for all share-based payment awards made to our employees and directors including employee stock options and employee stock purchases related to our Stock Purchase Plan based on estimated fair values. We recognize compensation expense for our stock awards on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. | ||||||||||||||||
The amount of stock-based compensation recognized is based on the value of the portion of awards that are ultimately expected to vest. Guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered option. We currently expect, based on an analysis of our historical forfeitures, that approximately 88% of our options will vest annually, and we have therefore applied a 12% annual forfeiture rate in determining the stock-based compensation charge recorded. We will re-evaluate this estimate periodically and adjust the forfeiture rate on a prospective basis as necessary. At the end of the vesting period, the actual stock-based compensation expense recognized will only be for those shares that actually vest. | ||||||||||||||||
For the fiscal years ended May 31, 2014, May 31, 2013 and May 31, 2012, we used the Black-Scholes option-pricing model (“Black-Scholes”) as our method of valuation and a single option award approach. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of share based payment awards on the date of the grant as determined by the Black-Scholes model is affected by our stock price as well as other assumptions. These assumptions include, but are not limited to the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, and a risk-free interest rate. The risk-free interest rate is based on factual data derived from public sources. The expected stock-price volatility and option life assumptions require significant judgment which makes them critical accounting estimates. | ||||||||||||||||
We utilize our historical volatility when estimating expected stock price volatility. We use yield rates on U.S. Treasury securities for a period approximating the expected term of the award to estimate the risk-free interest rate. The expected term is based on our actual historical experience. The dividend yield is based on the history and expectation of dividend payments. We have not paid dividends in the past nor do we expect to pay dividends in the foreseeable future. | ||||||||||||||||
Earnings Per Common Share | ||||||||||||||||
Basic earnings per share are based on the weighted average number of common shares outstanding without consideration of potential common stock. Diluted earnings per share further includes the dilutive effect of potential common stock consisting of stock options, warrants, restricted stock units and shares issuable upon conversion of convertible debt into shares of common stock, provided that the inclusion of such securities is not antidilutive. | ||||||||||||||||
For the period ended May 31, 2014, options and restricted stock units issued to employees and non-employees to purchase approximately 2.3 million shares of common stock were excluded from the calculation of diluted earnings per common share as their inclusion would be anti-dilutive. Excluded from the calculation of diluted earnings per common share are options and restricted stock units issued to employees and non-employees to purchase approximately 2.9 million shares of common stock at May 31, 2013 as their inclusion would be anti-dilutive compared with options and restricted stock units issued to employees and non-employees to purchase approximately 2.3 million shares of common stock at May 31, 2012. | ||||||||||||||||
The following table sets forth the reconciliation of the weighted-average number of common shares: | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Basic | 35,135,689 | 34,817,279 | 25,382,293 | |||||||||||||
Effect of dilutive securities | 304,161 | — | — | |||||||||||||
Diluted | 35,439,850 | 34,817,279 | 25,382,293 | |||||||||||||
Use of Estimates | ||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||||
Supplier Concentrations | ||||||||||||||||
We are dependent upon the ability of our suppliers to provide products on a timely basis and on favorable pricing terms. The loss of our principal suppliers or a significant reduction in product availability from these suppliers could have a material adverse effect on us. We believe that our relationships with these suppliers are satisfactory. | ||||||||||||||||
Recently Issued Accounting Pronouncements | ||||||||||||||||
In February 2013, the FASB expanded the disclosure requirements related to changes in accumulated other comprehensive income (AOCI). The new guidance requires disclosure of the amount of income (or loss) reclassified out of AOCI to each respective line item on the statement of operations where net income is presented. The guidance allows disclosure of the reclassification either in the notes to the financial statements or parenthetically on the face of the financial statements. This requirement was effective for reporting periods beginning after December 15, 2012 (fourth quarter of our fiscal year 2013). Since the guidance only impacts disclosure requirements, its adoption did not have a material impact on our consolidated financial statements. | ||||||||||||||||
In July 2013, the FASB issued guidance related to the presentation of certain tax information. This new pronouncement provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, or similar tax loss, or a tax credit carryforward exists. This pronouncement was effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2013 (our fiscal year 2015). Since the guidance only impacts presentation requirements, its adoption will not have a material impact on our consolidated financial statements. | ||||||||||||||||
In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). ASU 2014-09 provides a single, comprehensive accounting model for revenues arising from contracts with customers that supersedes most of the existing revenue recognition guidance, including industry-specific guidance. Under this model, revenue is recognized at an amount that an entity expects to be entitled to upon transferring control of goods or services to a customer, as opposed to when risks and rewards transfer to a customer under existing revenue recognition guidance. ASU 2014-09 is effective for the Company beginning in its fiscal year 2018, and may be applied retrospectively to all prior periods presented or through a cumulative adjustment to the opening retained earnings balance in the year of adoption. The Company is currently in the process of evaluation the impact of ASU 2014-09 on its consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended | |||
31-May-14 | ||||
Business Combinations [Abstract] | ||||
ACQUISITIONS | ACQUISITIONS | |||
Acquisition of Microsulis Medical Ltd. | ||||
On March 22, 2012, we established a strategic relationship with Microsulis Medical Ltd. (“Microsulis”), a U.K.-based company specializing in minimally-invasive, microwave ablation technology for the coagulation of soft tissue. | ||||
The relationship included an initial $5 million investment in Microsulis through the purchase of senior preferred stock, representing a 14.3% ownership position, exclusive distribution rights to market and sell their microwave ablation systems in all markets outside the United States from May 2012 through December 2013, and an exclusive option to purchase at any time until September 22, 2013, substantially all of the global assets of Microsulis Medical, Ltd. | ||||
On February 1, 2013, we completed the acquisition of certain assets of Microsulis, which was accounted for as a business combination, for cash payments at closing totaling $10.6 million, subject to a working capital adjustment, a $5.0 million payment made on December 31, 2013 and potential additional cash consideration payable upon performance over the next nine years. We also assumed $1.6 million of liabilities. | ||||
The total estimated purchase consideration of $33.6 million included the initial investment of $5.0 million, closing payments totaling $10.6 million, a $5.0 million payment made on December 31, 2013 and the estimated fair value of contingent consideration (Earn out) of $13.2 million. The estimated fair value of contingent consideration is based on projected net sales over the nine year period following the closing. The amount of the Earn out consideration that could be paid on net sales is not limited. | ||||
The Microsulis historical financial results were not significant and therefore pro forma results would not be substantially different. Sales since the acquisition closed are not significant and the operations of Microsulis have been fully integrated from the date of acquisition. | ||||
The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed (in thousands): | ||||
Accounts receivable | $ | 364 | ||
Inventories | 687 | |||
Other current assets | 443 | |||
Fixed assets | 1,906 | |||
Intangibles | 12,500 | |||
Goodwill | 19,284 | |||
Total assets acquired | 35,184 | |||
Liabilities assumed | (1,634 | ) | ||
Total purchase price | $ | 33,550 | ||
Cash payment at closing | $ | 10,566 | ||
Cash payment for initial investment | 5,000 | |||
Present value of deferred payment | 4,820 | |||
Present value of contingent consideration liability | 13,164 | |||
Total purchase price | $ | 33,550 | ||
The estimated purchase consideration exceeded the fair value of the acquired net assets by $19.3 million and was recorded as goodwill. Goodwill is deductible for tax purposes. Intangible assets are being amortized over their estimated useful lives of which range from 10 to 15 years. During each of the fiscal years ended May 31, 2014 and 2013, we incurred acquisition related costs of $0.3 million, which were expensed to “Acquisition, restructuring and other items, net” in the statement of operations. | ||||
Acquisition of Vortex Medical, Inc. | ||||
On October 15, 2012, we acquired all the outstanding capital stock of Vortex Medical, Inc., a privately-held company focused on the development and commercialization of medical devices for venous drainage and the removal of thrombus, or blood clots, from occluded blood vessels. Vortex’s principal product is the AngioVac ® system, which includes the AngioVac Cannula and Circuit. The AngioVac Cannula has a proprietary balloon-actuated, expandable, funnel-shaped distal tip that enhances flow, prevents clogging of the cannula and facilitates en bloc, or whole removal of undesirable intravascular material. Both the AngioVac Cannula and Circuit are FDA-cleared for use during extracorporeal bypass for up to 6 hours. CE Mark approval was received in December 2013. | ||||
The stock purchase agreement provided for the payment of $15.1 million in cash at closing, which is subject to a working capital adjustment, plus future earn out consideration payable in cash. Earn out consideration is based on our net sales of the AngioVac system during the ten years following the closing, payable in the amount of 10% of annual net sales up to $150 million, 12.5% of annual net sales between $150 million and $500 million, and 15% of annual net sales above $500 million. The Earn out consideration is subject to guaranteed minimum payments payable on the anniversary dates following closing, in the amounts of $8.35 million on the first, $8.0 million on the second, third and fourth, and $7.65 million on the fifth anniversary date. If a minimum payment for a period exceeds the contingent earn out payment for the same period, the amount of the excess will be credited against future contingent earn out payments. | ||||
The total estimated purchase consideration of $75.3 million included the upfront payment of $15.1 million and the estimated fair value of contingent consideration of $60.3 million, $40 million of which is guaranteed. The estimated fair value of contingent consideration is based on projected AngioVac net sales in the ten year period following the closing. The amount of the Earn out consideration that could be paid on AngioVac net sales is not limited. | ||||
The Vortex historical financial results were not significant and therefore pro forma results would not be substantially different. Sales since the acquisition and the operations of Vortex have been fully integrated from the date of acquisition. | ||||
The following table summarizes the estimated fair value of the assets acquired and liabilities assumed (in thousands): | ||||
Cash and cash equivalents | $ | 339 | ||
Accounts receivable | 203 | |||
Inventories | 488 | |||
Other assets | 7 | |||
Deferred tax assets | 1,307 | |||
Intangibles | 72,430 | |||
Goodwill | 29,519 | |||
Total assets acquired | 104,293 | |||
Deferred tax liabilities | (28,340 | ) | ||
Liabilities assumed | (661 | ) | ||
Total purchase price | $ | 75,292 | ||
Cash payments at closing | $ | 15,105 | ||
Present value of contingent consideration liability | 60,302 | |||
Working capital adjustment | (115 | ) | ||
Total purchase price | $ | 75,292 | ||
The estimated purchase consideration exceeded the fair value of the acquired net assets by $29.5 million and was recorded as goodwill. Goodwill is not deductible for tax purposes. Core technologies are being amortized over their estimated useful lives of approximately 15 years as revenues are earned from the sales of the related products. During the fiscal years ended May 31, 2014 and 2013, we incurred acquisition related costs of $0.2 million and $0.6 million, respectively, which were expensed to “Acquisition, restructuring and other items, net” in the statement of operations. | ||||
Acquisition of Navilyst | ||||
On May, 22, 2012, we completed the acquisition of privately-held Navilyst, a global medical device company with strengths in the vascular access, interventional radiology and interventional cardiology markets. The acquisition and related transaction costs were financed through the issuance of approximately 9.5 million shares of our common stock, $150 million in drawn acquisition debt financing and $97 million of cash. Based on the closing price of our stock of $12.44 on the day prior to the transaction, the purchase price was approximately $361 million. | ||||
The fiscal year ended May 31, 2013 and 2012 included $7.3 million and $11.2 million, respectively, in transaction and severance costs related to the Navilyst acquisition. These costs are included in “Acquisition, restructuring and other items, net” in the statement of operations. Investment funds affiliated with Avista Capital Partners, former owners of Navilyst, received approximately 9.4 million shares of our common stock and consisted approximately 27% of our outstanding shares. Investment funds affiliated with Avista Capital Partners entered into a stockholders agreement with us as part of the transaction and also appointed two additional directors to our existing Board of Directors. | ||||
To satisfy any working capital adjustment and potential indemnification claims that may arise, $19.1 million of purchase consideration was held in escrow at May 31, 2013, including approximately $14.0 million in cash and approximately 415 thousand shares of common stock. The indemnification claims period will terminate on July 15, 2013. At May 31, 2012, we had $2.5 million of receivable related to the working capital adjustment recorded as escrow receivable on the balance sheet. During the third fiscal quarter of 2013, we received $2.5 million of cash from the escrow fund to satisfy this receivable. | ||||
Goodwill recorded as a result of the acquisition was $144.7 million. Intangible assets acquired, other than goodwill, totaled approximately $107.1 million, of which $49.4 million has been identified as customer relationships (15-year weighted average useful life), $32.5 million of trademarks (of which $28.6 million has been determined to have an indefinite useful life and the remaining $3.9 million has a 7 year weighted average useful life), $15.1 million of in-process research and development (indefinite useful life until completed) and $10.1 million of technology (6-year weighted average useful life). | ||||
The IPR&D assets, which were accounted for as indefinite-lived assets at the time of acquisition, represent the development of a biomedical polymer additive for use in PICC and other vascular access product lines and a power injectable port which are valued at $12.1 million and $3.0 million, respectively. The biomedical polymer additive product recently received regulatory approval and the product was released in the United States in October 2012 and is being amortized over a 10 year useful life. The power injectable port is expected to be released in the United States in fiscal 2014, subject to regulatory approvals. The fair value of these intangible assets was determined based upon the present value of expected future cash flows adjusted for the probability of technological and commercial risk, utilizing a risk-adjusted discount rate. | ||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in thousands): | ||||
Cash and cash equivalents | $ | 7,683 | ||
Accounts receivable | 19,069 | |||
Inventories | 26,851 | |||
Prepaid expenses and other current assets | 5,504 | |||
Property, plant and equipment | 34,017 | |||
Deferred tax assets | 34,209 | |||
Goodwill | 144,705 | |||
Intangibles | 107,100 | |||
Other long-term assets | 497 | |||
Total assets acquired | 379,635 | |||
Liabilities assumed | (18,287 | ) | ||
Total net assets acquired | $ | 361,348 | ||
See Note G for additional information about changes in the carrying amount of goodwill. | ||||
The following supplemental unaudited pro forma information presents our financial results as if the acquisition of Navilyst had occurred on June 1, 2010 (in thousands): | ||||
For the year ended | ||||
May 31, | ||||
2012 | ||||
(unaudited) | ||||
Net sales | $ | 365,357 | ||
Net income | $ | 3,897 | ||
The above unaudited pro forma information was determined based on historical GAAP results of AngioDynamics and Navilyst. The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been if the acquisition was completed on June 1, 2010. The unaudited pro forma consolidated net income primarily reflects adjustments of: | ||||
(i) | exclusion of $17.6 million of transaction costs and restructuring charges for both AngioDynamics and Navilyst for the year ended May 31, 2012; | |||
(ii) | inclusion of $4.7 million of interest expense related to the $150 million credit facility associated with the transaction for the years ended May 31, 2012; and | |||
(iii) | tax effecting the unaudited pro forma consolidated net income and adjustments for the years ended May 31, 2012. | |||
Acquisition of Clinical Devices, B.V. | ||||
On August 15, 2013 we acquired all the outstanding shares of capital stock of Clinical Devices, B.V., exclusive distributor of our fluid management products in the Netherlands. The stock purchase agreement provided for the payment of $3.7 million in cash at closing, which was subject to a working capital adjustment and a $0.4 million holdback, plus future earn out consideration payable in cash. Earn out consideration is based on our net sales of the fluid management products during the five quarters following the closing as well as milestone payments for achieving regulatory approvals of certain in process research and development for a next-generation tip location technology. The total purchase consideration of $8.7 million includes an upfront payment and the estimated fair value of contingent consideration of $5 million. (See Note A for additional information related to the contingent Earn out liability.) | ||||
Goodwill recorded as a result of the acquisition was approximately $4.8 million and is not deductible for tax purposes. Intangible assets acquired, other than goodwill, totaled approximately $5.1 million, of which $3.6 million has been identified as in-process research and development (10-year estimated useful life), $1.4 million as customer relationships (15-year estimated useful life) and $0.1 million as trademarks (5-year estimated useful life). We also recorded a deferred tax liability of $1.2 million. | ||||
The acquisition has been accounted for as a purchase and, accordingly, we have included the results of operations in the financial statements effective August 15, 2013. The pro forma effects of the acquisition on our income statement and balance sheet were not material. |
Marketable_Securities_and_Inve
Marketable Securities and Investments | 12 Months Ended | |||||||||||||||
31-May-14 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||
MARKETABLE SECURITIES AND INVESTMENTS | MARKETABLE SECURITIES AND INVESTMENTS | |||||||||||||||
As of May 31, 2014, marketable securities consisted of the following: | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
cost | Unrealized | Unrealized | Value | |||||||||||||
Gains | Losses | |||||||||||||||
(in thousands) | ||||||||||||||||
Available-for-sales securities | ||||||||||||||||
U.S. government agency obligations | $ | 1,825 | $ | — | $ | (16 | ) | $ | 1,809 | |||||||
Corporate bond securities | — | — | — | — | ||||||||||||
$ | 1,825 | $ | — | $ | (16 | ) | $ | 1,809 | ||||||||
As of May 31, 2013, marketable securities consisted of the following: | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
cost | Unrealized | Unrealized | Value | |||||||||||||
Gains | Losses | |||||||||||||||
(in thousands) | ||||||||||||||||
Available-for-sales securities | ||||||||||||||||
U.S. government agency obligations | $ | 1,850 | $ | — | $ | — | $ | 1,850 | ||||||||
Corporate bond securities | 303 | — | — | 303 | ||||||||||||
$ | 2,153 | $ | — | $ | — | $ | 2,153 | |||||||||
The amortized cost and fair value of marketable securities as of May 31, 2014, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | ||||||||||||||||
Amortized | Fair | |||||||||||||||
cost | Value | |||||||||||||||
(in thousands) | ||||||||||||||||
As of May 31, 2014: | ||||||||||||||||
Due in one year or less | $ | — | $ | — | ||||||||||||
Due after one through five years | — | — | ||||||||||||||
Due after five through twenty years | 1,825 | 1,809 | ||||||||||||||
$ | 1,825 | $ | 1,809 | |||||||||||||
Inventories
Inventories | 12 Months Ended | |||||||
31-May-14 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
INVENTORIES | INVENTORIES | |||||||
As of May 31, 2014 and 2013, inventories, net consisted of the following: | ||||||||
31-May-14 | 31-May-13 | |||||||
(in thousands) | ||||||||
Raw materials | $ | 24,734 | $ | 18,362 | ||||
Work in process | 11,992 | 11,006 | ||||||
Finished goods | 24,508 | 25,711 | ||||||
Total | $ | 61,234 | $ | 55,079 | ||||
Prepaid_Expenses_and_Other
Prepaid Expenses and Other | 12 Months Ended | |||||||
31-May-14 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||
PREPAID EXPENSES AND OTHER | PREPAID EXPENSES AND OTHER | |||||||
As of May 31, 2014 and 2013, prepaid expenses and other consisted of the following: | ||||||||
31-May-14 | 31-May-13 | |||||||
(in thousands) | ||||||||
Deposits | $ | 3,356 | $ | 4,029 | ||||
Other prepaid taxes | 202 | 458 | ||||||
Licensee fees | 604 | 597 | ||||||
Software licenses | 130 | 520 | ||||||
Trade shows | 62 | 487 | ||||||
Rent | 114 | 135 | ||||||
Insurance | 395 | 120 | ||||||
Interest receivable | 1 | 2 | ||||||
Other | 607 | 937 | ||||||
Total | $ | 5,471 | $ | 7,285 | ||||
As of May 31, 2014 and 2013, prepaid income taxes totaled $0.5 million and $0.6 million, respectively, and are shown separately on the Consolidated Balance Sheets. |
Property_Plant_and_Equipment_a
Property, Plant and Equipment, at Cost | 12 Months Ended | |||||||||
31-May-14 | ||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||
PROPERTY, PLANT AND EQUIPMENT, AT COST | PROPERTY, PLANT AND EQUIPMENT, AT COST | |||||||||
Property, plant and equipment are summarized as follows: | ||||||||||
31-May-14 | 31-May-13 | Estimated | ||||||||
useful lives | ||||||||||
(in thousands) | ||||||||||
Building and building improvements | $ | 33,126 | $ | 30,150 | 39 years | |||||
Machinery and equipment | 31,880 | 30,870 | 3 to 8 years | |||||||
Computer software and equipment | 25,836 | 16,390 | 3 to 10 years | |||||||
Construction in progress | 12,564 | 13,373 | ||||||||
103,406 | 90,783 | |||||||||
Less accumulated depreciation and amortization | (37,845 | ) | (29,421 | ) | ||||||
65,561 | 61,362 | |||||||||
Land and land improvements | 1,029 | 1,029 | ||||||||
$ | 66,590 | $ | 62,391 | |||||||
Depreciation expense for fiscal 2014, 2013 and 2012 was $8.4 million, $8.7 million and $3.6 million, respectively. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||||||||
31-May-14 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS | |||||||||||||
Intangible assets other than goodwill and indefinite lived intangible assets are amortized over their estimated useful lives, which range between three and twenty years, on either a straight-line basis over the expected period of benefit or as revenues are earned from the sales of the related products. We periodically review the estimated useful lives of our intangible assets and review such assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Our determination of impairment is based on estimates of future cash flows. If an intangible asset is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset. | ||||||||||||||
Goodwill and intangible assets that have indefinite useful lives are not amortized, but rather, are tested for impairment annually or more frequently if impairment indicators arise. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. Goodwill and intangible assets have been recorded at either incurred or allocated cost. Allocated costs were based on respective fair market values at the date of acquisition. We have one intangible asset which has been assigned an indefinite life, the NAMIC trademark, which was acquired as part of our acquisition of Navilyst, and is valued at $28.6 million. | ||||||||||||||
We test goodwill for impairment during the third quarter of every fiscal year, and when an event occurs or circumstances change such that it is reasonably possible that impairment exists. For goodwill, the impairment test requires a comparison of the estimated fair value of the reporting unit to which the goodwill is assigned to the sum of the carrying value of the assets and liabilities of that unit. If the sum of the carrying value of the assets and liabilities of a reporting unit exceeds the fair value of the reporting unit, the carrying value of the reporting unit’s goodwill is reduced to its implied fair value through an adjustment to the goodwill balance, resulting in an impairment charge. Our determination of impairment is based on estimates of future cash flows. | ||||||||||||||
Effective June 1, 2012, we consider our business to be a single segment entity – the development, manufacture and sale on a global basis of medical devices for vascular access, surgery, peripheral vascular disease and oncology. Our chief operating decision maker (CEO) evaluates the various global product portfolios on a net sales basis. Executives reporting in to the CEO include those responsible for operations and supply chain management, research and development, sales, franchise marketing and certain corporate functions. The CEO evaluates profitability, investment and cash flow metrics on a consolidated worldwide basis due to shared infrastructure and resources. Prior to fiscal year 2013, our business was organized as two segments: Vascular and Oncology/Surgery, each under the direction of a general manager with direct responsibility for all sales, marketing and product development activities. | ||||||||||||||
To determine fair value, we considered two market-based approaches and an income approach. Under the market-based approaches, we utilized information regarding our own as well as publicly available industry information to determine earnings multiples and sales multiples. Under the income approach, we determined fair value based on estimated future cash flows of the reporting unit, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit and the rate of return an outside investor would expect to earn. We determined the discounted cash flow as the best indicator to determine fair value and therefore assigned a weight of 75% with the remaining 25% assigned to the market approach. | ||||||||||||||
Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates and future market conditions, among others. These assumptions are highly sensitive and changes in these estimates could result in impairment. Solely for purposes of establishing inputs for the fair value calculations, we assumed that the current economic conditions would continue through fiscal year 2014, followed by a recovery thereafter. In addition, we applied gross margin assumptions consistent with our historical trends at various revenue levels and used an EBITDA exit multiple of 7.0 to calculate the terminal value of the reporting unit. In addition, we used a discount rate of 12.0% to calculate the fair value of our reporting unit. | ||||||||||||||
We completed our annual goodwill impairment test as of December 31, 2013. Our assessment of goodwill impairment indicated that the fair value of our reporting unit exceeded its carrying value and therefore goodwill was not impaired. The fair value of our reporting unit exceeded its carrying value by 7%. The fair value of the reporting unit was reconciled to our current stock market capitalization as of December 31, 2013. | ||||||||||||||
Since early November 2008, our stock market capitalization has at times been lower than our shareholders’ equity or book value. However, our reporting unit has continued to generate significant cash flows from operations, and we expect to continue to do so in fiscal 2015 and beyond. Furthermore, we believe that a reasonable potential buyer would offer a control premium for our business that would adequately cover the difference between our stock market capitalization and our book value. | ||||||||||||||
We also completed our annual indefinite lived asset (NAMIC trademark) test as of December 31, 2013 using the income approach to determine fair value. Our assessment of the NAMIC trademark indicated that the fair value exceeded the carrying value and therefore the asset was not impaired. | ||||||||||||||
Even though we determined that there was no goodwill impairment as of December 31, 2013, the future occurrence of a potential indicator of impairment, such as a significant adverse change in legal factors or business climate, an adverse action or assessment by a regulator, unanticipated competition, a material negative change in relationships with significant customers, strategic decisions made in response to economic or competitive conditions, loss of key personnel or a more-likely-than-not expectation that the reporting unit or a significant portion of the reporting unit will be sold or disposed of, would require an interim assessment for the reporting unit prior to the next required annual assessment as of December 31, 2014. | ||||||||||||||
It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material. Events that could, in the future, result in impairment include, but are not limited to, declining sales for a significant product or in a significant geographic region. | ||||||||||||||
Adjustments to goodwill for the fiscal year ended May 31, 2014 and May 31, 2013 are as follows (in thousands): | ||||||||||||||
Total | ||||||||||||||
Balance, May 31, 2012 | $ | 309,091 | ||||||||||||
Goodwill recognized from Vortex business combination | 29,519 | |||||||||||||
Goodwill recognized from Microsulis asset acquisition | 19,284 | |||||||||||||
Adjustments to Navilyst purchase price allocation | (2,257 | ) | ||||||||||||
Balance, May 31, 2013 | $ | 355,637 | ||||||||||||
Acquisition of Clinical Devices B.V. | 4,836 | |||||||||||||
Balance, May 31, 2014 | $ | 360,473 | ||||||||||||
During fiscal 2014, the change in the carrying value of goodwill is the result of the acquisition of Clinical Devices, B.V. (See Note B.) During the fourth quarter of fiscal 2014, there was an adjustment of $0.5 million to the carrying value of such goodwill related to working capital. During fiscal 2013, the $2.3 million reduction in the carrying value of goodwill is primarily the result of a $0.9 million payment from former stockholders of Navilyst and a $1.6 million increase in the value of deferred tax assets from the Navilyst acquisition, net of $0.2 million of preacquisition Navilyst tax adjustments. | ||||||||||||||
As of May 31, 2014 and 2013, intangible assets consisted of the following: | ||||||||||||||
31-May-14 | ||||||||||||||
Gross carrying | Accumulated | Net carrying | Weighted average | |||||||||||
value | amortization | value | useful life | |||||||||||
(in thousands) | (years) | |||||||||||||
Product technologies | $ | 150,298 | $ | (32,930 | ) | $ | 117,368 | 10.2 | ||||||
Customer relationships | 86,645 | (37,848 | ) | 48,797 | 11.9 | |||||||||
Trademark—NAMIC | 28,600 | — | 28,600 | Indefinite | ||||||||||
In process R&D Acquired | 3,600 | — | 3,600 | Indefinite | ||||||||||
Licenses | 7,639 | (5,211 | ) | 2,428 | 8.4 | |||||||||
Trademarks | 6,345 | (1,882 | ) | 4,463 | 8 | |||||||||
Distributor relationships | 900 | (900 | ) | — | 3 | |||||||||
$ | 284,027 | $ | (78,771 | ) | $ | 205,256 | ||||||||
31-May-13 | ||||||||||||||
Gross carrying | Accumulated | Net carrying | Weighted avg | |||||||||||
value | amortization | value | useful life | |||||||||||
(in thousands) | (years) | |||||||||||||
Product technologies (1) | $ | 150,181 | $ | (24,835 | ) | $ | 125,346 | 10.6 | ||||||
Customer relationships (1) | 84,479 | (30,770 | ) | 53,709 | 14.8 | |||||||||
Trademark—NAMIC | 28,600 | — | 28,600 | Indefinite | ||||||||||
Licenses | 6,302 | (4,501 | ) | 1,801 | 9 | |||||||||
Trademarks | 6,275 | (1,058 | ) | 5,217 | 9.9 | |||||||||
Distributor relationships | 900 | (900 | ) | — | 3 | |||||||||
$ | 276,737 | $ | (62,064 | ) | $ | 214,673 | ||||||||
-1 | The Company has revised the previously reported disclosure to appropriately classify the components of intangible assets. | |||||||||||||
Amortization expense was $16.6 million, $16.6 million and $9.3 million for fiscal 2014, 2013 and 2012, respectively. | ||||||||||||||
Annual amortization of these intangible assets is expected to approximate the following amounts for each of the next five fiscal years (in thousands): | ||||||||||||||
2015 | $ | 15,693 | ||||||||||||
2016 | 15,696 | |||||||||||||
2017 | 16,355 | |||||||||||||
2018 | 17,385 | |||||||||||||
2019 | 19,928 | |||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
31-May-14 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
INCOME TAXES | H-INCOME TAXES | |||||||||||
The components of income (loss) before income tax provision for the years ended May 31 are as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
(Loss) income before tax provision: | ||||||||||||
US | $ | 5,199 | $ | (3,614 | ) | $ | (5,291 | ) | ||||
Non-US | 541 | 2,027 | (131 | ) | ||||||||
$ | 5,740 | $ | (1,587 | ) | $ | (5,422 | ) | |||||
Income tax (benefit) provision analyzed by category and by statement of operations classification for the years ended May 31 is summarized as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Current | ||||||||||||
Federal | $ | (133 | ) | $ | (1,622 | ) | $ | 448 | ||||
State and local | 99 | (52 | ) | (19 | ) | |||||||
Non U.S. | 157 | 468 | 18 | |||||||||
123 | (1,206 | ) | 447 | |||||||||
Deferred | 2,951 | 830 | (686 | ) | ||||||||
$ | 3,074 | $ | (376 | ) | $ | (239 | ) | |||||
The significant components of deferred income tax (benefit) expense from operations for the years ended May 31 consist of the following: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Deferred tax benefit | $ | 1,778 | $ | 830 | $ | (1,773 | ) | |||||
Impact of NYS tax reform legislation | 1,173 | — | — | |||||||||
Net operating loss carryforward | — | — | 1,087 | |||||||||
$ | 2,951 | $ | 830 | $ | (686 | ) | ||||||
Temporary differences that give rise to deferred tax assets and liabilities are summarized as follows: | ||||||||||||
May 31, 2014 | May 31, 2013 | |||||||||||
(in thousands) | ||||||||||||
Deferred tax assets | ||||||||||||
Net operating loss carryforward | $ | 48,749 | $ | 47,516 | ||||||||
Stock-based compensation | 4,851 | 4,813 | ||||||||||
Federal and state R&D tax credit carryforward | 1,249 | 490 | ||||||||||
Inventories | 875 | 1,713 | ||||||||||
State tax credits | — | 1,326 | ||||||||||
Expenses incurred not currently deductible | 1,379 | 880 | ||||||||||
Capital loss carryforwards | — | 95 | ||||||||||
Deferred revenue | 154 | 1,147 | ||||||||||
Gross deferred tax asset | 57,257 | 57,980 | ||||||||||
Deferred tax liabilities | ||||||||||||
Excess tax over book depreciation and amortization | 41,843 | 39,252 | ||||||||||
Impairment of long-lived assets | — | — | ||||||||||
41,843 | 39,252 | |||||||||||
Valuation Allowance | (1,532 | ) | (712 | ) | ||||||||
Net deferred tax asset | $ | 13,882 | $ | 18,016 | ||||||||
At May 31, 2014, we had approximately $166.0 million of remaining Federal net operating loss carryforwards and $33.8 million of state net operating loss carryforwards (“NOL”). Approximately $161.5 million of our Federal net operating loss was generated by acquired companies and are subject to Internal Revenue Code (“IRC”) Section 382 limitations which are expected to significantly limit our ability to utilize these net operating losses on an annual basis. As a result of our IRC Section 382 analyses, it is estimated that approximately $26.1 million of remaining Federal net operating losses and $13.0 million of state net operating losses will expire prior to utilization. The gross deferred income tax asset (“DTA”) related to the NOL reflects these limitations. | ||||||||||||
In order to ensure the realizability of our deferred tax assets, we need to generate $10.0 million of taxable income for each year from 2015 to 2023 and then $6.5 million of taxable income per year until 2033. If we are unable to meet these minimum taxable income levels, the deferred tax assets may still be utilized in future years if we can make up previous year taxable income short falls prior to the expiration of net operating loss carryforwards. We have determined that we have sufficient existing levels of pre-tax earnings to generate sufficient taxable income to realize the net deferred tax assets recorded on our balance sheets. | ||||||||||||
In order to support the realizability of our net deferred tax asset, we projected our pre-tax income utilizing a combination of historical and projected results. Utilizing this projected pre-tax income, we have projected taxable income taking into consideration existing levels of permanent differences including stock option exercise deductions and non-deductible expenses and the reversal of significant temporary differences. | ||||||||||||
Our Federal net operating loss carryforwards as of May 31, 2014 after considering IRC Section 382 limitations are $139.8 million. The expiration of the Federal net operating loss carryforwards are as follows: $30.7 million between 2017 and 2026 and $109.1 million between 2027 and 2033. | ||||||||||||
Our state net operating loss carryforwards as of May 31, 2014 after considering remaining IRC Section 382 limitations are $20.9 million which expire in various years from 2015 to 2033. | ||||||||||||
At May 31, 2014, we had a net deferred income tax asset of $13.9 million, after recording a valuation allowance of $1.5 million. The valuation allowance increased by $0.8 million in 2014 and decreased by $0.5 million in 2013. The 2014 change relates to the true-up of our fully reserved capital losses and state tax credits and net operating losses from our fiscal 2013 tax filings. The 2013 change relates to the use of fully reserved capital losses and the expiration of fully reserved state tax credits. The valuation allowance recorded against the deferred tax assets relates to state tax credits, capital losses and state NOLs that management has estimated will more likely than not expire before they are expected to be utilized. | ||||||||||||
Our consolidated income tax provision has differed from the amount that would be provided by applying the U.S. Federal statutory income tax rate to our income before income taxes for the following reasons: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Income tax (benefit) provision | $ | 3,074 | $ | (376 | ) | $ | (239 | ) | ||||
Effect of Graduated tax rates | 57 | 16 | (57 | ) | ||||||||
State income taxes, net of Federal tax benefit | (122 | ) | (95 | ) | (152 | ) | ||||||
State income tax credits, net of Federal tax benefit | — | 23 | 69 | |||||||||
Impact of Non US operations | 27 | 228 | (46 | ) | ||||||||
Tax-exempt interest | — | 2 | 4 | |||||||||
Research and development tax credit | 236 | 142 | 115 | |||||||||
Domestic Production Activities deduction | — | — | 71 | |||||||||
Nondeductible acquisition costs | — | (110 | ) | (1,144 | ) | |||||||
Nondeductible interest on contingent payments | (540 | ) | (130 | ) | — | |||||||
Nontaxable gain on revaluation of contingent consideration liability | 1,698 | — | — | |||||||||
Tax law change | (1,173 | ) | — | — | ||||||||
Effect of elimination of ASC 718 APIC pool | (440 | ) | — | — | ||||||||
Nondeductible stock-based compensation | (176 | ) | (108 | ) | (125 | ) | ||||||
Other nondeductible expenses | (384 | ) | (336 | ) | (336 | ) | ||||||
Overaccrual (underaccrual) of prior year Federal and state taxes | (249 | ) | 10 | 138 | ||||||||
Fully reserved capital losses | — | 179 | (208 | ) | ||||||||
Other | — | — | 12 | |||||||||
Income tax (benefit) provision at statutory tax rate of 35% | $ | 2,008 | $ | (555 | ) | $ | (1,898 | ) | ||||
During the twelve months ended May 31, 2014, we did not recognize any tax liabilities related to uncertain tax positions. Due to our unrecognized tax benefit being zero upon adoption, with no change since adoption, no “tabular reconciliation” of the total amount of unrecognized tax benefits at the beginning and end of the period is being presented. | ||||||||||||
We recognize interest and penalties related to unrecognized tax benefits within our global operations as a component of income tax expense. There were no accrued interest and penalties recognized in the consolidated balance sheet as of May 31, 2014 and May 31, 2013. | ||||||||||||
We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business we are subject to examination by taxing authorities throughout the world. The Internal Revenue Service (“IRS”) completed an examination of our federal income tax returns for fiscal years 2006 and 2007 in February 2009 which did not result in a material impact on our results of operations or financial position. During fiscal year 2012, New York State completed an examination of our New York State Franchise Tax returns for fiscal years 2005 to 2008. In relation to this examination, income tax expense in fiscal 2011 includes an out-of-period benefit of $300,000 to correct an error that originated in prior years related to certain state tax credits. We assessed the impact of this adjustment on the 2011 year and all prior periods and determined that the cumulative effect of the adjustments was not material to the full year 2011 and did not result in a material misstatement to any previously issued annual or quarterly financial statements. Additionally, as a result of the audit, we were able to claim state tax credits of $210,000 that are recorded in fiscal year 2012. | ||||||||||||
Fiscal years 2011 through 2014 remain open to examination by the various tax authorities. New York State is currently auditing Navilyst’s franchise tax filings for 2009 through 2011, we do not anticipate any material adjustments will result. We analyzed filing positions in all of the Federal and state jurisdictions where we are required to file income taxes, as well as all open tax years in these jurisdictions and believe that our income tax filing positions and deductions will be sustained on audit and we do not anticipate any adjustments will result in a material adverse effect on our financial condition, results of operations or cash flows. | ||||||||||||
We do not anticipate that the amount of unrecognized tax benefits will significantly change in the next twelve months. | ||||||||||||
The accumulated undistributed earnings of the Company’s foreign operations were approximately $4 million, and are intended to remain permanently invested in foreign operations. Accordingly, no taxes have been provided on these earnings at May 31, 2014. If these earnings were distributed, the Company would be subject to both foreign withholding taxes and U.S. income taxes that may not be fully offset by foreign tax credits. A reasonable estimate of the deferred tax liability on these earnings is not practicable at this time. |
Prepaid_Royalties
Prepaid Royalties | 12 Months Ended |
31-May-14 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID ROYALTIES | PREPAID ROYALTIES |
On August 13, 2007, we entered into a Distribution, Manufacturing and Purchase Option Agreement (“the Agreement”) with a company to acquire the exclusive worldwide rights to manufacture and distribute a split tip catheter for the dialysis market we have named Centros which included the option to purchase certain intellectual property associated with these products in the future. Under this Agreement, we paid royalties on net sales of the products covered in the Agreement. In accordance with the Agreement, we prepaid $3.0 million of royalties based upon the achievement of certain milestones. At May 31, 2011, based on lower than anticipated sales results, we reduced the prepaid royalties to net realizable value which resulted in an impairment loss of $2.3 million recorded in “Acquisition, restructuring and other items, net” in our fiscal 2011 consolidated statement of operations. In August 2011, we sold both the tangible and intangible assets associated with the Centros product, resulting in a gain of $201 thousand that is included in “Acquisition, restructuring and other items, net” in the consolidated statement of operations for the year ended May 31, 2012 and the elimination of all related “Prepaid Royalties” on the consolidated balance sheet as of May 31, 2012. We have entered into various other agreements that required royalty prepayments and these are reported in “Prepaid Royalties” on the May 31, 2014 and May 31, 2013 consolidated balance sheets. |
Accrued_Liabilities
Accrued Liabilities | 12 Months Ended | |||||||
31-May-14 | ||||||||
Payables and Accruals [Abstract] | ||||||||
ACCRUED LIABILITIES | ACCRUED LIABILITIES | |||||||
As of May 31, 2014 and 2013, accrued liabilities consist of the following: | ||||||||
May 31, | May 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Payroll and related expenses | $ | 8,114 | $ | 6,421 | ||||
Royalties | 2,620 | 2,034 | ||||||
Accrued severance | 765 | 1,602 | ||||||
Deferred revenue | 200 | 1,573 | ||||||
Sales and franchise taxes | 1,327 | 1,047 | ||||||
Interest rate swap liability | 555 | 523 | ||||||
Other | 3,071 | 3,156 | ||||||
Total | $ | 16,652 | $ | 16,356 | ||||
LongTerm_Debt
Long-Term Debt | 12 Months Ended | |||||||
31-May-14 | ||||||||
Debt Disclosure [Abstract] | ||||||||
LONG-TERM DEBT | LONG-TERM DEBT | |||||||
New Credit Agreement - On September 19, 2013, we entered into a Credit Agreement (the "Credit Agreement") with the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and Keybank National Association as co-syndication agents, and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Keybank National Association as joint bookrunners and joint lead arrangers. | ||||||||
The Credit Agreement provides for a $100 million senior secured term loan facility (the "Term Loan") and a $100 million senior secured revolving credit facility, which includes up to a $20 million sublimit for letters of credit and a $5 million sublimit for swingline loans (the "Revolving Facility", and together with the Term Loan, the "Facilities"). | ||||||||
The proceeds of the Term Loan and a portion of the proceeds of the Revolving Facility were used to repay our Credit Agreement (the "Prior Credit Agreement") dated as of May 22, 2012, with the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and Keybank National Association as co-syndication agents, and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Keybank National Association as joint bookrunners and joint lead arrangers. | ||||||||
The proceeds of the Revolving Facility may be used for general corporate purposes of AngioDynamics and its subsidiaries. The Facilities have a five years maturity. The Term Loan has a quarterly repayment schedule equal to 5%, 5%, 10%, 15% and 65% of its principal amount in years one through five. Interest on both the Term Loan and Revolving Facility will be based on a base rate or Eurodollar rate plus an applicable margin which increases as our total leverage ratio increases, with the base rate and Eurodollar rate having ranges of 0.5% to 1.25% and 1.5% to 2.25% respectively. After default, the interest rate may be increased by 2.0%. The Revolving Facility will also carry a commitment fee of 0.2% to 0.35% per annum on the unused portion. | ||||||||
Our obligations under the Facilities are unconditionally guaranteed, jointly and severally, by our material direct and indirect domestic subsidiaries (the "Guarantors"). All obligations of AngioDynamics and the Guarantors under the Facilities are secured by first priority security interests in substantially all of the assets of AngioDynamics and the Guarantors. | ||||||||
In June 2012, we entered in an interest rate swap agreement, (the "Swap Agreement"), with an initial notional amount of $100 million, to limit the effect of rising of interest rates. The Swap Agreement, which qualified for hedge accounting under authoritative guidance, was a contract to exchange floating interest rate payments for fixed interest rate payments on the outstanding balance of the loan over the life of the agreement without the exchange of the underlying notional amounts. The Swap Agreement provides for a fixed rate of 0.74% above the applicable rate provided for in the Credit Agreement. | ||||||||
On September 19, 2013, we borrowed $100 million under the Term Facility and approximately $41.4 million under the Revolving Facility to repay the Prior Credit Agreement. As of May 31, 2014, $96.3 million and $46.4 million were outstanding under the Term Facility and Revolving Facility, respectively. The Credit Agreement includes customary representations, warranties and covenants, and acceleration, indemnity and events of default provisions, including, among other things, two financial covenants. The first financial covenant requires us to maintain, as of the end of each of our fiscal quarters, a ratio of (i) consolidated EBITDA minus consolidated capital expenditures to (ii) consolidated interest expense paid or payable in cash plus scheduled principal payments in respect of indebtedness under the Credit Agreement of not less than 1.35 to 1.00. The second financial covenant requires us to maintain, as of the end of each of our fiscal quarters, a ratio of consolidated total indebtedness to consolidated EBITDA of not greater than 3.75 to 1.00. We were in compliance with both financial covenants as of May 31, 2014. | ||||||||
Following is a summary of long-term debt as of May 31, 2014 and 2013 (in thousands): | ||||||||
May 31, 2014 | May 31, 2013 | |||||||
Bank notes | $ | 142,660 | $ | 142,500 | ||||
Less: current maturities | (5,000 | ) | (7,500 | ) | ||||
Long-term debt | $ | 137,660 | $ | 135,000 | ||||
As of May 31, 2014, future minimum principal payments on long-term debt were as follows (in thousands): | ||||||||
2015 | $ | 5,000 | ||||||
2016 | 8,750 | |||||||
2017 | 13,750 | |||||||
2018 | 26,250 | |||||||
2019 | 42,500 | |||||||
$ | 96,250 | |||||||
Retirement_Plans
Retirement Plans | 12 Months Ended |
31-May-14 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS |
We have a 401(k) plan under which eligible employees can defer a portion of their compensation, part of which is matched by us. Matching contributions were $2.8 million, $2.5 million and $2.0 million in 2014, 2013 and 2012, respectively. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||||||||||||
31-May-14 | |||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||
1. Capitalization | |||||||||||||||||||||||||||
On February 27, 2004, our Board of Directors and the Former Parent, as sole stockholder, approved our Amended and Restated Certificate of Incorporation (the “Amended Certificate”). Under the Amended Certificate, the authorized capital stock is 50,000,000 shares, consisting of 45,000,000 shares of common stock, par value $.01 per share and 5,000,000 shares of preferred stock, par value $.01 per share. Pursuant to the Amended Certificate, (i) each share of voting common stock, $1 par value and (ii) each share of non-voting common stock, $1 par value was reclassified and exchanged into 9,200 shares of issued, fully paid, non-assessable common stock for a total of 9,200,000 shares to be then outstanding. | |||||||||||||||||||||||||||
The holders of common stock are entitled to one vote for each share held. Subject to preferences applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to receive ratably dividends, if any, as may be declared by the Board of Directors out of funds legally available for dividend payments. If we liquidate, dissolve, or wind up, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no pre-emptive rights or rights to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate in the future. | |||||||||||||||||||||||||||
Our board of directors has the authority to (i) issue the undesignated preferred stock in one or more series, (ii) determine the powers, preferences and rights and the qualifications, limitations or restrictions granted to or imposed upon any wholly un-issued series of undesignated preferred stock and (iii) fix the number of shares constituting any series and the designation of the series, without any further vote or action by our stockholders. | |||||||||||||||||||||||||||
Shares issued in Navilyst Acquisition | |||||||||||||||||||||||||||
On May 22, 2012, a portion of the acquisition and related transaction costs of the Navilyst acquisition were financed through the issuance of approximately 9.5 million shares to investment funds affiliated with Avista Capital Partners, former owners of Navilyst, and as of May 31, 2014 they hold approximately 27% of our outstanding shares. | |||||||||||||||||||||||||||
Share Repurchase Program | |||||||||||||||||||||||||||
On October 5, 2011, our Board of Directors authorized the repurchase of up to $20 million of our common stock, prior to May 31, 2012. During the fiscal year ended May 31, 2012, we purchased 142,305 shares at a cost of approximately $2.1 million. There were no shares repurchased under this program during fiscal 2014 or 2013. | |||||||||||||||||||||||||||
2. Stock Options | |||||||||||||||||||||||||||
We have two stock-based compensation plans. These plans provide for the issuance of up to approximately 5.8 million shares of common stock. | |||||||||||||||||||||||||||
1997 Stock Option Plan | |||||||||||||||||||||||||||
In 1997, we adopted a Stock Option Plan (the “1997 Plan”). The 1997 Plan provided for the grant to key employees of both nonqualified stock options and incentive stock options and to members of the Board of Directors and consultants of nonqualified stock options. A total of 1,497,674 shares of our common stock were available to be issued under the 1997 Plan pursuant to the exercise of options. All stock options were to have an exercise price of not less than the fair market value of the shares on the date of grant. Options are exercisable over a period of time to be designated by the administrators of the 1997 Plan (but not more than 10 years from the date of grant) and are subject to such other terms and conditions as the administrators may determine. The vesting schedule is subject to the discretion of our Board of Directors. Options are exercisable immediately upon vesting. In addition, all options, whether vested or not, become exercisable in full immediately upon a change of control, as defined under the 1997 Plan. The 1997 Plan terminated in March 2007 and as such, no further options will be granted under this plan. | |||||||||||||||||||||||||||
2004 Stock and Incentive Award Plan | |||||||||||||||||||||||||||
The 2004 Stock and Incentive Award Plan (the “2004 Plan”) provides for the grant of incentive options to our employees and for the grant of non-statutory stock options, restricted stock, stock appreciation rights, performance units, performance shares and other incentive awards to our employees, directors and other service providers. A total of 5,750,000 shares of our common stock have been reserved for issuance under the 2004 Plan, of which up to 800,000 shares may be issued upon the exercise of incentive stock options. The compensation committee of the Board of Directors administers the 2004 Plan. The committee determines vesting terms and the exercise price of options granted under the 2004 Plan, but for all incentive stock options the exercise price must at least be equal to the fair market value of our common stock on the date of grant. The term of an incentive stock option may not exceed ten years. | |||||||||||||||||||||||||||
On October 5, 2011, we amended the 2004 Stock and Incentive Award Plan to increase the maximum number of shares of our common stock with respect to which stock options may be granted during any calendar year to one employee from 200,000 shares to 500,000 shares. | |||||||||||||||||||||||||||
Stock Option Activity: | |||||||||||||||||||||||||||
The following schedule summarizes our stock option activity as of and for the years ended May 31, 2014, May 31, 2013 and May 31, 2012: | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Shares | Weighted- | Weighted | Aggregate | Shares | Weighted- | Shares | Weighted- | ||||||||||||||||||||
average | average | intrinsic | average | average | |||||||||||||||||||||||
exercise | remaining | value (in | exercise | exercise | |||||||||||||||||||||||
price | contractual | thousands) | price | price | |||||||||||||||||||||||
life | |||||||||||||||||||||||||||
Outstanding at beginning of year | 2,768,928 | $ | 14.84 | 2,985,192 | $ | 15.69 | 2,680,390 | $ | 15.96 | ||||||||||||||||||
Granted | 391,175 | $ | 13.01 | 406,700 | $ | 11.4 | 1,434,000 | $ | 13.7 | ||||||||||||||||||
Exercised | (105,676 | ) | $ | 15.38 | (16,835 | ) | $ | 11.15 | (193,684 | ) | $ | 14.22 | |||||||||||||||
Forfeited | (278,646 | ) | $ | 17.45 | (589,787 | ) | $ | 17.45 | (917,126 | ) | $ | 14.22 | |||||||||||||||
Expired | (102,030 | ) | $ | 15.69 | (16,342 | ) | $ | 15.69 | (18,388 | ) | $ | 24.44 | |||||||||||||||
Outstanding at end of year | 2,673,751 | $ | 14.82 | 4.56 | $ | 17,540 | 2,768,928 | $ | 14.84 | 2,985,192 | $ | 15.69 | |||||||||||||||
Options exercisable at year-end | 1,675,790 | $ | 16.12 | 4.54 | $ | 12,906 | 1,601,028 | $ | 16.12 | 1,678,559 | $ | 17.01 | |||||||||||||||
Options expected to vest in future periods | 845,256 | $ | 13.31 | 5.06 | $ | 3,986 | 1,069,119 | $ | 13.31 | 1,075,473 | $ | 14.19 | |||||||||||||||
Weighted average fair value of options granted during the fiscal years ended May 31, is as follows: | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Weighted-average fair value of options granted during the year | $ | 4.1 | $ | 4.19 | $ | 5.62 | |||||||||||||||||||||
On May 31, 2014, there remained approximately 1.6 million shares available for granting of options under the 2004 Plan. Options are exercisable into common stock. | |||||||||||||||||||||||||||
All of our options were granted at exercise prices equal to the quoted market price of our common stock at the date of the grants. Options under these grants vest 25% per year over four years for employees and 100% after one year for consultants. Initial grants to directors vest 25% per year over four years and subsequent grants to directors vest 33.33% per year over three years. Options granted prior to May 1, 2007 expire on the tenth anniversary of the grant date. Options granted on or after May 1, 2007, expire on the seventh anniversary of the grant date. The total intrinsic value of options exercised was $1.0 million, $0.1 million, and $2.2 million for the years ended May 31, 2014, May 31, 2013 and May 31, 2012, respectively. We generally issue authorized but unissued shares upon stock option exercises and the settlement of performance share awards and restricted stock units. | |||||||||||||||||||||||||||
The fair value of the options granted under the 1997 and 2004 Plans was estimated at the date of grant using the Black-Scholes option-pricing model assuming no expected dividends and the following weighted-average assumptions: | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Expected stock price volatility | 34.4 | % | 43.91 | % | 49.06 | % | |||||||||||||||||||||
Risk-free interest rate | 1.44 | % | 0.62 | % | 0.7 | % | |||||||||||||||||||||
Expected life of options | 4.74 years | 4.62 years | 4.59 years | ||||||||||||||||||||||||
The following information applies to options outstanding at May 31, 2013: | |||||||||||||||||||||||||||
Range of exercise prices | Number | Weighted- | Weighted- | Number | Weighted- | ||||||||||||||||||||||
outstanding | average | average | Exercisable | average | |||||||||||||||||||||||
remaining | exercise | exercise | |||||||||||||||||||||||||
life in | price | price | |||||||||||||||||||||||||
years | |||||||||||||||||||||||||||
$ 6.52 - $11.93 | 463,965 | 5.64 | $ | 11.37 | 65,832 | $ | 10.61 | ||||||||||||||||||||
$12.06 - $12.97 | 343,161 | 4.86 | 12.41 | 155,661 | 12.44 | ||||||||||||||||||||||
$13.18 - $13.85 | 432,426 | 3.38 | 13.35 | 321,348 | 13.36 | ||||||||||||||||||||||
$13.92 - $14.31 | 430,000 | 4.21 | 13.95 | 228,750 | 13.97 | ||||||||||||||||||||||
$14.48 - $15.57 | 202,880 | 1.09 | 15.25 | 202,880 | 15.25 | ||||||||||||||||||||||
$15.75 - $16.58 | 376,196 | 3.39 | 16.06 | 276,196 | 16.03 | ||||||||||||||||||||||
$16.75 - $19.94 | 267,522 | 1.06 | 18.19 | 267,522 | 18.16 | ||||||||||||||||||||||
$20.06 - $31.33 | 157,601 | 1.26 | 23.05 | 157,601 | 13.81 | ||||||||||||||||||||||
2,673,751 | 4.56 | $ | 14.84 | 1,675,790 | $ | 16.12 | |||||||||||||||||||||
3. Performance Share and Restricted Stock Unit Awards | |||||||||||||||||||||||||||
We grant restricted stock units and performance share awards to certain employees under the 2004 Plan. The performance criteria is established by the compensation committee for vesting of the performance share awards and may include factors such as the achievement of certain sales, operating income and earnings per share (“EPS”) goals. Performance share awards are subject to additional conditions, including the recipient’s continued employment with us. The restricted stock unit awards vest in equal annual installments over the term of the grants. Unvested restricted stock unit awards will be forfeited if the recipient ceases to be employed by us, competes with our business or otherwise engages in activities detrimental to our business before such date. The performance share awards and restricted stock units settle in shares of our common stock on a one-for-one basis. | |||||||||||||||||||||||||||
We value performance share and restricted stock unit awards based on the closing trading value of our shares on the date of grant. We recognize the compensation cost related to our non-vested stock awards ratably over the requisite service period, or over the performance period when performance award metrics are expected to be achieved, which is consistent with the treatment prior to the adoption of authoritative guidance on share based payment awards. | |||||||||||||||||||||||||||
Non-Vested Stock | Weighted Average | ||||||||||||||||||||||||||
Award Units | Grant-Date Fair Value | ||||||||||||||||||||||||||
Balance as of May 31, 2013 | 482,644 | $ | 12.14 | ||||||||||||||||||||||||
Granted | 473,824 | 13.37 | |||||||||||||||||||||||||
Cancelled | (109,634 | ) | 12.48 | ||||||||||||||||||||||||
Vested | (148,946 | ) | 12.62 | ||||||||||||||||||||||||
Balance as of May 31, 2014 | 697,888 | 13.02 | |||||||||||||||||||||||||
The total fair value of restricted stock awards vesting was $1.8 million, $1.2 million, and $0.9 million for the years ended May 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||||
4. Unrecognized Compensation Cost: | |||||||||||||||||||||||||||
Under the provisions of authoritative guidance on share based payment awards, we expect to recognize the following future expense for awards outstanding as of May 31, 2014 ($ in thousands): | |||||||||||||||||||||||||||
Unrecognized | Weighted Average | ||||||||||||||||||||||||||
Compensation | Remaining Vesting | ||||||||||||||||||||||||||
Cost | Period (in years) | ||||||||||||||||||||||||||
Stock options | $ | 3,382 | 2.13 | ||||||||||||||||||||||||
Non-vested stock awards | 5,625 | 2.37 | |||||||||||||||||||||||||
$ | 9,007 | 2.28 | |||||||||||||||||||||||||
Unrecognized compensation cost for stock options is presented net of 12% assumed annual forfeitures. | |||||||||||||||||||||||||||
5. Employee Stock Purchase Plan | |||||||||||||||||||||||||||
The Employee Stock Purchase Plan (the “Stock Purchase Plan”) provides a means by which our employees (the “participants”) are given an opportunity to purchase our common stock through payroll deductions. The maximum number of shares to be offered under the Stock Purchase Plan is 1,200,000 shares of our common stock, subject to any increase authorized by the Board of Directors. Shares are offered through two purchase periods, each with duration of approximately 6 months, commencing on the first business day of the first and third fiscal quarters. An employee is eligible to participate in an offering period if, on the first day of an offering period, he or she has been employed in a full-time capacity for at least six months, with a customary working schedule of 20 or more hours per week and more than five months in a calendar year. Employees who own stock possessing 5% or more of the total combined voting power or value of all classes of our stock are not eligible to participate in the Stock Purchase Plan. The purchase price of the shares of common stock acquired on each purchase date will be the lower of (i) 85% of the fair market value of a share of common stock on the first day of the offering period or (ii) 85% of the fair market value of a share of common stock on the last day of the purchase period, subject to adjustments made by the Board of Directors. The Stock Purchase Plan is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code. | |||||||||||||||||||||||||||
We use the Black-Scholes option-pricing model to calculate the purchase date fair value of the shares issued under the Stock Purchase Plan and recognize expense related to shares purchased ratably over the offering period. | |||||||||||||||||||||||||||
For the years ended May 31, 2014, 2013 and 2012, 146,275, 123,556 and 103,362 shares, respectively, were issued at an average price of $9.30, $9.80 and $11.62, respectively, under the Stock Purchase Plan. As of May 31, 2013, 423,895 shares remained available for future purchases under the Stock Purchase Plan. | |||||||||||||||||||||||||||
For fiscal 2014, stock based compensation was $5.5 million pre-tax ($3.6 million after tax). For fiscal 2013, stock based compensation was $4.6 million pre-tax ($3.1 million after tax). For fiscal 2012, stock based compensation was $4.1 million pre-tax ($2.6 million after tax). | |||||||||||||||||||||||||||
The following table summarizes stock-based compensation in accordance with authoritative guidance on share based payment awards for the years ended May 31, 2014, May 31, 2013 and May 31, 2012, which was allocated as follows: | |||||||||||||||||||||||||||
May 31, | May 31, | May 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Cost of sales | $ | 232 | $ | 271 | $ | 268 | |||||||||||||||||||||
Research and development | 483 | 399 | 738 | ||||||||||||||||||||||||
Sales and marketing | 1,672 | 1,610 | 1,340 | ||||||||||||||||||||||||
General and administrative | 3,115 | 2,329 | 1,706 | ||||||||||||||||||||||||
Stock based compensation expense included in operating expenses | 5,270 | 4,338 | 3,784 | ||||||||||||||||||||||||
Total stock based compensation | 5,502 | 4,609 | 4,052 | ||||||||||||||||||||||||
Tax benefit | 1,862 | 1,540 | 1,447 | ||||||||||||||||||||||||
Stock based compensation expense, net of tax | $ | 3,640 | $ | 3,069 | $ | 2,605 | |||||||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
31-May-14 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES | |||
Leases | ||||
We are committed under non-cancelable operating leases for facilities and equipment. During fiscal 2014, 2013 and 2012, aggregate rental costs under all operating leases were approximately $2.0 million, $2.5 million and $3.1 million, respectively. Future annual payments under non-cancelable operating leases in the aggregate, of which one includes an escalation clause, with initial remaining terms of more than one year at May 31, 2014, are summarized as follows (in thousands): | ||||
2015 | $ | 1,991 | ||
2016 | 1,644 | |||
2017 | 1,186 | |||
2018 | 1,093 | |||
2019 | 1,093 | |||
$ | 7,007 | |||
Litigation Matters | ||||
AngioDynamics v. biolitec | ||||
On January 2, 2008, we commenced an action in the United States District Court for the Northern District of New York entitled AngioDynamics, Inc. v. biolitec, Inc. In this action, we are seeking judgment against biolitec for defense and indemnification in two lawsuits which we previously settled. Our claims arise out of a Supply and Distribution Agreement (“SDA”) entered into with biolitec on April 1, 2002. On September 27, 2011, the U.S. District Court for the Northern District of New York granted key portions of our motion for summary judgment. The Court’s order was filed under seal. The Court also dismissed biolitec’s counterclaims against us. The court denied one portion of our summary judgment motion, which sought to recover additional costs from biolitec, leaving this for adjudication at trial. On November 8, 2012, the Court granted partial judgment to us in the amount of $23.2 million. Biolitec appealed this judgment. On August 23, 2013, the U.S. Court of Appeals for the Second Circuit dismissed biolitec's appeal. | ||||
In October 2009, we commenced an action in the United States District Court for the District of Massachusetts entitled AngioDynamics, Inc. v. biolitec AG and Wolfgang Neuberger. The Complaint in this action was amended in March 2010. This action seeks to recover against biolitec, Inc.’s parent entities and CEO for tortiously interfering with biolitec, Inc.’s contractual obligation to defend and indemnify us, and also seeks to pierce the corporate veil of biolitec, Inc. and to invalidate certain alleged fraudulent transfers in order to hold biolitec, Inc.’s parent entities jointly and severally liable for the alleged breach of the SDA. On September 13, 2012, the Massachusetts Court granted our request for a preliminary injunction prohibiting the downstream merger of biolitec AG with its Austrian subsidiary. On April 1, 2013, the U.S. Court of Appeals for the First Circuit affirmed the preliminary injunction. On January 14, 2014, the District Court entered judgment in our favor against Biolitec AG, Biomed Technology Holdings, Ltd., and Wolfgang Neuberger, jointly and severally, in the amount of $74.9 million. The defendants have appealed this judgment, and the appeal has not yet been decided. | ||||
On August 29, 2013, we become co-plaintiffs in an adversary proceeding in the Unites States Bankruptcy Court for the District of New Jersey entitled Cyganowski, Trustee, et al. v. Biolitec U.S., Inc., et al. In this action, we assert claims of conversion, unjust enrichment, tortious interference, and unfair competition against various biolitec entities for alleged violation of Bankruptcy Court settlement and sale orders under which we acquired certain assets of Biolitec, Inc. On September 3, 2013, we, along with our co-plaintiff, obtained a temporary restraining order against the defendants in this action. The restraining order is still in place, and the Bankruptcy court is currently considering our request for permanent injunctive relief. | ||||
C.R. Bard, Inc. v. AngioDynamics, Inc. | ||||
On January 11, 2012, C.R. Bard, Inc. filed a suit in the United States District Court of Utah claiming certain of our implantable port products infringe on patents held by them. Bard is seeking unspecified damages and other relief. The Court denied Bard’s motion for pre-trial consolidation with separate actions it filed on the same day against Medical Components, Inc. and Smiths Medical ASD, Inc., but has asked for supplemental briefing on the issue of whether to conduct a common Markman hearing. We filed petitions for reexamination in the US Patent and Trademark Office which seek to invalidate all three patents asserted in the litigation. Our petitions have been granted and 40 of 41 patent claims have been rejected. The reexamination proceedings are on-going. The case has been stayed pending final resolution of the PTO process. We believe these claims are without merit and intend to defend them vigorously. We have not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable. | ||||
We are party to other legal actions that arise in the ordinary course of business. We believe that any liability resulting from any currently pending litigation will not, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations, or cash flows. | ||||
Future Purchase Obligations | ||||
We have entered into commitments for future minimum inventory purchases related to several core products. Total future purchase obligations through fiscal 2018 amount to $12.5 million. There are no such obligations thereafter. |
Segments_and_Geographic_Inform
Segments and Geographic Information | 12 Months Ended | |||||||||||
31-May-14 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
SEGMENTS AND GEOGRAPHIC INFORMATION | SEGMENTS AND GEOGRAPHIC INFORMATION | |||||||||||
Segment information | ||||||||||||
We consider our business to be a single segment entity – the development, manufacture and sale on a global basis of medical devices for vascular access, surgery, peripheral vascular disease and oncology. Our chief operating decision maker (CEO) evaluates the various global product portfolios on a net sales basis. Executives reporting in to the CEO include those responsible for operations and supply chain management, research and development, sales, franchise marketing and certain corporate functions. The CEO evaluates profitability, investment and cash flow metrics on a consolidated worldwide basis due to shared infrastructure and resources. Prior to fiscal year 2013, our business was organized as two segments: Vascular and Oncology/Surgery, each under the direction of a general manager with direct responsibility for all sales, marketing and product development activities. | ||||||||||||
Total sales by product category are summarized below (in thousands): | ||||||||||||
Year Ended | ||||||||||||
May 31, | May 31, | May 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||||
Net sales by Product Category | ||||||||||||
Peripheral Vascular | $ | 192,626 | $ | 179,573 | $ | 95,330 | ||||||
Vascular Access | 106,394 | 106,690 | 63,857 | |||||||||
Oncology/Surgery | 49,360 | 47,155 | 62,730 | |||||||||
Supply Agreement | 6,045 | 8,498 | — | |||||||||
Total | $ | 354,425 | $ | 341,916 | $ | 221,917 | ||||||
Geographic information | ||||||||||||
Total sales for geographic areas are summarized below (in thousands): | ||||||||||||
Year Ended | ||||||||||||
May 31, | May 31, | May 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||||
Net sales by Geography | ||||||||||||
United States | $ | 280,161 | $ | 266,228 | $ | 188,317 | ||||||
International | 68,219 | 67,190 | 33,600 | |||||||||
Supply Agreement | 6,045 | 8,498 | — | |||||||||
Total | $ | 354,425 | $ | 341,916 | $ | 221,917 | ||||||
For fiscal years 2014, 2013 and 2012, International sales as a percentage of total net sales were 19%, 20% and 15%, respectively. Sales to any one country outside the U.S., as determined by shipment destination, did not comprise a material portion of our net sales in any of the last three fiscal years. 99% of our total assets are located within the United States. |
Restructuring
Restructuring | 12 Months Ended |
31-May-14 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING |
On December 5, 2013, we announced a company-wide operational excellence program designed to save between $15 and $18 million during the course of the next three years. The initiative is expected to create greater efficiencies and drive business performance improvements by focusing on several key elements, including product rationalization, lean manufacturing initiatives, supply chain optimization and enterprise resource planning (ERP) implementation. The plan also incorporates the consolidation of our New York plants to establish a single manufacturing center in Glens Falls and a distribution center in Queensbury. During the course of the three-year program, it is expected that we will reduce our New York employee base by approximately 80-100 positions as a result of this plant consolidation and reorganization. Over the three year period, we expect to invest $5.4 million in facility improvements. In addition, total restructuring charges are estimated to be $4.7 million. The program was launched in the third quarter of fiscal 2014 and the cost incurred was $1.4 million, consisting of $0.6 million of severance and related costs, $0.7 million of accelerated depreciation and $0.1 million in other costs. These costs are included in “Acquisition, restructuring and other items, net” in the statements of income. |
Quarterly_Information_unaudite
Quarterly Information (unaudited) | 12 Months Ended | |||||||||||||||
31-May-14 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
QUARTERLY INFORMATION (unaudited) | QUARTERLY INFORMATION (unaudited) | |||||||||||||||
During the preparation of its fiscal 2014 consolidated financial statements, the Company identified an accounting error related to the January 2014 implementation of our global enterprise resource planning system which resulted in the Company recording lower cost of goods sold during the third quarter of 2014. The Company has evaluated the impact of this error and has concluded that this error was not material to any previously issued financial statements. However, the Company has elected to revise this error in the Annual Report on Form 10-K that was filed with SEC for the period ending May 31, 2014. This error, in addition to the errors identified by the Company during the financial closing process for the first quarter of fiscal year 2015, are included within the revision tables in Note R below. The quarterly information shown below has also been revised to reflect these revisions. | ||||||||||||||||
Quarterly results of operations during the fiscal years ended 2014 and 2013 are as follows: | ||||||||||||||||
2014 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
quarter | quarter | quarter | quarter | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Net sales | $ | 83,644 | $ | 88,571 | $ | 88,150 | $ | 94,060 | ||||||||
Gross profit | 42,580 | 44,885 | 44,793 | 47,410 | ||||||||||||
Net income (loss) | (373 | ) | (261 | ) | 4,515 | (1,215 | ) | |||||||||
Earnings per common share | ||||||||||||||||
Basic | (0.01 | ) | (0.01 | ) | 0.13 | (0.03 | ) | |||||||||
Diluted | (0.01 | ) | (0.01 | ) | 0.13 | (0.03 | ) | |||||||||
2013 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
quarter | quarter | quarter | quarter | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Net sales | $ | 83,406 | $ | 87,007 | $ | 81,571 | $ | 89,932 | ||||||||
Gross profit | 39,387 | 44,016 | 41,129 | 43,982 | ||||||||||||
Net income (loss) | (985 | ) | 1,878 | (1,083 | ) | (1,021 | ) | |||||||||
Earnings per common share | ||||||||||||||||
Basic | (0.03 | ) | 0.05 | (0.03 | ) | (0.03 | ) | |||||||||
Diluted | (0.03 | ) | 0.05 | (0.03 | ) | (0.03 | ) | |||||||||
The data in the schedules above has been intentionally rounded to the nearest thousand and therefore the quarterly amounts may not sum to the full year amounts. | ||||||||||||||||
The first quarter results of fiscal 2014 included in “Acquisition, restructuring and other items, net”, $1.2 million in Navilyst related acquisition costs and $0.3 million in Clinical Devices related acquisition costs. The second quarter of fiscal 2014 included $1.6 million in Navilyst related acquisition costs and $0.8 million in litigation related costs. The third quarter of fiscal 2014 included $1.4 million in Navilyst related acquisition costs and $1.0 million in consolidation charges. The fourth quarter of fiscal 2014 included $1.3 million in Navilyst related acquisition costs, $1.1 million in litigation charges and $0.4 million in consolidation charges. | ||||||||||||||||
The first quarter results for fiscal 2013 included in “Acquisition, restructuring and other items, net”, $2.2 million in transaction and related costs of the Navilyst acquisition and $337 thousand in costs associated with the decision to close our UK facility. The 2013 second quarter results included $1.7 million for Navilyst transaction costs, $476 thousand for the UK closure costs, $425 thousand in litigation costs and $325 thousand in costs related to the Vortex acquisition, offset by $770 thousand gain on sale of a product line. The 2013 third quarter results included $1.6 million in costs related to the discontinuance of a product line, $1.3 million in Navilyst transaction costs, $920 thousand for the UK closure costs, $901 thousand in litigation costs and $414 thousand in transaction costs of the Vortex and Microsulis acquisitions. The 2013 fourth quarter results included $2.1 million for Navilyst transaction costs, $717 thousand in UK closure costs, and $580 thousand in litigation costs. |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||
31-May-14 | |||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | AngioDynamics, Inc. and Subsidiaries | ||||||||||||||||
SCHEDULE II -VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||
(in thousands) | |||||||||||||||||
Column A | Column B | Column C | Column D | Column E | |||||||||||||
Description | Balance at | Additions - | Deductions | Balance at | |||||||||||||
Beginning | Charged to | End of Period | |||||||||||||||
of Year | costs and | ||||||||||||||||
expenses | |||||||||||||||||
Year Ended May 31, 2012 | |||||||||||||||||
Allowance for deferred tax asset | 1,134 | 208 | (146 | ) | (b) | 1,196 | |||||||||||
Allowance for sales returns and doubtful accounts | 485 | 4,859 | (4,411 | ) | (a) | 933 | |||||||||||
Totals | $ | 1,619 | $ | 5,067 | $ | (4,557 | ) | $ | 2,129 | ||||||||
Year Ended May 31, 2013 | |||||||||||||||||
Allowance for deferred tax asset | 1,196 | — | (484 | ) | (b) | 712 | |||||||||||
Allowance for sales returns and doubtful accounts | 933 | 4,134 | (3,795 | ) | (a) | 1,272 | |||||||||||
Totals | $ | 2,129 | $ | 4,134 | $ | (4,279 | ) | $ | 1,984 | ||||||||
Year Ended May 31, 2014 | |||||||||||||||||
Allowance for deferred tax asset | 712 | 819 | — | (b) | 1,531 | ||||||||||||
Allowance for sales returns and doubtful accounts | 1,272 | 7,342 | (6,878 | ) | (a) | 1,736 | |||||||||||
Totals | $ | 1,984 | $ | 8,161 | $ | (6,878 | ) | $ | 3,267 | ||||||||
(a) | Previously reserved sales returns and accounts written off as uncollectible. | ||||||||||||||||
(b) | Use of fully reserved capital losses and expiration of fully reserved state tax credits. |
Basis_of_Presentation_Business1
Basis of Presentation, Business Description and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||||
31-May-14 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Basis of Presentation and Description of Business | Basis of Presentation and Description of Business | |||||||||||||||
The consolidated financial statements include the accounts of AngioDynamics, Inc. and its wholly owned subsidiaries, RITA Medical Systems, LLC, AngioDynamics UK Limited, AngioDynamics Netherlands B.V., NM Holding Company, Inc. (Navilyst) since May 22, 2012 and Vortex Medical, Inc. since October 15, 2012, and Clinical Devices B.V. since August 15, 2013, (collectively, the “Company”). We design, manufacture and sell a wide range of medical, surgical and diagnostic devices used by professional healthcare providers for vascular access, for the treatment of peripheral vascular disease and in oncology and surgical settings. Our devices are generally used in minimally invasive, image-guided procedures. Most of our products are intended to be used once and then discarded, or they may be temporarily implanted for short- or long-term use. | ||||||||||||||||
Fiscal Year | Fiscal Year | |||||||||||||||
We report on a fiscal year ending May 31. | ||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||||||||||||||
We consider all unrestricted highly liquid investments purchased with an initial maturity of less than three months to be cash equivalents. We maintain cash and cash equivalent balances with financial institutions in the United States in excess of amounts insured by the Federal Deposit Insurance Corporation. | ||||||||||||||||
Marketable Securities | Marketable Securities | |||||||||||||||
Marketable securities, which are principally government agency bonds, auction rate investments and corporate commercial paper, are classified as “available-for-sale securities” and are reported at fair value, with unrealized gains and losses excluded from operations and reported as a component of accumulated other comprehensive income (loss), net of the related tax effects, in stockholders’ equity. Cost is determined using the specific identification method. We hold investments in auction rate securities in order to generate higher than typical money market rate investment returns. Auction rate securities typically are high credit quality, generally achieved with municipal bond insurance. Credit risks are eased by the historical track record of bond insurers, which back a majority of this market. Sell orders for any security traded through an auction process could exceed bids and, in such cases, the auction fails and we may be unable to liquidate our position in the securities in the near term. During fiscal years 2014 and 2013, we had 1.8 million in investments in two auction rate securities issued by New York state and local government authorities that failed auctions. The authorities are current in their interest payments on the securities. | ||||||||||||||||
Accounts Receivable | Accounts Receivable | |||||||||||||||
Accounts receivable, principally trade, are generally due within 30 to 90 days and are stated at amounts due from customers, net of an allowance for sales returns and doubtful accounts. We perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and the customer’s current creditworthiness, as determined by a review of their current credit information. We continuously monitor aging reports, collections and payments from customers, and a provision for estimated credit losses is maintained based upon our historical experience and any specific customer collection issues that have been identified. While such credit losses have historically been within our expectations and the provisions established, we cannot guarantee that the same credit loss rates will be experienced in the future. We write off accounts receivable when they are determined to be uncollectible. | ||||||||||||||||
Inventories | Inventories | |||||||||||||||
Inventories are stated at the lower of cost (using the first-in, first-out method) or market. Appropriate consideration is given to deterioration, obsolescence and other factors in evaluating net realizable value. | ||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment | |||||||||||||||
Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. We evaluate these assets for impairment periodically or as changes in circumstances or the occurrence of events suggest the remaining value is not recoverable. Expenditures for repairs and maintenance are charged to expense as incurred. Renewals and betterments are capitalized. | ||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | |||||||||||||||
Intangible assets other than goodwill, indefinite-lived trademarks and acquired IPR&D are amortized over their estimated useful lives, which range between three and twenty years, on either a straight-line basis over the expected period of benefit or as revenues are earned from the sales of the related products. We periodically review the estimated useful lives of our intangible assets and review such assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets is not recoverable. Our determination of impairment is based on estimates of future cash flows. If an intangible asset is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset. | ||||||||||||||||
Acquired IPR&D has an indefinite life and is not amortized until completion and development of the project, at which time the IPR&D becomes an amortizable asset. If the related project is not completed in a timely manner or the project is terminated or abandoned, we may have an impairment related to the IPR&D, calculated as the excess of the asset’s carrying value over its fair value. As of May 31, 2014, we have one IPR&D asset which was acquired as part of the Clinical Devices acquisition with a value of $3.6 million. | ||||||||||||||||
Our policy defines IPR&D as the value assigned to those projects for which the related products have not received regulatory approval and have no alternative future use. Determining the portion of the purchase price allocated to IPR&D requires us to make significant estimates. The amount of the purchase price allocated to IPR&D is determined by estimating the future cash flows of each project or technology and discounting the net cash flows back to their present values. The discount rate used is determined at the time of measurement in accordance with accepted valuation methods. These methodologies include consideration of the risk of the project not achieving commercial feasibility. | ||||||||||||||||
At the time of acquisition, we expect that all acquired IPR&D will reach technological feasibility, but there can be no assurance that the commercial viability of these products will actually be achieved. The nature of the efforts to develop the acquired technologies into commercially viable products consists principally of planning, designing, and conducting clinical trials necessary to obtain regulatory approvals. The risks associated with achieving commercialization include, but are not limited to, delay or failure to obtain regulatory approvals to conduct clinical trials, delay or failure to obtain required market clearances, or delays or issues with patent issuance, or validity and litigation. If commercial viability were not achieved, we would likely look to other alternatives to provide these therapies. | ||||||||||||||||
Goodwill and other intangible assets that have indefinite useful lives are not amortized, but rather, are tested for impairment annually or more frequently if impairment indicators arise. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. Goodwill and intangible assets have been recorded at either incurred or allocated cost. Allocated costs were based on respective fair market values at the date of acquisition. We have one intangible asset which has been assigned an indefinite life, the NAMIC trademark that was acquired as part of our acquisition of Navilyst, and is valued at $28.6 million. | ||||||||||||||||
For goodwill, the impairment test requires a comparison of the estimated fair value of the reporting unit to which the goodwill is assigned to the sum of the carrying value of the assets and liabilities of that unit. If the sum of the carrying value of the assets and liabilities of a reporting unit exceeds the fair value of the reporting unit, the carrying value of the reporting unit’s goodwill is reduced to its implied fair value through an adjustment to the goodwill balance, resulting in an impairment charge. Our determination of impairment is based on estimates of future cash flows. | ||||||||||||||||
Revenue Recognition | Revenue Recognition | |||||||||||||||
We recognize revenue when the following four basic criteria has been met: (i) persuasive evidence that an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is reasonably assured; and (iv) product delivery has occurred or services have been rendered. We recognize revenue, net of sales taxes assessed by any governmental authority, as products are shipped, based on shipping terms, and when title and risk of loss passes to customers. We negotiate shipping and credit terms on a customer-by-customer basis and products are shipped at an agreed upon price. All product returns must be pre-approved by us and customers may be subject to a 20% restocking charge. To be accepted, a returned product must be unadulterated, undamaged and have at least twelve months remaining prior to its expiration date. | ||||||||||||||||
Research and Development | Research and Development | |||||||||||||||
Research and development costs, including salaries, consulting fees, building costs, utilities and administrative expenses are related to developing new products, enhancing existing products, validating new and enhanced products, managing clinical, regulatory and medical affairs and our intellectual property and are expensed as incurred. | ||||||||||||||||
Shipping and Handling Costs | Shipping and Handling Costs | |||||||||||||||
Shipping and handling costs, associated with the distribution of finished products to customers, are recorded in costs of goods sold and are recognized when the related finished product is shipped to the customer. Amounts charged to customers for shipping are recorded in net sales. | ||||||||||||||||
Income Taxes | Income Taxes | |||||||||||||||
Deferred income taxes are recognized for temporary differences between financial statement and income tax bases of assets and liabilities and loss carryforwards and tax credit carryforwards for which income tax benefits are expected to be realized in future years. A valuation allowance has been established to reduce deferred tax assets, if it is more likely than not that all, or some portion, of such deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period which includes the enactment date. The deferred tax asset includes net operating losses acquired as part of the acquisitions of Rita, Vortex and Navilyst. These losses could be significantly limited under Internal Revenue Code (“IRC”) Section 382. An analysis of RITA’s ownership changes as defined in IRC Section 382 shows that approximately $15.8 million (of which $7.1 million had expired as of May 31, 2014) of federal net operating losses will not be utilized due to limitations. In addition, it is estimated that $13.6 million of Rita state net operating losses will expire prior to utilization. An analysis of Vortex’s ownership changes as defined in IRC Section 382 shows that all net operating losses will be utilized prior to expiration. A similar analysis of Navilyst’s ownership changes as defined in IRS Section 382 shows that approximately $17.5 million of federal net operating losses will not be utilized due to limitations. In addition, it is estimated that $13.0 million of Navilyst’s state net operating losses will expire prior to utilization. The gross deferred tax asset related to the net operating losses reflects these limitations. | ||||||||||||||||
We intend to reinvest indefinitely any of our unrepatriated foreign earnings as of May 31, 2014, therefore, we have not provided for U.S. income taxes on these undistributed earnings of our foreign subsidiaries. If these earnings were distributed, we may be subject to both foreign withholding taxes and U.S. income taxes. Determination of the amount of this unrecognized deferred income tax liability is not practical. | ||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||||||||||||||
Our financial instruments include cash and cash equivalents, accounts receivable, marketable securities, accounts payable, interest rate swap agreement and contingent earn outs related to the acquisitions of Vortex, Microsulis and Clinical Devices. The carrying amount of cash and cash equivalents, accounts receivable, marketable securities and accounts payable approximates fair value due to the immediate or short-term maturities. The interest rate swap agreement has been recorded at its fair value based on a valuation received from an independent third party. Marketable securities, with the exception of one auction rate security, are carried at their fair value as determined by quoted market prices. The contingent earn out has been recorded at fair value using the income approach. | ||||||||||||||||
Our accounting policy defines fair value as the exchange 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 liability in an orderly transaction between market participants on the measurement date. This policy establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy describes three levels of inputs that may be used to measure fair value which are provided in the table below. | ||||||||||||||||
Level 1 | Quoted prices in active markets for identical assets or liabilities. Level 1 assets include bank time deposits, money market funds, mutual funds and U.S. Treasury securities that are traded in an active exchange market. | |||||||||||||||
Level 2 | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include US government securities and corporate bonds. When quoted market prices are unobservable, we obtain pricing information from an independent pricing vendor. The pricing vendor uses various pricing models for each asset class that are consistent with what other market participants would use. The inputs and assumptions to the model of the pricing vendor are derived from market observable sources including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and other market-related data. Since many fixed income securities do not trade on a daily basis, the methodology of the pricing vendor uses available information as applicable such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. The pricing vendor considers all available market observable inputs in determining the evaluation for a security. Thus, certain securities may not be priced using quoted prices, but rather determined from market observable information. These investments are included in Level 2 and primarily comprise our portfolio of corporate and government fixed income securities. Additionally included in Level 2 are interest rate swap agreements which are valued using a mid-market valuation model. | |||||||||||||||
Level 3 | Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category currently includes the auction rate securities where independent pricing information was not able to be obtained and the contingent Earn out related to the acquisition of Vortex and Microsulis. Our investments in auction-rate securities were classified as Level 3 as quoted prices were unavailable since these auction rate securities issued by New York state and local government authorities failed auction. Due to limited market information, we utilized a discounted cash flow (“DCF”) model to derive an estimate of fair value for all periods presented. The assumptions used in preparing the DCF model included estimates with respect to the amount and timing of future interest and principal payments, forward projections of the interest rate benchmarks, the probability of full repayment of the principal considering the credit quality and guarantees in place, and the rate of return required by investors to own such securities given the current liquidity risk associated with auction-rate securities. The contingent earn outs were valued utilizing a discounted cash flow method as detailed below. | |||||||||||||||
The following tables provide information by level for assets and liabilities that are measured at fair value (in thousands): | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||
using inputs considered as: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at May 31, 2014 | |||||||||||||
Financial Assets | ||||||||||||||||
Cash equivalents | ||||||||||||||||
Money market funds | $ | 445 | $ | — | $ | — | $ | 445 | ||||||||
Total | 445 | — | — | 445 | ||||||||||||
Marketable securities | ||||||||||||||||
U.S. government agency obligations | — | — | 1,809 | 1,809 | ||||||||||||
Total | — | — | 1,809 | 1,809 | ||||||||||||
Total Financial Assets | $ | 445 | $ | — | $ | 1,809 | $ | 2,254 | ||||||||
Financial Liabilities | ||||||||||||||||
Interest rate swap agreements | $ | — | $ | 555 | $ | — | $ | 555 | ||||||||
Contingent liability for acquisition earn out | — | — | 67,331 | 67,331 | ||||||||||||
Total Financial Liabilities | $ | — | $ | 555 | $ | 67,331 | $ | 67,886 | ||||||||
Fair Value Measurements | ||||||||||||||||
using inputs considered as: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at May 31, 2013 | |||||||||||||
Financial Assets | ||||||||||||||||
Cash equivalents | ||||||||||||||||
Money market funds | $ | 114 | $ | — | $ | — | $ | 114 | ||||||||
Total | 114 | — | — | 114 | ||||||||||||
Marketable securities | ||||||||||||||||
Corporate bond securities | — | 303 | — | 303 | ||||||||||||
U.S. government agency obligations | — | — | 1,850 | 1,850 | ||||||||||||
Total | — | 303 | 1,850 | 2,153 | ||||||||||||
Total Financial Assets | $ | 114 | $ | 303 | $ | 1,850 | $ | 2,267 | ||||||||
Financial Liabilities | ||||||||||||||||
Interest rate swap agreements | $ | — | $ | 522 | $ | — | $ | 522 | ||||||||
Contingent liability for acquisition earn out | — | — | 75,049 | 75,049 | ||||||||||||
Total Financial Liabilities | $ | — | $ | 522 | $ | 75,049 | $ | 75,571 | ||||||||
There were no transfers in and out of Level 1 and 2 measurements for the year ended May 31, 2014. During the year ended May 31, 2013, the Vortex and Microsulis contingent earn outs discussed below were added to Level 3 fair value instruments. | ||||||||||||||||
The components of Level 3 fair value instruments as of May 31, 2014 are shown below (in thousands): | ||||||||||||||||
Financial Assets | Financial Liabilities | |||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||
Using Significant | Using Significant | |||||||||||||||
Unobservable Inputs | Unobservable Inputs | |||||||||||||||
(Level 3) | ||||||||||||||||
Balance at May 31, 2013 | $ | 1,850 | $ | 75,049 | ||||||||||||
Total gains or losses (realized/unrealized): | ||||||||||||||||
Earnings revaluation gain - Included in earnings | — | (5,084 | ) | |||||||||||||
Earnings revaluation expense - Included in earnings | — | 3,276 | ||||||||||||||
Included in other comprehensive income | (16 | ) | — | |||||||||||||
Purchases, issuances and settlements | (25 | ) | (10,880 | ) | ||||||||||||
Transfers in and/or (out) of Level 3 | — | — | ||||||||||||||
Contingent consideration - Clinical Devices | — | 4,970 | ||||||||||||||
Balance at May 31, 2014 | $ | 1,809 | $ | 67,331 | ||||||||||||
Contingent Liability for Acquisition Earn Outs | ||||||||||||||||
Certain of our business combinations involve the potential for the payment of future contingent consideration upon the achievement of certain product development milestones and/or various other favorable operating conditions. Payment of the additional consideration is generally contingent on the acquired company reaching certain performance milestones, including attaining specified revenue levels or achieving product development targets. Contingent consideration is recorded at the estimated fair value of the contingent milestone payments on the acquisition date. The fair value of the contingent milestone consideration is remeasured at the estimated fair value at each reporting period with the change in fair value recognized as income or expense within change in fair value of contingent consideration in the consolidated statements of income. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. | ||||||||||||||||
Contingent consideration liabilities will be remeasured to fair value each reporting period using projected net sales, discount rates, probabilities of payment and projected payment dates. Projected contingent payment amounts are discounted back to the current period using a discounted cash flow model. Projected net sales are based on our internal projections and extensive analysis of the target market and the sales potential. Increases in projected net sales and probabilities of payment may result in higher fair value measurements in the future. Increases in discount rates and the projected time to payment may result in lower fair value measurements in the future. Increases or decreases in any valuation inputs in isolation may result in a significantly lower or higher fair value measurement in the future. | ||||||||||||||||
The recurring Level 3 fair value measurements of the contingent consideration liability related to the Vortex and Microsulis acquisitions include the following significant unobservable inputs ($ in thousands): | ||||||||||||||||
Fair value at | Valuation | Unobservable | Range | |||||||||||||
May 31, 2014 | Technique | Input | ||||||||||||||
Revenue based payments | $ | 63,961 | Discounted cash flow | Discount rate | 4% - 10% | |||||||||||
Probability of payment | 75% - 100% | |||||||||||||||
Projected fiscal year of payment | 2015 - 2022 | |||||||||||||||
Milestone based payments | 3,370 | Discounted cash flow | Discount rate | 16% | ||||||||||||
Probability of payment | 75% - 100% | |||||||||||||||
Projected fiscal year of payment | 2015 | |||||||||||||||
$ | 67,331 | |||||||||||||||
At May 31, 2014, the estimated potential amount of undiscounted future contingent consideration that we expect to pay as a result of all completed acquisitions is approximately $78.1 million. The milestones associated with the contingent consideration must be reached in future periods ranging from fiscal years 2015 to 2022 in order for the consideration to be paid. | ||||||||||||||||
The fair value of contingent milestone payments associated with the acquisitions was remeasured as of May 31, 2014 and $56.4 million was reflected in “Contingent consideration, net of current portion” and $10.9 million was reflected in “Current portion of contingent consideration” on the consolidated balance sheet. | ||||||||||||||||
The following table provides a reconciliation of the beginning and ending balances of contingent milestone payments associated with the Vortex, Microsulis and Clinical Devices acquisitions measured at fair value that used significant unobservable inputs (Level 3) (in thousands): | ||||||||||||||||
Balance at May 31, 2013 | $ | 75,049 | ||||||||||||||
Purchase price contingent consideration | 4,970 | |||||||||||||||
Contingent payments | (10,880 | ) | ||||||||||||||
Earnings revaluation gain | (5,084 | ) | ||||||||||||||
Earnings revaluation expense | 3,276 | |||||||||||||||
Balance at May 31, 2014 | $ | 67,331 | ||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments | |||||||||||||||
We are exposed to market risk due to changes in interest rates. We periodically enter into certain derivative financial instruments to hedge the underlying economic exposure. The derivative instruments used are floating-to-fixed rate interest rate swaps, which are subject to cash flow hedge accounting treatment. The cash flow hedge was terminated in May 2012 in conjunction with the early payoff of the related debt. We recognized interest expense of $61,000 in fiscal 2012, on the cash flow hedge. | ||||||||||||||||
In accordance with authoritative guidance on Accounting for Derivatives and Hedging Activities, as amended, our 2002 interest rate swap agreement qualified for hedge accounting under GAAP and the 2006 interest rate swap agreement did not. Both were presented in the consolidated financial statements at their fair value. Changes in the fair value of derivative financial instruments were either recognized periodically in income or in stockholders’ equity as a component of accumulated other comprehensive income (loss) depending on whether the derivative financial instrument qualifies for hedge accounting and, if so, whether it qualifies as a fair value or cash flow hedge. Generally, the changes in the fair value of derivatives accounted for as fair value hedges are recorded in income along with the portions of the changes in the fair value of hedged items that relate to the hedged risks. Changes in the fair value of derivatives accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in accumulated other comprehensive income (loss). Both the 2002 and the 2006 swap agreements were terminated in May 2012 in conjunction with the early payoff of the related debt. | ||||||||||||||||
In June 2012, we entered in an interest rate swap agreement, with an initial notional amount of $100 million, to limit the effect of variability due to interest rates on the loan. The Swap Agreement, which qualifies for hedge accounting under authoritative guidance, is a contract to exchange floating interest rate payments for fixed interest rate payments of 3.26% of the outstanding balance of the loan over the life of the agreement without the exchange of the underlying notional amounts. | ||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation | |||||||||||||||
We recognize compensation expense for all share-based payment awards made to our employees and directors including employee stock options and employee stock purchases related to our Stock Purchase Plan based on estimated fair values. We recognize compensation expense for our stock awards on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. | ||||||||||||||||
The amount of stock-based compensation recognized is based on the value of the portion of awards that are ultimately expected to vest. Guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered option. We currently expect, based on an analysis of our historical forfeitures, that approximately 88% of our options will vest annually, and we have therefore applied a 12% annual forfeiture rate in determining the stock-based compensation charge recorded. We will re-evaluate this estimate periodically and adjust the forfeiture rate on a prospective basis as necessary. At the end of the vesting period, the actual stock-based compensation expense recognized will only be for those shares that actually vest. | ||||||||||||||||
For the fiscal years ended May 31, 2014, May 31, 2013 and May 31, 2012, we used the Black-Scholes option-pricing model (“Black-Scholes”) as our method of valuation and a single option award approach. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of share based payment awards on the date of the grant as determined by the Black-Scholes model is affected by our stock price as well as other assumptions. These assumptions include, but are not limited to the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, and a risk-free interest rate. The risk-free interest rate is based on factual data derived from public sources. The expected stock-price volatility and option life assumptions require significant judgment which makes them critical accounting estimates. | ||||||||||||||||
We utilize our historical volatility when estimating expected stock price volatility. We use yield rates on U.S. Treasury securities for a period approximating the expected term of the award to estimate the risk-free interest rate. The expected term is based on our actual historical experience. The dividend yield is based on the history and expectation of dividend payments. We have not paid dividends in the past nor do we expect to pay dividends in the foreseeable future. | ||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share | |||||||||||||||
Basic earnings per share are based on the weighted average number of common shares outstanding without consideration of potential common stock. Diluted earnings per share further includes the dilutive effect of potential common stock consisting of stock options, warrants, restricted stock units and shares issuable upon conversion of convertible debt into shares of common stock, provided that the inclusion of such securities is not antidilutive. | ||||||||||||||||
Use of Estimates | Use of Estimates | |||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||||
Supplier Concentrations | Supplier Concentrations | |||||||||||||||
We are dependent upon the ability of our suppliers to provide products on a timely basis and on favorable pricing terms. The loss of our principal suppliers or a significant reduction in product availability from these suppliers could have a material adverse effect on us. We believe that our relationships with these suppliers are satisfactory. | ||||||||||||||||
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements | |||||||||||||||
In February 2013, the FASB expanded the disclosure requirements related to changes in accumulated other comprehensive income (AOCI). The new guidance requires disclosure of the amount of income (or loss) reclassified out of AOCI to each respective line item on the statement of operations where net income is presented. The guidance allows disclosure of the reclassification either in the notes to the financial statements or parenthetically on the face of the financial statements. This requirement was effective for reporting periods beginning after December 15, 2012 (fourth quarter of our fiscal year 2013). Since the guidance only impacts disclosure requirements, its adoption did not have a material impact on our consolidated financial statements. | ||||||||||||||||
In July 2013, the FASB issued guidance related to the presentation of certain tax information. This new pronouncement provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, or similar tax loss, or a tax credit carryforward exists. This pronouncement was effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2013 (our fiscal year 2015). Since the guidance only impacts presentation requirements, its adoption will not have a material impact on our consolidated financial statements. | ||||||||||||||||
In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). ASU 2014-09 provides a single, comprehensive accounting model for revenues arising from contracts with customers that supersedes most of the existing revenue recognition guidance, including industry-specific guidance. Under this model, revenue is recognized at an amount that an entity expects to be entitled to upon transferring control of goods or services to a customer, as opposed to when risks and rewards transfer to a customer under existing revenue recognition guidance. ASU 2014-09 is effective for the Company beginning in its fiscal year 2018, and may be applied retrospectively to all prior periods presented or through a cumulative adjustment to the opening retained earnings balance in the year of adoption. The Company is currently in the process of evaluation the impact of ASU 2014-09 on its consolidated financial statements. |
Basis_of_Presentation_Business2
Basis of Presentation, Business Description and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||||
31-May-14 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Fair value of assets and liabilities measured on recurring basis | The following tables provide information by level for assets and liabilities that are measured at fair value (in thousands): | |||||||||||||||
Fair Value Measurements | ||||||||||||||||
using inputs considered as: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at May 31, 2014 | |||||||||||||
Financial Assets | ||||||||||||||||
Cash equivalents | ||||||||||||||||
Money market funds | $ | 445 | $ | — | $ | — | $ | 445 | ||||||||
Total | 445 | — | — | 445 | ||||||||||||
Marketable securities | ||||||||||||||||
U.S. government agency obligations | — | — | 1,809 | 1,809 | ||||||||||||
Total | — | — | 1,809 | 1,809 | ||||||||||||
Total Financial Assets | $ | 445 | $ | — | $ | 1,809 | $ | 2,254 | ||||||||
Financial Liabilities | ||||||||||||||||
Interest rate swap agreements | $ | — | $ | 555 | $ | — | $ | 555 | ||||||||
Contingent liability for acquisition earn out | — | — | 67,331 | 67,331 | ||||||||||||
Total Financial Liabilities | $ | — | $ | 555 | $ | 67,331 | $ | 67,886 | ||||||||
Fair Value Measurements | ||||||||||||||||
using inputs considered as: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value at May 31, 2013 | |||||||||||||
Financial Assets | ||||||||||||||||
Cash equivalents | ||||||||||||||||
Money market funds | $ | 114 | $ | — | $ | — | $ | 114 | ||||||||
Total | 114 | — | — | 114 | ||||||||||||
Marketable securities | ||||||||||||||||
Corporate bond securities | — | 303 | — | 303 | ||||||||||||
U.S. government agency obligations | — | — | 1,850 | 1,850 | ||||||||||||
Total | — | 303 | 1,850 | 2,153 | ||||||||||||
Total Financial Assets | $ | 114 | $ | 303 | $ | 1,850 | $ | 2,267 | ||||||||
Financial Liabilities | ||||||||||||||||
Interest rate swap agreements | $ | — | $ | 522 | $ | — | $ | 522 | ||||||||
Contingent liability for acquisition earn out | — | — | 75,049 | 75,049 | ||||||||||||
Total Financial Liabilities | $ | — | $ | 522 | $ | 75,049 | $ | 75,571 | ||||||||
Fair value measurements using significant unobservable inputs | The components of Level 3 fair value instruments as of May 31, 2014 are shown below (in thousands): | |||||||||||||||
Financial Assets | Financial Liabilities | |||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||
Using Significant | Using Significant | |||||||||||||||
Unobservable Inputs | Unobservable Inputs | |||||||||||||||
(Level 3) | ||||||||||||||||
Balance at May 31, 2013 | $ | 1,850 | $ | 75,049 | ||||||||||||
Total gains or losses (realized/unrealized): | ||||||||||||||||
Earnings revaluation gain - Included in earnings | — | (5,084 | ) | |||||||||||||
Earnings revaluation expense - Included in earnings | — | 3,276 | ||||||||||||||
Included in other comprehensive income | (16 | ) | — | |||||||||||||
Purchases, issuances and settlements | (25 | ) | (10,880 | ) | ||||||||||||
Transfers in and/or (out) of Level 3 | — | — | ||||||||||||||
Contingent consideration - Clinical Devices | — | 4,970 | ||||||||||||||
Balance at May 31, 2014 | $ | 1,809 | $ | 67,331 | ||||||||||||
Summary showing the recurring fair value measurements of the contingent consideration liability | The recurring Level 3 fair value measurements of the contingent consideration liability related to the Vortex and Microsulis acquisitions include the following significant unobservable inputs ($ in thousands): | |||||||||||||||
Fair value at | Valuation | Unobservable | Range | |||||||||||||
May 31, 2014 | Technique | Input | ||||||||||||||
Revenue based payments | $ | 63,961 | Discounted cash flow | Discount rate | 4% - 10% | |||||||||||
Probability of payment | 75% - 100% | |||||||||||||||
Projected fiscal year of payment | 2015 - 2022 | |||||||||||||||
Milestone based payments | 3,370 | Discounted cash flow | Discount rate | 16% | ||||||||||||
Probability of payment | 75% - 100% | |||||||||||||||
Projected fiscal year of payment | 2015 | |||||||||||||||
$ | 67,331 | |||||||||||||||
Summary showing reconciliation of the contingent payments | The following table provides a reconciliation of the beginning and ending balances of contingent milestone payments associated with the Vortex, Microsulis and Clinical Devices acquisitions measured at fair value that used significant unobservable inputs (Level 3) (in thousands): | |||||||||||||||
Balance at May 31, 2013 | $ | 75,049 | ||||||||||||||
Purchase price contingent consideration | 4,970 | |||||||||||||||
Contingent payments | (10,880 | ) | ||||||||||||||
Earnings revaluation gain | (5,084 | ) | ||||||||||||||
Earnings revaluation expense | 3,276 | |||||||||||||||
Balance at May 31, 2014 | $ | 67,331 | ||||||||||||||
Reconciliation of the weighted-average number of common shares | The following table sets forth the reconciliation of the weighted-average number of common shares: | |||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Basic | 35,135,689 | 34,817,279 | 25,382,293 | |||||||||||||
Effect of dilutive securities | 304,161 | — | — | |||||||||||||
Diluted | 35,439,850 | 34,817,279 | 25,382,293 | |||||||||||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | |||
31-May-14 | ||||
Business Acquisition [Line Items] | ||||
Supplemental unaudited pro forma information | The following supplemental unaudited pro forma information presents our financial results as if the acquisition of Navilyst had occurred on June 1, 2010 (in thousands): | |||
For the year ended | ||||
May 31, | ||||
2012 | ||||
(unaudited) | ||||
Net sales | $ | 365,357 | ||
Net income | $ | 3,897 | ||
Microsulis Medical Ltd [Member] | ||||
Business Acquisition [Line Items] | ||||
Schedule of estimated fair value of the assets acquired and liabilities assumed | The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed (in thousands): | |||
Accounts receivable | $ | 364 | ||
Inventories | 687 | |||
Other current assets | 443 | |||
Fixed assets | 1,906 | |||
Intangibles | 12,500 | |||
Goodwill | 19,284 | |||
Total assets acquired | 35,184 | |||
Liabilities assumed | (1,634 | ) | ||
Total purchase price | $ | 33,550 | ||
Cash payment at closing | $ | 10,566 | ||
Cash payment for initial investment | 5,000 | |||
Present value of deferred payment | 4,820 | |||
Present value of contingent consideration liability | 13,164 | |||
Total purchase price | $ | 33,550 | ||
Vortex Medical [Member] | ||||
Business Acquisition [Line Items] | ||||
Schedule of estimated fair value of the assets acquired and liabilities assumed | The following table summarizes the estimated fair value of the assets acquired and liabilities assumed (in thousands): | |||
Cash and cash equivalents | $ | 339 | ||
Accounts receivable | 203 | |||
Inventories | 488 | |||
Other assets | 7 | |||
Deferred tax assets | 1,307 | |||
Intangibles | 72,430 | |||
Goodwill | 29,519 | |||
Total assets acquired | 104,293 | |||
Deferred tax liabilities | (28,340 | ) | ||
Liabilities assumed | (661 | ) | ||
Total purchase price | $ | 75,292 | ||
Cash payments at closing | $ | 15,105 | ||
Present value of contingent consideration liability | 60,302 | |||
Working capital adjustment | (115 | ) | ||
Total purchase price | $ | 75,292 | ||
Navilyst [Member] | ||||
Business Acquisition [Line Items] | ||||
Schedule of estimated fair value of the assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in thousands): | |||
Cash and cash equivalents | $ | 7,683 | ||
Accounts receivable | 19,069 | |||
Inventories | 26,851 | |||
Prepaid expenses and other current assets | 5,504 | |||
Property, plant and equipment | 34,017 | |||
Deferred tax assets | 34,209 | |||
Goodwill | 144,705 | |||
Intangibles | 107,100 | |||
Other long-term assets | 497 | |||
Total assets acquired | 379,635 | |||
Liabilities assumed | (18,287 | ) | ||
Total net assets acquired | $ | 361,348 | ||
Marketable_Securities_and_Inve1
Marketable Securities and Investments (Tables) | 12 Months Ended | |||||||||||||||
31-May-14 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||
Marketable securities | As of May 31, 2014, marketable securities consisted of the following: | |||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
cost | Unrealized | Unrealized | Value | |||||||||||||
Gains | Losses | |||||||||||||||
(in thousands) | ||||||||||||||||
Available-for-sales securities | ||||||||||||||||
U.S. government agency obligations | $ | 1,825 | $ | — | $ | (16 | ) | $ | 1,809 | |||||||
Corporate bond securities | — | — | — | — | ||||||||||||
$ | 1,825 | $ | — | $ | (16 | ) | $ | 1,809 | ||||||||
As of May 31, 2013, marketable securities consisted of the following: | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
cost | Unrealized | Unrealized | Value | |||||||||||||
Gains | Losses | |||||||||||||||
(in thousands) | ||||||||||||||||
Available-for-sales securities | ||||||||||||||||
U.S. government agency obligations | $ | 1,850 | $ | — | $ | — | $ | 1,850 | ||||||||
Corporate bond securities | 303 | — | — | 303 | ||||||||||||
$ | 2,153 | $ | — | $ | — | $ | 2,153 | |||||||||
Amortized cost and fair value of marketable securities by contractual maturity | The amortized cost and fair value of marketable securities as of May 31, 2014, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | |||||||||||||||
Amortized | Fair | |||||||||||||||
cost | Value | |||||||||||||||
(in thousands) | ||||||||||||||||
As of May 31, 2014: | ||||||||||||||||
Due in one year or less | $ | — | $ | — | ||||||||||||
Due after one through five years | — | — | ||||||||||||||
Due after five through twenty years | 1,825 | 1,809 | ||||||||||||||
$ | 1,825 | $ | 1,809 | |||||||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
31-May-14 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventories | As of May 31, 2014 and 2013, inventories, net consisted of the following: | |||||||
31-May-14 | 31-May-13 | |||||||
(in thousands) | ||||||||
Raw materials | $ | 24,734 | $ | 18,362 | ||||
Work in process | 11,992 | 11,006 | ||||||
Finished goods | 24,508 | 25,711 | ||||||
Total | $ | 61,234 | $ | 55,079 | ||||
Prepaid_Expenses_and_Other_Tab
Prepaid Expenses and Other (Tables) | 12 Months Ended | |||||||
31-May-14 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||
Prepaid expenses and other | As of May 31, 2014 and 2013, prepaid expenses and other consisted of the following: | |||||||
31-May-14 | 31-May-13 | |||||||
(in thousands) | ||||||||
Deposits | $ | 3,356 | $ | 4,029 | ||||
Other prepaid taxes | 202 | 458 | ||||||
Licensee fees | 604 | 597 | ||||||
Software licenses | 130 | 520 | ||||||
Trade shows | 62 | 487 | ||||||
Rent | 114 | 135 | ||||||
Insurance | 395 | 120 | ||||||
Interest receivable | 1 | 2 | ||||||
Other | 607 | 937 | ||||||
Total | $ | 5,471 | $ | 7,285 | ||||
Property_Plant_and_Equipment_a1
Property, Plant and Equipment, at Cost (Tables) | 12 Months Ended | |||||||||
31-May-14 | ||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||
Property, plant and equipment | Property, plant and equipment are summarized as follows: | |||||||||
31-May-14 | 31-May-13 | Estimated | ||||||||
useful lives | ||||||||||
(in thousands) | ||||||||||
Building and building improvements | $ | 33,126 | $ | 30,150 | 39 years | |||||
Machinery and equipment | 31,880 | 30,870 | 3 to 8 years | |||||||
Computer software and equipment | 25,836 | 16,390 | 3 to 10 years | |||||||
Construction in progress | 12,564 | 13,373 | ||||||||
103,406 | 90,783 | |||||||||
Less accumulated depreciation and amortization | (37,845 | ) | (29,421 | ) | ||||||
65,561 | 61,362 | |||||||||
Land and land improvements | 1,029 | 1,029 | ||||||||
$ | 66,590 | $ | 62,391 | |||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||||||||
31-May-14 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Adjustments to goodwill | Adjustments to goodwill for the fiscal year ended May 31, 2014 and May 31, 2013 are as follows (in thousands): | |||||||||||||
Total | ||||||||||||||
Balance, May 31, 2012 | $ | 309,091 | ||||||||||||
Goodwill recognized from Vortex business combination | 29,519 | |||||||||||||
Goodwill recognized from Microsulis asset acquisition | 19,284 | |||||||||||||
Adjustments to Navilyst purchase price allocation | (2,257 | ) | ||||||||||||
Balance, May 31, 2013 | $ | 355,637 | ||||||||||||
Acquisition of Clinical Devices B.V. | 4,836 | |||||||||||||
Balance, May 31, 2014 | $ | 360,473 | ||||||||||||
Intangible assets | As of May 31, 2014 and 2013, intangible assets consisted of the following: | |||||||||||||
31-May-14 | ||||||||||||||
Gross carrying | Accumulated | Net carrying | Weighted average | |||||||||||
value | amortization | value | useful life | |||||||||||
(in thousands) | (years) | |||||||||||||
Product technologies | $ | 150,298 | $ | (32,930 | ) | $ | 117,368 | 10.2 | ||||||
Customer relationships | 86,645 | (37,848 | ) | 48,797 | 11.9 | |||||||||
Trademark—NAMIC | 28,600 | — | 28,600 | Indefinite | ||||||||||
In process R&D Acquired | 3,600 | — | 3,600 | Indefinite | ||||||||||
Licenses | 7,639 | (5,211 | ) | 2,428 | 8.4 | |||||||||
Trademarks | 6,345 | (1,882 | ) | 4,463 | 8 | |||||||||
Distributor relationships | 900 | (900 | ) | — | 3 | |||||||||
$ | 284,027 | $ | (78,771 | ) | $ | 205,256 | ||||||||
31-May-13 | ||||||||||||||
Gross carrying | Accumulated | Net carrying | Weighted avg | |||||||||||
value | amortization | value | useful life | |||||||||||
(in thousands) | (years) | |||||||||||||
Product technologies (1) | $ | 150,181 | $ | (24,835 | ) | $ | 125,346 | 10.6 | ||||||
Customer relationships (1) | 84,479 | (30,770 | ) | 53,709 | 14.8 | |||||||||
Trademark—NAMIC | 28,600 | — | 28,600 | Indefinite | ||||||||||
Licenses | 6,302 | (4,501 | ) | 1,801 | 9 | |||||||||
Trademarks | 6,275 | (1,058 | ) | 5,217 | 9.9 | |||||||||
Distributor relationships | 900 | (900 | ) | — | 3 | |||||||||
$ | 276,737 | $ | (62,064 | ) | $ | 214,673 | ||||||||
Expected amortization expense | Annual amortization of these intangible assets is expected to approximate the following amounts for each of the next five fiscal years (in thousands): | |||||||||||||
2015 | $ | 15,693 | ||||||||||||
2016 | 15,696 | |||||||||||||
2017 | 16,355 | |||||||||||||
2018 | 17,385 | |||||||||||||
2019 | 19,928 | |||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
31-May-14 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of income (loss) before income tax provision | The components of income (loss) before income tax provision for the years ended May 31 are as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
(Loss) income before tax provision: | ||||||||||||
US | $ | 5,199 | $ | (3,614 | ) | $ | (5,291 | ) | ||||
Non-US | 541 | 2,027 | (131 | ) | ||||||||
$ | 5,740 | $ | (1,587 | ) | $ | (5,422 | ) | |||||
Summary of Income tax (benefit) provision analyzed by category | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Current | ||||||||||||
Federal | $ | (133 | ) | $ | (1,622 | ) | $ | 448 | ||||
State and local | 99 | (52 | ) | (19 | ) | |||||||
Non U.S. | 157 | 468 | 18 | |||||||||
123 | (1,206 | ) | 447 | |||||||||
Deferred | 2,951 | 830 | (686 | ) | ||||||||
$ | 3,074 | $ | (376 | ) | $ | (239 | ) | |||||
Summary of significant components of deferred income tax (benefit) expense from operations | The significant components of deferred income tax (benefit) expense from operations for the years ended May 31 consist of the following: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Deferred tax benefit | $ | 1,778 | $ | 830 | $ | (1,773 | ) | |||||
Impact of NYS tax reform legislation | 1,173 | — | — | |||||||||
Net operating loss carryforward | — | — | 1,087 | |||||||||
$ | 2,951 | $ | 830 | $ | (686 | ) | ||||||
Summary of deferred tax asset and liabilities | ||||||||||||
May 31, 2014 | May 31, 2013 | |||||||||||
(in thousands) | ||||||||||||
Deferred tax assets | ||||||||||||
Net operating loss carryforward | $ | 48,749 | $ | 47,516 | ||||||||
Stock-based compensation | 4,851 | 4,813 | ||||||||||
Federal and state R&D tax credit carryforward | 1,249 | 490 | ||||||||||
Inventories | 875 | 1,713 | ||||||||||
State tax credits | — | 1,326 | ||||||||||
Expenses incurred not currently deductible | 1,379 | 880 | ||||||||||
Capital loss carryforwards | — | 95 | ||||||||||
Deferred revenue | 154 | 1,147 | ||||||||||
Gross deferred tax asset | 57,257 | 57,980 | ||||||||||
Deferred tax liabilities | ||||||||||||
Excess tax over book depreciation and amortization | 41,843 | 39,252 | ||||||||||
Impairment of long-lived assets | — | — | ||||||||||
41,843 | 39,252 | |||||||||||
Valuation Allowance | (1,532 | ) | (712 | ) | ||||||||
Net deferred tax asset | $ | 13,882 | $ | 18,016 | ||||||||
Summary of Income tax rate reconciliation | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in thousands) | ||||||||||||
Income tax (benefit) provision | $ | 3,074 | $ | (376 | ) | $ | (239 | ) | ||||
Effect of Graduated tax rates | 57 | 16 | (57 | ) | ||||||||
State income taxes, net of Federal tax benefit | (122 | ) | (95 | ) | (152 | ) | ||||||
State income tax credits, net of Federal tax benefit | — | 23 | 69 | |||||||||
Impact of Non US operations | 27 | 228 | (46 | ) | ||||||||
Tax-exempt interest | — | 2 | 4 | |||||||||
Research and development tax credit | 236 | 142 | 115 | |||||||||
Domestic Production Activities deduction | — | — | 71 | |||||||||
Nondeductible acquisition costs | — | (110 | ) | (1,144 | ) | |||||||
Nondeductible interest on contingent payments | (540 | ) | (130 | ) | — | |||||||
Nontaxable gain on revaluation of contingent consideration liability | 1,698 | — | — | |||||||||
Tax law change | (1,173 | ) | — | — | ||||||||
Effect of elimination of ASC 718 APIC pool | (440 | ) | — | — | ||||||||
Nondeductible stock-based compensation | (176 | ) | (108 | ) | (125 | ) | ||||||
Other nondeductible expenses | (384 | ) | (336 | ) | (336 | ) | ||||||
Overaccrual (underaccrual) of prior year Federal and state taxes | (249 | ) | 10 | 138 | ||||||||
Fully reserved capital losses | — | 179 | (208 | ) | ||||||||
Other | — | — | 12 | |||||||||
Income tax (benefit) provision at statutory tax rate of 35% | $ | 2,008 | $ | (555 | ) | $ | (1,898 | ) | ||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 12 Months Ended | |||||||
31-May-14 | ||||||||
Payables and Accruals [Abstract] | ||||||||
Accrued liabilities | As of May 31, 2014 and 2013, accrued liabilities consist of the following: | |||||||
May 31, | May 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Payroll and related expenses | $ | 8,114 | $ | 6,421 | ||||
Royalties | 2,620 | 2,034 | ||||||
Accrued severance | 765 | 1,602 | ||||||
Deferred revenue | 200 | 1,573 | ||||||
Sales and franchise taxes | 1,327 | 1,047 | ||||||
Interest rate swap liability | 555 | 523 | ||||||
Other | 3,071 | 3,156 | ||||||
Total | $ | 16,652 | $ | 16,356 | ||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | |||||||
31-May-14 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Summary of long-term debt | Following is a summary of long-term debt as of May 31, 2014 and 2013 (in thousands): | |||||||
May 31, 2014 | May 31, 2013 | |||||||
Bank notes | $ | 142,660 | $ | 142,500 | ||||
Less: current maturities | (5,000 | ) | (7,500 | ) | ||||
Long-term debt | $ | 137,660 | $ | 135,000 | ||||
Future minimum principal payments on long-term debt | As of May 31, 2014, future minimum principal payments on long-term debt were as follows (in thousands): | |||||||
2015 | $ | 5,000 | ||||||
2016 | 8,750 | |||||||
2017 | 13,750 | |||||||
2018 | 26,250 | |||||||
2019 | 42,500 | |||||||
$ | 96,250 | |||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
31-May-14 | |||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||
Schedule summarizes stock option activity | The following schedule summarizes our stock option activity as of and for the years ended May 31, 2014, May 31, 2013 and May 31, 2012: | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Shares | Weighted- | Weighted | Aggregate | Shares | Weighted- | Shares | Weighted- | ||||||||||||||||||||
average | average | intrinsic | average | average | |||||||||||||||||||||||
exercise | remaining | value (in | exercise | exercise | |||||||||||||||||||||||
price | contractual | thousands) | price | price | |||||||||||||||||||||||
life | |||||||||||||||||||||||||||
Outstanding at beginning of year | 2,768,928 | $ | 14.84 | 2,985,192 | $ | 15.69 | 2,680,390 | $ | 15.96 | ||||||||||||||||||
Granted | 391,175 | $ | 13.01 | 406,700 | $ | 11.4 | 1,434,000 | $ | 13.7 | ||||||||||||||||||
Exercised | (105,676 | ) | $ | 15.38 | (16,835 | ) | $ | 11.15 | (193,684 | ) | $ | 14.22 | |||||||||||||||
Forfeited | (278,646 | ) | $ | 17.45 | (589,787 | ) | $ | 17.45 | (917,126 | ) | $ | 14.22 | |||||||||||||||
Expired | (102,030 | ) | $ | 15.69 | (16,342 | ) | $ | 15.69 | (18,388 | ) | $ | 24.44 | |||||||||||||||
Outstanding at end of year | 2,673,751 | $ | 14.82 | 4.56 | $ | 17,540 | 2,768,928 | $ | 14.84 | 2,985,192 | $ | 15.69 | |||||||||||||||
Options exercisable at year-end | 1,675,790 | $ | 16.12 | 4.54 | $ | 12,906 | 1,601,028 | $ | 16.12 | 1,678,559 | $ | 17.01 | |||||||||||||||
Options expected to vest in future periods | 845,256 | $ | 13.31 | 5.06 | $ | 3,986 | 1,069,119 | $ | 13.31 | 1,075,473 | $ | 14.19 | |||||||||||||||
Summary of weighted average fair value of options granted | Weighted average fair value of options granted during the fiscal years ended May 31, is as follows: | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Weighted-average fair value of options granted during the year | $ | 4.1 | $ | 4.19 | $ | 5.62 | |||||||||||||||||||||
Schedule of weighted-average fair value assumptions | The fair value of the options granted under the 1997 and 2004 Plans was estimated at the date of grant using the Black-Scholes option-pricing model assuming no expected dividends and the following weighted-average assumptions: | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
Expected stock price volatility | 34.4 | % | 43.91 | % | 49.06 | % | |||||||||||||||||||||
Risk-free interest rate | 1.44 | % | 0.62 | % | 0.7 | % | |||||||||||||||||||||
Expected life of options | 4.74 years | 4.62 years | 4.59 years | ||||||||||||||||||||||||
Summary of options outstanding | The following information applies to options outstanding at May 31, 2013: | ||||||||||||||||||||||||||
Range of exercise prices | Number | Weighted- | Weighted- | Number | Weighted- | ||||||||||||||||||||||
outstanding | average | average | Exercisable | average | |||||||||||||||||||||||
remaining | exercise | exercise | |||||||||||||||||||||||||
life in | price | price | |||||||||||||||||||||||||
years | |||||||||||||||||||||||||||
$ 6.52 - $11.93 | 463,965 | 5.64 | $ | 11.37 | 65,832 | $ | 10.61 | ||||||||||||||||||||
$12.06 - $12.97 | 343,161 | 4.86 | 12.41 | 155,661 | 12.44 | ||||||||||||||||||||||
$13.18 - $13.85 | 432,426 | 3.38 | 13.35 | 321,348 | 13.36 | ||||||||||||||||||||||
$13.92 - $14.31 | 430,000 | 4.21 | 13.95 | 228,750 | 13.97 | ||||||||||||||||||||||
$14.48 - $15.57 | 202,880 | 1.09 | 15.25 | 202,880 | 15.25 | ||||||||||||||||||||||
$15.75 - $16.58 | 376,196 | 3.39 | 16.06 | 276,196 | 16.03 | ||||||||||||||||||||||
$16.75 - $19.94 | 267,522 | 1.06 | 18.19 | 267,522 | 18.16 | ||||||||||||||||||||||
$20.06 - $31.33 | 157,601 | 1.26 | 23.05 | 157,601 | 13.81 | ||||||||||||||||||||||
2,673,751 | 4.56 | $ | 14.84 | 1,675,790 | $ | 16.12 | |||||||||||||||||||||
Share based compensation arrangement by share based payment award nonvested shares and weighted average grant date fair value | |||||||||||||||||||||||||||
Non-Vested Stock | Weighted Average | ||||||||||||||||||||||||||
Award Units | Grant-Date Fair Value | ||||||||||||||||||||||||||
Balance as of May 31, 2013 | 482,644 | $ | 12.14 | ||||||||||||||||||||||||
Granted | 473,824 | 13.37 | |||||||||||||||||||||||||
Cancelled | (109,634 | ) | 12.48 | ||||||||||||||||||||||||
Vested | (148,946 | ) | 12.62 | ||||||||||||||||||||||||
Balance as of May 31, 2014 | 697,888 | 13.02 | |||||||||||||||||||||||||
Summary of future expense for awards outstanding | Under the provisions of authoritative guidance on share based payment awards, we expect to recognize the following future expense for awards outstanding as of May 31, 2014 ($ in thousands): | ||||||||||||||||||||||||||
Unrecognized | Weighted Average | ||||||||||||||||||||||||||
Compensation | Remaining Vesting | ||||||||||||||||||||||||||
Cost | Period (in years) | ||||||||||||||||||||||||||
Stock options | $ | 3,382 | 2.13 | ||||||||||||||||||||||||
Non-vested stock awards | 5,625 | 2.37 | |||||||||||||||||||||||||
$ | 9,007 | 2.28 | |||||||||||||||||||||||||
Summary of stock-based compensation in accordance with authoritative guidance on share based payment awards | The following table summarizes stock-based compensation in accordance with authoritative guidance on share based payment awards for the years ended May 31, 2014, May 31, 2013 and May 31, 2012, which was allocated as follows: | ||||||||||||||||||||||||||
May 31, | May 31, | May 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Cost of sales | $ | 232 | $ | 271 | $ | 268 | |||||||||||||||||||||
Research and development | 483 | 399 | 738 | ||||||||||||||||||||||||
Sales and marketing | 1,672 | 1,610 | 1,340 | ||||||||||||||||||||||||
General and administrative | 3,115 | 2,329 | 1,706 | ||||||||||||||||||||||||
Stock based compensation expense included in operating expenses | 5,270 | 4,338 | 3,784 | ||||||||||||||||||||||||
Total stock based compensation | 5,502 | 4,609 | 4,052 | ||||||||||||||||||||||||
Tax benefit | 1,862 | 1,540 | 1,447 | ||||||||||||||||||||||||
Stock based compensation expense, net of tax | $ | 3,640 | $ | 3,069 | $ | 2,605 | |||||||||||||||||||||
Commitments_And_Contingencies_
Commitments And Contingencies (Tables) | 12 Months Ended | |||
31-May-14 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Aggregate of future annual payments under non cancelable operating leases for facilities and equipment | Future annual payments under non-cancelable operating leases in the aggregate, of which one includes an escalation clause, with initial remaining terms of more than one year at May 31, 2014, are summarized as follows (in thousands): | |||
2015 | $ | 1,991 | ||
2016 | 1,644 | |||
2017 | 1,186 | |||
2018 | 1,093 | |||
2019 | 1,093 | |||
$ | 7,007 | |||
Segments_and_Geographic_Inform1
Segments and Geographic Information (Tables) | 12 Months Ended | |||||||||||
31-May-14 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Summary of total net sales by product category | Total sales by product category are summarized below (in thousands): | |||||||||||
Year Ended | ||||||||||||
May 31, | May 31, | May 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||||
Net sales by Product Category | ||||||||||||
Peripheral Vascular | $ | 192,626 | $ | 179,573 | $ | 95,330 | ||||||
Vascular Access | 106,394 | 106,690 | 63,857 | |||||||||
Oncology/Surgery | 49,360 | 47,155 | 62,730 | |||||||||
Supply Agreement | 6,045 | 8,498 | — | |||||||||
Total | $ | 354,425 | $ | 341,916 | $ | 221,917 | ||||||
Summary of net sales for geographic areas | Total sales for geographic areas are summarized below (in thousands): | |||||||||||
Year Ended | ||||||||||||
May 31, | May 31, | May 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||||
Net sales by Geography | ||||||||||||
United States | $ | 280,161 | $ | 266,228 | $ | 188,317 | ||||||
International | 68,219 | 67,190 | 33,600 | |||||||||
Supply Agreement | 6,045 | 8,498 | — | |||||||||
Total | $ | 354,425 | $ | 341,916 | $ | 221,917 | ||||||
Quarterly_Information_unaudite1
Quarterly Information (unaudited) (Tables) | 12 Months Ended | |||||||||||||||
31-May-14 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Summary of Quarterly Financial Information | Quarterly results of operations during the fiscal years ended 2014 and 2013 are as follows: | |||||||||||||||
2014 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
quarter | quarter | quarter | quarter | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Net sales | $ | 83,644 | $ | 88,571 | $ | 88,150 | $ | 94,060 | ||||||||
Gross profit | 42,580 | 44,885 | 44,793 | 47,410 | ||||||||||||
Net income (loss) | (373 | ) | (261 | ) | 4,515 | (1,215 | ) | |||||||||
Earnings per common share | ||||||||||||||||
Basic | (0.01 | ) | (0.01 | ) | 0.13 | (0.03 | ) | |||||||||
Diluted | (0.01 | ) | (0.01 | ) | 0.13 | (0.03 | ) | |||||||||
2013 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
quarter | quarter | quarter | quarter | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Net sales | $ | 83,406 | $ | 87,007 | $ | 81,571 | $ | 89,932 | ||||||||
Gross profit | 39,387 | 44,016 | 41,129 | 43,982 | ||||||||||||
Net income (loss) | (985 | ) | 1,878 | (1,083 | ) | (1,021 | ) | |||||||||
Earnings per common share | ||||||||||||||||
Basic | (0.03 | ) | 0.05 | (0.03 | ) | (0.03 | ) | |||||||||
Diluted | (0.03 | ) | 0.05 | (0.03 | ) | (0.03 | ) | |||||||||
Basis_of_Presentation_Business3
Basis of Presentation, Business Description and Summary of Significant Accounting Policies (Details) (Recurring [Member], USD $) | 31-May-14 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Financial Assets | ||
Cash equivalents | $445 | $114 |
Marketable securities | 1,809 | 2,153 |
Total Financial Assets | 2,254 | 2,267 |
Financial Liabilities | ||
Total Financial Liabilities | 67,886 | 75,571 |
Interest rate swap agreements [Member] | ||
Financial Liabilities | ||
Total Financial Liabilities | 555 | 522 |
Contingent liability for acquisition earn out [Member] | ||
Financial Liabilities | ||
Total Financial Liabilities | 67,331 | 75,049 |
Corporate bond securities [Member] | ||
Financial Assets | ||
Marketable securities | 303 | |
U.S. government agency obligations [Member] | ||
Financial Assets | ||
Marketable securities | 1,809 | 1,850 |
Money market funds [Member] | ||
Financial Assets | ||
Cash equivalents | 445 | 114 |
Level 1 [Member] | ||
Financial Assets | ||
Cash equivalents | 445 | 114 |
Marketable securities | 0 | 0 |
Total Financial Assets | 445 | 114 |
Financial Liabilities | ||
Total Financial Liabilities | 0 | 0 |
Level 1 [Member] | Interest rate swap agreements [Member] | ||
Financial Liabilities | ||
Total Financial Liabilities | 0 | 0 |
Level 1 [Member] | Contingent liability for acquisition earn out [Member] | ||
Financial Liabilities | ||
Total Financial Liabilities | 0 | 0 |
Level 1 [Member] | Corporate bond securities [Member] | ||
Financial Assets | ||
Marketable securities | 0 | |
Level 1 [Member] | U.S. government agency obligations [Member] | ||
Financial Assets | ||
Marketable securities | 0 | 0 |
Level 1 [Member] | Money market funds [Member] | ||
Financial Assets | ||
Cash equivalents | 445 | 114 |
Level 2 [Member] | ||
Financial Assets | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 303 |
Total Financial Assets | 0 | 303 |
Financial Liabilities | ||
Total Financial Liabilities | 555 | 522 |
Level 2 [Member] | Interest rate swap agreements [Member] | ||
Financial Liabilities | ||
Total Financial Liabilities | 555 | 522 |
Level 2 [Member] | Contingent liability for acquisition earn out [Member] | ||
Financial Liabilities | ||
Total Financial Liabilities | 0 | 0 |
Level 2 [Member] | Corporate bond securities [Member] | ||
Financial Assets | ||
Marketable securities | 303 | |
Level 2 [Member] | U.S. government agency obligations [Member] | ||
Financial Assets | ||
Marketable securities | 0 | 0 |
Level 2 [Member] | Money market funds [Member] | ||
Financial Assets | ||
Cash equivalents | 0 | 0 |
Level 3 [Member] | ||
Financial Assets | ||
Cash equivalents | 0 | 0 |
Marketable securities | 1,809 | 1,850 |
Total Financial Assets | 1,809 | 1,850 |
Financial Liabilities | ||
Total Financial Liabilities | 67,331 | 75,049 |
Level 3 [Member] | Interest rate swap agreements [Member] | ||
Financial Liabilities | ||
Total Financial Liabilities | 0 | 0 |
Level 3 [Member] | Contingent liability for acquisition earn out [Member] | ||
Financial Liabilities | ||
Total Financial Liabilities | 67,331 | 75,049 |
Level 3 [Member] | Corporate bond securities [Member] | ||
Financial Assets | ||
Marketable securities | 0 | |
Level 3 [Member] | U.S. government agency obligations [Member] | ||
Financial Assets | ||
Marketable securities | 1,809 | 1,850 |
Level 3 [Member] | Money market funds [Member] | ||
Financial Assets | ||
Cash equivalents | $0 | $0 |
Basis_of_Presentation_Business4
Basis of Presentation, Business Description and Summary of Significant Accounting Policies (Details 1) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | 31-May-14 |
Fair Value Measurements using Significant Unobservable Inputs | |
Balance, May 31, 2013, Financial Assets | $1,850 |
Balance, May 31, 2013, Financial Liabilities | 75,049 |
Total gains or losses (realized/unrealized): | |
Included in earnings, Financial Assets | 0 |
Earnings revaluation gain - Included in Earnings, Financial Liabilities | -5,084 |
Earnings revaluation expense - Included in Earnings, Financial Liabilities | 3,276 |
Included in other comprehensive income, Financial Assets | -16 |
Included in other comprehensive income, Financial Liabilities | 0 |
Purchases, issuances and settlements, Financial Assets | -25 |
Purchases, issuances and settlements, Financial Liabilities | -10,880 |
Transfers in and/or (out) of Level 3, Financial Assets | 0 |
Transfers in and/or (out) of Level 3, Financial Liabilities | 0 |
Fair Value Measurement with Unobservable Inputs Reconciliation Recurring Basis Liability Contingent Consideration Earn Out Asset | 0 |
Contingent liability for acquisition earn out, Financial Liabilities | 4,970 |
Balance, May 31, 2014, Financial Assets | 1,809 |
Balance, May 31, 2014, Financial Liabilities | $67,331 |
Basis_of_Presentation_Business5
Basis of Presentation, Business Description and Summary of Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | 31-May-14 | 31-May-13 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration liability at fair value | $67,331 | $75,049 |
Summary showing the recurring fair value measurements of the contingent consideration liability | ||
Discount rate used in fair value calculation | 12.00% | |
Level 3 [Member] | Contingent Consideration Earn Out Liability [Member] | Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration liability at fair value | 67,331 | |
Revenue Based Payment [Member] | Level 3 [Member] | Contingent Consideration Earn Out Liability [Member] | Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration liability at fair value | 63,961 | |
Revenue Based Payment [Member] | Level 3 [Member] | Maximum [Member] | Contingent Consideration Earn Out Liability [Member] | Recurring [Member] | ||
Summary showing the recurring fair value measurements of the contingent consideration liability | ||
Discount rate used in fair value calculation | 10.00% | |
Probability of payment | 100.00% | |
Projected fiscal year of payment | 2022 | |
Revenue Based Payment [Member] | Level 3 [Member] | Minimum [Member] | Contingent Consideration Earn Out Liability [Member] | Recurring [Member] | ||
Summary showing the recurring fair value measurements of the contingent consideration liability | ||
Discount rate used in fair value calculation | 4.00% | |
Probability of payment | 75.00% | |
Projected fiscal year of payment | 2015 | |
Milestone Based Payments [Member] | Level 3 [Member] | Contingent Consideration Earn Out Liability [Member] | Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration liability at fair value | $3,370 | |
Summary showing the recurring fair value measurements of the contingent consideration liability | ||
Discount rate used in fair value calculation | 16.00% | |
Projected fiscal year of payment | 2015 | |
Milestone Based Payments [Member] | Level 3 [Member] | Maximum [Member] | Contingent Consideration Earn Out Liability [Member] | Recurring [Member] | ||
Summary showing the recurring fair value measurements of the contingent consideration liability | ||
Probability of payment | 100.00% | |
Milestone Based Payments [Member] | Level 3 [Member] | Minimum [Member] | Contingent Consideration Earn Out Liability [Member] | Recurring [Member] | ||
Summary showing the recurring fair value measurements of the contingent consideration liability | ||
Probability of payment | 75.00% |
Basis_of_Presentation_Business6
Basis of Presentation, Business Description and Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Summary showing reconciliation of the contingent payments | |||
Contingent payments | $15,943 | $0 | $0 |
Contingent Consideration Earn Out Liability [Member] | |||
Summary showing reconciliation of the contingent payments | |||
Balance at May 31, 2013 | 75,049 | ||
Purchase price contingent consideration | 4,970 | ||
Contingent payments | -10,880 | ||
Earnings revaluation gain | -5,084 | ||
Earnings revaluation expense | 3,276 | ||
Balance at May 31, 2014 | $67,331 |
Basis_of_Presentation_Business7
Basis of Presentation, Business Description and Summary of Significant Accounting Policies (Details 4) | 12 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-12 | |
Reconciliation of the weighted-average number of common shares | |||
Basic | 35,135,689 | 34,817,279 | 25,382,293 |
Effect of dilutive securities | 304,161 | 0 | 0 |
Diluted | 35,439,850 | 34,817,279 | 25,382,293 |
Basis_of_Presentation_Business8
Basis of Presentation, Business Description and Summary of Significant Accounting Policies (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||
Share data in Millions, unless otherwise specified | Mar. 31, 2014 | Sep. 24, 2012 | Feb. 13, 2012 | Feb. 10, 2012 | Apr. 21, 2014 | Feb. 25, 2014 | Oct. 15, 2012 | Mar. 05, 2012 | 31-May-14 | 31-May-13 | 31-May-12 | 22-May-12 | Jun. 30, 2012 |
Observation | Observation | Observation | Observation | Intangible_Asset | Investment | ||||||||
Investment | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Costs for quality call to action program | $3,200,000 | ||||||||||||
Number of observations | 3 | 5 | 6 | 12 | |||||||||
Number of business days to provide response to FDA | 15 days | 15 days | 15 days | 15 days | |||||||||
Short Term Investments Maturity Period | less than three months | ||||||||||||
Investments in auction rate securities that failed auctions | 1,809,000 | 1,800,000 | |||||||||||
Number of investments | 2 | 2 | |||||||||||
Number of Indefinite Lived Intangible Assets | 1 | ||||||||||||
Restocking charge percentage | 20.00% | ||||||||||||
Estimated net operating losses, prior to utilization | 13,000,000 | ||||||||||||
Potential amount of undiscounted future contingent consideration | 78,100,000 | ||||||||||||
Milestones associated with the contingent consideration | 56,400,000 | ||||||||||||
Reflected in current portion of contingent consideration | 10,900,000 | ||||||||||||
Interest expense on derivative financial instruments | 61,000 | ||||||||||||
Notional amount of interest rate swap agreement | 100,000,000 | ||||||||||||
Fixed interest rate payments | 3.26% | ||||||||||||
Stock-based compensation, options vested, percentage | 88.00% | ||||||||||||
Stock-based compensation, options forfeiture rate | 12.00% | ||||||||||||
Dividend paid | 0 | ||||||||||||
Antidilutive securities excluded from computation of diluted earnings per share | 2.3 | 2.9 | 2.3 | ||||||||||
Clinical Devices, B.V. [Member] | Trademark-NAMIC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired intangible asset | 3,600,000 | ||||||||||||
Navilyst [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Weighted average useful life | 10 years | ||||||||||||
Federal net operating losses, unutilized | 17,500,000 | ||||||||||||
Estimated net operating losses, prior to utilization | 13,000,000 | ||||||||||||
Navilyst [Member] | Trademark-NAMIC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired intangible asset | 28,600,000 | 28,600,000 | |||||||||||
RITA [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Federal net operating losses, unutilized | 15,800,000 | ||||||||||||
Federal net operating losses, utilized | 7,100,000 | ||||||||||||
Estimated net operating losses, prior to utilization | $13,600,000 | ||||||||||||
Maximum [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Accounts receivables period due | 90 days | ||||||||||||
Weighted average useful life | 20 years | ||||||||||||
Minimum [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Accounts receivables period due | 30 days | ||||||||||||
Weighted average useful life | 3 years | ||||||||||||
Undamaged product expiration date | 12 months |
Acquisitions_Details
Acquisitions (Details) (USD $) | 0 Months Ended | ||||||
In Thousands, unless otherwise specified | Feb. 01, 2013 | 22-May-12 | Oct. 15, 2012 | 31-May-14 | 31-May-13 | 31-May-12 | Dec. 31, 2013 |
Summary of estimated fair values of the assets acquired and liabilities assumed | |||||||
Goodwill | $360,473 | $355,637 | $309,091 | ||||
Microsulis Medical Ltd [Member] | |||||||
Summary of estimated fair values of the assets acquired and liabilities assumed | |||||||
Accounts receivable | 364 | ||||||
Prepaid expenses and other current assets | 443 | ||||||
Inventories | 687 | ||||||
Fixed assets | 1,906 | ||||||
Intangibles | 12,500 | ||||||
Goodwill | 19,284 | 19,284 | |||||
Total assets acquired | 35,184 | ||||||
Liabilities assumed | -1,634 | ||||||
Total purchase price | 33,550 | ||||||
Cash payment at closing | 10,566 | ||||||
Cash payment for initial investment | 5,000 | 5,000 | |||||
Present value of deferred payment | 4,820 | ||||||
Present value of contingent consideration liability | 13,164 | ||||||
Total purchase price | 33,550 | ||||||
Navilyst [Member] | |||||||
Summary of estimated fair values of the assets acquired and liabilities assumed | |||||||
Cash and cash equivalents | 7,683 | ||||||
Accounts receivable | 19,069 | ||||||
Prepaid expenses and other current assets | 5,504 | ||||||
Inventories | 26,851 | ||||||
Fixed assets | 34,017 | ||||||
Deferred tax assets | 34,209 | ||||||
Intangibles | 107,100 | ||||||
Other long-term assets | 497 | ||||||
Goodwill | 144,705 | ||||||
Total assets acquired | 379,635 | ||||||
Liabilities assumed | -18,287 | ||||||
Total purchase price | 361,348 | ||||||
Cash payment at closing | 97,000 | ||||||
Total purchase price | 361,000 | ||||||
Vortex Medical [Member] | |||||||
Summary of estimated fair values of the assets acquired and liabilities assumed | |||||||
Cash and cash equivalents | 339 | ||||||
Accounts receivable | 203 | ||||||
Prepaid expenses and other current assets | 7 | ||||||
Inventories | 488 | ||||||
Deferred tax assets | 1,307 | ||||||
Intangibles | 72,430 | ||||||
Goodwill | 29,519 | 29,519 | |||||
Total assets acquired | 104,293 | ||||||
Deferred tax liabilities | -28,340 | ||||||
Liabilities assumed | -661 | ||||||
Total purchase price | 75,292 | ||||||
Cash payment at closing | 15,105 | ||||||
Working capital adjustment | -115 | ||||||
Present value of contingent consideration liability | 60,302 | ||||||
Total purchase price | $75,292 |
Acquisitions_Details_1
Acquisitions (Details 1) (Navilyst [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | 31-May-12 |
Navilyst [Member] | |
Supplemental unaudited pro forma information | |
Net sales | $365,357 |
Net income (loss) | $3,897 |
Acquisitions_Details_Textual
Acquisitions (Details Textual) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||
Oct. 15, 2012 | 31-May-12 | 31-May-13 | 22-May-12 | 31-May-14 | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-12 | Feb. 01, 2013 | Aug. 15, 2013 | Sep. 19, 2013 | Dec. 31, 2013 | Mar. 22, 2012 | |
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Goodwill | $309,091,000 | $355,637,000 | 360,473,000 | $360,473,000 | $355,637,000 | $309,091,000 | |||||||||||||
Projected Angio Vac ten year net sales following closing | 10 years | ||||||||||||||||||
Senior secured term loan facility | 100,000,000 | ||||||||||||||||||
Purchase consideration placed in escrow | 19,100,000 | 19,100,000 | |||||||||||||||||
Purchase consideration placed in escrow in cash | 14,000,000 | 14,000,000 | |||||||||||||||||
Purchase consideration placed in escrow as common stock | 415,000 | 415,000 | |||||||||||||||||
Cash from escrow fund | 2,500,000 | 2,500,000 | |||||||||||||||||
Biomedical Polymer Additive [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Acquired intangible asset | 12,100,000 | ||||||||||||||||||
Power Injectable Port [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Acquired intangible asset | 3,000,000 | ||||||||||||||||||
Customer relationships [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Weighted average useful life | 10 years 7 months 6 days | 11 years 10 months 24 days | |||||||||||||||||
Acquired finite lived intangible assets | 49,400,000 | ||||||||||||||||||
Weighted average useful life | 15 years | ||||||||||||||||||
Trademarks [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Weighted average useful life | 9 years 10 months 24 days | 8 years | |||||||||||||||||
Intangible assets acquired other than goodwill | 32,500,000 | ||||||||||||||||||
Acquired finite lived intangible assets | 3,900,000 | ||||||||||||||||||
Weighted average useful life | 7 years | ||||||||||||||||||
In-process R&D acquired [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 15,100,000 | ||||||||||||||||||
Acquired intangible asset | 15,100,000 | ||||||||||||||||||
Technology [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Acquired finite lived intangible assets | 10,100,000 | ||||||||||||||||||
Weighted average useful life | 6 years | ||||||||||||||||||
Maximum [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Weighted average useful life | 20 years | ||||||||||||||||||
Minimum [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Weighted average useful life | 3 years | ||||||||||||||||||
Navilyst [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Cash payments at closing total | 97,000,000 | ||||||||||||||||||
Liabilities assumed | 18,287,000 | ||||||||||||||||||
Total estimated purchase consideration | 361,000,000 | ||||||||||||||||||
Goodwill | 144,705,000 | ||||||||||||||||||
Weighted average useful life | 10 years | ||||||||||||||||||
Acquisition of related cost\transaction and related costs | 1,300,000 | 1,400,000 | 1,600,000 | 1,200,000 | 2,100,000 | 1,300,000 | 1,700,000 | 2,200,000 | |||||||||||
Issuance of common stock | 9,500,000 | ||||||||||||||||||
Senior secured term loan facility | 150,000,000 | ||||||||||||||||||
Closing price of stock | $12.44 | ||||||||||||||||||
Transaction and severance costs related to acquisition | 7,300,000 | 11,200,000 | |||||||||||||||||
Intangible assets acquired other than goodwill | 107,100,000 | ||||||||||||||||||
Business acquisition proforma net income loss attributable to different component | 3,897,000 | ||||||||||||||||||
Adjustment related to credit facility due to business acquisition | 150,000,000 | 150,000,000 | |||||||||||||||||
Navilyst [Member] | Trademark-NAMIC [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Acquired intangible asset | 28,600,000 | 28,600,000 | |||||||||||||||||
Avista Capital Partners [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Issuance of common stock | 9,400,000 | ||||||||||||||||||
Common stock, outstanding shares, percentage | 27.00% | 27.00% | |||||||||||||||||
Vortex Medical [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Cash payments at closing total | 15,105,000 | ||||||||||||||||||
Liabilities assumed | 661,000 | ||||||||||||||||||
Total estimated purchase consideration | 75,292,000 | ||||||||||||||||||
Estimated fair value contingent consideration | 60,302,000 | ||||||||||||||||||
Goodwill | 29,519,000 | 29,519,000 | 29,519,000 | ||||||||||||||||
Weighted average useful life | 15 years | ||||||||||||||||||
Acquisition of related cost\transaction and related costs | 645,000 | 162,000 | |||||||||||||||||
Percentage of annual net sales, first limit | 10.00% | 10.00% | |||||||||||||||||
Annual net sales, first limit | 150,000,000 | 150,000,000 | |||||||||||||||||
Percentage of annual net sales, second limit | 12.50% | 12.50% | |||||||||||||||||
Annual net sales, second limit | 150,000,000 | 150,000,000 | |||||||||||||||||
Annual net sales | 500,000,000 | 500,000,000 | |||||||||||||||||
Percentage of annual net sales, third limit | 15.00% | 15.00% | |||||||||||||||||
Annual net sales, third limit | 500,000,000 | 500,000,000 | |||||||||||||||||
Guaranteed minimum payments payable first anniversary | 8,350,000 | 8,350,000 | |||||||||||||||||
Guaranteed minimum payments payable second anniversary | 8,000,000 | 8,000,000 | |||||||||||||||||
Guaranteed minimum payments payable third anniversary | 8,000,000 | 8,000,000 | |||||||||||||||||
Guaranteed minimum payments payable fourth anniversary | 8,000,000 | 8,000,000 | |||||||||||||||||
Guaranteed minimum payments payable fifth anniversary | 7,650,000 | 7,650,000 | |||||||||||||||||
Fair value of guaranteed contingent consideration | 40,000,000 | ||||||||||||||||||
Intangible assets acquired other than goodwill | 72,430,000 | ||||||||||||||||||
Microsulis Medical Ltd [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Investment in company | 5,000,000 | ||||||||||||||||||
Ownership percentage in investment | 14.30% | ||||||||||||||||||
Cash payments at closing total | 10,566,000 | ||||||||||||||||||
Business acquisition payment | 5,000,000 | ||||||||||||||||||
Liabilities assumed | 1,634,000 | ||||||||||||||||||
Total estimated purchase consideration | 33,550,000 | ||||||||||||||||||
Cash payment for initial investment | 5,000,000 | 5,000,000 | |||||||||||||||||
Estimated fair value contingent consideration | 13,164,000 | ||||||||||||||||||
Additional cash consideration payable period | 9 years | ||||||||||||||||||
Goodwill | 19,284,000 | 19,284,000 | 19,284,000 | ||||||||||||||||
Acquisition of related cost\transaction and related costs | 257,000 | ||||||||||||||||||
Intangible assets acquired other than goodwill | 12,500,000 | ||||||||||||||||||
Microsulis Medical Ltd [Member] | Maximum [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Weighted average useful life | 15 years | ||||||||||||||||||
Microsulis Medical Ltd [Member] | Minimum [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Weighted average useful life | 10 years | ||||||||||||||||||
Clinical Devices, B.V. [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Total estimated purchase consideration | 8,700,000 | ||||||||||||||||||
Estimated fair value contingent consideration | 5,000,000 | ||||||||||||||||||
Goodwill | 4,800,000 | ||||||||||||||||||
Acquisition of related cost\transaction and related costs | 300,000 | ||||||||||||||||||
Intangible assets acquired other than goodwill | 5,100,000 | ||||||||||||||||||
Stock purchase agreement payment holdback | 400,000 | ||||||||||||||||||
Deferred tax liability | 1,200,000 | ||||||||||||||||||
Clinical Devices, B.V. [Member] | Trademark-NAMIC [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Acquired intangible asset | 3,600,000 | ||||||||||||||||||
Clinical Devices, B.V. [Member] | Customer relationships [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Weighted average useful life | 15 years | ||||||||||||||||||
Customer relationships | 1,400,000 | ||||||||||||||||||
Clinical Devices, B.V. [Member] | Trademarks [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Weighted average useful life | 5 years | ||||||||||||||||||
Trademarks | 100,000 | ||||||||||||||||||
Clinical Devices, B.V. [Member] | In Process Research and Development [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Weighted average useful life | 10 years | ||||||||||||||||||
Intangible assets acquired other than goodwill | 3,600,000 | ||||||||||||||||||
Transaction Costs and Restructuring Charges [Member] | Navilyst [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Business acquisition proforma net income loss attributable to different component | 17,600,000 | ||||||||||||||||||
Interest Expense [Member] | Navilyst [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Business acquisition proforma net income loss attributable to different component | 4,700,000 | ||||||||||||||||||
Cash [Member] | Clinical Devices, B.V. [Member] | |||||||||||||||||||
Acquisitions (Additional Textual) [Abstract] | |||||||||||||||||||
Cash payments at closing total | $3,700,000 |
Marketable_Securities_and_Inve2
Marketable Securities and Investments (Details) (USD $) | 31-May-14 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Marketable securities | ||
Amortized cost | $1,825 | $2,153 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | -16 | 0 |
Fair Value | 1,809 | 2,153 |
U.S. government agency obligations [Member] | ||
Marketable securities | ||
Amortized cost | 1,825 | 1,850 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | -16 | 0 |
Fair Value | 1,809 | 1,850 |
Corporate bond securities [Member] | ||
Marketable securities | ||
Amortized cost | 0 | 303 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $0 | $303 |
Marketable_Securities_and_Inve3
Marketable Securities and Investments (Details 1) (USD $) | 31-May-14 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Amortized cost and fair value of marketable securities by contractual maturity | ||
Amortized cost, Due in one year or less | $0 | |
Amortized cost, Due after one through five years | 0 | |
Amortized cost, Due after five through twenty years | 1,825 | |
Amortized cost | 1,825 | 2,153 |
Fair Value, Due in one year or less | 0 | |
Fair Value, Due after one through five years | 0 | |
Fair Value, Due after five through twenty years | 1,809 | |
Fair Value, Total | $1,809 |
Inventories_Details
Inventories (Details) (USD $) | 31-May-14 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Inventories | ||
Raw materials | $24,734 | $18,362 |
Work in process | 11,992 | 11,006 |
Finished goods | 24,508 | 25,711 |
Total | $61,234 | $55,079 |
Prepaid_Expenses_and_Other_Det
Prepaid Expenses and Other (Details) (USD $) | 31-May-14 | 31-May-13 | 31-May-12 |
In Thousands, unless otherwise specified | |||
Prepaid expenses and other | |||
Deposits | $3,356 | $4,029 | |
Other prepaid taxes | 202 | 458 | |
Licensee fees | 604 | 597 | |
Software licenses | 130 | 520 | |
Trade shows | 62 | 487 | |
Rent | 114 | 135 | |
Insurance | 395 | 120 | |
Interest receivable | 1 | 2 | |
Other | 607 | 937 | |
Total | 5,471 | 7,285 | 9,803 |
Prepaid income taxes | $510 | $563 |
Property_Plant_and_Equipment_a2
Property, Plant, and Equipment, at Cost (Details) (USD $) | 12 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-12 | |
Property, plant and equipment | |||
Property, plant and equipment | $103,406,000 | $90,783,000 | |
Less accumulated depreciation and amortization | -37,845,000 | -29,421,000 | |
Property, plant and equipment excluding land and land improvements | 65,561,000 | 61,362,000 | |
Land and land improvements | 1,029,000 | 1,029,000 | |
Property, plant and equipment, Net | 66,590,000 | 62,391,000 | 55,610,000 |
Depreciation expense | 8,400,000 | 8,700,000 | 3,600,000 |
Trade shows | 62,000 | 487,000 | |
Building and building improvements [Member] | |||
Property, plant and equipment | |||
Property, plant and equipment | 33,126,000 | 30,150,000 | |
Estimated useful lives | 39 years | ||
Machinery and equipment [Member] | |||
Property, plant and equipment | |||
Property, plant and equipment | 31,880,000 | 30,870,000 | |
Machinery and equipment [Member] | Minimum [Member] | |||
Property, plant and equipment | |||
Estimated useful lives | 3 years | ||
Machinery and equipment [Member] | Maximum [Member] | |||
Property, plant and equipment | |||
Estimated useful lives | 8 years | ||
Computer software and equipment [Member] | |||
Property, plant and equipment | |||
Property, plant and equipment | 25,836,000 | 16,390,000 | |
Computer software and equipment [Member] | Minimum [Member] | |||
Property, plant and equipment | |||
Estimated useful lives | 3 years | ||
Computer software and equipment [Member] | Maximum [Member] | |||
Property, plant and equipment | |||
Estimated useful lives | 10 years | ||
Construction in progress [Member] | |||
Property, plant and equipment | |||
Property, plant and equipment | $12,564,000 | $13,373,000 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-14 | 31-May-13 | 31-May-12 | Oct. 15, 2012 | Feb. 01, 2013 | 22-May-12 | Aug. 15, 2013 |
Adjustments to Goodwill | ||||||||
Goodwill, Beginning Balance | $355,637 | $309,091 | ||||||
Adjustments to Navilyst purchase price allocation | 500 | |||||||
Goodwill, Ending Balance | 360,473 | 360,473 | 355,637 | 309,091 | ||||
Vortex Medical [Member] | ||||||||
Adjustments to Goodwill | ||||||||
Goodwill, Beginning Balance | 29,519 | |||||||
Goodwill recognized from business combination and asset acquisition | 29,519 | |||||||
Goodwill, Ending Balance | 29,519 | 29,519 | 29,519 | |||||
Microsulis Medical Ltd [Member] | ||||||||
Adjustments to Goodwill | ||||||||
Goodwill, Beginning Balance | 19,284 | |||||||
Goodwill recognized from business combination and asset acquisition | 19,284 | |||||||
Goodwill, Ending Balance | 19,284 | 19,284 | 19,284 | |||||
Navilyst [Member] | ||||||||
Adjustments to Goodwill | ||||||||
Goodwill, Beginning Balance | 144,705 | |||||||
Adjustments to Navilyst purchase price allocation | -2,257 | |||||||
Goodwill, Ending Balance | 144,705 | |||||||
Clinical Devices, B.V. [Member] | ||||||||
Adjustments to Goodwill | ||||||||
Goodwill, Beginning Balance | 4,800 | |||||||
Goodwill recognized from business combination and asset acquisition | 4,836 | |||||||
Goodwill, Ending Balance | $4,800 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Indefinite-lived Intangible Assets [Line Items] | |||
Gross carrying value, finite and indefinite intangible assets total | $284,027 | $276,737 | |
Accumulated amortization | -78,771 | -62,064 | |
Net carrying value, finite and indefinite intangible assets total | 205,256 | 214,673 | 147,363 |
Customer relationships [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Gross carrying value, finite-lived intangible assets | 86,645 | 150,181 | |
Accumulated amortization | -37,848 | -24,835 | |
Net carrying value, finite-lived intangible assets | 48,797 | 125,346 | |
Weighted average useful life | 11 years 10 months 24 days | 10 years 7 months 6 days | |
Product technologies [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Gross carrying value, finite-lived intangible assets | 150,298 | 84,479 | |
Accumulated amortization | -32,930 | -30,770 | |
Net carrying value, finite-lived intangible assets | 117,368 | 53,709 | |
Weighted average useful life | 10 years 2 months 12 days | 14 years 9 months 18 days | |
Licenses [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Gross carrying value, finite-lived intangible assets | 7,639 | 6,302 | |
Accumulated amortization | -5,211 | -4,501 | |
Net carrying value, finite-lived intangible assets | 2,428 | 1,801 | |
Weighted average useful life | 8 years 4 months 24 days | 9 years | |
Trademarks [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Gross carrying value, finite-lived intangible assets | 6,345 | 6,275 | |
Accumulated amortization | -1,882 | -1,058 | |
Net carrying value, finite-lived intangible assets | 4,463 | 5,217 | |
Weighted average useful life | 8 years | 9 years 10 months 24 days | |
Distributor relationships [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Gross carrying value, finite-lived intangible assets | 900 | 900 | |
Accumulated amortization | -900 | -900 | |
Net carrying value, finite-lived intangible assets | 0 | 0 | |
Weighted average useful life | 3 years | 3 years | |
Trademark-NAMIC [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Gross carrying value, indefinite-lived intangible assets | 28,600 | 28,600 | |
Net carrying value, indefinite-lived intangible assets | 28,600 | 28,600 | |
In-process R&D acquired [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Gross carrying value, indefinite-lived intangible assets | 3,600 | ||
Net carrying value, indefinite-lived intangible assets | $3,600 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Details 2) (USD $) | 31-May-14 |
In Thousands, unless otherwise specified | |
Expected amortization expense | |
2015 | $15,693 |
2016 | 15,696 |
2017 | 16,355 |
2018 | 17,385 |
2019 | $19,928 |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2013 | 31-May-14 | 31-May-14 | 31-May-13 | 31-May-12 | 22-May-12 | |
ReportingUnit | ||||||
Goodwill and Intangible Assets (Textual) [Abstract] | ||||||
Number of reporting segments | 2 | |||||
Terminal value of the reporting unit | 7 | 7 | ||||
Discount rate used in fair value calculation | 12.00% | |||||
Percentage of fair value, carrying value | 7.00% | |||||
Goodwill impairment | $0 | |||||
Change in carrying value of goodwill related to working capital | 500,000 | |||||
Reduction in carrying value of goodwill | 2,300,000 | |||||
Change in carrying value of goodwill due to settlement | 900,000 | |||||
Increase in value of deferred tax assets | 1,600,000 | |||||
Preacquisition tax adjustments to goodwill | 200,000 | |||||
Amortization expense | 16,622,000 | 16,617,000 | 9,309,000 | |||
Maximum [Member] | ||||||
Goodwill and Intangible Assets (Textual) [Abstract] | ||||||
Estimates useful life of intangible assets other than goodwill | 20 years | |||||
Minimum [Member] | ||||||
Goodwill and Intangible Assets (Textual) [Abstract] | ||||||
Estimates useful life of intangible assets other than goodwill | 3 years | |||||
Navilyst [Member] | ||||||
Goodwill and Intangible Assets (Textual) [Abstract] | ||||||
Estimates useful life of intangible assets other than goodwill | 10 years | |||||
Change in carrying value of goodwill related to working capital | -2,257,000 | |||||
Navilyst [Member] | Trademark-NAMIC [Member] | ||||||
Goodwill and Intangible Assets (Textual) [Abstract] | ||||||
Acquired intangible asset | $28,600,000 | 28,600,000 | ||||
Income Approach Valuation Technique [Member] | ||||||
Goodwill and Intangible Assets (Textual) [Abstract] | ||||||
Weight assigned to valuation methods | 75.00% | |||||
Market Approach Valuation Technique [Member] | ||||||
Goodwill and Intangible Assets (Textual) [Abstract] | ||||||
Weight assigned to valuation methods | 25.00% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 |
Components of income (loss) before income tax provision | |||||
US | $5,199 | ($3,614) | ($5,291) | ||
Non-US | 541 | 2,027 | -131 | ||
Total other (expenses) income, net | $2,110 | $5,740 | ($1,587) | ($5,422) | $10,636 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 |
Current | |||||
Federal | ($133) | ($1,622) | $448 | ||
State and local | 99 | -52 | -19 | ||
Non U.S. | 157 | 468 | 18 | ||
Current, Total | 123 | -1,206 | 447 | ||
Deferred | 2,951 | 830 | -686 | ||
Income tax expense/(benefit), Total | $3,325 | $3,074 | ($376) | ($239) | $2,559 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Summary of significant components of deferred income tax (benefit) expense from operations | |||
Deferred tax expense (benefit) | $1,778 | $830 | ($1,773) |
Impact of NYS tax reform legislation | 1,173 | 0 | 0 |
Net operating loss carryforward | 0 | 0 | 1,087 |
Deferred Income Tax Expense (Benefit) | $2,951 | $830 | ($686) |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 31-May-14 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Deferred tax assets | ||
Net operating loss carryforward | $48,749 | $47,516 |
Stock-based compensation | 4,851 | 4,813 |
Federal and state R&D tax credit carryforward | 1,249 | 490 |
Inventories | 875 | 1,713 |
State tax credits | 0 | 1,326 |
Expenses incurred not currently deductible | 1,379 | 880 |
Capital loss carryforwards | 0 | 95 |
Deferred revenue | 154 | 1,147 |
Gross deferred tax asset | 57,257 | 57,980 |
Deferred tax liabilities | ||
Excess tax over book depreciation and amortization | 41,843 | 39,252 |
Impairment of long-lived assets | 0 | 0 |
Gross deferred Liability | 41,843 | 39,252 |
Valuation Allowance | -1,532 | -712 |
Net deferred tax asset | $13,882 | $18,016 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 |
Reasons for consolidated income tax provision | |||||
Income tax (benefit) provision | $3,325 | $3,074 | ($376) | ($239) | $2,559 |
Effect of Graduated tax rates | 57 | 16 | -57 | ||
State income taxes, net of Federal tax benefit | -122 | -95 | -152 | ||
State income tax credits, net of Federal tax benefit | 0 | 23 | 69 | ||
Impact of Non US operations | 27 | 228 | -46 | ||
Tax-exempt interest | 0 | 2 | 4 | ||
Research and development tax credit | 236 | 142 | 115 | ||
Domestic Production Activities deduction | 0 | 0 | 71 | ||
Nondeductible acquisition costs | 0 | -110 | -1,144 | ||
Nondeductible interest on contingent payments | -540 | -130 | 0 | ||
Nontaxable gain on revaluation of contingent consideration liability | 1,698 | 0 | 0 | ||
Tax law change | -1,173 | 0 | 0 | ||
Effect of elimination of ASC 718 APIC pool | -440 | 0 | 0 | ||
Nondeductible stock-based compensation | -176 | -108 | -125 | ||
Other nondeductible expenses | -384 | -336 | -336 | ||
Overaccrual (underaccrual) of prior year Federal and state taxes | -249 | 10 | 138 | ||
Fully reserved capital losses | 0 | 179 | -208 | ||
Other | 0 | 0 | 12 | ||
Income tax (benefit) provision at statutory tax rate of 35% | $2,008 | ($555) | ($1,898) |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | |||
31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 | |
Income Taxes (Textual) [Abstract] | ||||
Remaining federal net operating loss | $26,100,000 | |||
State net operating loss expire prior to utilization | 13,000,000 | |||
Taxable income per year for the next ten years | 10,000,000 | |||
Taxable income per year for the final eight years | 6,500,000 | |||
Federal net operating loss carryforwards after considering IRC Section 382 limitations | 139,800,000 | |||
Federal net operating loss first amount expiring | 30,700,000 | |||
Maturity period of federal net operating loss carryforwards first amount minimum | 2017 | |||
Maturity period of federal net operating loss carryforwards first amount maximum | 2026 | |||
Federal Net Operating Loss Expected Expiration Amount Two | 109,100,000 | |||
Maturity period of federal net operating loss carryforwards second amount minimum | 2027 | |||
Maturity period of federal net operating loss carryforwards second amount maximum | 2033 | |||
State net operating loss carryforwards after considering remaining IRC Section 382 limitations | 20,900,000 | |||
Maturity period of state net operating loss carryforwards minimum | 2015 | |||
Net deferred income tax asset | 13,900,000 | |||
Valuation Allowance | -1,532,000 | -712,000 | ||
Increase decrease valuation allowance | 800,000 | 500,000 | ||
Effective income tax rate | 35.00% | |||
Tax liability not recognized | 0 | |||
Unrecognized tax benefits | 0 | |||
Accrued interest and penalties recognized | 0 | 0 | ||
Correct state tax credit benefit | 300,000 | |||
State tax credit claim | 200,000 | |||
Beginning of open tax year range | 2011 | |||
End of open tax year range | 2014 | |||
State [Member] | ||||
Income Tax [Line Items] | ||||
Federal and State net operating loss carryforwards | 33,800,000 | |||
Federal [Member] | ||||
Income Tax [Line Items] | ||||
Federal and State net operating loss carryforwards | 166,000,000 | |||
Operating loss carryforwards from acquired companies | $161,500,000 |
Prepaid_Royalties_Details
Prepaid Royalties (Details) (USD $) | 12 Months Ended | ||
31-May-12 | 31-May-11 | Aug. 13, 2007 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid royalty | $3,000,000 | ||
Acquisition, restructuring and other items, net | 201,000 | ||
Impairment loss | ($2,300,000) |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 |
In Thousands, unless otherwise specified | ||||
Accrued liabilities | ||||
Payroll and related expenses | $8,114 | $6,421 | ||
Royalties | 2,620 | 2,034 | ||
Accrued severance | 765 | 1,602 | ||
Deferred revenue | 200 | 1,573 | ||
Sales and franchise taxes | 1,327 | 1,047 | ||
Interest rate swap liability | 555 | 523 | ||
Other | 3,071 | 3,156 | ||
Total | $16,652 | $16,356 | $17,070 | $13,734 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 31-May-14 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Summary of long-term debt | ||
Bank Notes | $142,660 | $142,500 |
Less: current maturities | -5,000 | -7,500 |
Long-term debt | $137,660 | $135,000 |
LongTerm_Debt_Details1
Long-Term Debt (Details1) (USD $) | 31-May-14 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Future minimum principal payments on long-term debt | ||
Bank Notes | $142,660 | $142,500 |
Term Loan [Member] | ||
Future minimum principal payments on long-term debt | ||
2015 | 5,000 | |
2016 | 8,750 | |
2017 | 13,750 | |
2018 | 26,250 | |
2019 | 42,500 | |
Bank Notes | $96,250 |
LongTerm_Debt_Details_Textual
Long-Term Debt (Details Textual) (USD $) | 12 Months Ended | 0 Months Ended | |
31-May-14 | Sep. 19, 2013 | 31-May-13 | |
Debt Instrument [Line Items] | |||
Senior secured term loan facility | $100,000,000 | ||
Senior secured revolving credit facility | 100,000,000 | ||
Bank credit agreement maturity period | P5Y | ||
Quarterly percentage repayment of term facility year one | 5.00% | ||
Quarterly percentage repayment of term facility year two | 5.00% | ||
Quarterly percentage repayment of term facility year three | 10.00% | ||
Quarterly percentage repayment of term facility year four | 15.00% | ||
Quarterly percentage repayment of term facility year five | 65.00% | ||
Percentage of increase in interest | 2.00% | ||
Notional amount of interest rate swap agreement | 100,000,000 | ||
Fixed interest rate payments | 0.74% | ||
Loans payable, noncurrent | 91,250,000 | 135,000,000 | |
Ratio for debt service coverage | 1.35 | ||
Ratio of indebtedness to consolidated EBITDA | 3.75 | ||
Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Percentage of increases leverage ratio base rate, minimum | 1.50% | ||
Percentage of increases leverage ratio base rate, maximum | 2.25% | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Loans payable, noncurrent | 46,410,000 | ||
Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Percentage of increases leverage ratio base rate, minimum | 0.50% | ||
Percentage of increases leverage ratio base rate, maximum | 1.25% | ||
Loans Payable | 96,250,000 | ||
Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.35% | ||
Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.20% | ||
Letter of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility borrowing capacity | 20,000,000 | ||
Swingline Loans [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility borrowing capacity | 5,000,000 | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Borrowing under Revolving Facility | $41,400,000 |
Retirement_Plans_Details
Retirement Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Retirement Plans (Textual) [Abstract] | |||
Matching contributions | $2.80 | $2.50 | $2 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Schedule summarizes stock option activity | |||
Shares Outstanding at beginning of year | 2,768,928 | 2,985,192 | 2,680,390 |
Shares Granted | 391,175 | 406,700 | 1,434,000 |
Shares Exercised | -105,676 | -16,835 | -193,684 |
Shares Forfeited | -278,646 | -589,787 | -917,126 |
Shares Expired | -102,030 | -16,342 | -18,388 |
Shares Outstanding at end of year | 2,673,751 | 2,768,928 | 2,985,192 |
Shares Options exercisable at year end | 1,675,790 | 1,601,028 | 1,678,559 |
Shares Option expected to vest in future periods | 845,256 | 1,069,119 | 1,075,473 |
Weighted Average exercise price, Outstanding at beginning of year | $14.84 | $15.69 | $15.96 |
Weighted Average exercise price Granted | $13.01 | $11.40 | $13.70 |
Weighted Average exercise price Exercised | $15.38 | $11.15 | $14.22 |
Weighted Average exercise price Forfeited | $17.45 | $17.45 | $14.22 |
Weighted Average exercise price Expired | $15.69 | $15.69 | $24.44 |
Weighted Average exercise price, Outstanding at end of year | $14.82 | $14.84 | $15.69 |
Weighted Average exercise price, Options exercisable at year end | $16.12 | $16.12 | $17.01 |
Weighted Average exercise price, Options expected to vest in future periods | $13.31 | $13.31 | $14.19 |
Weighted Average remaining contractual life | 4 years 6 months 22 days | ||
Weighted Average remaining contractual life, Option exercisable at year end | 4 years 6 months 16 days | ||
Weighted Average remaining contractual life, Option expected to vest in future periods | 5 years 22 days | ||
Aggregate intrinsic value, Outstanding at end of year | $17,540 | ||
Aggregate intrinsic value, Options exercisable at year end | 12,906 | ||
Aggregate intrinsic value, Option expected to vest in future periods | $3,986 |
Stockholders_Equity_Details_1
Stockholders' Equity (Details 1) (USD $) | 12 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-12 | |
Summary of weighted average fair value of options granted | |||
Weighted-average fair value of options granted during the year | $4.10 | $4.19 | $5.62 |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) | 12 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-12 | |
Schedule of weighted-average fair value assumptions | |||
Expected stock price volatility | 34.40% | 43.91% | 49.06% |
Risk-free interest rate | 1.44% | 0.62% | 0.70% |
Expected life of options | 4 years 8 months 25 days | 4 years 7 months 13 days | 4 years 7 months 2 days |
Stockholders_Equity_Details_3
Stockholders' Equity (Details 3) (USD $) | 12 Months Ended |
31-May-14 | |
Options outstanding | |
Number outstanding | 2,673,751 |
Weighted-average remaining life in years | 4 years 6 months 22 days |
Weighted -average exercise price | $14.84 |
Number Exercisable | 1,675,790 |
Weighted-average exercise price | $16.12 |
Range One [Member] | |
Options outstanding | |
Range of exercise prices, Lower limit | $6.52 |
Range of exercise prices, Upper limit | $11.93 |
Number outstanding | 463,965 |
Weighted-average remaining life in years | 5 years 7 months 21 days |
Weighted -average exercise price | $11.37 |
Number Exercisable | 65,832 |
Weighted-average exercise price | $10.61 |
Range Two [Member] | |
Options outstanding | |
Range of exercise prices, Lower limit | $12.06 |
Range of exercise prices, Upper limit | $12.97 |
Number outstanding | 343,161 |
Weighted-average remaining life in years | 4 years 10 months 10 days |
Weighted -average exercise price | $12.41 |
Number Exercisable | 155,661 |
Weighted-average exercise price | $12.44 |
Range Three [Member] | |
Options outstanding | |
Range of exercise prices, Lower limit | $13.18 |
Range of exercise prices, Upper limit | $13.85 |
Number outstanding | 432,426 |
Weighted-average remaining life in years | 3 years 4 months 17 days |
Weighted -average exercise price | $13.35 |
Number Exercisable | 321,348 |
Weighted-average exercise price | $13.36 |
Range Four [Member] | |
Options outstanding | |
Range of exercise prices, Lower limit | $13.92 |
Range of exercise prices, Upper limit | $14.31 |
Number outstanding | 430,000 |
Weighted-average remaining life in years | 4 years 2 months 16 days |
Weighted -average exercise price | $13.95 |
Number Exercisable | 228,750 |
Weighted-average exercise price | $13.97 |
Range Five [Member] | |
Options outstanding | |
Range of exercise prices, Lower limit | $14.48 |
Range of exercise prices, Upper limit | $15.57 |
Number outstanding | 202,880 |
Weighted-average remaining life in years | 1 year 1 month 2 days |
Weighted -average exercise price | $15.25 |
Number Exercisable | 202,880 |
Weighted-average exercise price | $15.25 |
Range Six [Member] | |
Options outstanding | |
Range of exercise prices, Lower limit | $15.75 |
Range of exercise prices, Upper limit | $16.58 |
Number outstanding | 376,196 |
Weighted-average remaining life in years | 3 years 4 months 21 days |
Weighted -average exercise price | $16.06 |
Number Exercisable | 276,196 |
Weighted-average exercise price | $16.03 |
Range Seven [Member] | |
Options outstanding | |
Range of exercise prices, Lower limit | $16.75 |
Range of exercise prices, Upper limit | $19.94 |
Number outstanding | 267,522 |
Weighted-average remaining life in years | 1 year 0 months 22 days |
Weighted -average exercise price | $18.19 |
Number Exercisable | 267,522 |
Weighted-average exercise price | $18.16 |
Range Eight [Member] | |
Options outstanding | |
Range of exercise prices, Lower limit | $20.06 |
Range of exercise prices, Upper limit | $31.33 |
Number outstanding | 157,601 |
Weighted-average remaining life in years | 1 year 3 months 4 days |
Weighted -average exercise price | $23.05 |
Number Exercisable | 157,601 |
Weighted-average exercise price | $13.81 |
Stockholders_Equity_Details_4
Stockholders' Equity (Details 4) (USD $) | 12 Months Ended |
31-May-14 | |
Share Based Compensation Arrangement by Share Based Payment Award Nonvested Shares and Weighted Average Grant Date Fair Value [Abstract] | |
Non-Vested Stock Award Units Beginning Balance | 482,644 |
Non-Vested Stock Award Units, Granted | 473,824 |
Non-Vested Stock Award Units, Cancelled | -109,634 |
Non-Vested Stock Award Units, Vested | -148,946 |
Non-Vested Stock Award Units Ending Balance | 697,888 |
Weighted Average Grant-Date Fair Value Beginning Balance | $12.14 |
Weighted Average Grant-Date Fair Value, Granted | $13.37 |
Weighted Average Grant-Date Fair Value, Cancelled | $12.48 |
Weighted Average Grant-Date Fair Value, Vested | $12.62 |
Weighted Average Grant-Date Fair Value Ending Balance | $13.02 |
Stockholders_Equity_Details_5
Stockholders' Equity (Details 5) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | 31-May-14 |
Summary of future expense for awards outstanding | |
Stock options Unrecognized Compensation Cost | $3,382 |
Non-vested stock awards, Unrecognized Compensation Cost | 5,625 |
Total, Unrecognized Compensation Cost | $9,007 |
Stock options, Weighted Average Remaining Vesting Period (in years) | 2 years 1 month 17 days |
Non-vested stock awards, Weighted Average Remaining Vesting Period (in years) | 2 years 4 months 13 days |
Total, Weighted Average Remaining Vesting Period (in years) | 2 years 3 months 11 days |
Stockholders_Equity_Details_6
Stockholders' Equity (Details 6) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Summary of stock-based compensation in accordance with authoritative guidance on share based payment awards | |||
Stock based compensation expense | $5,502 | $4,609 | $4,052 |
Tax benefit | 1,862 | 1,540 | 1,447 |
Stock based compensation expense, net of tax | 3,640 | 3,069 | 2,605 |
Cost of Sales [Member] | |||
Summary of stock-based compensation in accordance with authoritative guidance on share based payment awards | |||
Stock based compensation expense | 232 | 271 | 268 |
Research and Development [Member] | |||
Summary of stock-based compensation in accordance with authoritative guidance on share based payment awards | |||
Stock based compensation expense | 483 | 399 | 738 |
Sales and Marketing [Member] | |||
Summary of stock-based compensation in accordance with authoritative guidance on share based payment awards | |||
Stock based compensation expense | 1,672 | 1,610 | 1,340 |
General and Administrative [Member] | |||
Summary of stock-based compensation in accordance with authoritative guidance on share based payment awards | |||
Stock based compensation expense | 3,115 | 2,329 | 1,706 |
Operating Expenses [Member] | |||
Summary of stock-based compensation in accordance with authoritative guidance on share based payment awards | |||
Stock based compensation expense | $5,270 | $4,338 | $3,784 |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textual) (USD $) | 12 Months Ended | 0 Months Ended | ||||
31-May-14 | 31-May-13 | 31-May-12 | 22-May-12 | Oct. 05, 2011 | Feb. 27, 2004 | |
OptionPlan | ||||||
Other Ownership Interests [Line Items] | ||||||
Authorized capital stock | 50,000,000 | |||||
Shares of common stock | 45,000,000 | 45,000,000 | 45,000,000 | |||
Common stock, par value | $0.01 | $0.01 | $0.01 | |||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||
Preferred stock, par value | $0.01 | $0.01 | $0.01 | |||
Voting common stock, par value | $1 | |||||
Non-voting common stock, par value | $1 | |||||
Common stock, issued | 9,200 | |||||
Common stock, shares outstanding | 9,200,000 | |||||
Authorized the repurchase of common stock | 20,000,000 | |||||
Number of purchased shares | 0 | 0 | 142,305 | |||
Purchase of common stock for treasury | -2,104,000 | |||||
Stock-based compensation plans | 2 | |||||
Maximum number of shares to be offered | 5,800,000 | |||||
Percentage of grants to employees vesting | 25.00% | |||||
Option grants to employees vesting period | 4 years | |||||
Percentage of grants for consultants vesting | 100.00% | |||||
Option grants to consultants vesting period | 1 year | |||||
Percentage of Initial grants to directors vesting | 25.00% | |||||
Initial grants to directors vesting period | 4 years | |||||
Subsequent grants for directors vesting | 33.33% | |||||
Subsequent grants for directors vesting period | 3 years | |||||
The total intrinsic value of options exercised | 1,000,000 | 100,000 | 2,200,000 | |||
Unrecognized compensation cost for stock options | 12.00% | |||||
Average price of share issued | $9.30 | $9.80 | $11.62 | |||
Stock based compensation pre tax amount | 5,502,000 | 4,609,000 | 4,052,000 | |||
Stock based compensation after tax amount | 3,640,000 | 3,069,000 | 2,605,000 | |||
Avista Capital Partners [Member] | ||||||
Other Ownership Interests [Line Items] | ||||||
Issuance of investment funds | 9,500,000 | |||||
Common stock, outstanding shares, percentage | 27.00% | |||||
Performance Share and Restricted Stock Unit Awards [Member] | ||||||
Other Ownership Interests [Line Items] | ||||||
Total fair value of restricted stock awards vesting | $1,800,000 | $1,200,000 | $900,000 | |||
1997 Stock Option Plan [Member] | ||||||
Other Ownership Interests [Line Items] | ||||||
Total number of common stock available to be issued | 1,497,674 | |||||
Options exercisable period | 10 years | |||||
2004 Stock and Incentive Award Plan [Member] | ||||||
Other Ownership Interests [Line Items] | ||||||
Total number of common stock available to be issued | 1,600,000 | |||||
Options exercisable period | 10 years | |||||
Total number of common stock reserved for issuance | 5,750,000 | |||||
Incentive award plan to increase the minimum number of shares | 200,000 | |||||
Incentive award plan to increase the maximum number of shares | 500,000 | |||||
2004 Stock and Incentive Award Plan [Member] | Maximum [Member] | ||||||
Other Ownership Interests [Line Items] | ||||||
Total number of common stock available to be issued | 800,000 | |||||
Employee Stock Purchase Plan [Member] | ||||||
Other Ownership Interests [Line Items] | ||||||
Maximum number of shares to be offered | 1,200,000 | |||||
Total number of common stock available to be issued | 423,895 | |||||
Share purchase periods | 2 | |||||
Duration of purchase of shares | 6 months | |||||
Employee eligible in participating in offering period | 6 months | |||||
Working schedule of employee to participate in offering period | 20 or more hours per week and more than five months in a calendar year | |||||
Employees ownership threshold | 5.00% | |||||
Percentage of fair market value of a share of common stock on the first day of the offering period | 85.00% | |||||
Percentage of fair market value of a share of common stock on the last day of the offering period | 85.00% | |||||
Maximum number of shares to be offered under the Stock Purchase Plan | 146,275 | 123,556 | 103,362 |
Recovered_Sheet1
Commitments and Contingencies (Details) (USD $) | 31-May-14 |
In Thousands, unless otherwise specified | |
Aggregate of future annual payments under non cancelable operating leases for facilities and equipment [Abstract] | |
2015 | $1,991 |
2016 | 1,644 |
2017 | 1,186 |
2018 | 1,093 |
2019 | 1,093 |
Total | $7,007 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||
Jan. 14, 2014 | Nov. 08, 2012 | 31-May-14 | 31-May-13 | 31-May-12 | |
Petition | |||||
Lawsuit | |||||
Commitments and Contingencies (Textual) [Abstract] | |||||
Aggregate rental costs under operating leases | $2,000,000 | $2,500,000 | $3,100,000 | ||
Number of lawsuits against biolitec previously settled for which seeking defense and indemnification | 2 | ||||
Partial judgment granted | 23,200,000 | ||||
Judgment entered in favor | 74,900,000 | ||||
Number of petitions filed for reexamination of patents | 3 | ||||
Number of rejected patent claims | 40 of 41 patent | ||||
Total future purchase obligations due through 2018 | 12,500,000 | ||||
Purchase obligations after 2018 | $0 |
Segments_and_Geographic_Inform2
Segments and Geographic Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 |
Summary of total net sales by product category | ||||||||||||
Total | $94,060 | $88,150 | $88,571 | $83,644 | $89,932 | $81,571 | $87,007 | $83,406 | $354,425 | $341,916 | $221,917 | $215,620 |
Peripheral Vascular [Member] | ||||||||||||
Summary of total net sales by product category | ||||||||||||
Total | 192,626 | 179,573 | 95,330 | |||||||||
Access [Member] | ||||||||||||
Summary of total net sales by product category | ||||||||||||
Total | 106,394 | 106,690 | 63,857 | |||||||||
Oncology/Surgery [Member] | ||||||||||||
Summary of total net sales by product category | ||||||||||||
Total | 49,360 | 47,155 | 62,730 | |||||||||
Supply Agreement [Member] | ||||||||||||
Summary of total net sales by product category | ||||||||||||
Total | $6,045 | $8,498 | $0 |
Segments_and_Geographic_Inform3
Segments and Geographic Information (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 |
Net Sales by Geography | ||||||||||||
Net sales | $94,060 | $88,150 | $88,571 | $83,644 | $89,932 | $81,571 | $87,007 | $83,406 | $354,425 | $341,916 | $221,917 | $215,620 |
United States [Member] | ||||||||||||
Net Sales by Geography | ||||||||||||
Net sales | 280,161 | 266,228 | 188,317 | |||||||||
International [Member] | ||||||||||||
Net Sales by Geography | ||||||||||||
Net sales | 68,219 | 67,190 | 33,600 | |||||||||
Supply Agreement [Member] | ||||||||||||
Net Sales by Geography | ||||||||||||
Net sales | $6,045 | $8,498 | $0 |
Segments_and_Geographic_Inform4
Segments and Geographic Information (Details Textual) | 12 Months Ended | ||
31-May-14 | 31-May-13 | 31-May-12 | |
Segment | |||
Segments and Geographic Information (Textual) [Abstract] | |||
International sales percentage of total net sales | 19.00% | 20.00% | 15.00% |
Number of segment | 1 | ||
Total assets are located within the United States | 99.00% |
Restructuring_Details
Restructuring (Details) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | 31-May-14 | 31-May-14 |
Employees | ||
Operational Excellence Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | $4.70 | 4.7 |
Restructuring costs incurred to date | 1.4 | 1.4 |
Accelerated depreciation due to restructuring | 0.7 | |
Severance [Member] | Operational Excellence Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs incurred to date | 0.6 | 0.6 |
Other Costs [Member] | Operational Excellence Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs incurred to date | 0.1 | 0.1 |
Minimum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected number of positions eliminated | 80,000 | |
Minimum [Member] | Operational Excellence Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected future saving | 15 | |
Maximum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected number of positions eliminated | 100,000 | |
Maximum [Member] | Operational Excellence Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected future saving | 18 | |
Facility Improvements [Member] | Operational Excellence Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | $5.40 | 5.4 |
Quarterly_Information_Quarterl
Quarterly Information Quarterly Information (unaudited) Statement of Immaterial Errors (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, except Per Share data, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 |
Cost of sales | $46,650 | $174,757 | $173,402 | $96,608 | $90,047 | |||||||
Gross profit | 47,410 | 44,793 | 44,885 | 42,580 | 43,982 | 41,129 | 44,016 | 39,387 | 179,668 | 168,514 | 125,309 | 125,573 |
Operating income | 3,584 | 12,940 | 6,288 | -3,908 | 11,901 | |||||||
Income before income tax provision | 2,110 | 5,740 | -1,587 | -5,422 | 10,636 | |||||||
Income tax expense | 3,325 | 3,074 | -376 | -239 | 2,559 | |||||||
Net income | -1,215 | 4,515 | -261 | -373 | -1,021 | -1,083 | 1,878 | -985 | 2,666 | -1,211 | -5,183 | 8,077 |
Income per common share | ($0.03) | $0.13 | ($0.01) | ($0.01) | ($0.03) | ($0.03) | $0.05 | ($0.03) | $0.08 | ($0.03) | ($0.20) | |
Income per diluted share | ($0.03) | $0.13 | ($0.01) | ($0.01) | ($0.03) | ($0.03) | $0.05 | ($0.03) | $0.08 | ($0.03) | ($0.20) | |
Inventory, net | 61,234 | 55,079 | 61,234 | 55,079 | ||||||||
Income taxes payable | 689 | 0 | 689 | 0 | ||||||||
Change in inventories | -5,608 | -1,909 | -1,522 | |||||||||
Accounts payable, accrued and other liabilities | 6,658 | -9,711 | 6,582 | |||||||||
Net cash provided by operating activities | 24,681 | 26,652 | 11,602 | |||||||||
As Previously Reported | ||||||||||||
Cost of sales | 46,534 | 174,594 | 173,037 | 95,829 | 90,047 | |||||||
Gross profit | 47,531 | 179,861 | 168,989 | 125,958 | 125,703 | |||||||
Operating income | 3,735 | 13,448 | 7,094 | -2,962 | 11,963 | |||||||
Income before income tax provision | 2,246 | 6,380 | -643 | -5,282 | 10,698 | |||||||
Income tax expense | 3,324 | 3,292 | -31 | -188 | 2,581 | |||||||
Net income | -1,078 | 3,088 | -612 | -5,094 | 8,117 | |||||||
Inventory, net | 61,056 | 55,062 | 61,056 | 55,062 | ||||||||
Net cash provided by operating activities | 25,280 | 26,883 | 11,497 | |||||||||
Adjustments | ||||||||||||
Cost of sales | 116 | 163 | 365 | 779 | 0 | |||||||
Gross profit | -121 | -193 | -475 | -649 | -130 | |||||||
Operating income | -151 | -508 | -806 | -946 | -62 | |||||||
Income before income tax provision | -136 | -640 | -944 | -140 | -62 | |||||||
Income tax expense | 1 | -218 | -345 | -51 | -22 | |||||||
Net income | -137 | -422 | -599 | -89 | -40 | |||||||
Inventory, net | 178 | 17 | 178 | 17 | ||||||||
Net cash provided by operating activities | ($599) | ($231) | $105 |
Quarterly_Information_unaudite2
Quarterly Information (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, except Per Share data, unless otherwise specified | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 |
Summary of Quarterly Financial Information | ||||||||||||
Net sales | $94,060 | $88,150 | $88,571 | $83,644 | $89,932 | $81,571 | $87,007 | $83,406 | $354,425 | $341,916 | $221,917 | $215,620 |
Gross profit | 47,410 | 44,793 | 44,885 | 42,580 | 43,982 | 41,129 | 44,016 | 39,387 | 179,668 | 168,514 | 125,309 | 125,573 |
Net income | ($1,215) | $4,515 | ($261) | ($373) | ($1,021) | ($1,083) | $1,878 | ($985) | $2,666 | ($1,211) | ($5,183) | $8,077 |
Earnings per common share | ||||||||||||
Basic (usd per share) | ($0.03) | $0.13 | ($0.01) | ($0.01) | ($0.03) | ($0.03) | $0.05 | ($0.03) | $0.08 | ($0.03) | ($0.20) | |
Diluted (usd per share) | ($0.03) | $0.13 | ($0.01) | ($0.01) | ($0.03) | ($0.03) | $0.05 | ($0.03) | $0.08 | ($0.03) | ($0.20) |
Quarterly_Information_unaudite3
Quarterly Information (unaudited) (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
Feb. 28, 2013 | Nov. 30, 2012 | 31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | |
Quarterly Information (Additional Textual) [Abstract] | ||||||||||
Transaction and related costs, UK facility | $920,000 | $476,000 | ||||||||
Navilyst [Member] | ||||||||||
Quarterly Information (Textual) [Abstract] | ||||||||||
Acquisition of related cost\transaction and related costs | 1,300,000 | 1,700,000 | 1,300,000 | 1,400,000 | 1,600,000 | 1,200,000 | 2,100,000 | 2,200,000 | ||
Consolidation charges | 400,000 | 1,000,000 | ||||||||
Litigation related costs | 1,100,000 | 800,000 | 580,000 | |||||||
Quarterly Information (Additional Textual) [Abstract] | ||||||||||
Costs related to the discontinuance of product line | 1,600,000 | |||||||||
Transaction and related costs, UK facility | 717,000 | 337,000 | ||||||||
Vortex Medical [Member] | ||||||||||
Quarterly Information (Textual) [Abstract] | ||||||||||
Acquisition of related cost\transaction and related costs | 162,000 | 645,000 | ||||||||
Litigation related costs | 425,000 | |||||||||
Quarterly Information (Additional Textual) [Abstract] | ||||||||||
Gain (loss) on sale of product line | 770,000 | |||||||||
Clinical Devices, B.V. [Member] | ||||||||||
Quarterly Information (Textual) [Abstract] | ||||||||||
Acquisition of related cost\transaction and related costs | 300,000 | |||||||||
Vortex and Microsulis Medical Ltd [Member] | ||||||||||
Quarterly Information (Textual) [Abstract] | ||||||||||
Acquisition of related cost\transaction and related costs | 414,000 | |||||||||
Litigation related costs | 901,000 | |||||||||
Vortex Medical [Member] | ||||||||||
Quarterly Information (Textual) [Abstract] | ||||||||||
Acquisition of related cost\transaction and related costs | $325,000 |
Immaterial_Error_Corrections_D
Immaterial Error Corrections (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||||
31-May-14 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | 31-May-13 | Feb. 28, 2013 | Nov. 30, 2012 | Aug. 31, 2012 | 31-May-14 | 31-May-13 | 31-May-12 | 31-May-11 | Aug. 31, 2014 | |
Cash and Cash Equivalents, at Carrying Value | $16,105,000 | $21,802,000 | $16,105,000 | $21,802,000 | $23,739,000 | $45,984,000 | |||||||
Accounts Receivable, Net, Current | 61,968,000 | 47,681,000 | 61,968,000 | 47,681,000 | 46,903,000 | 27,011,000 | |||||||
Net Cash Provided by (Used in) Operating Activities | 24,681,000 | 26,652,000 | 11,602,000 | ||||||||||
Revenue, Net | 94,060,000 | 88,150,000 | 88,571,000 | 83,644,000 | 89,932,000 | 81,571,000 | 87,007,000 | 83,406,000 | 354,425,000 | 341,916,000 | 221,917,000 | 215,620,000 | |
Cost of Goods Sold | 46,650,000 | 174,757,000 | 173,402,000 | 96,608,000 | 90,047,000 | ||||||||
Gross profit | 47,410,000 | 44,793,000 | 44,885,000 | 42,580,000 | 43,982,000 | 41,129,000 | 44,016,000 | 39,387,000 | 179,668,000 | 168,514,000 | 125,309,000 | 125,573,000 | |
Operating Expenses | 43,826,000 | 166,728,000 | 162,226,000 | 129,217,000 | 113,672,000 | ||||||||
Operating income (loss) | 3,584,000 | 12,940,000 | 6,288,000 | -3,908,000 | 11,901,000 | ||||||||
Other Nonoperating Income (Expense) | -1,474,000 | -7,200,000 | -7,875,000 | -1,514,000 | -1,265,000 | ||||||||
Income (loss) before income tax expense (benefit) | 2,110,000 | 5,740,000 | -1,587,000 | -5,422,000 | 10,636,000 | ||||||||
Income Tax Expense (Benefit) | -3,325,000 | -3,074,000 | 376,000 | 239,000 | -2,559,000 | ||||||||
Net income (loss) | -1,215,000 | 4,515,000 | -261,000 | -373,000 | -1,021,000 | -1,083,000 | 1,878,000 | -985,000 | 2,666,000 | -1,211,000 | -5,183,000 | 8,077,000 | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | -1,140,000 | 2,931,000 | -1,471,000 | -5,184,000 | 8,198,000 | ||||||||
Net Cash Provided by (Used in) Investing Activities | -16,448,000 | -22,238,000 | -176,234,000 | ||||||||||
Net Cash Provided by (Used in) Financing Activities | -14,016,000 | -6,286,000 | 142,338,000 | ||||||||||
Inventory, net | 61,234,000 | 55,079,000 | 61,234,000 | 55,079,000 | |||||||||
Prepaid Expense and Other Assets, Current | 5,471,000 | 7,285,000 | 5,471,000 | 7,285,000 | 9,803,000 | ||||||||
Assets, Current | 151,722,000 | 141,154,000 | 151,722,000 | 141,154,000 | 157,761,000 | 194,175,000 | |||||||
Property, Plant and Equipment, Net | 66,590,000 | 62,391,000 | 66,590,000 | 62,391,000 | 55,610,000 | ||||||||
Other Assets, Noncurrent | 3,926,000 | 4,908,000 | 3,926,000 | 4,908,000 | 10,359,000 | ||||||||
GOODWILL | 360,473,000 | 355,637,000 | 360,473,000 | 355,637,000 | 309,091,000 | ||||||||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 10,403,000 | 11,425,000 | 10,403,000 | 11,425,000 | 39,271,000 | 5,857,000 | |||||||
Assets | 798,891,000 | 790,734,000 | 798,891,000 | 790,734,000 | 719,988,000 | 437,313,000 | |||||||
Accrued Liabilities, Current | 16,652,000 | 16,356,000 | 16,652,000 | 16,356,000 | 17,070,000 | 13,734,000 | |||||||
Current portion of contingent consideration | 10,918,000 | 9,207,000 | 10,918,000 | 9,207,000 | |||||||||
Liabilities, Current | 66,753,000 | 63,315,000 | 66,753,000 | 63,315,000 | 53,770,000 | 25,400,000 | |||||||
Business Combination, Contingent Consideration, Liability, Noncurrent | 56,413,000 | 65,842,000 | 56,413,000 | 65,842,000 | |||||||||
Liabilities | 262,056,000 | 264,632,000 | 262,056,000 | 264,632,000 | 196,597,000 | 31,675,000 | |||||||
Additional Paid in Capital, Common Stock | 508,354,000 | 500,554,000 | 508,354,000 | 500,554,000 | 371,380,000 | ||||||||
Retained Earnings (Accumulated Deficit) | 31,501,000 | 28,835,000 | 31,501,000 | 28,835,000 | 30,046,000 | 35,280,000 | |||||||
Stockholders' Equity Attributable to Parent | 536,835,000 | 526,102,000 | 536,835,000 | 526,102,000 | 523,391,000 | 405,637,000 | |||||||
Intangible Assets, Net (Excluding Goodwill) | 205,256,000 | 214,673,000 | 205,256,000 | 214,673,000 | 147,363,000 | ||||||||
Accounts Payable, Current | 32,895,000 | 24,470,000 | 32,895,000 | 24,470,000 | |||||||||
Depreciation | 8,400,000 | 8,700,000 | 3,600,000 | ||||||||||
Scenario, Adjustment [Member] | |||||||||||||
Prepaid Expense and Other Assets, Noncurrent | 1,200,000 | ||||||||||||
Cash and Cash Equivalents, at Carrying Value | 231,000 | ||||||||||||
Accounts Receivable, Net, Current | -180,000 | -110,000 | -180,000 | -110,000 | -1,685,000 | -130,000 | |||||||
Net Cash Provided by (Used in) Operating Activities | -599,000 | -231,000 | 105,000 | ||||||||||
Revenue, Net | -5,000 | -30,000 | -110,000 | 130,000 | -130,000 | ||||||||
Cost of Goods Sold | 116,000 | 163,000 | 365,000 | 779,000 | 0 | ||||||||
Gross profit | -121,000 | -193,000 | -475,000 | -649,000 | -130,000 | ||||||||
Operating Expenses | 30,000 | 315,000 | 331,000 | 297,000 | -68,000 | ||||||||
Operating income (loss) | -151,000 | -508,000 | -806,000 | -946,000 | -62,000 | ||||||||
Other Nonoperating Income (Expense) | 15,000 | -132,000 | -138,000 | 806,000 | 0 | ||||||||
Income (loss) before income tax expense (benefit) | -136,000 | -640,000 | -944,000 | -140,000 | -62,000 | ||||||||
Income Tax Expense (Benefit) | -1,000 | 218,000 | 345,000 | 51,000 | 22,000 | ||||||||
Net income (loss) | -137,000 | -422,000 | -599,000 | -89,000 | -40,000 | ||||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | -137,000 | -422,000 | -599,000 | -89,000 | -40,000 | ||||||||
Net Cash Provided by (Used in) Investing Activities | 599,000 | 0 | 126,000 | ||||||||||
Net Cash Provided by (Used in) Financing Activities | 0 | 0 | 0 | ||||||||||
Inventory, net | 178,000 | 17,000 | 178,000 | 17,000 | |||||||||
Prepaid Expense and Other Assets, Current | -504,000 | -269,000 | -504,000 | -269,000 | -23,000 | ||||||||
Assets, Current | -506,000 | -362,000 | -506,000 | -362,000 | -1,477,000 | -130,000 | |||||||
Property, Plant and Equipment, Net | -618,000 | -259,000 | -618,000 | -259,000 | -305,000 | ||||||||
Other Assets, Noncurrent | -950,000 | -651,000 | -950,000 | -651,000 | -348,000 | ||||||||
GOODWILL | 179,000 | 179,000 | 179,000 | 179,000 | 179,000 | ||||||||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 636,000 | 418,000 | 636,000 | 418,000 | 73,000 | 22,000 | |||||||
Assets | -1,259,000 | -850,000 | -1,259,000 | -850,000 | -1,781,000 | -108,000 | |||||||
Accrued Liabilities, Current | -110,000 | -70,000 | -110,000 | -70,000 | -1,652,000 | -107,000 | |||||||
Current portion of contingent consideration | -5,423,000 | -5,423,000 | |||||||||||
Liabilities, Current | -5,533,000 | -122,000 | -5,533,000 | -122,000 | -1,652,000 | -107,000 | |||||||
Business Combination, Contingent Consideration, Liability, Noncurrent | 5,333,000 | 5,333,000 | |||||||||||
Liabilities | -200,000 | -122,000 | -200,000 | -122,000 | -1,652,000 | -107,000 | |||||||
Additional Paid in Capital, Common Stock | 91,000 | 91,000 | -13,000 | ||||||||||
Retained Earnings (Accumulated Deficit) | -1,150,000 | -728,000 | -1,150,000 | -728,000 | -129,000 | 11,000 | |||||||
Stockholders' Equity Attributable to Parent | -1,059,000 | -728,000 | -1,059,000 | -728,000 | -129,000 | -2,000 | |||||||
Intangible Assets, Net (Excluding Goodwill) | -175,000 | -175,000 | 97,000 | ||||||||||
Accounts Payable, Current | -52,000 | -52,000 | |||||||||||
Depreciation | 400,000 | ||||||||||||
Scenario, Previously Reported [Member] | |||||||||||||
Cash and Cash Equivalents, at Carrying Value | 23,508,000 | ||||||||||||
Accounts Receivable, Net, Current | 62,148,000 | 47,791,000 | 62,148,000 | 47,791,000 | 48,588,000 | 27,141,000 | |||||||
Net Cash Provided by (Used in) Operating Activities | 25,280,000 | 26,883,000 | 11,497,000 | ||||||||||
Revenue, Net | 94,065,000 | 354,455,000 | 342,026,000 | 221,787,000 | 215,750,000 | ||||||||
Cost of Goods Sold | 46,534,000 | 174,594,000 | 173,037,000 | 95,829,000 | 90,047,000 | ||||||||
Gross profit | 47,531,000 | 179,861,000 | 168,989,000 | 125,958,000 | 125,703,000 | ||||||||
Operating Expenses | 43,796,000 | 166,413,000 | 161,895,000 | 128,920,000 | 113,740,000 | ||||||||
Operating income (loss) | 3,735,000 | 13,448,000 | 7,094,000 | -2,962,000 | 11,963,000 | ||||||||
Other Nonoperating Income (Expense) | -1,489,000 | -7,068,000 | -7,737,000 | -2,320,000 | -1,265,000 | ||||||||
Income (loss) before income tax expense (benefit) | 2,246,000 | 6,380,000 | -643,000 | -5,282,000 | 10,698,000 | ||||||||
Income Tax Expense (Benefit) | -3,324,000 | -3,292,000 | 31,000 | 188,000 | -2,581,000 | ||||||||
Net income (loss) | -1,078,000 | 3,088,000 | -612,000 | -5,094,000 | 8,117,000 | ||||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | -1,003,000 | 3,353,000 | -872,000 | -5,095,000 | 8,238,000 | ||||||||
Net Cash Provided by (Used in) Investing Activities | -17,047,000 | -22,238,000 | -176,360,000 | ||||||||||
Net Cash Provided by (Used in) Financing Activities | -14,016,000 | -6,286,000 | 142,338,000 | ||||||||||
Inventory, net | 61,056,000 | 55,062,000 | 61,056,000 | 55,062,000 | |||||||||
Prepaid Expense and Other Assets, Current | 5,975,000 | 7,554,000 | 5,975,000 | 7,554,000 | 9,826,000 | ||||||||
Assets, Current | 152,228,000 | 141,516,000 | 152,228,000 | 141,516,000 | 159,238,000 | 194,305,000 | |||||||
Property, Plant and Equipment, Net | 67,208,000 | 62,650,000 | 67,208,000 | 62,650,000 | 55,915,000 | ||||||||
Other Assets, Noncurrent | 4,876,000 | 5,559,000 | 4,876,000 | 5,559,000 | 10,707,000 | ||||||||
GOODWILL | 360,294,000 | 355,458,000 | 360,294,000 | 355,458,000 | 308,912,000 | ||||||||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 9,767,000 | 11,007,000 | 9,767,000 | 11,007,000 | 39,198,000 | 5,835,000 | |||||||
Assets | 800,150,000 | 791,584,000 | 800,150,000 | 791,584,000 | 721,769,000 | 437,421,000 | |||||||
Accrued Liabilities, Current | 16,762,000 | 16,426,000 | 16,762,000 | 16,426,000 | 18,722,000 | 13,841,000 | |||||||
Current portion of contingent consideration | 16,341,000 | 16,341,000 | |||||||||||
Liabilities, Current | 72,286,000 | 63,437,000 | 72,286,000 | 63,437,000 | 55,422,000 | 25,507,000 | |||||||
Business Combination, Contingent Consideration, Liability, Noncurrent | 51,080,000 | 51,080,000 | |||||||||||
Liabilities | 262,256,000 | 264,754,000 | 262,256,000 | 264,754,000 | 198,249,000 | 31,782,000 | |||||||
Additional Paid in Capital, Common Stock | 508,263,000 | 508,263,000 | 371,393,000 | ||||||||||
Retained Earnings (Accumulated Deficit) | 32,651,000 | 29,563,000 | 32,651,000 | 29,563,000 | 30,175,000 | 35,269,000 | |||||||
Stockholders' Equity Attributable to Parent | 537,894,000 | 526,830,000 | 537,894,000 | 526,830,000 | 523,520,000 | 405,639,000 | |||||||
Intangible Assets, Net (Excluding Goodwill) | 214,848,000 | 214,848,000 | 147,266,000 | ||||||||||
Accounts Payable, Current | $24,522,000 | $24,522,000 |
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | 31-May-14 | 31-May-13 | 31-May-12 |
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $1,984 | $2,129 | $1,619 |
Additions - Charged to costs and expenses | 8,161 | 4,134 | 5,067 |
Deductions | -6,878 | -4,279 | -4,557 |
Balance at End of Period | 3,267 | 1,984 | 2,129 |
Allowance for deferred tax asset [Member] | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | 712 | 1,196 | 1,134 |
Additions - Charged to costs and expenses | 819 | 0 | 208 |
Deductions | 0 | -484 | -146 |
Balance at End of Period | 1,531 | 712 | 1,196 |
Allowance for sales returns and doubtful accounts [Member] | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | 1,272 | 933 | 485 |
Additions - Charged to costs and expenses | 7,342 | 4,134 | 4,859 |
Deductions | -6,878 | -3,795 | -4,411 |
Balance at End of Period | $1,736 | $1,272 | $933 |