Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 08, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Amphastar Pharmaceuticals, Inc. | ||
Trading Symbol | amph | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001297184 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Common Stock, Shares Outstanding | 46,788,811 | ||
Entity Public Float | $ 454,913,022 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 86,337 | $ 65,594 |
Short-term investments | 2,831 | 2,635 |
Restricted cash and short-term investments | 4,155 | 4,155 |
Accounts receivable, net | 52,163 | 35,996 |
Inventories | 69,322 | 63,609 |
Income tax refunds and deposits | 49 | 6,036 |
Prepaid expenses and other assets | 5,485 | 9,753 |
Total current assets | 220,342 | 187,778 |
Property, plant, and equipment, net | 210,418 | 180,545 |
Goodwill and intangible assets, net | 42,267 | 45,140 |
Other assets | 9,918 | 8,663 |
Deferred tax assets | 30,618 | 28,946 |
Total assets | 513,563 | 451,072 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 87,418 | 57,555 |
Income taxes payable | 1,187 | 3,325 |
Current portion of long-term debt and capital leases | 18,229 | 6,312 |
Total current liabilities | 106,834 | 67,192 |
Long-term reserve for income tax liabilities | 415 | 879 |
Long-term debt and capital leases, net of current portion | 31,984 | 40,844 |
Deferred tax liabilities | 1,031 | 1,361 |
Other long-term liabilities | 8,940 | 7,060 |
Total liabilities | 149,204 | 117,336 |
Stockholders’ equity: | ||
Preferred stock: par value $0.0001; 20,000,000 shares authorized; no shares issued and outstanding | ||
Common stock: par value $0.0001; 300,000,000 shares authorized; 51,438,675 and 46,631,118 shares issued and outstanding as of December 31, 2018 and 50,039,212 and 46,623,581 shares issued and outstanding as of December 31, 2017, respectively | 5 | 5 |
Additional paid-in capital | 344,434 | 313,891 |
Retained earnings | 67,485 | 72,642 |
Accumulated other comprehensive loss | (4,013) | (2,100) |
Treasury stock | (75,476) | (50,702) |
Total Amphastar Pharmaceuticals, Inc. stockholders’ equity | 332,435 | 333,736 |
Noncontrolling Interests | 31,924 | |
Total equity | 364,359 | 333,736 |
Total liabilities and stockholders’ equity | $ 513,563 | $ 451,072 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock; shares authorized | 300,000,000 | 300,000,000 |
Common stock; shares issued | 51,438,675 | 50,039,212 |
Common stock; shares outstanding | 46,631,118 | 46,623,581 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Net revenues | $ 294,666 | $ 240,175 | $ 255,165 |
Cost of revenues | 187,681 | 149,666 | 150,969 |
Gross profit | 106,985 | 90,509 | 104,196 |
Operating (income) expenses: | |||
Selling, distribution, and marketing | 8,156 | 6,460 | 5,466 |
General and administrative | 49,888 | 44,458 | 41,832 |
Research and development | 57,564 | 43,503 | 41,522 |
Gain on sale of intangible assets | (2,643) | ||
Total operating expenses | 115,608 | 91,778 | 88,820 |
Income (loss) from operations | (8,623) | (1,269) | 15,376 |
Non-operating income (expenses): | |||
Interest income | 456 | 425 | 270 |
Interest expense | (243) | (826) | (1,024) |
Other income (expenses), net | (1,516) | 2,919 | 8 |
Total non-operating income (expenses), net | (1,303) | 2,518 | (746) |
Income (loss) before income taxes | (9,926) | 1,249 | 14,630 |
Income tax expense (benefit) | (3,266) | (2,398) | 4,810 |
Net income (loss) | (6,660) | 3,647 | 9,820 |
Net loss attributable to noncontrolling interest | (922) | ||
Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. | $ (5,738) | $ 3,647 | $ 9,820 |
Net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: | |||
Basic (in Dollars per share) | $ (0.12) | $ 0.08 | $ 0.22 |
Diluted (in Dollars per share) | $ (0.12) | $ 0.08 | $ 0.21 |
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: | |||
Basic (in Shares) | 46,395 | 46,107 | 45,375 |
Diluted (in Shares) | 46,395 | 48,367 | 47,504 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. | $ (5,738) | $ 3,647 | $ 9,820 |
Other comprehensive income (loss) attributable to Amphastar Pharmaceuticals, Inc., net of income taxes | |||
Foreign currency translation adjustment | (1,957) | 2,713 | (1,800) |
Change in pension obligations | 44 | (117) | (421) |
Total other comprehensive income (loss) attributable to Amphastar Pharmaceuticals, Inc. | (1,913) | 2,596 | (2,221) |
Total comprehensive income (loss) attributable to Amphastar Pharmaceuticals, Inc. | $ (7,651) | $ 6,243 | $ 7,599 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Total Amphastar Stockholders' Equity [Member] | Non-controlling Interest [Member] | Total |
Balance at Dec. 31, 2015 | $ 5 | $ 247,829 | $ 58,303 | $ (2,475) | $ (10,172) | $ 293,490 | ||
Balance at Dec. 31, 2015 | $ 293,490 | |||||||
Balance at Dec. 31, 2015 | 45,960,206 | (761,715) | ||||||
Changes in Stockholders' Equity | ||||||||
Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. | 9,820 | 9,820 | 9,820 | |||||
Other comprehensive income (loss) attributable to Amphastar Pharmaceuticals, Inc. | (2,221) | (2,221) | (2,221) | |||||
Treasury stock acquired | $ (9,908) | (9,908) | (9,908) | |||||
Treasury stock acquired (in Shares) | (759,067) | |||||||
Issuance of treasury stock in connection with the Company's equity plans | (48) | $ 48 | ||||||
Issuance of treasury stock in connection with the Company's equity plans (in Shares) | 4,255 | |||||||
Issuance of common stock in connection with the Company's equity plans | 20,639 | 20,639 | 20,639 | |||||
Issuance of common stock in connection with the Company's equity plans (in Shares) | 1,804,943 | |||||||
Share-based compensation expense | 15,124 | 15,124 | 15,124 | |||||
Tax effect of settlement of share-based awards | (421) | (421) | (421) | |||||
Balance at Dec. 31, 2016 | $ 5 | 283,123 | 68,123 | (4,696) | $ (20,032) | 326,523 | ||
Balance at Dec. 31, 2016 | 326,523 | |||||||
Balance at Dec. 31, 2016 | 47,765,149 | (1,516,527) | ||||||
Changes in Stockholders' Equity | ||||||||
Beginning balance adjustment as a result of the adoption of accounting standards | 872 | 872 | 872 | |||||
Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. | 3,647 | 3,647 | 3,647 | |||||
Other comprehensive income (loss) attributable to Amphastar Pharmaceuticals, Inc. | 2,596 | 2,596 | 2,596 | |||||
Treasury stock acquired | $ (30,747) | (30,747) | (30,747) | |||||
Treasury stock acquired (in Shares) | (1,905,653) | |||||||
Issuance of treasury stock in connection with the Company's equity plans | (77) | $ 77 | ||||||
Issuance of treasury stock in connection with the Company's equity plans (in Shares) | 6,549 | |||||||
Issuance of common stock in connection with the Company's equity plans | 13,758 | 13,758 | 13,758 | |||||
Issuance of common stock in connection with the Company's equity plans (in Shares) | 2,274,063 | |||||||
Share-based compensation expense | 17,087 | 17,087 | 17,087 | |||||
Balance at Dec. 31, 2017 | $ 5 | 313,891 | 72,642 | (2,100) | $ (50,702) | 333,736 | 333,736 | |
Balance at Dec. 31, 2017 | $ 333,736 | |||||||
Balance at Dec. 31, 2017 | 50,039,212 | (3,415,631) | 46,623,581 | |||||
Changes in Stockholders' Equity | ||||||||
Beginning balance adjustment as a result of the adoption of accounting standards | 582 | 582 | $ 582 | |||||
Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. | (5,738) | (5,738) | (5,738) | |||||
Other comprehensive income (loss) attributable to Amphastar Pharmaceuticals, Inc. | (1,913) | (1,913) | (1,913) | |||||
Proceeds from the private placement of ANP | 5,190 | 5,190 | $ 32,846 | 38,036 | ||||
Net loss attributable to non-controlling interest | (922) | (922) | ||||||
Treasury stock acquired | $ (25,047) | (25,047) | (25,047) | |||||
Treasury stock acquired (in Shares) | (1,414,924) | |||||||
Issuance of treasury stock in connection with the Company's equity plans | (273) | $ 273 | ||||||
Issuance of treasury stock in connection with the Company's equity plans (in Shares) | 22,998 | |||||||
Issuance of common stock in connection with the Company's equity plans | 8,946 | 8,946 | 8,946 | |||||
Issuance of common stock in connection with the Company's equity plans (in Shares) | 1,399,463 | |||||||
Share-based compensation expense | 16,680 | 16,680 | 16,680 | |||||
Balance at Dec. 31, 2018 | $ 5 | $ 344,434 | $ 67,485 | $ (4,013) | $ (75,476) | $ 332,435 | $ 31,924 | 332,435 |
Balance at Dec. 31, 2018 | $ 364,359 | |||||||
Balance at Dec. 31, 2018 | 51,438,675 | (4,807,557) | 46,631,118 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash Flows From Operating Activities: | |||
Net income (loss) | $ (6,660) | $ 3,647 | $ 9,820 |
Reconciliation to net cash provided by operating activities: | |||
Loss (gain) on disposal and impairment of long-lived assets | 1,429 | (2,337) | 1,242 |
Depreciation of property, plant, and equipment | 14,529 | 12,954 | 12,161 |
Amortization of product rights, trademarks, and patents | 1,987 | 2,856 | 2,517 |
Share-based compensation | 16,680 | 17,087 | 15,124 |
Reserve for uncertain tax positions | (464) | 34 | 347 |
Changes in deferred taxes | (1,414) | 4,386 | (3,222) |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (16,295) | (8,102) | 6,377 |
Inventories | (5,984) | 18,650 | (9,715) |
Prepaid expenses and other assets | 1,375 | (4,817) | 1,331 |
Income tax refund, deposits, and payable | 3,849 | (11,836) | 3,329 |
Accounts payable and accrued liabilities | 29,159 | 6,687 | (751) |
Net cash provided by operating activities | 38,191 | 39,209 | 38,560 |
Cash Flows From Investing Activities: | |||
Business Acquisitions | (12,461) | ||
Purchases and construction of property, plant, and equipment | (46,808) | (35,099) | (21,382) |
Proceeds from the sale of property, plant and equipment | 245 | ||
Sale of intangible assets | 4,400 | 2,000 | |
Purchase of short-term investments | (308) | (5,645) | (3,602) |
Maturity of short-term investments | 91 | 3,650 | 3,075 |
Changes in restricted short-term investments | (900) | (105) | |
Payment of deposits and other assets | 198 | (896) | (5,026) |
Net cash used in investing activities | (42,182) | (36,890) | (39,501) |
Cash Flows From Financing Activities: | |||
Proceeds from the private placement of ANP | 38,036 | ||
Proceeds from equity plans, net of withholding tax payments | 8,946 | 13,758 | 21,502 |
Purchase of treasury stock | (25,047) | (30,747) | (9,908) |
Proceeds from borrowing under lines of credit | 347 | ||
Proceeds from issuance of long-term debt | 8,431 | 18,983 | 10,198 |
Principal payments on long-term debt | (5,705) | (9,712) | (14,652) |
Net cash provided by (used in) financing activities | 25,008 | (7,718) | 7,140 |
Effect of exchange rate changes on cash | (274) | 504 | 81 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 20,743 | (4,895) | 6,280 |
Cash, cash equivalents, and restricted cash at beginning of period | 67,459 | 72,354 | 66,074 |
Cash, cash equivalents, and restricted cash at end of period | 88,202 | 67,459 | 72,354 |
Noncash Investing and Financing Activities: | |||
Equipment acquired under capital leases | 14 | 1,238 | |
Supplemental Disclosures of Cash Flow Information: | |||
Interest paid, net of capitalized interest | 2,376 | 1,877 | 1,722 |
Income taxes paid | $ 339 | $ 4,876 | $ 3,397 |
General
General | 12 Months Ended |
Dec. 31, 2018 | |
General | |
General | Note 1. General Amphastar Pharmaceuticals, Inc., a California corporation, was incorporated in February 1996 and merged with and into Amphastar Pharmaceuticals, Inc., a Delaware corporation, in July 2004 (together with its subsidiaries, hereinafter referred to as “the Company”). The Company is a specialty pharmaceutical company that develops, manufactures, markets, and sells generic and proprietary injectable, inhalation, and intranasal products, including products with high technical barriers to market entry. Additionally, the Company sells insulin active pharmaceutical ingredient, or API, products. Most of the Company’s products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers. The Company’s insulin API products are sold to other pharmaceutical companies for use in their own products and are being used by the Company in the development of injectable finished pharmaceutical products. The Company’s inhalation products are primarily distributed through drug retailers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and are prepared in accordance with accounting principles generally accepted in the United States, or GAAP. All significant intercompany activity has been eliminated in the preparation of the consolidated financial statements. Effective January 1, 2017, the Company prospectively adopted certain requirements of Accounting Standards Update, or ASU, No. 2016-09 to classify cash flows related to excess tax benefits in operating activities and directly record all excess tax benefits and tax deficiencies in income tax expense or benefit in the consolidated statement of operations without adjusting prior periods. The Company’s subsidiaries include: (1) International Medication Systems, Limited, or IMS, (2) Armstrong Pharmaceuticals, Inc., or Armstrong, (3) Amphastar Nanjing Pharmaceuticals Inc., or ANP, (4) Nanjing Letop Fine Chemistry Co., Ltd., or Letop, (5) Nanjing Hanxin Pharmaceutical Technology Co., Ltd., or Hanxin, (6) Nanjing Baixin Trading Co., Ltd., or Baixin, (7) Amphastar France Pharmaceuticals, S.A.S., or AFP, (8) Amphastar UK Ltd., or AUK, and (9) International Medication Systems (UK) Limited, or IMS UK. In July 2018, the Company’s Chinese subsidiary, ANP, completed a private placement of its common equity interest to accredited investors for aggregate gross proceeds of approximately $57 million, of which $38.0 million had been received by ANP as of December 31, 2018. While investors were initially required to complete their contributions in cash by December 31, 2018, ANP granted an extension to certain investors. Subsequently, including the funds from the extension, the proceeds ANP has received from the private placement totaled $56.3 million. The Company has retained approximately 58% of the equity interest in ANP immediately after the private placement and continues to consolidate the financial results of ANP with the Company’s results of operations. ANP’s net income or loss after July 2, 2018, was attributed to the Company in accordance with the Company’s equity interest of approximately 58% in ANP. In 2018, the Company identified errors in its accounting primarily related to the depreciation of certain leasehold improvements within property, plant and equipment. The errors were not material to any of the Company’s prior period annual financial statements. However, for comparative purposes, the Company has revised the prior period consolidated financial statements included herein. As a result, the net income for the years ended December 31, 2017 and 2016 was reduced by $0.9 million and $0.7 million, respectively. The errors resulted in a change to the basic and diluted net income per share for the year ended December, 2017, which was reduced by $0.02 and $0.01, respectively. The error resulted in a change to the basic and diluted net income per share for the year ended December 31, 2016, which was reduced by $0.01 and $0.01, respectively. The balances of property, plant, and equipment, net and retained earnings as of December 31, 2017, were reduced by $4.8 million and $3.6 million, respectively. The error did not result in a change to the net cash provided by operating activities in the Company’s consolidated statement of cash flows for the years ended December 31, 2017 and 2016. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The principal accounting estimates include: determination of allowances for doubtful accounts and discounts, provision for chargebacks and rebates, provision for product returns, adjustment of inventory to their net realizable values, impairment of long-lived and intangible assets and goodwill, self-insured claims, workers’ compensation liabilities, litigation reserves, stock price volatilities for share-based compensation expense, valuation allowances for deferred tax assets, and liabilities for uncertain income tax positions. Foreign Currency The functional currency of the Company, its domestic subsidiaries, its Chinese subsidiary ANP, and its U.K. subsidiary, AUK, is the U.S. dollar, or USD. ANP maintains its books of record in Chinese yuan. These books are remeasured into the functional currency of USD using the current or historical exchange rates. The resulting currency remeasurement adjustments and other transactional foreign currency exchange gains and losses are reflected in the Company’s statements of operations. The Company’s French subsidiary, AFP, maintains its book of record in euros. Its other Chinese subsidiaries, maintain their books of record in Chinese yuan. Its U.K. subsidiary, IMS UK, maintains its book of record in Great British pounds. These local currencies have been determined to be the subsidiaries’ respective functional currencies. These books of record are translated into USD using average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transactions. Translation adjustments are reflected in stockholders’ equity and are included as a component of other accumulated comprehensive income (loss). The unrealized gains or losses of intercompany foreign currency transactions that are of a long-term investment nature are reported in other accumulated comprehensive income (loss). The unrealized gains and losses of intercompany foreign currency transactions that are of a long-term investment nature for the years ended December 31, 2018, 2017, and 2016 were a $1.5 million gain, a $4.3 million gain, and a $1.5 million loss, respectively. The Company does not undertake hedging transactions to cover its foreign currency exposure. Comprehensive Income (Loss) For the years ended December 31, 2018, 2017 and 2016, the Company included its foreign currency translation gain or loss and change in pension obligation of its defined benefit pension plan as part of its comprehensive income (loss) . There was no material income tax expense (benefit) allocated to other comprehensive loss for the year ended December 31, 2018. Income tax expense of $1.5 million was allocated to other comprehensive income for the year ended December 31, 2017. There was no material income tax expense (benefit) allocated to other comprehensive loss for the year ended December 31, 2016. Shipping and Handling Costs For the years ended December 31, 2018, 2017, and 2016, the Company included shipping and handling costs of approximately $3.7 million, $3.0 million, and $2.4 million, respectively, in selling, distribution and marketing expenses in the accompanying consolidated statements of operations. Research and Development Costs Research and development costs are charged to expense as incurred and consist of costs incurred to further the Company’s research and development activities. These include salaries and related employee benefits, costs associated with clinical trials, nonclinical research and development activities, regulatory activities, research‑related overhead expenses and fees paid to external service providers. The Company may produce or purchase inventories prior to or with the expectation of receiving marketing authorization in the near term, based on operational decisions about the most effective use of existing resources. This inventory is referred to as pre‑launch inventory. It is the Company’s accounting policy that the pre-launch inventory is capitalized if it has a probable future economic benefit. If marketing authorization is received and previously expensed pre‑launch inventory is sold, such sales may contribute up to a 100% margin to the Company’s operating results. Pre‑launch inventory costs include cost of work in process, materials, and finished drug products. As of December 31, 2018, 2017, and 2016, the Company did not have material capitalized pre-launch inventory. Financial Instruments The carrying amounts of cash and cash equivalents, short-term investments, restricted cash and short-term investments, accounts receivable, accounts payable, accrued expenses, and short-term borrowings approximate fair value due to the short maturity of these items. The majority of the Company’s long-term obligations consist of variable rate debt, and their carrying value approximates fair value as the stated borrowing rates are comparable to rates currently offered to the Company for instruments with similar maturities. The Company at times enters into fixed interest rate swap contracts to exchange the variable interest rates for fixed interest rates without the exchange of the underlying notional debt amounts. Such interest rate swap contracts are recorded at their fair values. Cash and Cash Equivalents Cash and cash equivalents consist of cash, money market accounts, certificates of deposit and highly liquid investments purchased with original maturities of three months or less. Short-Term Investments Short-term investments as of December 31, 2018 consisted of certificates of deposit with original expiration dates within 12 months. Restricted Cash and Short-Term Investments Restricted cash and short-term investments are collateral required for the Company to effect a standby letter of credit and to qualify for workers’ compensation self-insurance and are available to meet the Company’s workers’ compensation obligations on a current basis, as needed. As of December 31, 2018, restricted cash and short-term investments included $1.9 million in cash and $2.3 million in certificates of deposit. As of December 31, 2017, restricted cash and short-term investments included $1.9 million in cash and $2.3 million in certificates of deposit. The certificates of deposit have original maturities greater than three months and are classified as short-term investments. Allowance for Doubtful Accounts Receivable The Company evaluates the collectability of accounts receivable based on a combination of factors. When the Company is aware of circumstances that may impair a customer’s ability to pay subsequent to the original sale, the Company records a specific allowance to reduce the amounts receivable to the amount that the Company reasonably believes to be collectable. For all other customers, the Company recognizes an allowance for doubtful accounts based on factors that include the length of time the receivables are past due, industry and geographic concentrations, the current business environment and historical collection experience. As of December 31, 2018 and 2017, the Company's allowance for doubtful accounts was $0.5 million and $0.3 million, respectively. Inventories Inventories consist of currently marketed products and products manufactured under contract. Inventories are stated using the first-in, first-out method, on a consistent basis. The Company states inventory at the lower of cost and net realizable value. Provisions are made for slow‑moving, unsellable, or obsolete items. Net realizable value is determined using the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose. Property, Plant and Equipment Property, plant and equipment are stated at cost or, in the case of assets acquired in a business combination, at fair value on the purchase date. Depreciation and amortization expense is computed using the straight‑line method over the estimated useful lives of the related assets as follows: Buildings 20 - 31 years Machinery and equipment 3 - 12 years Furniture and fixtures 3 - 7 years Automobiles 4 - 5 years Leasehold improvements Lesser of remaining lease term or useful life Intangible Assets Intangible assets with finite lives are amortized using the straight-line method over the period the asset is expected to contribute directly or indirectly to the future cash flows of the Company as follows: Product rights 10 - 15 years Patents 10 - 20 years Land-use rights 37 - 50 years Impairment of Long‑Lived Assets, including Identifiable Definite-Lived Intangible Assets The Company reviews long-term and identifiable definite-lived intangible assets or asset groups for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset or an asset group, further impairment analysis is performed. An impairment loss is measured as the amount by which the carrying amount of the asset or asset groups exceeds the fair value (assets to be held and used) or fair value less cost to sell (assets to be disposed of). The Company also reviews the useful lives of its assets periodically to determine whether events and circumstances warrant a revision to the remaining useful life. Changes in the useful life are adjusted prospectively by revising the remaining period over which the asset is amortized. Deferred Income Taxes The Company utilizes the liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates. A valuation allowance is recorded when it is more likely than not that the deferred tax assets will not be realized. Impairment of Indefinite-Lived Intangible Asset and Goodwill The Company reviews indefinite‑lived intangible asset and goodwill for impairment in the fourth quarter of each year or more frequently if indicators of impairment are present. When the Company chooses to perform a qualitative assessment, it evaluates economic, industry and company-specific factors as an initial step. If the Company determines it is more likely than not that the indefinite-lived intangible asset is impaired or the fair value of a reporting unit is less than its carrying amount, further quantitative impairment process is then performed; otherwise, no further testing is required. An impairment loss is recorded if the asset’s fair value is less than its carrying value. The Company also periodically reviews the indefinite-lived intangible asset to determine if events and circumstances continue to support an indefinite useful life. If the life is no longer indefinite, the asset is tested for impairment. The carrying value, after recognition of any impairment loss, is amortized over its remaining useful life. Self-Insured Claims The Company is primarily self-insured, up to certain limits, for workers’ compensation claims. The Company has purchased stop-loss insurance, which will reimburse the Company for individual claims in excess of $350,000 annually or aggregate claims exceeding $2.9 million annually. Operations are charged with the cost of claims reported and an estimate of claims incurred but not reported. A liability for unpaid claims and the associated claim expenses, including incurred but not reported losses, is actuarially determined and reflected in accrued liabilities in the accompanying consolidated balance sheets. Total expense under the program was approximately $2.6 million, $1.5 million, and $1.6 million, for the years ended December 31, 2018, 2017 and 2016, respectively. The self-insured claims liability was $5.6 million and $4.1 million at December 31, 2018 and 2017, respectively. The determination of such claims and expenses and the appropriateness of the related liability is reviewed periodically and updated, as necessary. Changes in estimates are recorded in the period identified. Business Combinations If an acquired set of activities and assets is capable of being operated as a business consisting of inputs and processes from the viewpoint of a market participant, the assets acquired and liabilities assumed are a business. Business combinations are accounted for using the acquisition method of accounting, which requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. Fair value determinations are based on discounted cash flow analyses or other valuation techniques. In determining the fair value of the assets acquired and liabilities assumed in a material acquisition, the Company may utilize appraisals from third party valuation firms to determine fair values of some or all of the assets acquired and liabilities assumed, or may complete some or all of the valuations internally. In either case, the Company takes full responsibility for the determination of the fair value of the assets acquired and liabilities assumed. The value of goodwill reflects the excess of the fair value of the consideration conveyed to the seller over the fair value of the net assets received. Acquisition-related costs that the Company incurs to effect a business combination are expensed in the periods in which the costs are incurred. When the operations of the acquired businesses were not material to the Company’s consolidated financial statements, no pro forma presentations were disclosed. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board, or FASB, issued ASU No. 2016-02, Leases , which is aimed at making leasing activities more transparent and comparable and requires substantially all leases be recognized by lessees on their balance sheets as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The ASU and the related clarifications subsequently issued by the FASB will become effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019, and all annual and interim reporting periods thereafter. Early adoption is permitted. In July 2018, the FASB further amended the standard to allow for a new transition method that offers the option to use the effective date as the date of initial application. The Company intends to elect this alternative transition method and therefore will not adjust comparative-period financial information. The Company is finalizing its assessment related to policies, processes and internal controls to comply with the guidance. The Company estimates the right-of-use assets and lease obligations for its lease portfolio as of December 31, 2018 to be within the range of approximately $13.4 million and $14.3 million, which would be recorded on its consolidated balance sheet, primarily related to real estate. The Company anticipates that it will elect the available practical expedients at transition including the package of expedients whereby the Company will not reassess its prior conclusion related to whether a contact contains a lease, the underlying lease classification or accounting for initial direct cost in a lease, in addition to electing the hindsight practical expedient in determining the lease term and the short-term lease exception such that it will not recognize a right-of-use asset or lease liability for leases with a term of 12 months or less. The new standard also provides practical expedients for the ongoing accounting and the Company currently expects to elect the practical expedient to not separate lease and non-lease components for its asset classes. Note 17 provides details on the Company’s current operating lease arrangements. The adoption of ASC 842 is not expected to have a material impact on the Company’s results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses , which is aimed at providing financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit. The standard update changes the impairment model for financial assets measured at amortized cost, requiring presentation at the net amount expected to be collected. The measurement of expected credit losses requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Available-for-sale debt securities with unrealized losses will be recorded through an allowance for credit losses. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted for interim or annual periods after December 31, 2019. The Company will be required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not believe the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04 simplifying the Test for Goodwill Impairment , which eliminates the requirement to calculate the implied fair value of goodwill. An entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The update also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020, and applied on a prospective basis. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. The Company currently does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In August 2017, the FASB issued ASU No. 2017-12 Targeted Improvements to Accounting for Hedging Activities , which amends the hedge accounting model in ASC 815 to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. The amendments also simplify the application of hedge accounting in certain situations. The new guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows entities to reclassify from accumulated other comprehensive income to retained earnings stranded tax effects resulting from the Tax Act. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Non-employee Share-Based Payment Accounting , which simplifies the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees. The Company early adopted the guidance on July 1, 2018. The adoption did not have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which removes, modifies, and adds certain disclosure requirements to ASC 820, Fair Value Measurement. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans , which removes, modifies, and adds certain disclosure requirements to ASC 715-20, Defined Benefit Plans. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2021. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In October 2018, the FASB issued ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities , which requires indirect interests held through related parties in common control arrangements be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted. The Company currently does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In November 2018, the FASB issued ASU No. 2018-18, Clarifying the Interaction between Topic 808 and Topic 606 , which requires transactions in collaborative arrangements to be accounted for under ASC 606, Revenue from Contracts with Customers, or ASC 606, if the counterparty is a customer for a good or service that is a distinct unit of account. The amendments also preclude entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted, including in any interim period. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements and related disclosures. |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Acquisitions | |
Business Acquisitions | Note 3. Business Acquisitions Acquisition of International Medication Systems (UK) Limited from UCB PHARMA GmbH In August 2016, the Company’s UK subsidiary, AUK, acquired IMS UK, a UK-based subsidiary of UCB PHARMA GmbH, including its trademarks, assets related to the products, as well as marketing authorizations for 33 products in the UK, Ireland, Australia, and New Zealand, representing 11 different injectable chemical entities. The Company paid $7.7 million in cash as consideration for the transaction. The Company is in the process of transferring the manufacturing of the purchased products to its facilities in California. The transfer will require approval of the UK Medicines and Healthcare products Regulatory Agency and other related regulatory agencies before the products can be sold by the Company. The transaction is accounted for as a business combination in accordance with ASC 805. The fair values of the assets acquired and liabilities assumed include marketing authorizations of $9.2 million, manufacturing equipment of $0.1 million, and deferred tax liability of $1.6 million. The acquired marketing authorizations intangible assets are subject to a straight-line amortization over a useful life of approximately 10 years. Acquisition of fourteen injectable products from Hikma Pharmaceuticals PLC In March 2016, the Company acquired 14 abbreviated new drug applications, or ANDAs, representing 11 different injectable chemical entities from Hikma Pharmaceuticals PLC, or Hikma, for $4.0 million. This transaction was accounted for as a business combination in accordance with ASC 805. The ANDAs were estimated to have a fair value of $4.0 million, and were subject to a straight-line amortization over a useful life of approximately 15 years. In February 2017, the Company sold these products to an unrelated party. (See note 9) Acquisition of Nanjing Letop Medical Technology Co. Ltd. In January 2016, the Company’s Chinese subsidiary, ANP, acquired Nanjing Letop Medical Technology Co. Ltd. for $1.7 million consisting of $0.8 million in cash and a deposit of $0.9 million that ANP had previously paid to Letop and was effectively eliminated upon the consummation of the transaction. The Company accounted for this transaction as a business combination in accordance with ASC 805. The Company recognized $1.4 million of acquired assets, $0.1 million of assumed liabilities, and $0.4 million of goodwill. Letop had previously supplied ANP with intermediates used in making various APIs. In March 2016, the acquired subsidiary was renamed Nanjing Letop Fine Chemistry Co., Ltd. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition | |
Revenue Recognition | Note 4. Revenue Recognition In 2018, the Company adopted ASC 606 using the modified retrospective transition method. The adoption of ASC 606 did not have a material impact on the Company’s revenue recognition or on the consolidated financial statements and related disclosures. According to ASC 606, revenue is recognized at the time that the Company’s customers obtain control of the promised goods. The results for the reporting period beginning after January 1, 2018, are presented in accordance with the new standard, although comparative information continues to be reported under the accounting standards and policies in effect for those periods. Generally, revenue is recognized at the time of product delivery to the Company’s customers. In some cases, revenue is recognized at the time of shipment when stipulated by the terms of the sale agreements. Revenues derived from contract manufacturing services are recognized when third-party products are shipped to customers, after the customer has accepted test samples of the products to be shipped. On June 30, 2016, the Company and Actavis Inc., or Actavis, amended a distribution agreement, which terminated the agreement in December 2016. Profit-sharing revenue under this agreement was recognized at the time Actavis sold the products to its customers. The Company only records revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved, by estimating and recording reductions to revenue for discounts, product returns, and pricing adjustments, such as wholesaler chargebacks and retailer rebates, in the same period that the related revenue is recorded. The Company’s accounting policy is to review each agreement involving contract development and manufacturing services to determine if there are multiple revenue-generating activities that constitute more than one unit of accounting. Revenues are recognized for each unit of accounting based on revenue recognition criteria relevant to that unit. The Company does not have any revenue arrangements with multiple performance obligations. Provision for Chargebacks and Rebates The provision for chargebacks and rebates is a significant estimate used in the recognition of revenue. Wholesaler chargebacks relate to sales terms under which the Company agrees to reimburse wholesalers for differences between the gross sales prices at which the Company sells its products to wholesalers and the actual prices of such products that wholesalers resell under the Company’s various contractual arrangements with third parties such as hospitals and group purchasing organizations in the United States. Rebates include primarily amounts paid to retailers, payers, and providers in the United States, including those paid to state Medicaid programs, and are based on contractual arrangements or statutory requirements. The Company estimates chargebacks and rebates using the expected value method at the time of sale to wholesalers based on wholesaler inventory stocking levels, historic chargeback and rebate rates, and current contract pricing. The provision for chargebacks and rebates is reflected in net revenues. The following table is an analysis of the chargeback and rebate provision: Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 18,470 $ 39,709 Provision for chargebacks and rebates 125,112 152,011 Credits and payments issued to third parties (121,159) (173,250) Ending balance $ 22,423 $ 18,470 Changes in the chargeback provision from period to period are primarily dependent on the Company’s sales to its wholesalers, the level of inventory held by wholesalers, and the wholesaler’s customer mix. Changes in the rebate provision from period to period are primarily dependent on retailer’s and other indirect customers’ purchases. The approach that the Company uses to estimate chargebacks has been consistently applied for all periods presented. Variations in estimates have been historically small. The Company continually monitors the provision for chargebacks and rebates and makes adjustments when it believes that the actual chargebacks and rebates may differ from the estimates. The settlement of chargebacks and rebates generally occurs within 30 days to 60 days after the sale to wholesalers. Accounts receivable and/or accounts payable and accrued liabilities are reduced and/or increased by the chargebacks and rebate amounts depending on whether the Company has the right to offset with the customer. Of the provision for chargebacks and rebates as of December 31, 2018 and 2017, $12.0 million and $6.8 million were included in accounts receivable, net, on the consolidated balance sheets, respectively. The remaining provision as of December 31, 2018 and 2017 was $10.4 million and $11.7 million, respectively, which were included in accounts payable and accrued liabilities. Accrual for Product Returns The Company offers most customers the right to return qualified excess or expired inventory for partial credit; however, API product sales are generally non-returnable. The Company’s product returns primarily consist of the returns of expired products from sales made in prior periods. Returned products cannot be resold. At the time product revenue is recognized, the Company records an accrual for product returns estimated using the expected value method. The accrual is based, in part, upon the historical relationship of product returns to sales and customer contract terms. The Company also assesses other factors that could affect product returns including market conditions, product obsolescence, and the introduction of new competition. Although these factors do not normally give the Company’s customers the right to return products outside of the regular return policy, the Company realizes that such factors could ultimately lead to increased returns. The Company analyzes these situations on a case-by-case basis and makes adjustments to the product return reserve as appropriate. The provision for product returns is reflected in net revenues. The following table is an analysis of product return liability: Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 6,522 $ 3,143 Provision for product returns 4,149 5,754 Credits issued to third parties (2,641) (2,375) Ending balance $ 8,030 $ 6,522 Of the provision of product returns as of December 31, 2018 and 2017, $5.3 million and $4.1 million were included in accounts payable and accrued liabilities on the consolidated balance sheets, respectively. The remaining provision of $2.7 million and $2.4 million were included in other long-term liabilities, respectively. For the years ended December 31, 2018 and 2017 , the Company’s aggregate product return rate was 1 .3% and 1.3% of qualified sales, respectively. |
Income (loss) per share attribu
Income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders | 12 Months Ended |
Dec. 31, 2018 | |
Income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders | |
Income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders | Note 5. Income (Loss) per Share Attributable to Amphastar Pharmaceuticals, Inc. Shareholders Basic income (loss) per share attributable to Amphastar Pharmaceuticals Inc. shareholders is calculated based upon the weighted-average number of shares outstanding during the period. Diluted net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders gives effect to all potential dilutive shares outstanding during the period, such as stock options, non-vested restricted stock units, and shares issuable under the Company’s Employee Stock Purchase Plan, or ESPP. As the Company reported a net loss for the year ended December 31, 2018, the diluted net loss per share attributable to Amphastar Pharmaceuticals, Inc. shareholders, as reported, equals the basic net loss per share attributable to Amphastar Pharmaceuticals, Inc. shareholders since the effect of the assumed exercise of stock options, vesting of non-vested RSUs, and issuance of common shares under the Company’s ESPP are anti-dilutive. Total stock options, non-vested RSUs, and shares issuable under the Company’s ESPP excluded from the year ended December 31, 2018, net loss per share were 10,105,565 stock options, 1,206,661 non-vested RSUs, and 51,792 shares issuable under the ESPP. For the year ended December 31, 2017, options to purchase 839,651 shares of stock with a weighted-average exercise price of $26.43 per share, were excluded in the computation of diluted net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders because the effect from the assumed exercise of these options would be anti-dilutive. For the year ended December 31, 2016, options to purchase 2,379,984 shares of stock with a weighted-average exercise price of $22.46 per share, were excluded in the computation of diluted net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders because the effect from the assumed exercise of these options would be anti-dilutive. The following table provides the calculation of basic and diluted net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders for each of the periods presented: Year Ended December 31, 2018 2017 2016 (in thousands, except per share data) Basic and dilutive numerator: Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. $ (5,738) $ 3,647 $ 9,820 Denominator: Weighted-average shares outstanding — basic 46,395 46,107 45,375 Net effect of dilutive securities: Incremental shares from equity awards — 2,260 2,129 Weighted-average shares outstanding — diluted 46,395 48,367 47,504 Net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders — basic $ (0.12) $ 0.08 $ 0.22 Net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders — diluted $ (0.12) $ 0.08 $ 0.21 |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting | |
Segment Reporting | Note 6. Segment Reporting The Company’s business is the development, manufacture, and marketing of pharmaceutical products. The Company has established two reporting segments that each report to the Chief Operating Decision Maker, or CODM, as defined in ASC 280, Segment Reporting. The Company’s performance is assessed and resources are allocated by the CODM based on the following two reportable segments: · Finished pharmaceutical products · API The finished pharmaceutical products segment manufactures, markets and distributes enoxaparin, naloxone, phytonadione, lidocaine, medroxyprogesterone acetate, Primatene ® Mist, as well as various other critical and non-critical care drugs. The API segment manufactures and distributes recombinant human insulin API and porcine insulin API for external customers and internal product development. Selected financial information by reporting segment is presented below: Year Ended December 31, 2018 2017 2016 (in thousands) Net revenues: Finished pharmaceutical products $ 271,059 $ 230,139 $ 240,221 API 23,607 10,036 14,944 Total net revenues 294,666 240,175 255,165 Gross profit: Finished pharmaceutical products 113,220 96,517 106,107 API (6,235) (6,008) (1,911) Total gross profit 106,985 90,509 104,196 Operating expenses 115,608 91,778 88,820 Income (loss) from operations (8,623) (1,269) 15,376 Non-operating income (1,303) 2,518 (746) Income (loss) before income taxes $ (9,926) $ 1,249 $ 14,630 The Company manages its business segments to the gross profit level and manages its operating and other costs on a company-wide basis. The Company does not identify total assets by segment for internal purposes, as the Company’s CODM does not assess performance, make strategic decisions, or allocate resources based on assets. The amount of net revenues in the finished pharmaceutical product segment is presented below: Year Ended December 31, 2018 2017 2016 (in thousands) Finished pharmaceutical products net revenues: Enoxaparin $ 53,371 $ 36,593 $ 59,320 Lidocaine 43,328 37,602 36,600 Phytonadione 41,897 37,946 33,315 Naloxone 37,195 42,342 47,532 Medroxyprogesterone 24,071 — — Epinephrine 10,055 25,914 25,661 Primatene ® Mist 3,574 — — Other finished pharmaceutical products 57,568 49,742 37,793 Total finished pharmaceutical products net revenues $ 271,059 $ 230,139 $ 240,221 Discontinuation of Epinephrine Injection, USP Vial Product In February 2017, the U.S. Food and Drug Administration, or FDA, requested the Company to discontinue the manufacturing and distribution of its epinephrine injection, USP vial product, which had been marketed under the “grandfather” exception to the FDA’s “Prescription Drug Wrap-Up” program. The Company discontinued selling this product in the second quarter of 2017. For the years ended December 31, 2017 and 2016, the Company recognized $17.8 million and $18.6 million in net revenues for the sale of this product, respectively. Net revenues and carrying values of long-lived assets of enterprises by geographic regions are as follows: Net Revenue Long-Lived Assets Year Ended December 31, December 31, 2018 2017 2016 2018 2017 (in thousands) United States $ 279,122 $ 234,321 $ 249,007 $ 109,331 $ 105,441 China — — — 58,059 41,078 France 15,544 5,854 6,158 43,028 34,026 United Kingdom — — — — — Total $ 294,666 $ 240,175 $ 255,165 $ 210,418 $ 180,545 |
Customer and Supplier Concentra
Customer and Supplier Concentration | 12 Months Ended |
Dec. 31, 2018 | |
Customer and Supplier Concentration | |
Customer and Supplier Concentration | Note 7. Customer and Supplier Concentration Customer Concentrations Three large wholesale drug distributors, AmerisourceBergen Corporation, or AmerisourceBergen, Cardinal Health, Inc., or Cardinal, and McKesson Corporation, or McKesson, are all distributors of the Company’s products, as well as suppliers of a broad range of health care products. Actavis had exclusive marketing rights of the Company’s enoxaparin product to the U.S. retail pharmacy market until December 2016. The Company considers these four customers to be its major customers, as each individually and these customers collectively, represented a significant percentage of the Company’s net revenue for the years ended December 31, 2018, 2017, and 2016, and accounts receivable as of December 31, 2018 and 2017, respectively. The following table provides accounts receivable and net revenue information for these major customers: % of Total Accounts % of Net Receivable Revenue December 31, December 31, Year Ended December 31, 2018 2017 2018 2017 2016 McKesson 28 % 22 % 27 % 27 % 21 % AmerisourceBergen 19 % 33 % 27 % 28 % 21 % Cardinal Health 21 % 12 % 21 % 23 % 22 % Actavis (1) — — — — 14 % (1) The agreement with Actavis was terminated in December 2016. Supplier Concentrations The Company depends on suppliers for raw materials, APIs, and other components that are subject to stringent FDA requirements. Some of these materials may only be available from one or a limited number of sources. Establishing additional or replacement suppliers for these materials may take a substantial period of time, as suppliers must be approved by the FDA. Furthermore, a significant portion of raw materials may only be available from foreign sources. If the Company is unable to secure, on a timely basis, sufficient quantities of the materials it depends on to manufacture and market its products, it could have a materially adverse effect on the Company’s business, financial condition, and results of operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 8. Fair Value Measurements The accounting standards of the FASB define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability at the measurement date (an exit price). These standards also establish a hierarchy that prioritizes observable and unobservable inputs used in measuring fair value of an asset or liability, as described below: · Level 1 – Inputs to measure fair value are based on quoted prices (unadjusted) in active markets on identical assets or liabilities; · Level 2 – Inputs to measure fair value are based on the following: a) quoted prices in active markets on similar assets or liabilities, b) quoted prices for identical or similar instruments in inactive markets, or c) observable (other than quoted prices) or collaborated observable market data used in a pricing model from which the fair value is derived; and · Level 3 – Inputs to measure fair value are unobservable and the assets or liabilities have little, if any, market activity; these inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities based on best information available in the circumstances. As of December 31, 2018, cash equivalents include money market accounts. Short-term investments consist of certificates of deposit with original expiration dates within 12 months. These certificates of deposit are carried at amortized cost in the Company’s consolidated balance sheet, which approximates their fair value determined based on Level 2 inputs. The restrictions on restricted cash and short-term investments have a negligible effect on the fair value of these financial assets. The Company does not hold any Level 2 or Level 3 instruments that are measured for fair value on a recurring basis. Nonfinancial assets and liabilities are not measured at fair value on a recurring basis but are subject to fair value adjustments in certain circumstances. These items primarily include long-lived assets, goodwill, and intangible assets for which the fair value of assets is determined as part of the related impairment test. As of December 31, 2018 and 2017, there were no significant adjustments to fair value for nonfinancial assets or liabilities. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 9. Goodwill and Intangible Assets The table below shows the weighted-average life, original cost, accumulated amortization, and net book value by major intangible asset classification: Weighted-Average Accumulated Life (Years) Original Cost Amortization Net Book Value (in thousands) Definite-lived intangible assets Cortrosyn ® product rights 12 $ 27,134 $ 27,134 $ — IMS (UK) international product rights 10 8,911 2,153 6,758 Patents 12 486 213 273 Land-use rights 39 2,540 486 2,054 Other intangible assets 4 69 63 6 Subtotal 12 39,140 30,049 9,091 Indefinite-lived intangible assets Trademark * 29,225 — 29,225 Goodwill - Finished pharmaceutical products * 3,951 — 3,951 Subtotal * 33,176 — 33,176 As of December 31, 2018 * $ 72,316 $ 30,049 $ 42,267 Weighted-Average Accumulated Life (Years) Original Cost Amortization Net Book Value (in thousands) Definite-lived intangible assets Cortrosyn ® product rights 12 $ 27,134 $ 26,243 $ 891 IMS (UK) international product rights 10 9,440 1,337 8,103 Patents 12 486 170 316 Land-use rights 39 2,540 419 2,121 Other intangible assets 4 69 46 23 Subtotal 12 39,669 28,215 11,454 Indefinite-lived intangible assets Trademark * 29,225 — 29,225 Goodwill - Finished pharmaceutical products * 4,461 — 4,461 Subtotal * 33,686 — 33,686 As of December 31, 2017 * $ 73,355 $ 28,215 $ 45,140 * Intangible assets with indefinite lives have an indeterminable average life. Sale of Fourteen Injectable ANDAs In February 2017, the Company sold the 14 ANDAs it acquired in March 2016 from Hikma to an unrelated party. The consideration included a purchase price of $6.4 million of which $1.0 million was received upon closing, $1.0 million was received in the second quarter of 2017 and the remaining $4.4 million was received in January 2018. In addition to the purchase price, the purchaser agreed to pay the Company a royalty fee equal to 2% of net sales derived from purchaser’s sales of the products for the period from February 2017 through February 2027. The Company has not recognized any royalty fee revenue. The Company recognized a gain of $2.6 million within operating (income) expenses on its consolidated statement of operations for the year ended December 31, 2017. Goodwill The changes in the carrying amounts of goodwill were as follows: December 31, 2018 2017 (in thousands) Beginning balance $ 4,461 $ 3,976 Currency translation (510) 485 Ending balance $ 3,951 $ 4,461 Primatene ® Trademark In January 2009, the Company acquired the exclusive rights to the trademark, domain name, website and domestic marketing, distribution and selling rights related to Primatene ® Mist, an over-the-counter bronchodilator product, recorded at the allocated fair value of $29.2 million, which is its carrying value as of December 31, 2018. The trademark was determined to have an indefinite life. In determining its indefinite life, the Company considered the following: the expected use of the intangible; the longevity of the brand; the legal, regulatory and contractual provisions that affect their maximum useful life; the Company’s ability to renew or extend the asset’s legal or contractual life without substantial costs; effects of the regulatory environment; expected changes in distribution channels; maintenance expenditures required to obtain the expected future cash flows from the asset; and considerations for obsolescence, demand, competition and other economic factors. As a result of environmental concerns about chlorofluorocarbons, or CFCs, the FDA required the CFC formulation of Primatene ® Mist to be phased out on December 31, 2011. In 2013, the Company filed a new drug application, or NDA, for Primatene ® Mist, which utilizes a non-CFC propellant. In November 2018, the FDA granted over-the-counter approval of the NDA for Primatene ® Mist, and the Company re-launched in December 2018. No impairment charge was required as of December 31, 2018. Amortization Included in cost of revenues for the years ended December 31, 2018, 2017 and 2016 is product rights amortization expense of $1.8 million, $2.7 million, and $2.4 million, respectively. As of December 31, 2018, the expected amortization expense for all amortizable intangible assets during the next five fiscal years ended December 31 and thereafter is as follows: (in thousands) 2019 $ 870 2020 864 2021 864 2022 844 2023 835 Thereafter 4,814 Total amortizable intangible assets 9,091 Indefinite-lived intangibles 33,176 Total intangibles (net of accumulated amortization) $ 42,267 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventories | |
Inventories | Note 10. Inventories Inventories consist of the following: December 31, 2018 2017 (in thousands) Raw materials and supplies $ 30,153 $ 19,973 Work in process 30,272 22,469 Finished goods 8,897 21,167 Total inventories $ 69,322 $ 63,609 Charges of $12.9 million, $8.5 million, and $7.3 million were included in the cost of revenues in the Company’s consolidated statements of operations for the years ended December 31, 2018, 2017, and 2016, respectively, to adjust the Company’s inventory and related purchase commitments to their net realizable value. For the year ended December 31, 2018, the charge included $9.1 million related to enoxaparin inventory due to a decrease in the forecasted average selling price. For the year ended December 31, 2017, the charge included $5.5 million related to enoxaparin inventory due to a decrease in the forecasted average selling price. For the year ended December 31, 2016, the charge included $3.1 million related to enoxaparin inventory due to a decrease in the forecasted average selling price and $3.3 million related to epinephrine injection, USP vial inventory items due to the anticipated discontinuation of the product. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant, and Equipment | |
Property, Plant, and Equipment | Note 11. Property, Plant, and Equipment Property, plant, and equipment consist of the following: December 31, 2018 2017 (in thousands) Buildings $ 96,287 $ 89,124 Leasehold improvements 26,755 29,847 Land 7,628 7,110 Machinery and equipment 143,299 118,056 Furniture, fixtures, and automobiles 19,151 16,385 Construction in progress 66,390 58,145 Total property, plant, and equipment 359,510 318,667 Less accumulated depreciation (149,092) (138,122) Total property, plant, and equipment, net $ 210,418 $ 180,545 The Company incurred depreciation expense of $14.5 million, $13.0 million, and $12.2 million for the years ended December 31, 2018, 2017, and 2016, respectively. Interest expense capitalized was approximately $2.2 million, $1.1 million, and $0.8 million, for the years ended December 31, 2018, 2017, and 2016, respectively. As of December 31, 2018 and 2017, the purchase of property, plant, and equipment of $8.4 million and $6.7 million, respectively, were included in accounts payable and accrued liabilities. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | Note 12. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following: December 31, 2018 2017 (in thousands) Accrued customer fees and rebates $ 15,215 $ 15,981 Accrued payroll and related benefits 19,430 15,680 Accrued product returns, current portion 5,349 4,133 Reserve for net loss on firm purchase commitments 5,355 320 Other accrued liabilities 10,746 4,812 Total accrued liabilities 56,095 40,926 Accounts payable 31,323 16,629 Total accounts payable and accrued liabilities $ 87,418 $ 57,555 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt | |
Debt | Note 13. Debt Debt consists of the following: December 31, 2018 2017 (in thousands) Loans with East West Bank Equipment loan paid off January 2019 $ 128 $ 1,668 Line of credit facility due December 2020 — — Mortgage payable due February 2021 3,491 3,577 Equipment loan due June 2021 3,061 4,286 Equipment loan due December 2022 8,000 — Mortgage payable due October 2026 3,463 3,524 Mortgage payable due June 2027 8,801 8,936 Loans with Cathay Bank Acquisition loan due April 2019 13,025 15,073 Line of credit facility due May 2020 — — Mortgage payable due August 2027 7,627 7,795 Loans with Bank of Nanjing Working capital loan due June 2019 — Loans with Seine-Normandie Water Agency French government loan 1 paid March 2018 — French government loan 2 due June 2020 French government loan 3 due July 2021 French government loan 4 due December 2026 — French government loan 5 due December 2026 — Payment Obligation to Merck 552 599 Equipment under Capital Leases 1,055 1,357 Total debt and capital leases 50,213 47,156 Less current portion of long-term debt and capital leases 18,229 6,312 Long-term debt and capital leases, net of current portion $ 31,984 $ 40,844 Loans with East West Bank Equipment Loan—Paid off January 2019 In July 2013, the Company entered into an $8.0 million line of credit facility. In January 2015, the Company drew down $6.2 million from the line of credit facility. Subsequently, the facility was converted into a term equipment loan with an outstanding principal balance of $6.2 million and a maturity date of January 2019. Borrowings under the facility are secured by equipment. As of December 31, 2018, the fair value of the loan approximates its book value. The interest rate used in the fair value estimation was determined to be a Level 2 input. The Company entered into a fixed interest rate swap contract on this facility to exchange the variable interest rate for a fixed interest rate of 4.48% over the life of the facility without the exchange of the underlying notional debt amount. The interest rate swap contract does not qualify for hedge accounting, and is recorded at fair value for an immaterial amount based on Level 2 inputs. In January 2019, the Company repaid all outstanding amounts due under this loan. Line of Credit Facility—Due December 2020 In March 2012, the Company entered into a $10.0 million line of credit facility, which bears a variable interest rate at the prime rate as published by The Wall Street Journal . Borrowings under the facility are secured by inventory and accounts receivable. In March 2016, the facility was amended to increase the line of credit to $15.0 million. This facility matured in December 2018. As of December 31, 2018, the Company did not have any amounts outstanding under this facility. In January 2019, the Company amended the facility to extend the maturity date to December 2020. Mortgage Payable—Due February 2021 The Company refinanced the mortgage term loan in January 2016, which had an outstanding principal balance of $3.7 million at December 31, 2015, and a maturity date of February 2021. The refinanced loan is payable in monthly installments with a final balloon payment of $3.3 million. The refinanced loan is secured by one of the buildings at the Company’s Rancho Cucamonga, California, headquarters complex. The refinanced loan has a variable interest rate at the prime rate as published by The Wall Street Journal . As of December 31, 2018, the fair value of the loan approximates its book value. The interest rate used in the fair value estimation was determined to be a Level 2 input. The Company has entered into a fixed interest rate swap contract on this loan to exchange the variable interest rate for a fixed interest rate of 4.39% over the life of the loan without the exchange of the underlying notional debt amount. The interest rate swap contract does not qualify for hedge accounting, and is recorded at fair value of approximately $0.1 million based on Level 2 inputs. Equipment Loan–Due June 2021 In March 2016, the Company entered into a $5.0 million equipment credit facility. In May 2017, the Company converted the outstanding balance of $5.0 million into a term equipment loan that matures in June 2021. Borrowings under the loan are secured by equipment. The loan bears a variable interest rate at the prime rate as published by The Wall Street Journal . As of December 31, 2018, the fair value of the loan approximates its book value. The interest rate used in the fair value estimation was determined to be a Level 2 input. The Company has entered into a fixed interest rate swap contract on this facility to exchange the variable interest rate for a fixed interest rate of 4.86% over the life of the facility without the exchange of the underlying notional debt amount. The interest rate swap contract does not qualify for hedge accounting and is recorded at fair value for an immaterial amount based on Level 2 inputs. Equipment Loan—Due December 2022 In June 2017, the Company entered into an $8.0 million equipment credit line with an 18-month draw down period. Interest payments are due monthly through December 2018 at the prime rate as published by The Wall Street Journal . After the draw down period, the outstanding principal balance converts into a 48-month term loan which bears a variable interest rate at the prime rate as published by The Wall Street Journal . The loan matures in December 2022, and the principal and interest payments are due monthly. Borrowings under the facility are secured by equipment. In June 2018, the Company drew down $8.0 million on the equipment credit line and in December 2018, the credit line converted into an equipment loan. As of December 31, 2018, the fair value of the loan approximates its book value. The interest rate used in the fair value estimation was determined to be a Level 2 input. The Company entered into a fixed interest rate swap contract on this facility to exchange the variable interest rate for a fixed interest rate of 5.87% over the life of the facility without the exchange of the underlying notional debt amount. The interest rate swap contract does not qualify for hedge accounting and is recorded at fair value for an immaterial amount based on Level 2 inputs. Mortgage Payable—Due October 2026 In September 2006, the Company entered into a mortgage term loan in the principal amount of $2.8 million, which matured in September 2016. The Company refinanced the mortgage term loan in September 2016, which increased the principal amount to $3.6 million and extended the maturity date to October 2026. The refinanced loan is payable in monthly installments with a final balloon payment of $2.9 million. The refinanced loan was secured by one of the buildings at the Company’s Rancho Cucamonga, California, headquarters complex. The refinanced loan bears a variable interest rate at the one-month LIBOR rate plus 2.75%. As of December 31, 2018, the fair value of the loan approximates its book value. The interest rate used in the fair value estimation was determined to be a Level 2 input. Subsequently, the Company entered into a fixed interest rate swap contract on this loan to exchange the variable interest rate for a fixed interest rate of 4.15% until October 2021 without the exchange of the underlying notional debt amount. The interest rate swap contract does not qualify for hedge accounting, and is recorded at fair value for an immaterial amount based on Level 2 inputs. Mortgage Payable—Due June 2027 In May 2017, the Company entered into a mortgage term loan in the principal amount of $9.0 million, which matures in June 2027. The loan is payable in monthly installments with a final balloon payment of $7.4 million plus interest. The loan is secured by one of the buildings at the Company’s Rancho Cucamonga, California, headquarters complex and two buildings at the Company’s Chino, California, facility. The loan bears a variable interest rate at the one-month LIBOR rate plus 2.5%. As of December 31, 2018, the fair value of the loan approximates its book value. The interest rate used in the fair value estimation was determined to be a Level 2 input. The Company entered into a fixed interest rate swap contract on this loan to exchange the variable interest rate for a fixed interest rate of 4.79% until June 2024 without the exchange of the underlying notional debt amount. The interest rate swap contract does not qualify for hedge accounting, and is recorded at fair value of approximately $0.1 million based on Level 2 inputs. Loans with Cathay Bank Acquisition Loan with Cathay Bank—Due April 2019 On April 22, 2014, in conjunction with the Merck API Transaction, the Company entered into a secured term loan with Cathay Bank as lender. The principal amount of the loan is $21.9 million and bears a variable interest rate at the prime rate as published by The Wall Street Journal , with a minimum interest rate of 4.00%. Beginning on June 1, 2014, and through the maturity date April 22, 2019, the Company must make monthly payments of principal and interest based on the then outstanding amount of the loan amortized over a 120-month period. On April 22, 2019, all amounts outstanding under the loan become due and payable, which would be approximately $12.0 million based upon an interest rate of 4.00%. The loan is secured by 65% of the issued and outstanding shares of stock in AFP and certain assets of the Company, including accounts receivable, inventory, certain investment property, goods, deposit accounts, and general intangibles but not including the Company’s equipment and real property. As of December 31, 2018, the fair value of the loan approximates its book value. The interest rate used in the fair value estimation was determined to be a Level 2 input. The loan includes customary restrictions on, among other things, the Company’s ability to incur additional indebtedness, pay dividends in cash or make other distributions in cash, make certain investments, create liens, sell assets, and make loans. The loan also includes customary events of defaults, the occurrence and continuation of any of which provide Cathay Bank the right to exercise remedies against the Company and the collateral securing the loan. These events of default include, among other things, the Company’s failure to pay any amounts due under the loan, the Company’s insolvency, the occurrence of any default under certain other indebtedness or material agreements, and a final judgment against the Company that is not discharged in 30 days. Line of Credit Facility—Due May 2020 In April 2012, the Company entered into a $20.0 million revolving line of credit facility. Borrowings under the facility are secured by inventory, accounts receivable, and intangibles held by the Company. The facility bears a variable interest rate at the prime rate as published by The Wall Street Journal with a minimum interest rate of 4.00%. In July 2018, the Company amended the facility to extend the maturity date from May 2018 to May 2020. As of December 31, 2018, the Company did not have any amounts outstanding under this facility. Mortgage Payable—Due August 2027 In August 2017, the Company refinanced the mortgage term loan that had been entered into on April 2014, with a principal balance outstanding of $7.9 million. The loan is payable in monthly installments and is secured by the building at the Company’s Canton, Massachusetts location. The loan bears interest at a fixed rate of 4.70% for the first five years of the loan; thereafter, the loan bears a variable interest rate at the prime rate as published by The Wall Street Journal and matures in June 2027. As of December 31, 2018, the fair value of the loan approximates its book value. The interest rate used in the fair value estimation was determined to be a Level 2 input. Loan with Bank of Nanjing Working Capital Loan —Due June 2019 In June 2018, the Company entered into a working capital loan of RMB 10.0 million, or $1.5 million, subject to currency exchange rate fluctuations. The loan bears a variable interest rate at the benchmark interest rate of the People’s Bank of China. Interest payments are due monthly. Repayment of the principal amount is due in June 2019. As of December 31, 2018, the Company had RMB 2.4 million, or $0.3 million outstanding under this loan. Loans with Seine-Normandie Water Agency In January 2015, the Company entered into three French government loans with the Seine-Normandie water agency in the aggregate amount of €0.6 million, or $0.7 million, subject to currency exchange fluctuations. The life of the loans range between three to six years, and includes annual equal payments and bears no interest over the life of the loans. In December 2018, the Company entered into two additional French government loans with the Seine-Normandie water agency in the aggregate amount of €0.5 million, or $0.5 million, subject to currency exchange fluctuations. The loans have 8 year lives, and include annual equal payments and bear no interest. As of December 31, 2018, the payment obligation had an aggregate book value of €0.6 million, or $0.7 million, subject to currency exchange rate fluctuations, which approximates fair value. The fair value of the payment obligation was determined by using the interest rate associated with the Company’s acquisition loan with Cathay Bank that bears a variable interest rate at the prime rate as published by The Wall Street Journal , with a minimum interest rate of 4.00%. Such interest rate is deemed to be a Level 2 input for measuring fair value. Payment Obligation to Merck On April 30, 2014, in conjunction with the Merck API Transaction, the Company entered into a commitment obligation with Merck, in the principal amount of €11.6 million, or $16.0 million, subject to currency exchange rate fluctuations. The terms of the purchase price include annual payments over four years and bear a fixed interest rate of 3.00%. As of December 31, 2018, the payment obligation had a balance of €0.5 million, or $0.6 million, which approximates fair value. The fair value of the payment obligation was determined by using the interest rate associated with the Company’s acquisition loan with Cathay Bank that bears a variable interest rate at the prime rate as published by The Wall Street Journal , with a minimum interest rate of 4.00%. Such interest rate is deemed to be a Level 2 input for measuring fair value. Covenants At December 31, 2018 and 2017, the Company was in compliance with its debt covenants, which include a minimum current ratio, minimum debt service coverage, minimum tangible net worth, maximum debt-to-effective-tangible-net-worth ratio, and minimum deposit requirement computed on a consolidated basis. The profitability requirements for loans with Cathay Bank were not effective as of December 31, 2018. Such requirements will become effective as of December 31, 2019. Equipment under Capital Leases The Company entered into leases for certain equipment under capital leasing arrangements, which will expire at various times through 2023. The cost of equipment under capital leases was $1.6 million and $1.6 million at December 31, 2018 and 2017, respectively. Long-Term Debt Maturities As of December 31, 2018, the principal amounts of long-term debt maturities during each of the next five fiscal years ending December 31 are as follows: Capital Debt Leases Total (in thousands) 2019 $ 17,886 $ 343 2020 3,856 342 2021 6,452 272 2022 2,475 159 2023 458 1 Thereafter 17,969 — $ 49,096 $ 1,117 $ 50,213 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 14. Income Taxes The Tax Cuts and Jobs Act, or the Tax Act, was enacted on December 22, 2017. The Tax Act, among other things, reduces the statutory U.S. federal corporate income tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred. As of December 31, 2017, the Company recorded a provisional expense amount of $0.6 million related to the remeasurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. During the year ended December 31, 2018, the Company completed its determination of the accounting implications of the Tax Act resulting in no material changes to the provisional amounts recorded as of December 31, 2017. The Company’s income (loss) before income taxes generated from its United States and foreign operations were: Year Ended December 31, 2018 2017 2016 (in thousands) Income (loss) before income taxes: United States $ 3,580 $ 6,892 $ 20,572 Foreign (13,506) (5,643) (5,942) Total income (loss) before taxes $ (9,926) $ 1,249 $ 14,630 The Company’s provision (benefit) for income taxes consisted of the following: Year Ended December 31, 2018 2017 2016 (in thousands) Current provision (benefit): Federal $ 32 $ (6,380) $ 7,279 State 343 133 344 Foreign 773 643 787 Total current provision (benefit) 1,148 (5,604) 8,410 Deferred provision (benefit): Federal (687) 6,340 (2,383) State (3,900) (2,169) (1,100) Foreign 173 (965) (117) Total deferred provision (benefit) (4,414) 3,206 (3,600) Total provision (benefit) for income taxes $ (3,266) $ (2,398) $ 4,810 A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows: Year Ended December 31, 2018 2017 2016 Statutory federal income tax (benefit) 21.0 % 35.0 % 35.0 % State tax expense, net of federal tax benefit 28.3 (106.0) (3.3) Foreign tax rate differences 4.0 3.9 4.1 Foreign valuation allowance (42.0) 129.1 14.7 Qualified production activities deduction — 89.6 (8.9) Research and development credits 28.0 (250.1) (12.0) Share-based compensation 5.1 (166.2) 4.4 Executive compensation (12.4) 17.1 — Deferred tax remeasurement 1.0 49.5 — Employee-related expenses (0.4) 6.3 0.4 Other 0.3 (0.2) (1.5) Effective tax rate (benefit) 32.9 % (192.0) % 32.9 % Deferred Tax Assets and Liabilities Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, tax credit carryforwards, and the tax effects of net operating loss carryforwards. The significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2018 2017 (in thousands) Deferred tax assets: Net operating loss carryforward $ 9,951 $ 7,356 State income taxes 26 221 Inventory capitalization and reserve 6,212 5,333 Deferred revenue 2 — Accrued payroll and benefits 1,344 1,233 Share-based compensation 6,162 6,504 Research and development credits 22,690 21,550 Alternative minimum tax 742 656 Accrued professional fees 1,289 344 Product return allowance 2,314 1,879 Accrued chargebacks 3,103 1,856 Bad debt reserve 115 60 Intangibles 2,124 2,022 Accrued for workers’ compensation insurance 1,401 1,063 Others 971 52 Total deferred tax assets 58,446 50,129 Deferred tax liabilities: Depreciation/amortization 9,684 7,568 Intangibles 6,303 6,992 Federal impact of state deferred taxes 3,769 3,077 Total deferred tax liabilities 19,756 17,637 Valuation allowance (9,103) (4,907) Net deferred tax assets $ 29,587 $ 27,585 Effective January 1, 2017, the Company adopted ASU No. 2016-09, under which differences between the tax deduction for share-based awards and the related compensation expenses recognized under ASC 718 are prospectively accounted for as a component of the provision for income taxes. In addition, ASU No. 2016-09 eliminated the requirement that excess tax benefits from share-based compensation reduce taxes payable prior to being recognized in the financial statements. As a result of the adoption of ASU No. 2016-09, the cumulative excess benefits of stock compensation of $0.9 million that was not previously recognized was established on the balance sheet resulting in an increase in deferred tax assets and retained earnings. Effective January 1, 2018, the Company adopted ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory , pursuant to which the income tax consequences of intra-entity transfer of an asset other than inventory is required to be recognized in the period in which the transfer occurs. The Company adopted the standard on a modified retrospective basis resulting in an increase of deferred tax assets and the beginning balance of retained earnings by $0.5 million, respectively. Net Operating Loss Carryforwards and Tax Credits At December 31, 2018, the Company had approximately $5.6 million California net operating loss, or NOL, carryforwards and no material U.S. federal or other state NOL carryforwards. The California NOL carryforwards begins to expire in 2031. The Company had foreign NOL carryforwards of approximately $34.1 million which can be used annually with certain limitations and have an indefinite carryforward period. At December 31, 2018, the Company had federal and California research and development tax credit carryforwards of approximately $10.6 million and $18.8 million, respectively. The federal research and development tax credit begins to expire in 2036. The California research and development tax credit has an indefinite carryforward period. The Company also had a U.S. federal alternative minimum tax, or AMT, credit carryforward of $0.5 million which can be used to offset future regular tax to the extent of the current AMT; the credit has an indefinite carryforward period. The utilization of NOL and credit carryforwards and other tax attributes could be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, or the Code, whereby they could be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period as defined in the Code. Valuation Allowance In assessing the need for a valuation allowance, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. Ultimately, the realization of deferred tax assets depends on the existence of future taxable income. M anagement considers sources of taxable income such as income in prior carryback periods, future reversal of existing deferred taxable temporary differences, tax-planning strategies, and projected future taxable income. As of December 31, 2015, the Company assessed the realizability of the deferred tax assets of AFP and determined that it was not more likely than not that the net deferred tax assets of AFP would be realized. Therefore, the Company established a full valuation allowance of $0.9 million as of December 31, 2015. The Company has discontinued recognizing AFP income tax benefits until it is determined that it is more likely than not that AFP will generate sufficient taxable income to realize its deferred income tax assets. As of December 31, 2018 and 2017, the Company had a full valuation allowance against the net deferred tax assets of AFP, which totaled $9.1 million and $4.9 million, respectively. Undistributed Earnings from Foreign Operations As of December 31, 2018 and 2017, deferred income taxes have not been provided on foreign operations. The foreign subsidiaries have accumulated losses of approximately $30.7 million and $15.9 million, respectively, and as such there are no earnings in which to provide taxes. It is the Company’s plan not to repatriate future foreign earnings to the U.S. Uncertain Income Tax Positions A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows: December 31, 2018 2017 2016 (in thousands) Balance at the beginning of the year $ 7,438 $ 6,686 $ 5,595 Additions based on tax positions related to prior years — — 188 Deductions based on tax positions related to prior years (1,566) — — Additions based on tax positions related to the current year 1,304 1,300 903 Deductions based on tax audit settlement (126) — — Deductions based on statute of limitations (56) (548) — Balance at the end of the year $ 6,994 $ 7,438 $ 6,686 Included in the balance of unrecognized tax benefits as of December 31, 2018, was $6.8 million that represents the portion that would impact the effective income tax rate if recognized. During the year ended December 31, 2018, the Company reduced unrecognized tax benefits for tax positions related to prior years by $1.6 million and for tax audit settlement by $0.1 million as the result of a state tax audit resolution. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax provision. For the years ended December 31, 2018 and 2017, the Company recognized accrued interest of approximately $0.1 million and $0.1 million, respectively, related to its uncertain tax positions. The Company and/or one or more of its subsidiaries filed income tax returns in the U.S. federal jurisdiction and various U.S. states and foreign jurisdictions. As of December 31, 2018, the Company is not subject to U.S. federal, state, and foreign income tax examinations for years before 2008. In June 2017, the Internal Revenue Service, or IRS, commenced an audit of the Company’s 2015 income tax return. In February 2018, the IRS completed the examination resulting in no changes to reported tax. In August 2011, the California Franchise Tax Board commenced an audit of the Company’s 2007, 2008, and 2009 tax returns. In June 2018, the Franchise Tax Board completed the examination resulting in no material tax liability. The Company is subject to income tax audit by tax authorities for tax years 2015 to 2017 for federal and 2014 to 2017 for states. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | Note 15. Stockholders' Equity Common and Preferred Stock The Company’s Certificate of Incorporation, as amended and restated in June 2014 in connection with the closing of its initial public offering, authorizes the Company to issue 300,000,000 shares of common stock, $0.0001 par value per share, and 20,000,000 shares of preferred stock, $0.0001 par value per share. As of December 31, 2018 and 2017, there were no shares of preferred stock issued or outstanding. Equity Plans As of December 31, 2018, the Company has two equity plans: the 2015 Equity Incentive Plan, or 2015 Plan, and the 2014 Employee Stock Purchase Plan or ESPP. Prior to the adoption of these plans, the Company granted options pursuant to the Amended and Restated 2005 Equity Incentive Award Plan and the 2002 Amended and Restated Stock Option/Stock Issuance Plan. Upon termination of the predecessor plans, the shares available for grant at the time of termination, and shares subsequently returned to the plans upon forfeiture or option termination, were transferred to the successor plan in effect at the time of share return. The Company issues new shares of common stock upon exercise of stock options, vesting of restricted stock units, or RSU, and settlement of ESPP, with the exception of the awards granted to employees at AFP, which are settled through re-issuance of the Company’s treasury shares. The 2015 Equity Incentive Plan In March 2015, the Board of Directors adopted the Company’s 2015 Equity Incentive Plan, or the 2015 Plan, which was approved by the Company’s stockholders in May 2015 and is set to expire in March 2025. The 2015 Plan is designed to meet the needs of a publicly traded company, including the requirements for granting “performance based compensation” under Section 162(m) of the Internal Revenue Code. The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, performance shares, and other stock or cash awards to employees of the Company and its subsidiaries, members of the Board of Directors and consultants. The Company initially reserved 5,000,000 shares of common stock for issuance under the 2015 Plan. This number will be increased by the number of shares available for issuance under the Company’s prior equity incentive plans or arrangements that are not subject to options or other awards, plus the number of shares of common stock related to options or other awards granted under the Company’s prior equity incentive plans or arrangements that are repurchased, forfeited, expired, or cancelled on or after the effective date of the 2015 Plan. The 2015 Plan also contains an “evergreen provision” that allows for an annual increase in the number of shares available for issuance on January 1 of each year during the 10 year term of the 2015 Plan, beginning January 1, 2016. The annual increase in the number of shares shall be the lesser of (i) 3,000,000 shares, (ii) two and one-half percent ( 2.5% ) of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares as determined by the Board of Directors. As of the effective date, there were 5,300,296 shares available for grant under the 2015 Plan. As of December 31, 2018, the Company reserved an aggregate of 5,521,732 shares of common stock for future issuance under the 2015 Plan. In January 2019, an additional 1,165,778 shares were reserved under the 2015 Plan pursuant to the evergreen provision. Amended and Restated 2005 Equity Incentive Award Plan The Amended and Restated 2005 Equity Incentive Award Plan, or 2005 Plan, provided for the grant of incentive stock options, or ISOs, nonqualified stock options, or NQSOs, restricted stock awards, restricted stock unit awards, stock appreciation rights, or SARs, dividend equivalents and stock payments to the Company’s employees, members of the Board of Directors and consultants. Stock options under the 2005 Plan were granted with a term of up to ten years and at prices no less than the fair market value of the Company’s common stock on the date of grant. To date, stock options granted to existing employees generally vest over three to five years and stock options granted to new employees vest over four years. Stock options granted to Board of Directors and consultants generally vested over one year. As of March 2015, consequent to the 2015 Plan becoming effective, awards were no longer granted under the 2005 Plan. 2014 Employee Stock Purchase Plan In June 2014, the Company adopted the ESPP in connection with its initial public offering. A total of 2,000,000 shares of common stock are reserved for issuance under this plan. The Company’s ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Under the ESPP, the Company may specify offerings with durations of not more than 27 months, and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of its common stock will be purchased for employees participating in the offering. An offering may be terminated under certain circumstances. The price at which the stock is purchased is equal to 85% of the lower of the fair market value of the common stock at the beginning of an offering period or on the date of purchase. As of December 31, 2018, the Company has issued 525,417 shares of common stock under the ESPP and 1,474,583 shares of its common stock remains available for issuance under the ESPP. For the year ended December 31, 2018, 2017, and 2016, the Company recorded ESPP expense of $0.7 million, $0.6 million, and $0.5 million, respectively. Share Buyback Program In November 2014, the Company’s Board of Directors authorized a $10.0 million share buyback program, which was completed in December 2015. In November 2015, the Company’s Board of Directors authorized an additional $10.0 million to the Company’s share buyback program, which was completed in December 2016. In November 2016, the Company’s Board of Directors authorized an increase of $20.0 million to the Company’s share buyback program, which was completed in August 2017. In August 2017, the Company’s Board of Directors authorized an additional $20.0 million to the Company’s share buyback program, which was completed in April 2018. In May 2018, the Company’s Board of Directors authorized an increase of $20.0 million to the Company’s share buyback program, which is expected to continue for an indefinite period of time. The primary goal of the program is to offset dilution created by the Company’s equity compensation programs. Purchases are made through open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated transactions or other means as determined by the Company’s management and in accordance with the requirements of the SEC. The timing and actual number of treasury share purchases will depend on a variety of factors including price, corporate and regulatory requirements, and other conditions. These treasury share purchases are accounted for under the cost method and are included as a component of treasury stock in the Company’s consolidated balance sheets. Pursuant to the Company’s share buyback program, the Company purchased 1,414,924 shares, 1,905,653 shares, and 759,067, shares of its common stock during the years ended December 31, 2018, 2017 and 2016, totaling $25.0 million, $30.7 million, and $9.9 million, respectively. Share-Based Award Activity and Balances The Company accounts for share‑based compensation payments in accordance with ASC 718, which requires measurement and recognition of compensation expense at fair value for all share‑based payment awards made to employees and directors. Under these standards, the fair value of option awards and the option components of the ESPP awards are estimated at the grant date using the Black-Scholes option-pricing model. The fair value of RSUs is estimated at the grant date using the Company’s common share price. Prior to the adoption of ASU No. 2018-07, Improvements to Non-employees Share-Based Payment Accounting , non‑vested stock options held by non-employees are revalued at each balance sheet date. As a result of the Company’s early adoption of the guidance on July 1, 2018, stock options held by non-employees are no longer revalued after grant. The portion that is expected to vest is amortized and recognized in compensation expense on a straight-line basis over the requisite service period, generally from the grant date to the vesting date. Options issued under the Company’s 2015 Plan and 2005 Plan, are granted at exercise prices equal to or greater than the fair value of the underlying common shares on the date of grant and vest based on continuous service. There have been no awards with performance conditions and no awards with market conditions. The options have a contractual term of five to ten years and generally vest over a three- to five‑year period. The Black‑Scholes option pricing model has various inputs such as the common share price on the date of grant, exercise price, the risk‑free interest rate, volatility, expected life and dividend yield, all of which are estimates. The Company records share‑based compensation expense net of expected forfeitures. The change of any of these inputs could significantly impact the determination of the fair value of the Company’s options as well as significantly impact its results of operations. The significant assumptions used in the Black-Scholes option-pricing are as follows: · Determination of Fair Value of the Underlying Common Stock. For options and ESPP awards granted after the completion of the Company’s initial public offering, the fair value for its underlying common stock is determined using the closing price on the date of grant as reported on the Nasdaq Global Select Market. Since the Company’s common stock was not traded in a public stock market exchange prior to June 25, 2014, prior to such date the Board of Directors considered numerous factors including recent cash sales of the Company’s common stock to third-party investors, new business and economic developments affecting the Company and independent appraisals, when appropriate, to determine the fair value of the Company’s common stock. Independent appraisal reports were prepared using conventional valuation techniques, such as discounted cash flow analyses and the guideline company method using revenue and earnings multiples for comparable publicly traded companies, and a calculation of total option proceeds, from which a discount factor for lack of marketability was applied. This determination of the fair value of the common stock was performed on a contemporaneous basis. Prior to the Company’s initial public offering, the Board of Directors determined the Company’s common stock fair market value on a quarterly basis and in some cases more frequently when appropriate. · Expected Volatility. The Company has limited data regarding company‑specific historical or implied volatility of its share price. Consequently, the Company estimates its volatility based on the weighted average historical volatility of our stock price since IPO and the stock price from a set of peer companies, since our shares do not have sufficient trading history. Management considers factors such as stage of life cycle, competitors, size, market capitalization and financial leverage in the selection of similar entities. · Expected Term. The expected term represents the period of time in which the options granted are expected to be outstanding. The Company estimates the expected term of options with consideration of vesting date, contractual term, and historical experience for exercise and post-vesting employment or contractual termination behavior after its common stock has been publicly traded. The expected term of “plain vanilla” options is estimated based on the midpoint between the vesting date and the end of the contractual term under the simplified method permitted by the SEC implementation guidance. The weighted‑average expected term of the Company’s options is approximately five years. · Risk‑Free Rate. The risk‑free interest rate is selected based upon the implied yields in effect at the time of the option grant on U.S. Treasury zero‑coupon issues with a term approximately equal to the expected life of the option being valued. · Dividends. The Company does not anticipate paying cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield rate of zero. The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual experience differs from those estimates. For the years ended December 31, 2018, 2017 and 2016, the Company estimated an average overall forfeiture rate of 5%, 7%, and 7%, respectively, based on historical experience. Forfeiture rates are separately estimated for its (1) directors and officers, (2) management personnel and (3) other employees. Share‑based compensation is recorded net of expected forfeitures. The Company periodically assesses the forfeiture rate and the amount of expense recognized based on estimated historical forfeitures as compared to actual forfeitures. Changes in estimates are recorded in the period they are identified. Tax benefits resulting from tax deductions in excess of the share‑based compensation cost recognized (excess tax benefits) are recorded in the statements of cash flows as financing activities. The weighted-averages for key assumptions used in determining the fair value of options granted during the years ended December 31, 2018, 2017, and 2016 are as follows: Year Ended December 31, 2018 2017 2016 Average volatility 39.9 % 37.0 % 30.4 % Risk-free interest rate 2.7 % 2.1 % 1.5 % Weighted-average expected life in years 5.7 5.5 5.5 Dividend yield rate — % — % — % Stock Options A summary of option activity under all plans for the year ended December 31, 2018, is presented below: Weighted-Average Weighted-Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term (Years) Value (1) (in thousands) Outstanding as of December 31, 2017 10,898,701 $ 14.65 Options granted 1,096,832 20.16 Options exercised (1,357,865) 13.14 Options cancelled (143,724) 13.84 Options expired (388,379) 34.81 Outstanding as of December 31, 2018 10,105,565 $ 14.69 4.80 $ 53,472 Exercisable as of December 31, 2018 6,826,539 $ 14.31 3.57 $ 38,217 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company’s common stock for those awards that have an exercise price below the estimated fair value at December 31, 2018. During the years ended December 31, 2018, 2017, and 2016, the Company recorded expense of $8.2 million, $8.3 million, and $8.7 million, respectively, related to stock options granted under all plans. Information relating to option grants and exercises is as follows: Year Ended December 31, 2018 2017 2016 (in thousands, except per share data) Weighted-average grant date fair value per option share $ 7.80 $ 4.98 $ 3.42 Intrinsic value of options exercised 7,372 17,247 7,446 Cash received from options exercised 11,753 19,098 20,338 Total fair value of the options vested during the year 7,972 7,263 8,654 A summary of the status of the Company’s nonvested options as of December 31, 2018, and changes during the year ended December 31, 2018, are presented below: Weighted-Average Grant Date Options Fair Value Non-vested as of December 31, 2017 4,310,241 $ 4.21 Options granted 1,096,832 7.80 Options vested (1,984,323) 4.02 Options forfeited (143,724) 5.20 Non-vested as of December 31, 2018 3,279,026 5.47 As of December 31, 2018, there was $11.3 million of total unrecognized compensation cost, net of forfeitures, related to nonvested stock option based compensation arrangements granted under all plans. The cost is expected to be recognized over a weighted-average period of 2.2 years and will be adjusted for future changes in estimated forfeitures. Restricted Stock Units The Company grants restricted stock units, or RSUs, to certain employees and members of the Board of Directors with a vesting period of up to five years. The grantee receives one share of common stock at a specified future date for each RSU awarded. The RSUs may not be sold or otherwise transferred until certificates of common stock have been issued, recorded, and delivered to the participant. The RSUs do not have any voting or dividend rights prior to the issuance of certificates of the underlying common stock. The share-based expense associated with these grants was based on the Company’s common stock fair value at the time of grant and is amortized over the requisite service period, which generally is the vesting period, using the straight-line method. During the years ended December 31, 2018, 2017, and 2016, the Company recorded expenses of $7.7 million, $7.7 million, and $5.9 million, respectively, related to RSU awards granted under all plans . As of December 31, 2018, there was $12.3 million of total unrecognized compensation cost, net of forfeitures, related to non-vested RSU-based compensation arrangements granted under all plans. The cost is expected to be recognized over a weighted-average period of 2.2 years and will be adjusted for future changes in estimated forfeitures. Information relating to RSU grants and deliveries is as follows: Total Fair Market Value of RSUs Issued Total RSUs as Issued Compensation (1) (in thousands) RSUs outstanding at December 31, 2017 1,392,781 RSUs granted 439,980 $ 8,560 RSUs forfeited (55,514) RSUs vested (2) (570,586) RSUs outstanding at December 31, 2018 1,206,661 (1) The total FMV is derived from the number of RSUs granted times the current stock price on the date of grant. (2) Of the vested RSUs, 363,640 shares of common stock were surrendered to fulfil tax withholding obligations Equity Awards to Consultants and Advisory Board Members The Company pays certain consultants and advisory board members in the form of share-based awards. Prior to the adoption of ASU No. 2018-07, Improvements to Non-employees Share-Based Payment Accounting , non-vested stock options held by non-employees were revalued at each balance sheet date. As a result of the Company’s early adoption of the guidance on July 1, 2018, stock options held by non-employees are no longer revalued after grant. During the years ended December 31, 2018, 2017, and 2016 the Company recorded $0.2 million, $0.5 million, and $0.1 million, respectively, in share-based compensation related to the issuance of equity awards for services rendered by consultants. The Company recorded share-based compensation expense under all plans and is included in the Company’s consolidated statement of operations as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Cost of revenues $ 3,923 $ 3,756 $ 2,967 Operating expenses: Selling, distribution, and marketing 383 302 220 General and administrative 10,853 11,643 10,865 Research and development 1,521 1,386 1,072 Total share-based compensation $ 16,680 $ 17,087 $ 15,124 |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefits | |
Employee Benefits | Note 16. Employee Benefits 401(k) Plan The Company has a defined contribution 401(k) plan, or the Plan, whereby eligible employees voluntarily contribute up to a defined percentage of their annual compensation. The Company matches contributions at a rate of 50% on the first 6% of employee contributions, and pays the administrative costs of the Plan. Total employer contributions for the years ended December 31, 2018, 2017, and 2016 were approximately $1.3 million, $1.1 million, and $1.0 million, respectively. Defined Benefit Pension Plan In connection with the Merck API Transaction, the Company assumed an obligation associated with a defined-benefit plan for eligible employees of AFP. This plan provides benefits to the employees from the date of retirement and is based on the employee’s length of time employed by the Company. The calculation is based on a statistical calculation combining a number of factors that include the employee’s age, length of service, and AFP employee turnover rate. The liability under the plan is based on a discount rate of 1.70% and 1.60% as of December 31, 2018 and 2017, respectively. The liability is included in accrued liabilities in the accompanying consolidated balance sheets. The plan is currently unfunded, and the benefit obligation under the plan was $2.2 million and $2.1 million at December 31, 2018 and 2017, respectively. Expense under the plan was $0.3 million, $0.2 million, and $0.2 million for the years ended December 31, 2018, 2017, and 2016, respectively. Gain or loss due to change in actuarial valuation of the Company’s defined benefit pension plan is recorded in other comprehensive income (loss). |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 17. Commitments and Contingencies Collaboration Agreements with Medical Device Manufacturers In August 2014, the Company entered into a collaboration agreement with a medical device manufacturer to develop a drug delivery system to be used by the Company for one of its pipeline products. As of December 31, 2018, the Company has paid an upfront payment of $0.5 million and $1.7 million in milestone payments under this agreement, which were classified as research and development expense, as the milestones were met. The Company is obligated to pay up to an additional $0.4 million if certain research and development milestones are met. As of December 31, 2018, no such obligation existed. Pursuant to the collaboration agreement, if the medical device manufacturer is successful in the development of this drug delivery system and the Company’s pipeline products receive appropriate regulatory approval, the Company intends to enter into a commercial supply agreement with such medical device manufacturer for a minimum purchase of 1.0 million units during the first 12 months. In October 2017, the Company entered into a collaboration agreement with a medical device manufacturer to develop a drug delivery system to be used by the Company for one of its pipeline products for a total of $1.6 million. As of December 31, 2018, the Company has paid and expensed an upfront payment of $0.4 million and $0.2 million in milestone payments under this agreement, which were classified as research and development expenses as the milestones were met. The Company is obligated to pay up to an additional $1.0 million, if certain research and development milestones are met. As of December 31, 2018, no such obligation existed for the milestones. In addition, pursuant to the collaboration agreement, if the medical device manufacturer is successful in the development of this drug delivery system and the Company’s pipeline products receive appropriate regulatory approval, the Company intends to enter into a commercial supply agreement with such medical device manufacturer under which the Company is obligated to pay an additional $1.0 million, if certain commercial development milestones are met and to purchase a minimum of 100,000 units per year for three years. Operating Lease Agreements The Company leases real and personal property, in the normal course of business, under various non-cancelable operating leases. The Company, at its option, can renew a substantial portion of its leases, at the market rate, for various renewal periods ranging from one to six years. Rental expense under these leases for the years ended December 31, 2018, 2017, and 2016, was approximately $4.2 million, $3.5 million, and $3.4 million, respectively. Future minimum rental payments under operating leases that have initial or remaining non-cancelable lease terms in excess of 12 months for fiscal years ending December 31 are as follows: Operating Leases (in thousands) 2019 $ 3,712 2020 3,131 2021 1,967 2022 1,050 2023 125 $ 9,985 Purchase Commitments As of December 31, 2018, the Company has entered into commitments to purchase equipment and raw materials for an aggregate amount of approximately $59.5 million. The Company anticipates that most of these commitments with remaining term in excess of one year will be fulfilled by 2020. The Company entered into agreements with a Chinese governmental entity to acquire land-use rights to real property in Nanjing, China. Under the terms of these agreements, the Company committed to invest capital in its wholly-owned subsidiary, ANP, and to develop these properties as an API manufacturing facility for the Company’s pipeline products. In conjunction with these agreements, ANP modified its business license on July 3, 2012, to increase its authorized capital. As of December 31, 2016, the Company had completed its investment of total registered capital commitment of $61.0 million to ANP. This investment in ANP resulted in cash being transferred from the U.S. parent company to ANP. In accordance with certain agreements between ANP and the Chinese government, in January 2010 and November 2012, the Company acquired certain land-use rights for $1.2 million and $1.3 million, respectively. As required by these agreements, the Company committed to spend approximately $15.0 million in the related land development, which primarily includes the construction of fixed assets according to a specific timetable. As of December 31, 2018, the Company has spent $4.5 million on such construction. The Company anticipates that this spending commitment will be met by the end of 2019. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related-Party Transactions | |
Related-Party Transactions | Note 18. Related-Party Transactions ANP Private Placement In July 2018, ANP completed a private placement of its common equity interest to accredited investors for aggregate gross proceeds of approximately $57 million. While investors were initially required to complete their contributions in cash by December 31, 2018, ANP granted an extension to certain investors. In connection with the private placement, all of the executive officers of the Company, Stephen Shohet, Howard Lee, and Richard Koo, directors of the Company, and certain employees of ANP entered into subscription agreements (each, a “Subscription Agreement”) for the indirect investment in ANP. These Subscription Agreements were transacted either through an investment in Amphastar Cayman, a Cayman Islands limited liability company, or Qianqia or Zhongpan, Chinese partnerships. The aggregate gross proceeds received from management and directors were approximately $29.7 million. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2018 | |
Litigation | |
Litigation | Note 19. Litigation Enoxaparin Patent Litigation In September 2011, Momenta Pharmaceuticals, Inc., or Momenta, a Boston based pharmaceutical company, and Sandoz Inc., or Sandoz, the generic division of Novartis, initiated litigation against the Company for alleged patent infringement of two patents related to testing methods for batch release of enoxaparin, which the Company refers to as the “’886 patent” and the “’466 patent.” The lawsuit was filed in the United States District Court for the District of Massachusetts, or the Massachusetts District Court. In October 2011, the Massachusetts District Court issued a preliminary injunction barring the Company from selling its generic enoxaparin product and also requiring Momenta and Sandoz to post a $100.1 million bond. The preliminary injunction was stayed by the United States Court of Appeals for the Federal Circuit, or the Federal Circuit, in January 2012, and reversed by the Federal Circuit in August 2012. In January 2013, the Company moved for summary judgment of non-infringement of both patents. Momenta and Sandoz withdrew their allegations as to the ’466 patent, and in July 2013, the Massachusetts District Court granted the Company’s motion for summary judgment of non-infringement of the ’886 patent and denied Momenta and Sandoz’s motion for leave to amend their infringement contentions. On January 24, 2014, the Massachusetts District Court judge entered final judgment in the Company’s favor on both patents. Momenta and Sandoz also filed a motion to collect attorneys’ fees and costs relating to a discovery motion, which the Massachusetts District Court granted. On May 9, 2016, the Massachusetts District Court issued an order imposing fees and costs of approximately $0.4 million in relation to this discovery motion. This amount has been accrued in the general and administrative expense for the quarter ended March 31, 2016 . On January 30, 2014, Momenta and Sandoz filed a notice of appeal to the Federal Circuit appealing the court’s final judgment including summary judgment denying Momenta and Sandoz’s motion for leave to amend their infringement contentions. Following appeal briefing filed by the parties, t he Federal Circuit held oral argument on May 4, 2015. On November 10, 2015, the Federal Circuit panel affirmed-in-part and vacated-in-part the decision of the Massachusetts District Court granting summary judgment of non-infringement as to the Company, and it remanded the case to the Massachusetts District Court for further proceedings consistent with its opinion. The Federal Circuit panel affirmed the Massachusetts District Court’s holding in the Company’s favor that the Company does not infringe under 35 U.S.C. 271(g), and the panel vacated the grant of summary judgment to the extent it was based on the determination that the Company’s activities fall within the 35 U.S.C. 271(e)(1) safe harbor. The Federal Circuit panel also left to the Massachusetts District Court’s discretion whether to reconsider on remand its denial of leave for Momenta and Sandoz to amend their infringement contentions. On January 11, 2016, the Company filed a Petition for Rehearing En Banc with the Federal Circuit. On February 17, 2016, the Federal Circuit denied the Company’s Petition, and the Federal Circuit issued its mandate on February 24, 2016, whereby the case returned to the Massachusetts District Court for further proceedings. On March 18, 2016, the parties filed a joint status report with the Massachusetts District Court. On June 21, 2016, the Massachusetts District Court granted Momenta and Sandoz’s Motion for Leave to Amend its Infringement Contentions. In light of Momenta and Sandoz’s Amended Infringement Contentions and recent changes in Supreme Court precedent since the case was stayed in 2012, the Company sought to amend its Non-Infringement and Invalidity Contentions. On July 18, 2016, the Company submitted its Motion for Leave to Amend Its Non-Infringement and Invalidity Contentions and Momenta and Sandoz responded on July 25, 2016. In light of the new arguments made in their response, the Company further filed a Motion For Leave to Reply in Further Support of Defendants’ Motion for Leave to Amend Non-Infringement and Invalidity Contentions, which was granted. A hearing was held on August 23, 2016, where the Magistrate Judge ordered the Company to file its proposed amended contentions, which it filed on August 31, 2016. On February 4, 2017, the Magistrate Judge issued an order denying the Company leave to amend its contentions. The Company filed objections to this order with the District Court on February 21, 2017. On April 13, 2017, the District Court rejected the determination of the Magistrate Judge with respect to the Company’s amended non-infringement contentions, and allowed the Company to amend its non-infringement contentions. With respect to the Company’s amended invalidity contentions, the District Court accepted the Magistrate Judge’s determination; however, the District Court specifically stated that the Company can argue changes in law at the summary judgment stage or at trial. In parallel with the Massachusetts District Court proceedings, the Company appealed the Federal Circuit’s decision to vacate the grant of the Company’s summary judgment to the extent it was based on the determination that the Company’s activities are protected under the Safe Harbor. The Company filed a Petition for a Writ of Certiorari with the Supreme Court on May 17, 2016. Momenta and Sandoz initially waived their right to respond to the petition; however, on May 31, 2016, the Supreme Court requested a response from Momenta and Sandoz. The response from Momenta and Sandoz was initially due on June 30, 2016, but they requested an extension. Momenta and Sandoz filed their response on August 1, 2016. On October 3, 2016, the Supreme Court declined the Petition for a Writ of Certiorari. Fact discovery in the Massachusetts District Court proceedings closed on November 22, 2016, and the parties proceeded with expert discovery and exchanged opening and rebuttal expert reports. Expert discovery closed on March 24, 2017. On April 14, 2017, Plaintiffs filed a Motion for Summary Judgment seeking to dismiss the Company’s equitable defenses. On April 14, 2017, the Company filed Defendants’ Motion for Summary Judgment of Invalidity and Noninfringement. In the Motion, the Company moved for the District Court to grant summary judgment in favor of the Company on the following issues: (1) the ’886 patent is invalid under 35 U.S.C. § 101 as claiming non-patentable subject matter; (2) the ’886 patent is invalid under 35 U.S.C. § 112 because the claims are indefinite; and (3) the Company’s tests do not infringe the claims of the ’886 patent. Oppositions to the motions for summary judgment were filed on May 5, 2017. Replies in support of the motions for summary judgment were filed on May 19, 2017. On June 16, 2017, the District Court issued an order denying the summary judgment motions. The District Court also denied Plaintiffs’ motion for summary judgment dismissing the Company’s defenses of implied waiver and equitable estoppel, and denied Plaintiffs’ alternative request for a separate hearing on the implied waiver and equitable estoppel defenses holding that the defenses would be submitted to the jury for an advisory verdict. Trial in the Massachusetts District Court on all claims and defenses began on July 10, 2017. On July 21, 2017, the jury returned a unanimous verdict finding that although the Company’s tests infringed the asserted patent, the patent was invalid for lack of enablement and lack of written description and the jury further found that Plaintiffs are entitled to zero ($0) damages. As for the Company’s defenses of implied waiver and equitable estoppel, the jury found that Plaintiffs waived their right to recover for infringement of the asserted patent and that Plaintiffs are estopped from enforcing the asserted patent against the Company. The verdict on these equitable defenses was briefed by the parties and submitted to the Court. In the post-trial briefing, the Company requested the Court to adopt the findings of the jury on the equitable defenses, and to set aside the jury’s finding of infringement. In Plaintiffs’ post-trial briefing, Plaintiffs requested a new trial, and requested the Court to set aside the jury’s finding that the asserted patent was invalid for lack of enablement and lack of written description. In a February 7, 2018 Memorandum and Order and with respect to the equitable defenses, the Court found that Plaintiffs waived their right to enforce the ’ 866 patent against the Company for its use of one of its test, and are equitably estopped from enforcing the ’ 866 patent against the Company for its use of that same test. The Court also found that Plaintiffs have not waived their right to enforce the ’ 866 patent against the Company for its use of a second test, and are not equitable estopped from enforcing the ’ 866 patent against the Company for its use of that same second test. On February 7, 2018, the Court also denied all other post-trial motions. On March 20, 2018, the Court entered final judgment in this matter reflecting the jury’s verdict and the Court’s February 7, 2018 Memorandum and Order. On March 23, 2018, the Company filed a motion to enforce liability on the bonds related to the preliminary injunction issued in October 2011, stayed in January 2012, and reversed by the Federal Circuit in August 2012. On March 27, 2018, Plaintiffs filed a notice of appeal with the Federal Circuit. On April 3, 2018, Plaintiffs filed a motion with the District Court to defer decision on the Company’s motion to enforce liability on the bonds pending their appeal. On July 13, 2018, the District Court allowed Plaintiffs motion to defer consideration of the Company’s motion to enforce liability on the bonds until the appeal is resolved. The Plaintiffs filed their Opening Brief on July 30, 2018, the Company filed its Response Brief on September 21, 2018, and Plaintiffs filed their Reply Brief on November 19, 2018. The briefing in the appeal has concluded and the parties are waiting for the Federal Circuit to set a date for oral arguments. On February 28, 2019, the Plaintiffs filed a motion to stay this appeal, and the Company’s opposition to their motion to stay is due March 21, 2019. Plaintiffs filed a motion for sanctions on January 14, 2019. The Company filed its opposition brief to the motion for sanctions on February 4, 2019. Plaintiffs filed a reply on February 14, 2019 and the Company filed a sur-reply on February 22, 2019. The Company’s opposition to the motion for relief from the final judgment is currently due on March 20, 2019. The Company intends to vigorously defend against these motions and will continue to vigorously defend the jury’s verdict, including against any appeal by the Plaintiffs . The Company intends to continue to pursue its attempt to collect the $100.1 million bond posted by Momenta and Sandoz. False Claims Act Litigation In January 2009, the Company filed a qui tam complaint in the U.S. District Court for the Central District of California, or the California District Court, alleging that Aventis Pharma S.A., or Aventis, through its acquisition of a patent through false and misleading statements to the U.S. Patent and Trademark Office, as well as through false and misleading statements to the FDA, overcharged the federal and state governments for its Lovenox ® product. If the Company is successful in this litigation, it could be entitled to a portion of any damage award that the government ultimately may recover from Aventis. In October 2011, the California District Court unsealed the Company’s complaint. On February 28, 2014, Aventis filed a motion for summary judgment on the issue of the adequacy of the Company’s notice letter to the government, and the California District Court denied Aventis’ motion for summary judgment in a final order it issued on May 12, 2014. On June 9, 2014, at Aventis’ request, the California District Court issued an order certifying for appeal its order denying Aventis’ motion for summary judgment. On June 9, 2014, Aventis filed with the United States Court of Appeals for the Ninth Circuit, or the Ninth Circuit, a petition for permission to appeal the California District Court’s denial of Aventis’ motion for summary judgment, and the Company filed an opposition to Aventis’ petition on June 19, 2014. On August 22, 2014, the Ninth Circuit granted Aventis’ petition. The parties filed their respective appeal briefs with the Ninth Circuit. On November 10, 2016, the Ninth Circuit heard oral argument on the appeal. The California District Court set an evidentiary hearing for July 7, 2014 on the “original source” issue, a key element under the False Claims Act. The evidentiary hearing was conducted as scheduled, from July 7, 2014 through July 10, 2014. On July 13, 2015, the California District Court issued a ruling concluding that the Company is not an original source under the False Claims Act, and entered final judgment dismissing the case for lack of subject matter jurisdiction. On July 20, 2015, the Company filed with the Ninth Circuit a notice of appeal of the California District Court’s dismissal of the case, and Aventis filed a notice of cross-appeal on August 5, 2015. On November 12, 2015, Aventis filed a pleading asking that the California District Court impose various monetary penalties and fines against the Company, including disgorgement of enoxaparin revenues and attorneys’ fees expended by Aventis in this action, based on Aventis’ allegations that the Company engaged in sanctionable conduct. On November 23, 2015, the California District Court issued an order setting forth a procedure for sanctions proceedings as to the Company as well as its outside counsel. On December 24, 2015, the Company filed a pleading with the California District Court opposing the imposition of sanctions, and on January 20, 2016, Aventis filed a response pleading further pressing for the imposition of sanctions. On May 4, 2016, the California District Court issued three orders requesting that the Company and its outside counsel file a document showing cause as to why sanctions should not be imposed and to set up a conference call with the parties and the Court to discuss whether any discovery and/or a hearing is necessary. On June 13, 2016, the Company and its outside counsel each filed responses to the Court’s order to show cause as to why sanctions should not be imposed. On July 21, 2016, Aventis filed a response contending that the Court should impose sanctions. On February 10, 2017, the Court held a show cause hearing regarding the potential imposition of sanctions and took the matter under submission. On September 18, 2017, the District Court issued its decision that no sanctions will be imposed on either the Company or its counsel. On March 28, 2016, the Company filed its opening brief with the Ninth Circuit Court of Appeals setting forth detailed arguments as to why the False Claims Act litigation should not have been dismissed by the California District Court. On June 20, 2016, Aventis filed its principal brief in the appeal, responding to the Company’s arguments regarding dismissal of the False Claims Act litigation, and setting forth Aventis’ argument that it should be awarded attorneys’ fees and expenses. On September 19, 2016, the Company filed its reply brief to Aventis’s principal brief. On October 3, 2016, Aventis filed its reply brief in support of its cross-appeal of the District Court’s denial of attorneys’ fees. On November 10, 2016, the Ninth Circuit heard oral argument on the appeals. On May 11, 2017, the Ninth Circuit issued an opinion affirming the California District Court’s dismissal of the action for lack of subject matter jurisdiction; dismissing as moot Aventis’ appeal of the District Court’s denial of its motion for summary judgment on the issue of the adequacy of the Company’s notice letter to the government; reversing the District Court’s denial of Aventis’ motion for attorneys’ fees; and remanding the case to the District Court for resolution of the attorneys’ fees issue. On July 14, 2017, Aventis filed an application with the District Court for entitlement to attorneys’ fees and expenses. On November 20, 2017, the District Court issued its order granting Aventis’ application for fees, stating that it would refer the matter to a magistrate judge for a report and recommendation regarding the amount of the award to be made. On November 21, 2017, the District Court referred the matter to a magistrate judge. On August 7, 2018, Aventis filed its Application for Fees and Expenses. On November 26, 2018, the Company filed Opposition to Aventis’s Application for Fees and Expenses. On February 12, 2019, following further briefing on the attorneys’ fee issue, the District Court approved of the parties’ consent for the Magistrate Judge to conduct all further proceedings in this matter at the district court level, including determining the amount of attorneys’ fees to be awarded and entering a final judgment. The Magistrate Judge set a hearing on the application, for May 8, 2019. The Company intends to continue to vigorously defend against any imposition of attorneys’ fees and expenses in this case. Momenta/Sandoz Antitrust Litigation On September 17, 2015, the Company initiated a lawsuit by filing a complaint in the California District Court against Momenta and Sandoz, or the Defendants. The Company’s complaint generally asserts that Defendants have engaged in certain types of illegal, monopolistic, and anticompetitive conduct giving rise to various causes of action against them. On December 9, 2015, Defendants filed a motion to dismiss and a motion to transfer the case to the District of Massachusetts. On January 4, 2016, the Company filed oppositions to both motions. On January 26, 2016, the California District Court granted Defendants’ motion to transfer and did not rule on Defendants’ motion to dismiss. Accordingly, the case was transferred to the District of Massachusetts. On February 9, 2016, the Company filed a writ of mandamus with the Ninth Circuit to attempt to appeal the California District Court’s granting of Defendants’ motion to transfer to the District of Massachusetts. The Ninth Circuit denied this petition on May 20, 2016, and as such the case will remain before the District of Massachusetts. On July 27, 2016, the Massachusetts District Court granted Defendants’ motion to dismiss based on antitrust immunity doctrine, without addressing the substantive merits of the claims. On August 25, 2016, the Company filed with the First Circuit Court of Appeals a notice of appeal of the Massachusetts District Court’s dismissal of the antitrust case. On April 20, 2017, Defendants filed their supplemental motion to dismiss and the Company filed its opposition on May 4, 2017. On March 19, 2018, the District Court entirely denied the Defendants’ motion to dismiss. On April 19, 2018, the Defendants filed a motion to seek interlocutory appeal of the District Court’s motion to dismiss opinion. The Company filed its opposition to interlocutory appeal on May 1, 2018. On June 1, 2018, the District Court denied Defendants’ motion seeking interlocutory appeal. On August 23, 2018, the Massachusetts District Court granted the parties’ joint motion to extend the schedule as to fact and expert discovery and accepted their proposed dates. Fact discovery closed on November 30, 2018 and expert discovery will close on April 12, 2019. On February 19, 2019, the Company filed a Motion for Partial Summary Judgment on Issues Previously Litigated in the Patent Action. Defendants’ opposition is due on April 9, 2019, and the Company’s reply is due on May 3, 2019. Any additional summary judgment motions are due on April 26, 2019, oppositions are due on June 14, 2019, and replies are due on July 10, 2019. Additionally, Momenta and Sandoz filed motions for sanctions on January 14, 2019 and January 22, 2019, respectively. The Company filed its opposition briefs to both motions on February 4, 2019 and February 5, 2019, respectively. Momenta and Sandoz filed replies to both motions on February 14, 2019. The Company filed sur-replies to both motions on February 22, 2019. The Company intends to vigorously defend against both motions as it prepares for trial. Trial is scheduled for September 9, 2019. Epinephrine Injection, 0.1 mg/mL Litigation On June 28, 2018, Belcher Pharmaceuticals, LLC, or Belcher initiated a lawsuit by filing a complaint against IMS for infringement of U.S. Patent No. 9,283,197 with regard to IMS’s New Drug Application No. 211363, filed under 21 U.S.C. § 355(b)(2) of the Hatch-Waxman Act, for FDA approval to manufacture and sell 0.1 mg/mL epinephrine injections. On July 20, 2018, the Company filed a motion to dismiss Belcher’s complaint for patent infringement under Federal Rule of Civil Procedure 12(b)(6). The briefing concluded on October 2, 2018. The District Court has not yet ruled on the motion to dismiss. The Company intends to vigorously defend this patent lawsuit. Vasopressin (20 units/mL) Patent Litigation On December 20, 2018, Par Pharmaceutical, Inc., Par Sterile Products, LLC and Endo Par Innovation Company (collectively, “Par”) initiated a patent lawsuit by filing a Complaint against the Company for infringement of U.S. Patent Nos. 9,375,478 (“the ‘478 Patent”), 9,687,526 (“the ‘526 Patent”), 9,744,209 (“the ‘209 Patent”), 9,744,239 (“the ‘239 Patent”), 9,750,785 (“the ‘785 Patent”) and 9,937,223 (“the ‘223 Patent”) (collectively, “Par Patents”) with regard to the Company’s Abbreviated New Drug Application No. 211,857 for FDA approval to manufacture and sell Vasopressin (20 units/ mL). The Company filed its Answer to this Complaint on February 19, 2019. The Company intends to vigorously defend this patent lawsuit. Other Litigation The Company is also subject to various other claims and lawsuits from time to time arising in the ordinary course of business. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the opinion of management, the ultimate resolution of any such matters is not expected to have a material adverse effect on its financial position, results of operations, or cash flows; however, the results of litigation and claims are inherently unpredictable and the Company’s view of these matters may change in the future. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data | |
Quarterly Financial Data | Note 20. Quarterly Financial Data (Unaudited) 2018 Quarters First Second Third Fourth (in thousands, except per share data) Net revenues Finished pharmaceutical products $ 53,117 $ 63,241 $ 71,767 $ 82,934 API 5,276 7,799 3,776 6,756 Total net revenues $ 58,393 $ 71,040 $ 75,543 $ 89,690 Gross profit Finished pharmaceutical products $ 19,636 $ 27,649 $ 30,571 $ 35,364 API (2,664) (1,585) (1,311) (675) Total gross profit $ 16,972 $ 26,064 $ 29,260 $ 34,689 Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. $ (7,141) $ (2,853) $ 2,389 $ 1,867 Weighted-average shares used to compute net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: Basic 46,514 46,557 46,241 46,268 Diluted 46,514 46,557 48,281 49,181 Net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: Basic $ (0.15) $ (0.06) $ 0.05 $ 0.04 Diluted $ (0.15) $ (0.06) $ 0.05 $ 0.04 2017 Quarters First Second Third Fourth (in thousands, except per share data) Net revenues Finished pharmaceutical products $ 55,934 $ 63,765 $ 54,455 $ 55,985 API 736 1,422 3,461 4,417 Total net revenues $ 56,670 $ 65,187 $ 57,916 $ 60,402 Gross profit Finished pharmaceutical products $ 24,289 $ 28,778 $ 21,222 $ 22,228 API (1,482) (2,119) (669) (1,738) Total gross profit $ 22,807 $ 26,659 $ 20,553 $ 20,490 Net income attributable to Amphastar Pharmaceuticals, Inc. $ 861 $ 1,900 $ 99 $ 787 Weighted-average shares used to compute net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: Basic 46,069 46,025 46,101 46,233 Diluted 48,057 47,866 48,215 49,330 Net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: Basic $ 0.02 $ 0.04 $ 0.00 $ 0.02 Diluted $ 0.02 $ 0.04 $ 0.00 $ 0.02 Net income (loss) per share amounts for the fiscal quarters have been calculated independently and may not in the aggregate equal the amount for the full year. In 2018, the Company identified immaterial errors in each of its previously reported quarters of 2017 as well as the first and second quarters of 2018, primarily related to the depreciation of certain leasehold improvements within property, plant and equipment. The Company corrected the immaterial errors in the third quarter of 2018, resulting in a decrease to the net loss of approximately $0.1 million, for the first quarter of 2018 and an increase to the net loss of approximately $0.1 million for the second quarter of 2018. Net income for each of the first, second, and third quarters of 2017 decreased by $0.1 million and the immaterial error correction for the fourth quarter of 2017 resulted in a decrease to net income of approximately $0.7 million. The errors did not have an effect on basic or diluted net income (loss) per share, except that the basic and diluted earnings per share for the fourth quarter of 2017 was reduced by $0.01 and the basic and diluted loss per share for the first quarter of 2018 was reduced by $0.01. Based on management's evaluation of the materiality of the error from a qualitative and quantitative perspective as required by authoritative guidance, the Company concluded that correcting the error had no material impact on any of the Company's previously issued interim financial statements and had no effect on the trend of financial results. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and are prepared in accordance with accounting principles generally accepted in the United States, or GAAP. All significant intercompany activity has been eliminated in the preparation of the consolidated financial statements. Effective January 1, 2017, the Company prospectively adopted certain requirements of Accounting Standards Update, or ASU, No. 2016-09 to classify cash flows related to excess tax benefits in operating activities and directly record all excess tax benefits and tax deficiencies in income tax expense or benefit in the consolidated statement of operations without adjusting prior periods. The Company’s subsidiaries include: (1) International Medication Systems, Limited, or IMS, (2) Armstrong Pharmaceuticals, Inc., or Armstrong, (3) Amphastar Nanjing Pharmaceuticals Inc., or ANP, (4) Nanjing Letop Fine Chemistry Co., Ltd., or Letop, (5) Nanjing Hanxin Pharmaceutical Technology Co., Ltd., or Hanxin, (6) Nanjing Baixin Trading Co., Ltd., or Baixin, (7) Amphastar France Pharmaceuticals, S.A.S., or AFP, (8) Amphastar UK Ltd., or AUK, and (9) International Medication Systems (UK) Limited, or IMS UK. In July 2018, the Company’s Chinese subsidiary, ANP, completed a private placement of its common equity interest to accredited investors for aggregate gross proceeds of approximately $57 million, of which $38.0 million had been received by ANP as of December 31, 2018. While investors were initially required to complete their contributions in cash by December 31, 2018, ANP granted an extension to certain investors. Subsequently, including the funds from the extension, the proceeds ANP has received from the private placement totaled $56.3 million. The Company has retained approximately 58% of the equity interest in ANP immediately after the private placement and continues to consolidate the financial results of ANP with the Company’s results of operations. ANP’s net income or loss after July 2, 2018, was attributed to the Company in accordance with the Company’s equity interest of approximately 58% in ANP. In 2018, the Company identified errors in its accounting primarily related to the depreciation of certain leasehold improvements within property, plant and equipment. The errors were not material to any of the Company’s prior period annual financial statements. However, for comparative purposes, the Company has revised the prior period consolidated financial statements included herein. As a result, the net income for the years ended December 31, 2017 and 2016 was reduced by $0.9 million and $0.7 million, respectively. The errors resulted in a change to the basic and diluted net income per share for the year ended December, 2017, which was reduced by $0.02 and $0.01, respectively. The error resulted in a change to the basic and diluted net income per share for the year ended December 31, 2016, which was reduced by $0.01 and $0.01, respectively. The balances of property, plant, and equipment, net and retained earnings as of December 31, 2017, were reduced by $4.8 million and $3.6 million, respectively. The error did not result in a change to the net cash provided by operating activities in the Company’s consolidated statement of cash flows for the years ended December 31, 2017 and 2016. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The principal accounting estimates include: determination of allowances for doubtful accounts and discounts, provision for chargebacks and rebates, provision for product returns, adjustment of inventory to their net realizable values, impairment of long-lived and intangible assets and goodwill, self-insured claims, workers’ compensation liabilities, litigation reserves, stock price volatilities for share-based compensation expense, valuation allowances for deferred tax assets, and liabilities for uncertain income tax positions. |
Foreign Currency | Foreign Currency The functional currency of the Company, its domestic subsidiaries, its Chinese subsidiary ANP, and its U.K. subsidiary, AUK, is the U.S. dollar, or USD. ANP maintains its books of record in Chinese yuan. These books are remeasured into the functional currency of USD using the current or historical exchange rates. The resulting currency remeasurement adjustments and other transactional foreign currency exchange gains and losses are reflected in the Company’s statements of operations. The Company’s French subsidiary, AFP, maintains its book of record in euros. Its other Chinese subsidiaries, maintain their books of record in Chinese yuan. Its U.K. subsidiary, IMS UK, maintains its book of record in Great British pounds. These local currencies have been determined to be the subsidiaries’ respective functional currencies. These books of record are translated into USD using average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transactions. Translation adjustments are reflected in stockholders’ equity and are included as a component of other accumulated comprehensive income (loss). The unrealized gains or losses of intercompany foreign currency transactions that are of a long-term investment nature are reported in other accumulated comprehensive income (loss). The unrealized gains and losses of intercompany foreign currency transactions that are of a long-term investment nature for the years ended December 31, 2018, 2017, and 2016 were a $1.5 million gain, a $4.3 million gain, and a $1.5 million loss, respectively. The Company does not undertake hedging transactions to cover its foreign currency exposure. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) For the years ended December 31, 2018, 2017 and 2016, the Company included its foreign currency translation gain or loss and change in pension obligation of its defined benefit pension plan as part of its comprehensive income (loss) . There was no material income tax expense (benefit) allocated to other comprehensive loss for the year ended December 31, 2018. Income tax expense of $1.5 million was allocated to other comprehensive income for the year ended December 31, 2017. There was no material income tax expense (benefit) allocated to other comprehensive loss for the year ended December 31, 2016. |
Shipping and Handling Costs | Shipping and Handling Costs For the years ended December 31, 2018, 2017, and 2016, the Company included shipping and handling costs of approximately $3.7 million, $3.0 million, and $2.4 million, respectively, in selling, distribution and marketing expenses in the accompanying consolidated statements of operations. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred and consist of costs incurred to further the Company’s research and development activities. These include salaries and related employee benefits, costs associated with clinical trials, nonclinical research and development activities, regulatory activities, research‑related overhead expenses and fees paid to external service providers. The Company may produce or purchase inventories prior to or with the expectation of receiving marketing authorization in the near term, based on operational decisions about the most effective use of existing resources. This inventory is referred to as pre‑launch inventory. It is the Company’s accounting policy that the pre-launch inventory is capitalized if it has a probable future economic benefit. If marketing authorization is received and previously expensed pre‑launch inventory is sold, such sales may contribute up to a 100% margin to the Company’s operating results. Pre‑launch inventory costs include cost of work in process, materials, and finished drug products. As of December 31, 2018, 2017, and 2016, the Company did not have material capitalized pre-launch inventory. |
Restricted Cash and Short-term Investments | Restricted Cash and Short-Term Investments Restricted cash and short-term investments are collateral required for the Company to effect a standby letter of credit and to qualify for workers’ compensation self-insurance and are available to meet the Company’s workers’ compensation obligations on a current basis, as needed. As of December 31, 2018, restricted cash and short-term investments included $1.9 million in cash and $2.3 million in certificates of deposit. As of December 31, 2017, restricted cash and short-term investments included $1.9 million in cash and $2.3 million in certificates of deposit. The certificates of deposit have original maturities greater than three months and are classified as short-term investments. |
Financial Instruments | Financial Instruments The carrying amounts of cash and cash equivalents, short-term investments, restricted cash and short-term investments, accounts receivable, accounts payable, accrued expenses, and short-term borrowings approximate fair value due to the short maturity of these items. The majority of the Company’s long-term obligations consist of variable rate debt, and their carrying value approximates fair value as the stated borrowing rates are comparable to rates currently offered to the Company for instruments with similar maturities. The Company at times enters into fixed interest rate swap contracts to exchange the variable interest rates for fixed interest rates without the exchange of the underlying notional debt amounts. Such interest rate swap contracts are recorded at their fair values. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash, money market accounts, certificates of deposit and highly liquid investments purchased with original maturities of three months or less. |
Short-Term Investments | Short-Term Investments Short-term investments as of December 31, 2018 consisted of certificates of deposit with original expiration dates within 12 months. |
Allowance for Doubtful Accounts Receivable | Allowance for Doubtful Accounts Receivable The Company evaluates the collectability of accounts receivable based on a combination of factors. When the Company is aware of circumstances that may impair a customer’s ability to pay subsequent to the original sale, the Company records a specific allowance to reduce the amounts receivable to the amount that the Company reasonably believes to be collectable. For all other customers, the Company recognizes an allowance for doubtful accounts based on factors that include the length of time the receivables are past due, industry and geographic concentrations, the current business environment and historical collection experience. As of December 31, 2018 and 2017, the Company's allowance for doubtful accounts was $0.5 million and $0.3 million, respectively. |
Inventories | Inventories Inventories consist of currently marketed products and products manufactured under contract. Inventories are stated using the first-in, first-out method, on a consistent basis. The Company states inventory at the lower of cost and net realizable value. Provisions are made for slow‑moving, unsellable, or obsolete items. Net realizable value is determined using the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost or, in the case of assets acquired in a business combination, at fair value on the purchase date. Depreciation and amortization expense is computed using the straight‑line method over the estimated useful lives of the related assets |
Intangible Assets | Intangible Assets Intangible assets with finite lives are amortized using the straight-line method over the period the asset is expected to contribute directly or indirectly to the future cash flows of the Company |
Impairment of Long Lived Assets, including Identifiable Definite-Lived Intangible Assets | Impairment of Long‑Lived Assets, including Identifiable Definite-Lived Intangible Assets The Company reviews long-term and identifiable definite-lived intangible assets or asset groups for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset or an asset group, further impairment analysis is performed. An impairment loss is measured as the amount by which the carrying amount of the asset or asset groups exceeds the fair value (assets to be held and used) or fair value less cost to sell (assets to be disposed of). The Company also reviews the useful lives of its assets periodically to determine whether events and circumstances warrant a revision to the remaining useful life. Changes in the useful life are adjusted prospectively by revising the remaining period over which the asset is amortized. |
Deferred Income Taxes | Deferred Income Taxes The Company utilizes the liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates. A valuation allowance is recorded when it is more likely than not that the deferred tax assets will not be realized. |
Impairment of Indefinite-Lived Intangible Asset and Goodwill | Impairment of Indefinite-Lived Intangible Asset and Goodwill The Company reviews indefinite‑lived intangible asset and goodwill for impairment in the fourth quarter of each year or more frequently if indicators of impairment are present. When the Company chooses to perform a qualitative assessment, it evaluates economic, industry and company-specific factors as an initial step. If the Company determines it is more likely than not that the indefinite-lived intangible asset is impaired or the fair value of a reporting unit is less than its carrying amount, further quantitative impairment process is then performed; otherwise, no further testing is required. An impairment loss is recorded if the asset’s fair value is less than its carrying value. The Company also periodically reviews the indefinite-lived intangible asset to determine if events and circumstances continue to support an indefinite useful life. If the life is no longer indefinite, the asset is tested for impairment. The carrying value, after recognition of any impairment loss, is amortized over its remaining useful life. |
Self-Insured Claims | Self-Insured Claims The Company is primarily self-insured, up to certain limits, for workers’ compensation claims. The Company has purchased stop-loss insurance, which will reimburse the Company for individual claims in excess of $350,000 annually or aggregate claims exceeding $2.9 million annually. Operations are charged with the cost of claims reported and an estimate of claims incurred but not reported. A liability for unpaid claims and the associated claim expenses, including incurred but not reported losses, is actuarially determined and reflected in accrued liabilities in the accompanying consolidated balance sheets. Total expense under the program was approximately $2.6 million, $1.5 million, and $1.6 million, for the years ended December 31, 2018, 2017 and 2016, respectively. The self-insured claims liability was $5.6 million and $4.1 million at December 31, 2018 and 2017, respectively. The determination of such claims and expenses and the appropriateness of the related liability is reviewed periodically and updated, as necessary. Changes in estimates are recorded in the period identified. |
Business Combinations | Business Combinations If an acquired set of activities and assets is capable of being operated as a business consisting of inputs and processes from the viewpoint of a market participant, the assets acquired and liabilities assumed are a business. Business combinations are accounted for using the acquisition method of accounting, which requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. Fair value determinations are based on discounted cash flow analyses or other valuation techniques. In determining the fair value of the assets acquired and liabilities assumed in a material acquisition, the Company may utilize appraisals from third party valuation firms to determine fair values of some or all of the assets acquired and liabilities assumed, or may complete some or all of the valuations internally. In either case, the Company takes full responsibility for the determination of the fair value of the assets acquired and liabilities assumed. The value of goodwill reflects the excess of the fair value of the consideration conveyed to the seller over the fair value of the net assets received. Acquisition-related costs that the Company incurs to effect a business combination are expensed in the periods in which the costs are incurred. When the operations of the acquired businesses were not material to the Company’s consolidated financial statements, no pro forma presentations were disclosed. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board, or FASB, issued ASU No. 2016-02, Leases , which is aimed at making leasing activities more transparent and comparable and requires substantially all leases be recognized by lessees on their balance sheets as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The ASU and the related clarifications subsequently issued by the FASB will become effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019, and all annual and interim reporting periods thereafter. Early adoption is permitted. In July 2018, the FASB further amended the standard to allow for a new transition method that offers the option to use the effective date as the date of initial application. The Company intends to elect this alternative transition method and therefore will not adjust comparative-period financial information. The Company is finalizing its assessment related to policies, processes and internal controls to comply with the guidance. The Company estimates the right-of-use assets and lease obligations for its lease portfolio as of December 31, 2018 to be within the range of approximately $13.4 million and $14.3 million, which would be recorded on its consolidated balance sheet, primarily related to real estate. The Company anticipates that it will elect the available practical expedients at transition including the package of expedients whereby the Company will not reassess its prior conclusion related to whether a contact contains a lease, the underlying lease classification or accounting for initial direct cost in a lease, in addition to electing the hindsight practical expedient in determining the lease term and the short-term lease exception such that it will not recognize a right-of-use asset or lease liability for leases with a term of 12 months or less. The new standard also provides practical expedients for the ongoing accounting and the Company currently expects to elect the practical expedient to not separate lease and non-lease components for its asset classes. Note 17 provides details on the Company’s current operating lease arrangements. The adoption of ASC 842 is not expected to have a material impact on the Company’s results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses , which is aimed at providing financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit. The standard update changes the impairment model for financial assets measured at amortized cost, requiring presentation at the net amount expected to be collected. The measurement of expected credit losses requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Available-for-sale debt securities with unrealized losses will be recorded through an allowance for credit losses. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted for interim or annual periods after December 31, 2019. The Company will be required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not believe the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04 simplifying the Test for Goodwill Impairment , which eliminates the requirement to calculate the implied fair value of goodwill. An entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The update also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020, and applied on a prospective basis. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. The Company currently does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In August 2017, the FASB issued ASU No. 2017-12 Targeted Improvements to Accounting for Hedging Activities , which amends the hedge accounting model in ASC 815 to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. The amendments also simplify the application of hedge accounting in certain situations. The new guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows entities to reclassify from accumulated other comprehensive income to retained earnings stranded tax effects resulting from the Tax Act. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Non-employee Share-Based Payment Accounting , which simplifies the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees. The Company early adopted the guidance on July 1, 2018. The adoption did not have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which removes, modifies, and adds certain disclosure requirements to ASC 820, Fair Value Measurement. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans , which removes, modifies, and adds certain disclosure requirements to ASC 715-20, Defined Benefit Plans. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2021. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In October 2018, the FASB issued ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities , which requires indirect interests held through related parties in common control arrangements be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted. The Company currently does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In November 2018, the FASB issued ASU No. 2018-18, Clarifying the Interaction between Topic 808 and Topic 606 , which requires transactions in collaborative arrangements to be accounted for under ASC 606, Revenue from Contracts with Customers, or ASC 606, if the counterparty is a customer for a good or service that is a distinct unit of account. The amendments also preclude entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted, including in any interim period. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful life of property, plant and equipment | Buildings 20 - 31 years Machinery and equipment 3 - 12 years Furniture and fixtures 3 - 7 years Automobiles 4 - 5 years Leasehold improvements Lesser of remaining lease term or useful life |
Schedule of estimated useful life of intangible assets | Product rights 10 - 15 years Patents 10 - 20 years Land-use rights 37 - 50 years |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition | |
Schedule of chargeback and rebates provision analysis | Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 18,470 $ 39,709 Provision for chargebacks and rebates 125,112 152,011 Credits and payments issued to third parties (121,159) (173,250) Ending balance $ 22,423 $ 18,470 |
Schedule of product return liability analysis | Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 6,522 $ 3,143 Provision for product returns 4,149 5,754 Credits issued to third parties (2,641) (2,375) Ending balance $ 8,030 $ 6,522 |
Income (loss) per share attri_2
Income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders | |
Schedule of basic and diluted net income (loss) per share calculation | Year Ended December 31, 2018 2017 2016 (in thousands, except per share data) Basic and dilutive numerator: Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. $ (5,738) $ 3,647 $ 9,820 Denominator: Weighted-average shares outstanding — basic 46,395 46,107 45,375 Net effect of dilutive securities: Incremental shares from equity awards — 2,260 2,129 Weighted-average shares outstanding — diluted 46,395 48,367 47,504 Net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders — basic $ (0.12) $ 0.08 $ 0.22 Net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders — diluted $ (0.12) $ 0.08 $ 0.21 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting | |
Schedule of financial information by reporting segment | Year Ended December 31, 2018 2017 2016 (in thousands) Net revenues: Finished pharmaceutical products $ 271,059 $ 230,139 $ 240,221 API 23,607 10,036 14,944 Total net revenues 294,666 240,175 255,165 Gross profit: Finished pharmaceutical products 113,220 96,517 106,107 API (6,235) (6,008) (1,911) Total gross profit 106,985 90,509 104,196 Operating expenses 115,608 91,778 88,820 Income (loss) from operations (8,623) (1,269) 15,376 Non-operating income (1,303) 2,518 (746) Income (loss) before income taxes $ (9,926) $ 1,249 $ 14,630 |
Schedule of net revenues in the finished pharmaceutical products segment | Year Ended December 31, 2018 2017 2016 (in thousands) Finished pharmaceutical products net revenues: Enoxaparin $ 53,371 $ 36,593 $ 59,320 Lidocaine 43,328 37,602 36,600 Phytonadione 41,897 37,946 33,315 Naloxone 37,195 42,342 47,532 Medroxyprogesterone 24,071 — — Epinephrine 10,055 25,914 25,661 Primatene ® Mist 3,574 — — Other finished pharmaceutical products 57,568 49,742 37,793 Total finished pharmaceutical products net revenues $ 271,059 $ 230,139 $ 240,221 |
Schedule of net revenues and carrying values of long-lived assets by geographic region | Net Revenue Long-Lived Assets Year Ended December 31, December 31, 2018 2017 2016 2018 2017 (in thousands) United States $ 279,122 $ 234,321 $ 249,007 $ 109,331 $ 105,441 China — — — 58,059 41,078 France 15,544 5,854 6,158 43,028 34,026 United Kingdom — — — — — Total $ 294,666 $ 240,175 $ 255,165 $ 210,418 $ 180,545 |
Customer and Supplier Concent_2
Customer and Supplier Concentration (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Customer and Supplier Concentration | |
Schedule of accounts receivable and net revenues by major customer | % of Total Accounts % of Net Receivable Revenue December 31, December 31, Year Ended December 31, 2018 2017 2018 2017 2016 McKesson 28 % 22 % 27 % 27 % 21 % AmerisourceBergen 19 % 33 % 27 % 28 % 21 % Cardinal Health 21 % 12 % 21 % 23 % 22 % Actavis (1) — — — — 14 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets | |
Schedule of weighted-average life, original cost, accumulated amortization and net book value by major class | Weighted-Average Accumulated Life (Years) Original Cost Amortization Net Book Value (in thousands) Definite-lived intangible assets Cortrosyn ® product rights 12 $ 27,134 $ 27,134 $ — IMS (UK) international product rights 10 8,911 2,153 6,758 Patents 12 486 213 273 Land-use rights 39 2,540 486 2,054 Other intangible assets 4 69 63 6 Subtotal 12 39,140 30,049 9,091 Indefinite-lived intangible assets Trademark * 29,225 — 29,225 Goodwill - Finished pharmaceutical products * 3,951 — 3,951 Subtotal * 33,176 — 33,176 As of December 31, 2018 * $ 72,316 $ 30,049 $ 42,267 Weighted-Average Accumulated Life (Years) Original Cost Amortization Net Book Value (in thousands) Definite-lived intangible assets Cortrosyn ® product rights 12 $ 27,134 $ 26,243 $ 891 IMS (UK) international product rights 10 9,440 1,337 8,103 Patents 12 486 170 316 Land-use rights 39 2,540 419 2,121 Other intangible assets 4 69 46 23 Subtotal 12 39,669 28,215 11,454 Indefinite-lived intangible assets Trademark * 29,225 — 29,225 Goodwill - Finished pharmaceutical products * 4,461 — 4,461 Subtotal * 33,686 — 33,686 As of December 31, 2017 * $ 73,355 $ 28,215 $ 45,140 * Intangible assets with indefinite lives have an indeterminable average life. |
Schedule of changes in carrying amounts of goodwill | December 31, 2018 2017 (in thousands) Beginning balance $ 4,461 $ 3,976 Currency translation (510) 485 Ending balance $ 3,951 $ 4,461 |
Schedule of finite-lived intangible assets, future amortization expense | (in thousands) 2019 $ 870 2020 864 2021 864 2022 844 2023 835 Thereafter 4,814 Total amortizable intangible assets 9,091 Indefinite-lived intangibles 33,176 Total intangibles (net of accumulated amortization) $ 42,267 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventories | |
Schedule of inventories | December 31, 2018 2017 (in thousands) Raw materials and supplies $ 30,153 $ 19,973 Work in process 30,272 22,469 Finished goods 8,897 21,167 Total inventories $ 69,322 $ 63,609 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant, and Equipment | |
Schedule of property, plant, and equipment | December 31, 2018 2017 (in thousands) Buildings $ 96,287 $ 89,124 Leasehold improvements 26,755 29,847 Land 7,628 7,110 Machinery and equipment 143,299 118,056 Furniture, fixtures, and automobiles 19,151 16,385 Construction in progress 66,390 58,145 Total property, plant, and equipment 359,510 318,667 Less accumulated depreciation (149,092) (138,122) Total property, plant, and equipment, net $ 210,418 $ 180,545 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities | |
Schedule of accounts payable and accrued liabilities | December 31, 2018 2017 (in thousands) Accrued customer fees and rebates $ 15,215 $ 15,981 Accrued payroll and related benefits 19,430 15,680 Accrued product returns, current portion 5,349 4,133 Reserve for net loss on firm purchase commitments 5,355 320 Other accrued liabilities 10,746 4,812 Total accrued liabilities 56,095 40,926 Accounts payable 31,323 16,629 Total accounts payable and accrued liabilities $ 87,418 $ 57,555 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt | |
Schedule of debt | December 31, 2018 2017 (in thousands) Loans with East West Bank Equipment loan paid off January 2019 $ 128 $ 1,668 Line of credit facility due December 2020 — — Mortgage payable due February 2021 3,491 3,577 Equipment loan due June 2021 3,061 4,286 Equipment loan due December 2022 8,000 — Mortgage payable due October 2026 3,463 3,524 Mortgage payable due June 2027 8,801 8,936 Loans with Cathay Bank Acquisition loan due April 2019 13,025 15,073 Line of credit facility due May 2020 — — Mortgage payable due August 2027 7,627 7,795 Loans with Bank of Nanjing Working capital loan due June 2019 — Loans with Seine-Normandie Water Agency French government loan 1 paid March 2018 — French government loan 2 due June 2020 French government loan 3 due July 2021 French government loan 4 due December 2026 — French government loan 5 due December 2026 — Payment Obligation to Merck 552 599 Equipment under Capital Leases 1,055 1,357 Total debt and capital leases 50,213 47,156 Less current portion of long-term debt and capital leases 18,229 6,312 Long-term debt and capital leases, net of current portion $ 31,984 $ 40,844 |
Schedule of Maturities of Long-term Debt | Capital Debt Leases Total (in thousands) 2019 $ 17,886 $ 343 2020 3,856 342 2021 6,452 272 2022 2,475 159 2023 458 1 Thereafter 17,969 — $ 49,096 $ 1,117 $ 50,213 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of income (loss) before income taxes | Year Ended December 31, 2018 2017 2016 (in thousands) Income (loss) before income taxes: United States $ 3,580 $ 6,892 $ 20,572 Foreign (13,506) (5,643) (5,942) Total income (loss) before taxes $ (9,926) $ 1,249 $ 14,630 |
Summary of provision (benefit) for income taxes | Year Ended December 31, 2018 2017 2016 (in thousands) Current provision (benefit): Federal $ 32 $ (6,380) $ 7,279 State 343 133 344 Foreign 773 643 787 Total current provision (benefit) 1,148 (5,604) 8,410 Deferred provision (benefit): Federal (687) 6,340 (2,383) State (3,900) (2,169) (1,100) Foreign 173 (965) (117) Total deferred provision (benefit) (4,414) 3,206 (3,600) Total provision (benefit) for income taxes $ (3,266) $ (2,398) $ 4,810 |
Schedule of reconciliation of the statutory federal income tax rate | Year Ended December 31, 2018 2017 2016 Statutory federal income tax (benefit) 21.0 % 35.0 % 35.0 % State tax expense, net of federal tax benefit 28.3 (106.0) (3.3) Foreign tax rate differences 4.0 3.9 4.1 Foreign valuation allowance (42.0) 129.1 14.7 Qualified production activities deduction — 89.6 (8.9) Research and development credits 28.0 (250.1) (12.0) Share-based compensation 5.1 (166.2) 4.4 Executive compensation (12.4) 17.1 — Deferred tax remeasurement 1.0 49.5 — Employee-related expenses (0.4) 6.3 0.4 Other 0.3 (0.2) (1.5) Effective tax rate (benefit) 32.9 % (192.0) % 32.9 % |
Summary of deferred tax assets and liabilities | December 31, 2018 2017 (in thousands) Deferred tax assets: Net operating loss carryforward $ 9,951 $ 7,356 State income taxes 26 221 Inventory capitalization and reserve 6,212 5,333 Deferred revenue 2 — Accrued payroll and benefits 1,344 1,233 Share-based compensation 6,162 6,504 Research and development credits 22,690 21,550 Alternative minimum tax 742 656 Accrued professional fees 1,289 344 Product return allowance 2,314 1,879 Accrued chargebacks 3,103 1,856 Bad debt reserve 115 60 Intangibles 2,124 2,022 Accrued for workers’ compensation insurance 1,401 1,063 Others 971 52 Total deferred tax assets 58,446 50,129 Deferred tax liabilities: Depreciation/amortization 9,684 7,568 Intangibles 6,303 6,992 Federal impact of state deferred taxes 3,769 3,077 Total deferred tax liabilities 19,756 17,637 Valuation allowance (9,103) (4,907) Net deferred tax assets $ 29,587 $ 27,585 |
Schedule of unrecognized tax benefits | December 31, 2018 2017 2016 (in thousands) Balance at the beginning of the year $ 7,438 $ 6,686 $ 5,595 Additions based on tax positions related to prior years — — 188 Deductions based on tax positions related to prior years (1,566) — — Additions based on tax positions related to the current year 1,304 1,300 903 Deductions based on tax audit settlement (126) — — Deductions based on statute of limitations (56) (548) — Balance at the end of the year $ 6,994 $ 7,438 $ 6,686 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity | |
Schedule of key assumptions to determine fair value of options | Year Ended December 31, 2018 2017 2016 Average volatility 39.9 % 37.0 % 30.4 % Risk-free interest rate 2.7 % 2.1 % 1.5 % Weighted-average expected life in years 5.7 5.5 5.5 Dividend yield rate — % — % — % |
Schedule of the summary of option activity under all plans | Weighted-Average Weighted-Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term (Years) Value (1) (in thousands) Outstanding as of December 31, 2017 10,898,701 $ 14.65 Options granted 1,096,832 20.16 Options exercised (1,357,865) 13.14 Options cancelled (143,724) 13.84 Options expired (388,379) 34.81 Outstanding as of December 31, 2018 10,105,565 $ 14.69 4.80 $ 53,472 Exercisable as of December 31, 2018 6,826,539 $ 14.31 3.57 $ 38,217 |
Schedule of information relating to options grants | Year Ended December 31, 2018 2017 2016 (in thousands, except per share data) Weighted-average grant date fair value per option share $ 7.80 $ 4.98 $ 3.42 Intrinsic value of options exercised 7,372 17,247 7,446 Cash received from options exercised 11,753 19,098 20,338 Total fair value of the options vested during the year 7,972 7,263 8,654 |
Schedule of the summary of nonvested options status | Weighted-Average Grant Date Options Fair Value Non-vested as of December 31, 2017 4,310,241 $ 4.21 Options granted 1,096,832 7.80 Options vested (1,984,323) 4.02 Options forfeited (143,724) 5.20 Non-vested as of December 31, 2018 3,279,026 5.47 |
Schedule of information relating to RSU grants and deliveries | Total Fair Market Value of RSUs Issued Total RSUs as Issued Compensation (1) (in thousands) RSUs outstanding at December 31, 2017 1,392,781 RSUs granted 439,980 $ 8,560 RSUs forfeited (55,514) RSUs vested (2) (570,586) RSUs outstanding at December 31, 2018 1,206,661 (1) The total FMV is derived from the number of RSUs granted times the current stock price on the date of grant. (2) Of the vested RSUs, 363,640 shares of common stock were surrendered to fulfil tax withholding obligations |
Schedule of recorded share-based compensation expense under all plans | Year Ended December 31, 2018 2017 2016 (in thousands) Cost of revenues $ 3,923 $ 3,756 $ 2,967 Operating expenses: Selling, distribution, and marketing 383 302 220 General and administrative 10,853 11,643 10,865 Research and development 1,521 1,386 1,072 Total share-based compensation $ 16,680 $ 17,087 $ 15,124 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Schedule of future minimum rental payments for operating leases | Operating Leases (in thousands) 2019 $ 3,712 2020 3,131 2021 1,967 2022 1,050 2023 125 $ 9,985 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data | |
Schedule of Quarterly Financial Information | 2018 Quarters First Second Third Fourth (in thousands, except per share data) Net revenues Finished pharmaceutical products $ 53,117 $ 63,241 $ 71,767 $ 82,934 API 5,276 7,799 3,776 6,756 Total net revenues $ 58,393 $ 71,040 $ 75,543 $ 89,690 Gross profit Finished pharmaceutical products $ 19,636 $ 27,649 $ 30,571 $ 35,364 API (2,664) (1,585) (1,311) (675) Total gross profit $ 16,972 $ 26,064 $ 29,260 $ 34,689 Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. $ (7,141) $ (2,853) $ 2,389 $ 1,867 Weighted-average shares used to compute net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: Basic 46,514 46,557 46,241 46,268 Diluted 46,514 46,557 48,281 49,181 Net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: Basic $ (0.15) $ (0.06) $ 0.05 $ 0.04 Diluted $ (0.15) $ (0.06) $ 0.05 $ 0.04 2017 Quarters First Second Third Fourth (in thousands, except per share data) Net revenues Finished pharmaceutical products $ 55,934 $ 63,765 $ 54,455 $ 55,985 API 736 1,422 3,461 4,417 Total net revenues $ 56,670 $ 65,187 $ 57,916 $ 60,402 Gross profit Finished pharmaceutical products $ 24,289 $ 28,778 $ 21,222 $ 22,228 API (1,482) (2,119) (669) (1,738) Total gross profit $ 22,807 $ 26,659 $ 20,553 $ 20,490 Net income attributable to Amphastar Pharmaceuticals, Inc. $ 861 $ 1,900 $ 99 $ 787 Weighted-average shares used to compute net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: Basic 46,069 46,025 46,101 46,233 Diluted 48,057 47,866 48,215 49,330 Net income per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: Basic $ 0.02 $ 0.04 $ 0.00 $ 0.02 Diluted $ 0.02 $ 0.04 $ 0.00 $ 0.02 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Dec. 31, 2018 | Jul. 31, 2018 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Proceeds from private placement | $ 38,036,000 | |||||||||||
Gains and losses of intercompany foreign currency transactions | 1,500,000 | $ 4,300,000 | $ (1,500,000) | |||||||||
Income tax expense allocated to other comprehensive income | 1,500,000 | |||||||||||
Selling, distribution, and marketing | 8,156,000 | 6,460,000 | 5,466,000 | |||||||||
Allowance for doubtful accounts | $ 500,000 | $ 300,000 | 500,000 | 300,000 | ||||||||
Restricted Cash, Current | 1,900,000 | 1,900,000 | 1,900,000 | 1,900,000 | ||||||||
Certificates of deposit | 2,300,000 | 2,300,000 | 2,300,000 | 2,300,000 | ||||||||
Inventory adjustment to reflect net realizable value | 12,900,000 | 8,500,000 | 7,300,000 | |||||||||
Amount retained, individual claims | 350,000 | |||||||||||
Amount retained, aggregate claims | 2,900,000 | |||||||||||
Actuarially Determined Self-insurance Expense | 2,600,000 | 1,500,000 | 1,600,000 | |||||||||
Self-insurance Claims Liability | 5,600,000 | 4,100,000 | 5,600,000 | 4,100,000 | ||||||||
ANP | ||||||||||||
Proceeds from private placement | $ 57,000,000 | |||||||||||
Equity interest retained post private placement | 58.00% | |||||||||||
Restatement adjustment | ||||||||||||
Impact of restatement on net income | $ (100,000) | $ (100,000) | (700,000) | $ (100,000) | $ (100,000) | $ (100,000) | $ (900,000) | $ (700,000) | ||||
Impact of restatement on earnings per share, basic | $ (0.02) | $ (0.01) | ||||||||||
Impact of restatement on earnings per share, diluted | $ (0.01) | $ (0.01) | ||||||||||
Impact of restatement on property, plant, and equipment, net | (4,800,000) | $ (4,800,000) | ||||||||||
Impact of restatement on retained earnings | $ (3,600,000) | (3,600,000) | ||||||||||
Funds Received | ANP | ||||||||||||
Proceeds from private placement | $ 38,000,000 | |||||||||||
Subsequent Event | Funds Received | ANP | ||||||||||||
Proceeds from private placement | $ 56,300,000 | |||||||||||
Shipping and Handling [Member] | ||||||||||||
Selling, distribution, and marketing | $ 3,700,000 | $ 3,000,000 | $ 2,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Schedule of PP&E Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Buildings | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment Useful Life | 20 years |
Buildings | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment Useful Life | 31 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment Useful Life | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment Useful Life | 12 years |
Furniture and Fixtures | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment Useful Life | 3 years |
Furniture and Fixtures | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment Useful Life | 7 years |
Automobiles | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment Useful Life | 4 years |
Automobiles | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment Useful Life | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Schedule of Intangible Useful Lives) (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Useful life of intangibles | 12 years | 12 years |
Product rights | ||
Useful life of intangibles | 12 years | 12 years |
Product rights | Minimum | ||
Useful life of intangibles | 10 years | |
Product rights | Maximum | ||
Useful life of intangibles | 15 years | |
Patents | ||
Useful life of intangibles | 12 years | 12 years |
Patents | Minimum | ||
Useful life of intangibles | 10 years | |
Patents | Maximum | ||
Useful life of intangibles | 20 years | |
Land-use rights | ||
Useful life of intangibles | 39 years | 39 years |
Land-use rights | Minimum | ||
Useful life of intangibles | 37 years | |
Land-use rights | Maximum | ||
Useful life of intangibles | 50 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Recent Accounting Pronouncements) (Details) - Accounting Standards Update 2016-02 $ in Millions | Dec. 31, 2018USD ($) |
Minimum | |
Right-of-use assets | $ 13.4 |
Lease obligations | 13.4 |
Maximum | |
Right-of-use assets | 14.3 |
Lease obligations | $ 14.3 |
Business Acquisitions (Details)
Business Acquisitions (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2016USD ($)item | Mar. 31, 2016USD ($)item | Jan. 31, 2016USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016USD ($) | |
Business Acquisitions | ||||||
Payment to Acquire Business, Gross | $ 12,461 | |||||
Useful life of intangibles | 12 years | 12 years | ||||
International Medication Systems (UK) Limited | ||||||
Business Acquisitions | ||||||
Number of Marketing Authorizations Acquired | item | 33 | |||||
Number of Different Injectable Chemical Entities | item | 11 | |||||
Payment to Acquire Business, Gross | $ 7,700 | |||||
Marketing authorizations acquired | 9,200 | |||||
Manufacturing equipment acquired | 100 | |||||
Deferred tax liability assumed | $ 1,600 | |||||
Useful life of intangibles | 10 years | |||||
Hikma Pharmaceuticals PLC | ||||||
Business Acquisitions | ||||||
Number of Different Injectable Chemical Entities | item | 11 | |||||
Payment to Acquire Business, Gross | $ 4,000 | |||||
Useful life of intangibles | 15 years | |||||
Number of Injectable Products Acquired | item | 14 | |||||
Assets acquired | $ 4,000 | |||||
Letop | ||||||
Business Acquisitions | ||||||
Payment to Acquire Business, Gross | $ 800 | |||||
Assets acquired | 1,400 | |||||
Purchase price | 1,700 | |||||
Deposit that ANP previously paid which was effectively eliminated upon the consummation of the transaction | 900 | |||||
Liabilities assumed | $ 100 |
Revenue Recognition (Analysis o
Revenue Recognition (Analysis of the Chargeback Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Beginning balance | $ 18,470 | $ 39,709 |
Provision for chargebacks and rebates | 125,112 | 152,011 |
Credits and payments issued to third parties | (121,159) | (173,250) |
Ending balance | 22,423 | 18,470 |
Accounts Receivable, Net | ||
Provision for chargebacks and rebates | 12,000 | 6,800 |
Accounts Payable and Accrued Liabilities [Member] | ||
Provision for chargebacks and rebates | $ 10,400 | $ 11,700 |
Revenue Recognition (Analysis_2
Revenue Recognition (Analysis of Product Return Liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Aggregate product return rate | 1.30% | 1.30% |
Return accrual included in accounts payable and accrued liabilities | $ 5,349 | $ 4,133 |
Return accrual included in other long-term liabilities | 2,700 | 2,400 |
Product returns | ||
Beginning balance | 6,522 | 3,143 |
Provision for product returns | 4,149 | 5,754 |
Credits issued to third parties | (2,641) | (2,375) |
Ending balance | $ 8,030 | $ 6,522 |
Income (loss) per share attri_3
Income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders (Narrative) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Shares | 10,105,565 | 839,651 | 2,379,984 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Exercise Price of Excluded Securities | $ 26.43 | $ 22.46 | |
Restricted Stock Units (RSUs) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Shares | 1,206,661 | ||
Employee Stock Purchase Plan (ESPP) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Shares | 51,792 |
Income (loss) per share attri_4
Income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders (Calculation of Basic and Diluted Net Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic and dilutive numerator: | |||||||||||
Net income (loss) attributable to Amphastar Pharmaceuticals, Inc. | $ (5,738) | $ 3,647 | $ 9,820 | ||||||||
Denominator: | |||||||||||
Shares outstanding | 46,395 | 46,107 | 45,375 | ||||||||
Weighted-average shares outstanding—basic | 46,268 | 46,241 | 46,557 | 46,514 | 46,233 | 46,101 | 46,025 | 46,069 | 46,395 | 46,107 | 45,375 |
Net effect of dilutive securities: | |||||||||||
Incremental shares from equity awards | 2,260 | 2,129 | |||||||||
Weighted-average shares outstanding — diluted | 49,181 | 48,281 | 46,557 | 46,514 | 49,330 | 48,215 | 47,866 | 48,057 | 46,395 | 48,367 | 47,504 |
Net income (loss) per share — basic | $ 0.04 | $ 0.05 | $ (0.06) | $ (0.15) | $ 0.02 | $ 0 | $ 0.04 | $ 0.02 | $ (0.12) | $ 0.08 | $ 0.22 |
Net income (loss) per share — diluted | $ 0.04 | $ 0.05 | $ (0.06) | $ (0.15) | $ 0.02 | $ 0 | $ 0.04 | $ 0.02 | $ (0.12) | $ 0.08 | $ 0.21 |
Segment Reporting (Selected Fin
Segment Reporting (Selected Financial Information by Reporting Segment) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of Reportable Segments | segment | 2 | ||||||||||
Net revenues: | |||||||||||
Net Revenue | $ 89,690 | $ 75,543 | $ 71,040 | $ 58,393 | $ 60,402 | $ 57,916 | $ 65,187 | $ 56,670 | $ 294,666 | $ 240,175 | $ 255,165 |
Gross Profit: | |||||||||||
Gross Profit | 34,689 | 29,260 | 26,064 | 16,972 | 20,490 | 20,553 | 26,659 | 22,807 | 106,985 | 90,509 | 104,196 |
Operating expenses | 115,608 | 91,778 | 88,820 | ||||||||
Income (loss) from operations | (8,623) | (1,269) | 15,376 | ||||||||
Non-operating income (expenses) | (1,303) | 2,518 | (746) | ||||||||
Income (loss) before income taxes | (9,926) | 1,249 | 14,630 | ||||||||
Finished Pharmaceutical Products | |||||||||||
Net revenues: | |||||||||||
Net Revenue | 82,934 | 71,767 | 63,241 | 53,117 | 55,985 | 54,455 | 63,765 | 55,934 | 271,059 | 230,139 | 240,221 |
Gross Profit: | |||||||||||
Gross Profit | 35,364 | 30,571 | 27,649 | 19,636 | 22,228 | 21,222 | 28,778 | 24,289 | 113,220 | 96,517 | 106,107 |
Epinephrine | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues recognized | 17,800 | 18,600 | |||||||||
API | |||||||||||
Net revenues: | |||||||||||
Net Revenue | 6,756 | 3,776 | 7,799 | 5,276 | 4,417 | 3,461 | 1,422 | 736 | 23,607 | 10,036 | 14,944 |
Gross Profit: | |||||||||||
Gross Profit | $ (675) | $ (1,311) | $ (1,585) | $ (2,664) | $ (1,738) | $ (669) | $ (2,119) | $ (1,482) | $ (6,235) | $ (6,008) | $ (1,911) |
Segment Reporting (Summary of N
Segment Reporting (Summary of Net Revenues by Product Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | $ 89,690 | $ 75,543 | $ 71,040 | $ 58,393 | $ 60,402 | $ 57,916 | $ 65,187 | $ 56,670 | $ 294,666 | $ 240,175 | $ 255,165 |
Finished Pharmaceutical Products | |||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | $ 82,934 | $ 71,767 | $ 63,241 | $ 53,117 | $ 55,985 | $ 54,455 | $ 63,765 | $ 55,934 | 271,059 | 230,139 | 240,221 |
Finished Pharmaceutical Products | Enoxaparin | |||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | 53,371 | 36,593 | 59,320 | ||||||||
Finished Pharmaceutical Products | Naloxone | |||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | 37,195 | 42,342 | 47,532 | ||||||||
Finished Pharmaceutical Products | Lidocaine | |||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | 43,328 | 37,602 | 36,600 | ||||||||
Finished Pharmaceutical Products | Phytonadione | |||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | 41,897 | 37,946 | 33,315 | ||||||||
Finished Pharmaceutical Products | Epinephrine | |||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | 10,055 | 25,914 | 25,661 | ||||||||
Finished Pharmaceutical Products | Medroxyprogesterone | |||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | 24,071 | ||||||||||
Finished Pharmaceutical Products | Primatene Mist | |||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | 3,574 | ||||||||||
Finished Pharmaceutical Products | Other Finished Pharmaceutical Products | |||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | |||||||||||
Net Revenue | $ 57,568 | $ 49,742 | $ 37,793 |
Segment Reporting (Summary of R
Segment Reporting (Summary of Revenues and Long-Lived Assets by Geographic Region) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Revenue | $ 89,690 | $ 75,543 | $ 71,040 | $ 58,393 | $ 60,402 | $ 57,916 | $ 65,187 | $ 56,670 | $ 294,666 | $ 240,175 | $ 255,165 |
Long-Lived Assets | 210,418 | 180,545 | 210,418 | 180,545 | |||||||
UNITED STATES | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Revenue | 279,122 | 234,321 | 249,007 | ||||||||
Long-Lived Assets | 109,331 | 105,441 | 109,331 | 105,441 | |||||||
CHINA | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-Lived Assets | 58,059 | 41,078 | 58,059 | 41,078 | |||||||
FRANCE | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Revenue | 15,544 | 5,854 | $ 6,158 | ||||||||
Long-Lived Assets | $ 43,028 | $ 34,026 | $ 43,028 | $ 34,026 |
Customer and Supplier Concent_3
Customer and Supplier Concentration (Details) - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2018customeritem | Dec. 31, 2017customeritem | Dec. 31, 2016item | |
Revenue, Major Customer [Line Items] | |||
Number of major customers that are wholesale distributors | 3 | ||
Accounts Receivable, Net | |||
Revenue, Major Customer [Line Items] | |||
Number of major customers | customer | 4 | 4 | |
Net Revenues | |||
Revenue, Major Customer [Line Items] | |||
Number of major customers | 4 | 4 | 4 |
Actavis, Inc. | Net Revenues | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 14.00% | ||
AmerisourceBergen | Accounts Receivable, Net | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 19.00% | 33.00% | |
AmerisourceBergen | Net Revenues | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 27.00% | 28.00% | 21.00% |
Cardinal Health | Accounts Receivable, Net | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 21.00% | 12.00% | |
Cardinal Health | Net Revenues | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 21.00% | 23.00% | 22.00% |
McKesson | Accounts Receivable, Net | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 28.00% | 22.00% | |
McKesson | Net Revenues | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 27.00% | 27.00% | 21.00% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Summary of Intangible Assets) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jan. 31, 2018USD ($) | Feb. 28, 2017USD ($) | Aug. 31, 2016USD ($)item | Jun. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Definite-lived intangible assets | |||||||
Weighted-Average Life (Years) | 12 years | 12 years | |||||
Finite-Lived Intangible Assets, Gross | $ 39,140 | $ 39,669 | |||||
Accumulated Amortization | 30,049 | 28,215 | |||||
Finite-Lived Intangible Assets, Net | 9,091 | 11,454 | |||||
Indefinite-lived intangible assets | |||||||
Goodwill recognized | 3,951 | 4,461 | $ 3,976 | ||||
Subtotal, Original Cost | 33,176 | 33,686 | |||||
Subtotal, Net Book Value | 33,176 | 33,686 | |||||
Balance, Original Cost | 72,316 | 73,355 | |||||
Balance, Net Book Value | 42,267 | 45,140 | |||||
Payment to Acquire Business, Gross | $ 12,461 | ||||||
Sale of intangible assets | 4,400 | 2,000 | |||||
Hikma Pharmaceuticals PLC | |||||||
Indefinite-lived intangible assets | |||||||
Sale of intangible assets | $ 4,400 | $ 1,000 | $ 1,000 | ||||
Royalty Fee Percentage | 2.00% | ||||||
Gain recognized within operating (income) expenses | 2,600 | ||||||
Finished Pharmaceutical Products | |||||||
Indefinite-lived intangible assets | |||||||
Goodwill recognized | 3,951 | 4,461 | |||||
Trademarks | |||||||
Indefinite-lived intangible assets | |||||||
Indefinite-lived intangible assets | $ 29,225 | $ 29,225 | |||||
Product rights | |||||||
Definite-lived intangible assets | |||||||
Weighted-Average Life (Years) | 12 years | 12 years | |||||
Finite-Lived Intangible Assets, Gross | $ 27,134 | $ 27,134 | |||||
Accumulated Amortization | $ 27,134 | 26,243 | |||||
Finite-Lived Intangible Assets, Net | $ 891 | ||||||
Patents | |||||||
Definite-lived intangible assets | |||||||
Weighted-Average Life (Years) | 12 years | 12 years | |||||
Finite-Lived Intangible Assets, Gross | $ 486 | $ 486 | |||||
Accumulated Amortization | 213 | 170 | |||||
Finite-Lived Intangible Assets, Net | $ 273 | $ 316 | |||||
Land-use rights | |||||||
Definite-lived intangible assets | |||||||
Weighted-Average Life (Years) | 39 years | 39 years | |||||
Finite-Lived Intangible Assets, Gross | $ 2,540 | $ 2,540 | |||||
Accumulated Amortization | 486 | 419 | |||||
Finite-Lived Intangible Assets, Net | $ 2,054 | $ 2,121 | |||||
Other intangible assets | |||||||
Definite-lived intangible assets | |||||||
Weighted-Average Life (Years) | 4 years | 4 years | |||||
Finite-Lived Intangible Assets, Gross | $ 69 | $ 69 | |||||
Accumulated Amortization | 63 | 46 | |||||
Finite-Lived Intangible Assets, Net | $ 6 | $ 23 | |||||
International Medication Systems (UK) Limited | |||||||
Definite-lived intangible assets | |||||||
Weighted-Average Life (Years) | 10 years | ||||||
Indefinite-lived intangible assets | |||||||
Payment to Acquire Business, Gross | $ 7,700 | ||||||
Marketing authorizations acquired | $ 9,200 | ||||||
Number of Different Injectable Chemical Entities | item | 11 | ||||||
International Medication Systems (UK) Limited | Acquired international product rights | |||||||
Definite-lived intangible assets | |||||||
Weighted-Average Life (Years) | 10 years | 10 years | |||||
Finite-Lived Intangible Assets, Gross | $ 8,911 | $ 9,440 | |||||
Accumulated Amortization | 2,153 | 1,337 | |||||
Finite-Lived Intangible Assets, Net | $ 6,758 | $ 8,103 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Summary of Changes in the Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets | ||
Beginning balance | $ 4,461 | $ 3,976 |
Currency translation and other adjustments | (510) | 485 |
Ending balance | $ 3,951 | $ 4,461 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Summary of Expected Amortization Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
2019 | $ 870 | ||
2020 | 864 | ||
2021 | 864 | ||
2022 | 844 | ||
2023 | 835 | ||
Thereafter | 4,814 | ||
Finite-Lived Intangible Assets, Net | 9,091 | $ 11,454 | |
Indefinite-lived intangibles | 33,176 | ||
Balance, Net Book Value | 42,267 | 45,140 | |
Amortization expense related to Cortrosyn | 1,987 | 2,856 | $ 2,517 |
Product rights | |||
Finite-Lived Intangible Assets, Net | 891 | ||
Amortization expense related to Cortrosyn | $ 1,800 | $ 2,700 | $ 2,400 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Raw materials and supplies | $ 30,153 | $ 19,973 | |
Work in process | 30,272 | 22,469 | |
Finished goods | 8,897 | 21,167 | |
Total inventory, net | 69,322 | 63,609 | |
Inventory adjustment to reflect net realizable value | 12,900 | 8,500 | $ 7,300 |
Enoxaparin | |||
Inventory adjustment to reflect net realizable value | $ 9,100 | $ 5,500 | 3,100 |
Injection USP Vial Inventory | |||
Inventory adjustment to reflect net realizable value | $ 3,300 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment (Summary of Property, Plant, and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | $ 359,510 | $ 318,667 |
Less accumulated depreciation and amortization | (149,092) | (138,122) |
Total property, plant, and equipment, net | 210,418 | 180,545 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 96,287 | 89,124 |
Leasehold improvement | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 26,755 | 29,847 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 7,628 | 7,110 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 143,299 | 118,056 |
Furniture, fixtures, and automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 19,151 | 16,385 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | $ 66,390 | $ 58,145 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 14,529 | $ 12,954 | $ 12,161 |
Interest Costs Capitalized | 2,200 | 1,100 | $ 800 |
Capitalized manufacturing equipment for specific use | 359,510 | 318,667 | |
Accounts Payable and Accrued Liabilities [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Purchase of property, plant, and equipment included in accounts payable and accrued liabilities | $ 8,400 | $ 6,700 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities | ||
Accrued customer fees and rebates | $ 15,215 | $ 15,981 |
Accrued payroll and related benefits | 19,430 | 15,680 |
Accrued product returns, current portion | 5,349 | 4,133 |
Reserve for Net Loss on Firm Purchase Commitments | 5,355 | 320 |
Other accrued liabilities | 10,746 | 4,812 |
Total accrued liabilities | 56,095 | 40,926 |
Accounts payable | 31,323 | 16,629 |
Total accounts payable and accrued liabilities | $ 87,418 | $ 57,555 |
Debt (Schedule of Debt) (Detail
Debt (Schedule of Debt) (Details) $ in Thousands, € in Millions | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument | |||
Equipment under Capital Leases | $ 1,055 | $ 1,357 | |
Total debt and capital leases | 50,213 | 47,156 | |
Less current portion of long-term debt and capital leases | 18,229 | 6,312 | |
Long-term debt and capital leases, net of current portion | 31,984 | 40,844 | |
Equipment Loan - Due January 2019 | East West Bank | |||
Debt Instrument | |||
Long Term Debt | 128 | 1,668 | |
Mortgage Payable - Due February 2021 | East West Bank | |||
Debt Instrument | |||
Long Term Debt | 3,491 | 3,577 | |
Equipment Loan - Due June 2021 | East West Bank | |||
Debt Instrument | |||
Long Term Debt | 3,061 | 4,286 | |
Mortgage Payable - Due October 2026 | East West Bank | |||
Debt Instrument | |||
Long Term Debt | 3,463 | 3,524 | |
Mortgage Payable - Due June 2027 | East West Bank | |||
Debt Instrument | |||
Long Term Debt | 8,801 | 8,936 | |
Acquisition Loan - Due April 2019 | Cathay Bank | |||
Debt Instrument | |||
Long Term Debt | 13,025 | 15,073 | |
Mortgage Payable - Due August 2027 | Cathay Bank | |||
Debt Instrument | |||
Long Term Debt | 7,627 | 7,795 | |
Working Capital Loan - Due June 2019 | Bank of Nanjing | |||
Debt Instrument | |||
Long Term Debt | 347 | ||
French Government Loan - Due March 2018 | Seine-Normandie Water Agency | |||
Debt Instrument | |||
Long Term Debt | 17 | ||
French Government Loan - Due June 2020 | Seine-Normandie Water Agency | |||
Debt Instrument | |||
Long Term Debt | 55 | 85 | |
French Government Loan - Due July 2021 | Seine-Normandie Water Agency | |||
Debt Instrument | |||
Long Term Debt | 172 | 239 | |
French Government Loan - Due December 2026 | Seine-Normandie Water Agency | |||
Debt Instrument | |||
Long Term Debt | 22 | ||
French Government Loan 5 - Due December 2026 | Seine-Normandie Water Agency | |||
Debt Instrument | |||
Long Term Debt | 414 | ||
Note Payable To Merck | |||
Debt Instrument | |||
Long Term Debt | € 0.5 | $ 552 | $ 599 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) € in Millions, ¥ in Millions | Aug. 14, 2017USD ($) | Jun. 28, 2017USD ($) | May 18, 2017USD ($)building | May 11, 2017USD ($) | Sep. 08, 2016USD ($)building | Jan. 31, 2015USD ($) | Jan. 05, 2015USD ($) | Apr. 30, 2014EUR (€) | Apr. 22, 2014USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Jan. 31, 2015EUR (€)item | Dec. 31, 2018USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018EUR (€) | Dec. 31, 2018loan | Dec. 31, 2018 | Dec. 31, 2018USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Jan. 08, 2016USD ($)building | Jan. 31, 2015USD ($)item | Apr. 30, 2014USD ($) | Jul. 05, 2013USD ($) | Apr. 10, 2012USD ($) | Mar. 31, 2012USD ($) | Sep. 15, 2006USD ($) |
Debt | ||||||||||||||||||||||||||||||
Proceeds from borrowing under lines of credit | $ 347,000 | |||||||||||||||||||||||||||||
Long-term Debt and Capital Lease Obligations | $ 31,984,000 | $ 40,844,000 | ||||||||||||||||||||||||||||
Payment to Acquire Business, Gross | $ 12,461,000 | |||||||||||||||||||||||||||||
Capital Leased Assets, Gross | 1,600,000 | 1,600,000 | ||||||||||||||||||||||||||||
Seine-Normandie Water Agency | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Principal amount | € 0.6 | $ 700,000 | ||||||||||||||||||||||||||||
Debt Instrument, Term | 8 years | |||||||||||||||||||||||||||||
Number of Loans with Government Agency | 3 | 2 | 500,000 | 3 | ||||||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | $ 0 | $ 0 | ||||||||||||||||||||||||||||
Notes Payable | € 0.6 | 700,000 | ||||||||||||||||||||||||||||
Line of Credit Facility - Due December 2020 | East West Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 15,000,000 | $ 10,000,000 | ||||||||||||||||||||||||||||
Line of Credit outstanding | 0 | |||||||||||||||||||||||||||||
Equipment Loan - Due January 2019 | East West Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Principal amount | $ 6,200,000 | |||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.48% | |||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 8,000,000 | |||||||||||||||||||||||||||||
Proceeds from borrowing under lines of credit | $ 6,200,000 | |||||||||||||||||||||||||||||
Long Term Debt | 128,000 | 1,668,000 | ||||||||||||||||||||||||||||
Mortgage Payable - Due February 2021 | East West Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Principal amount | $ 3,700,000 | |||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 3,300,000 | |||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.39% | |||||||||||||||||||||||||||||
Interest rate swap, fair value | 100,000 | |||||||||||||||||||||||||||||
Long Term Debt | 3,491,000 | 3,577,000 | ||||||||||||||||||||||||||||
Mortgage Payable - Due February 2021 | East West Bank | Rancho Cucamonga, California | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Number of Buildings Securing Loan | building | 1 | |||||||||||||||||||||||||||||
Equipment Loan - Due June 2021 | East West Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Line of Credit Converted into Equipment Loan, Amount | $ 5,000,000 | |||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.86% | |||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | |||||||||||||||||||||||||||||
Long Term Debt | 3,061,000 | 4,286,000 | ||||||||||||||||||||||||||||
Equipment Loan - Due December 2022 | East West Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.87% | 5.87% | ||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 8,000,000 | |||||||||||||||||||||||||||||
Proceeds from borrowing under lines of credit | $ 8,000,000 | |||||||||||||||||||||||||||||
Draw down period | 18 months | |||||||||||||||||||||||||||||
Term of loan after draw down period expires | 48 months | |||||||||||||||||||||||||||||
Long Term Debt | 8,000,000 | |||||||||||||||||||||||||||||
Mortgage Payable - Due October 2026 | East West Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Long Term Debt | 3,463,000 | 3,524,000 | ||||||||||||||||||||||||||||
Mortgage Payable - Due October 2026 | East West Bank | Rancho Cucamonga, California | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Principal amount | $ 3,600,000 | $ 2,800,000 | ||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 2,900,000 | |||||||||||||||||||||||||||||
Number of Buildings Securing Loan | building | 1 | |||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.15% | |||||||||||||||||||||||||||||
Mortgage Payable - Due October 2026 | East West Bank | LIBOR | Rancho Cucamonga, California | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | |||||||||||||||||||||||||||||
Mortgage Payable - Due June 2027 | East West Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Principal amount | $ 9,000,000 | |||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 7,400,000 | |||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.79% | |||||||||||||||||||||||||||||
Interest rate swap, fair value | 100,000 | |||||||||||||||||||||||||||||
Long Term Debt | 8,801,000 | 8,936,000 | ||||||||||||||||||||||||||||
Mortgage Payable - Due June 2027 | East West Bank | Rancho Cucamonga, California | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Number of Buildings Securing Loan | building | 1 | |||||||||||||||||||||||||||||
Mortgage Payable - Due June 2027 | East West Bank | Chino, California | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Number of Buildings Securing Loan | building | 2 | |||||||||||||||||||||||||||||
Mortgage Payable - Due June 2027 | East West Bank | LIBOR | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||||||||||||||||||||||||||||
Acquisition Loan - Due April 2019 | Cathay Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Principal amount | $ 21,900,000 | |||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 12,000,000 | |||||||||||||||||||||||||||||
Debt Instrument Loan Collateral Percentage | 65.00% | |||||||||||||||||||||||||||||
Debt Instrument Covenant Period To Discharge Final Judgment | 30 days | |||||||||||||||||||||||||||||
Long Term Debt | 13,025,000 | 15,073,000 | ||||||||||||||||||||||||||||
Line of Credit Facility - Due May 2020 | Cathay Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 20,000,000 | |||||||||||||||||||||||||||||
Line of Credit outstanding | 0 | |||||||||||||||||||||||||||||
Mortgage Payable - Due August 2027 | Cathay Bank | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Long Term Debt | 7,627,000 | 7,795,000 | ||||||||||||||||||||||||||||
Mortgage Payable - Due August 2027 | Cathay Bank | Canton, Massachusetts | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Principal amount | $ 7,900,000 | |||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.70% | |||||||||||||||||||||||||||||
Duration by which the loan bears interest at fixed rate | 5 years | |||||||||||||||||||||||||||||
Working Capital Loan - Due June 2019 | Bank of Nanjing | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Principal amount | ¥ 10 | $ 1,500,000 | ||||||||||||||||||||||||||||
Line of Credit outstanding | ¥ 2.4 | 300,000 | ||||||||||||||||||||||||||||
Long Term Debt | 347,000 | |||||||||||||||||||||||||||||
Note Payable To Merck | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Principal amount | € 11.6 | $ 16,000,000 | ||||||||||||||||||||||||||||
Debt Instrument, Term | 4 years | |||||||||||||||||||||||||||||
Long Term Debt | € 0.5 | $ 552,000 | $ 599,000 | |||||||||||||||||||||||||||
Minimum | Seine-Normandie Water Agency | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Term | 3 years | |||||||||||||||||||||||||||||
Minimum | Seine-Normandie Water Agency | Prime Rate | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | |||||||||||||||||||||||||||||
Minimum | Acquisition Loan - Due April 2019 | Cathay Bank | Prime Rate | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.00% | |||||||||||||||||||||||||||||
Minimum | Line of Credit Facility - Due May 2020 | Cathay Bank | Prime Rate | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | |||||||||||||||||||||||||||||
Minimum | Note Payable To Merck | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | 3.00% | ||||||||||||||||||||||||||||
Minimum | Note Payable To Merck | Prime Rate | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | |||||||||||||||||||||||||||||
Maximum | Seine-Normandie Water Agency | ||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||
Debt Instrument, Term | 6 years |
Debt (Long-Term Debt Maturities
Debt (Long-Term Debt Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt | ||
2019 | $ 17,886 | |
2020 | 3,856 | |
2021 | 6,452 | |
2022 | 2,475 | |
2023 | 458 | |
Thereafter | 17,969 | |
Total long-term Debt | 49,096 | |
Capital Leases | ||
2019 | 343 | |
2020 | 342 | |
2021 | 272 | |
2022 | 159 | |
2023 | 1 | |
Capital Leases, Future Minimum Payments, Present Value of Net Minimum Payments, Total | 1,117 | |
Total debt and capital leases | $ 50,213 | $ 47,156 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Jan. 01, 2017 | Dec. 31, 2015 | |
Tax Credit Carryforward [Line Items] | ||||||
Federal income tax rate | 21.00% | 35.00% | 35.00% | |||
Discrete tax benefits | $ 600 | |||||
Cumulative excess benefits of stock compensation established | $ 6,162 | 6,504 | ||||
Deferred Tax Assets, Valuation Allowance | 9,103 | 4,907 | $ 900 | |||
Accumulated undistributed foreign earnings | $ 30,700 | $ 15,900 | ||||
Federal | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Federal income tax rate | 21.00% | 35.00% | ||||
Federal | Research and Development Tax Credit | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Tax Credit Carryforward, Amount | $ 10,600 | |||||
Tax Credit Carryforward, Expiration Date | Dec. 31, 2036 | |||||
Federal | Alternative Minimum Tax | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Tax Credit Carryforward, Amount | $ 500 | |||||
California | Earliest Tax Year | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2031 | |||||
California | Research and Development Tax Credit | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Tax Credit Carryforward, Amount | $ 18,800 | |||||
State and Local Jurisdiction | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Operating Loss Carryforwards | 5,600 | |||||
Foreign Tax Authority [Member] | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Operating Loss Carryforwards | $ 34,100 | |||||
Accounting Standards Update 2016-16 | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Deferred income tax assets | $ 500 | |||||
Accounting Standards Update 2016-09 [Member] | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Cumulative excess benefits of stock compensation established | $ 900 |
Income Taxes (Summary of Income
Income Taxes (Summary of Income Before Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income (loss) before income taxes: | |||||||||||
United States | $ 3,580 | $ 6,892 | $ 20,572 | ||||||||
Foreign | (13,506) | (5,643) | (5,942) | ||||||||
Income (loss) before income taxes | (9,926) | 1,249 | 14,630 | ||||||||
Income tax expense (benefit) | (3,266) | (2,398) | 4,810 | ||||||||
Net income (loss) | $ 1,867 | $ 2,389 | $ (2,853) | $ (7,141) | $ 787 | $ 99 | $ 1,900 | $ 861 | $ (6,660) | $ 3,647 | $ 9,820 |
Income tax provision as a percentage of income before income taxes | 32.90% | (192.00%) | 32.90% |
Income Taxes (Summary of Provis
Income Taxes (Summary of Provision (Benefit) for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current provision (benefit): | |||
Federal | $ 32 | $ (6,380) | $ 7,279 |
State | 343 | 133 | 344 |
Foreign | 773 | 643 | 787 |
Total current provision (benefit) | 1,148 | (5,604) | 8,410 |
Deferred provision (benefit): | |||
Federal | (687) | 6,340 | (2,383) |
State | (3,900) | (2,169) | (1,100) |
Foreign | 173 | (965) | (117) |
Total deferred provision (benefit) | (4,414) | 3,206 | (3,600) |
Total provision (benefit) for income taxes | $ (3,266) | $ (2,398) | $ 4,810 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of the Statutory Federal Income Tax Rate to the Effective Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the statutory federal income tax rate to the Companys effective rate: | |||
Statutory federal income tax (benefit) | 21.00% | 35.00% | 35.00% |
State tax expense, net of federal tax benefit | 28.30% | (106.00%) | (3.30%) |
Foreign tax rate differences | 4.00% | 3.90% | 4.10% |
Foreign valuation allowance | (42.00%) | 129.10% | 14.70% |
Qualified production activities deduction | 89.60% | ||
Qualified production activities deduction | (8.90%) | ||
Research and development credits | 28.00% | (250.10%) | (12.00%) |
Share-based compensation | 5.10% | (166.20%) | 4.40% |
Executive compensation | (12.40%) | 17.10% | |
Deferred tax remeasurement | 1.00% | 49.50% | |
Employee-related expenses | (0.40%) | 6.30% | 0.40% |
Other | 0.30% | (0.20%) | (1.50%) |
Effective tax rate (benefit) | 32.90% | (192.00%) | 32.90% |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets/Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 |
Deferred tax assets: | |||
Net operating loss carryforward | $ 9,951 | $ 7,356 | |
State income taxes | 26 | 221 | |
Inventory capitalization and reserve | 6,212 | 5,333 | |
Deferred revenue | 2 | ||
Accrued payroll and benefits | 1,344 | 1,233 | |
Share-based compensation | 6,162 | 6,504 | |
Research and development credits | 22,690 | 21,550 | |
Alternative minimum tax | 742 | 656 | |
Accrued professional fees | 1,289 | 344 | |
Product return allowance | 2,314 | 1,879 | |
Accrued chargebacks | 3,103 | 1,856 | |
Bad debt reserve | 115 | 60 | |
Intangibles | 2,124 | 2,022 | |
Accrued for workers’ compensation insurance | 1,401 | 1,063 | |
Other | 971 | 52 | |
Total deferred tax assets | 58,446 | 50,129 | |
Deferred tax liabilities: | |||
Depreciation/amortization | 9,684 | 7,568 | |
Intangibles | 6,303 | 6,992 | |
Federal impact of state deferred taxes | 3,769 | 3,077 | |
Total deferred tax liabilities | 19,756 | 17,637 | |
Valuation allowance | (9,103) | (4,907) | $ (900) |
Net deferred tax assets | $ 29,587 | $ 27,585 |
Income Taxes (Reconciliation _2
Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at the beginning of the year | $ 7,438 | $ 6,686 | $ 5,595 |
Additions based on tax positions related to prior years | 188 | ||
Deductions based on tax positions related to prior years | (1,566) | ||
Additions based on tax positions related to the current year | 1,304 | 1,300 | 903 |
Deductions based on tax audit settlement | (126) | ||
Deductions based on statute of limitations | (56) | (548) | |
Balance at the end of the year | $ 6,994 | $ 7,438 | $ 6,686 |
Income Taxes (Uncertain Income
Income Taxes (Uncertain Income Tax Positions - Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 6.8 | |
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | 1.6 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0.1 | $ 0.1 |
Tax Year 2007 | California | ||
Income Tax Contingency [Line Items] | ||
Income Tax Examination, Year under Examination | 2007 | |
Tax Year 2008 | California | ||
Income Tax Contingency [Line Items] | ||
Income Tax Examination, Year under Examination | 2008 | |
Tax Year 2009 | California | ||
Income Tax Contingency [Line Items] | ||
Income Tax Examination, Year under Examination | 2009 | |
Domestic Tax Authority | Earliest Tax Year | Federal | ||
Income Tax Contingency [Line Items] | ||
Open Tax Year | 2015 | |
Domestic Tax Authority | Latest Tax Year | Federal | ||
Income Tax Contingency [Line Items] | ||
Open Tax Year | 2017 | |
State and Local Jurisdiction | Earliest Tax Year | ||
Income Tax Contingency [Line Items] | ||
Open Tax Year | 2014 | |
State and Local Jurisdiction | Latest Tax Year | ||
Income Tax Contingency [Line Items] | ||
Open Tax Year | 2017 |
Stockholders' Equity (Common an
Stockholders' Equity (Common and Preferred Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stockholders' Equity | |||
Allocated Share-based Compensation Expense | $ 16,680 | $ 17,087 | $ 15,124 |
Common stock; shares authorized | 300,000,000 | 300,000,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 |
Stockholders' Equity (2014 Empl
Stockholders' Equity (2014 Employee Stock Purchase Plan) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share based compensation | $ 16,680 | $ 17,087 | $ 15,124 | |
2014 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee Stock Purchase Plan, Offering Duration, Maximum | 27 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Offering Date | 85.00% | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans (in Shares) | 525,417 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares) | 1,474,583 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 2,000,000 | |||
Allocated share based compensation | $ 700 | $ 600 | $ 500 |
Stockholders' Equity (Share Buy
Stockholders' Equity (Share Buyback Program) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 07, 2018 | Aug. 07, 2017 | Nov. 07, 2016 | Nov. 10, 2015 | Nov. 06, 2014 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||
Stock buyback program, authorized amount | $ 10,000 | |||||||
Treasury Stock, Value, Acquired, Cost Method | $ 25,047 | $ 30,747 | $ 9,908 | |||||
November 2014 Share Repurchase Plan | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Increase authorized for share buyback program | $ 20,000 | $ 20,000 | $ 20,000 | $ 10,000 | ||||
Treasury Stock, Shares, Acquired (in Shares) | 1,414,924 | 1,905,653 | 759,067 | |||||
Treasury Stock, Value, Acquired, Cost Method | $ 25,000 | $ 30,700 | $ 9,900 |
Stockholders' Equity (The 2015
Stockholders' Equity (The 2015 Equity Incentive Plan) (Details) - shares | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2019 | Dec. 31, 2018 | Mar. 18, 2015 | |
The 2015 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares) | 5,521,732 | 5,300,296 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 5,000,000 | ||
Equity Incentive Plan, Term | 10 years | ||
Share Based Compensation Arrangement By Share Based Payment Award Potential Number of Additional Shares Authorized (in Shares) | 3,000,000 | ||
Share Based Compensation Arrangement by Share Based Payment Award Potential Annual Increase in Shares, Percentage | 2.50% | ||
The 2015 Equity Incentive Plan | Subsequent Event | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 1,165,778 | ||
Amended and Restated 2005 Equity Plan | Existing Employees | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Amended and Restated 2005 Equity Plan | Existing Employees | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | ||
Amended and Restated 2005 Equity Plan | New Employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years |
Stockholders' Equity (Key Assum
Stockholders' Equity (Key Assumptions Used in Determining Fair Value of Options Granted) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stockholders' Equity | |||
Average overall forfeiture rate | 5.00% | 7.00% | 7.00% |
Average volatility | 39.90% | 37.00% | 30.40% |
Risk-free interest rate | 2.70% | 2.10% | 1.50% |
Weighted-average expected life in years | 5 years 8 months 12 days | 5 years 6 months | 5 years 6 months |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Options | |||
Outstanding Options, Beginning of period | 10,898,701 | ||
Options granted | 1,096,832 | ||
Options exercised | (1,357,865) | ||
Options cancelled | (143,724) | ||
Options expired | (388,379) | ||
Outstanding Options, End of period | 10,105,565 | 10,898,701 | |
Exercisable at the end of period | 6,826,539 | ||
Weighted-Average Exercise Price | |||
Outstanding Exercise Price (in dollars per share) | $ 14.65 | ||
Options granted (in dollars per share) | 20.16 | ||
Options exercised (in dollars per share) | 13.14 | ||
Options cancelled (in dollars per share) | 13.84 | ||
Options expired (in dollars per share) | 34.81 | ||
Outstanding Exercise Price (in dollars per share) | 14.69 | $ 14.65 | |
Exercisable at the end of period (in dollars per share) | $ 14.31 | ||
Additional Disclosures | |||
Outstanding Contractual Term (in Years) | 4 years 9 months 18 days | ||
Outstanding Intrinsic Value | $ 53,472 | ||
Exercisable at the end of period (in Years) | 3 years 6 months 26 days | ||
Exercisable aggregate intrinsic value | $ 38,217 | ||
Allocated share based compensation | $ 16,680 | $ 17,087 | $ 15,124 |
The 2015 Plan and 2005 Plan [Member] | Minimum | |||
Additional Disclosures | |||
Outstanding Contractual Term (in Years) | 5 years | ||
Vesting term | 3 years | ||
The 2015 Plan and 2005 Plan [Member] | Maximum | |||
Additional Disclosures | |||
Outstanding Contractual Term (in Years) | 10 years | ||
Vesting term | 5 years | ||
Employee Stock Option | |||
Additional Disclosures | |||
Allocated share based compensation | $ 8,200 | $ 8,300 | $ 8,700 |
Stockholders' Equity (Informati
Stockholders' Equity (Information Relating to Option Grants and Exercises) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stockholders' Equity | |||
Weighted-average grant date fair value (in Dollars per share) | $ 7.80 | $ 4.98 | $ 3.42 |
Intrinsic value of options exercised | $ 7,372 | $ 17,247 | $ 7,446 |
Cash received | 11,753 | 19,098 | 20,338 |
Total fair value of the options vested during the year | $ 7,972 | $ 7,263 | $ 8,654 |
Stockholders' Equity (Summary_2
Stockholders' Equity (Summary of Nonvested Options) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Options | |||
Nonvested at beginning of period | 4,310,241 | ||
Options granted | 1,096,832 | ||
Options vested | (1,984,323) | ||
Options forfeited | (143,724) | ||
Nonvested at end of period | 3,279,026 | 4,310,241 | |
Weighted-Average Grant Date Fair Value | |||
Nonvested at beginning of period (in dollars per share) | $ 4.21 | ||
Options granted (in dollars per share) | 7.80 | $ 4.98 | $ 3.42 |
Options vested (in dollars per share) | 4.02 | ||
Options forfeited (in dollars per share) | 5.20 | ||
Nonvested at end of period (in dollars per share) | $ 5.47 | $ 4.21 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 11.3 | ||
Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 2 months 12 days |
Stockholders' Equity (Restricte
Stockholders' Equity (Restricted Stock Units) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding Contractual Term (in Years) | 4 years 9 months 18 days | ||
Allocated share based compensation | $ 16,680 | $ 17,087 | $ 15,124 |
Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 2 months 12 days | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | ||
Allocated share based compensation | $ 7,700 | $ 7,700 | $ 5,900 |
Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 2 months 12 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Number of Shares of Common Stock Per Award (in Shares) | 1 | ||
Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 12,300 | ||
Maximum | Amended and Restated 2005 Equity Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years |
Stockholders' Equity (Informa_2
Stockholders' Equity (Information Relating to RSU Grants and Deliveries) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Total RSUs outstanding at the beginning of the period | 1,392,781 |
RSUs granted | 439,980 |
RSUs forfeited | (55,514) |
RSUs vested | (570,586) |
Total RSUs outstanding at the end of the period | 1,206,661 |
Total Fair Market Value of RSUs Issued | |
RSUs granted (in Dollars) | $ | $ 8,560 |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Stock surrendered to fulfill tax withholding obligations | 363,640 |
Stockholders' Equity (Equity Aw
Stockholders' Equity (Equity Awards to Consultants and Advisory Board Members) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated share based compensation | $ 16,680 | $ 17,087 | $ 15,124 |
Consultants and Advisory Board | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated share based compensation | $ 200 | $ 500 | $ 100 |
Stockholders' Equity (Share-Bas
Stockholders' Equity (Share-Based Compensation Expense Included in the Statement of Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated share based compensation | $ 16,680 | $ 17,087 | $ 15,124 |
Cost of revenues | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated share based compensation | 3,923 | 3,756 | 2,967 |
Selling, distribution and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated share based compensation | 383 | 302 | 220 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated share based compensation | 10,853 | 11,643 | 10,865 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated share based compensation | $ 1,521 | $ 1,386 | $ 1,072 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Benefits | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 50.00% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 6.00% | ||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 1.3 | $ 1.1 | $ 1 |
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 1.70% | 1.60% | |
Defined Benefit Plan, Benefit Obligation | $ 2.2 | $ 2.1 | |
Pension Cost | $ 0.3 | $ 0.2 | $ 0.2 |
Commitments and Contingencies_2
Commitments and Contingencies (Collaboration Agreements) (Details) - Drug delivery system $ in Millions | 1 Months Ended | 12 Months Ended |
Oct. 31, 2017USD ($)item | Dec. 31, 2018USD ($)item | |
Collaborative Arrangement One [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Collaborative Agreement, Upfront Payment | $ 0.5 | |
Collaborative Agreement, Milestone Payments | 1.7 | |
Collaborative Agreement, Contingent Obligation | $ 0.4 | |
Collaborative Agreement, Contingent Purchase Obligation First 12 Months, Units | item | 1,000,000 | |
Purchase period | 12 months | |
Collaborative Arrangement Two [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Collaborative Agreement, Upfront Payment | $ 0.4 | |
Collaborative Agreement, Milestone Payments | 0.2 | |
Collaborative Agreement, Contingent Obligation | $ 1 | $ 1 |
Purchase period | 3 years | |
Collaborative Agreement, Amount | $ 1.6 | |
Collaborative Agreement, Contingent Purchase Obligation, Units | item | 100,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Operating Lease Agreements) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Leased Assets [Line Items] | |||
Operating Leases, Rent Expense | $ 4,200 | $ 3,500 | $ 3,400 |
2019 | 3,712 | ||
2020 | 3,131 | ||
2021 | 1,967 | ||
2022 | 1,050 | ||
2023 | 125 | ||
Operating Leases, Future Minimum Payments Due, Total | $ 9,985 | ||
Minimum | |||
Operating Leased Assets [Line Items] | |||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 1 year | ||
Maximum | |||
Operating Leased Assets [Line Items] | |||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 6 years |
Commitments and Contingencies_4
Commitments and Contingencies (Purchase Commitments) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2012 | Jan. 31, 2010 | Dec. 31, 2018 | Dec. 31, 2016 | |
Commitments to Purchase Equipment and Raw Materials | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Long-term Purchase Commitment, Amount | $ 59.5 | |||
Commitment to invest | ANP | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Purchase Commitments Amount Fulfilled | $ 61 | |||
Commitment to develop land | ANP | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Contractual Obligation | $ 15 | |||
Payments for Construction in Process | $ 4.5 | |||
Land-use rights | ANP | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Finite-lived Intangible Assets Acquired | $ 1.3 | $ 1.2 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jul. 31, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Proceeds from the private placement of ANP | $ 38,036 | |
ANP | ||
Related Party Transaction [Line Items] | ||
Proceeds from the private placement of ANP | $ 57,000 | |
ANP | Management and directors | ||
Related Party Transaction [Line Items] | ||
Proceeds from the private placement of ANP | $ 29,700 |
Litigation (Details)
Litigation (Details) $ in Millions | Jul. 21, 2017USD ($) | May 09, 2016USD ($) | May 04, 2016item | Oct. 31, 2011USD ($) | Sep. 21, 2011item |
Enoxaparin Patent Litigation | |||||
Loss Contingencies [Line Items] | |||||
Fees and costs relating to a discovery motion | $ 0.4 | ||||
False Claims Act Litigation | |||||
Loss Contingencies [Line Items] | |||||
Number of orders issued by district court | item | 3 | ||||
Pending Litigation [Member] | Enoxaparin Patent Litigation | |||||
Loss Contingencies [Line Items] | |||||
Number of Alleged Patent Infringements | item | 2 | ||||
Litigation, Plaintiff Preliminary Injunction Bond, Amount | $ 100.1 | ||||
Settled Litigation [Member] | Enoxaparin Patent Litigation | |||||
Loss Contingencies [Line Items] | |||||
Litigation Settlement, Amount | $ 0 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Income Statements, Captions [Line Items] | |||||||||||
Total net revenues | $ 89,690 | $ 75,543 | $ 71,040 | $ 58,393 | $ 60,402 | $ 57,916 | $ 65,187 | $ 56,670 | $ 294,666 | $ 240,175 | $ 255,165 |
Gross profit | 34,689 | 29,260 | 26,064 | 16,972 | 20,490 | 20,553 | 26,659 | 22,807 | 106,985 | 90,509 | 104,196 |
Net income (loss) | $ 1,867 | $ 2,389 | $ (2,853) | $ (7,141) | $ 787 | $ 99 | $ 1,900 | $ 861 | $ (6,660) | $ 3,647 | $ 9,820 |
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar Pharmaceuticals, Inc. shareholders: | |||||||||||
Basic (in Shares) | 46,268 | 46,241 | 46,557 | 46,514 | 46,233 | 46,101 | 46,025 | 46,069 | 46,395 | 46,107 | 45,375 |
Diluted (in Shares) | 49,181 | 48,281 | 46,557 | 46,514 | 49,330 | 48,215 | 47,866 | 48,057 | 46,395 | 48,367 | 47,504 |
Net income (loss) per share: | |||||||||||
Basic (in Dollars per share) | $ 0.04 | $ 0.05 | $ (0.06) | $ (0.15) | $ 0.02 | $ 0 | $ 0.04 | $ 0.02 | $ (0.12) | $ 0.08 | $ 0.22 |
Diluted (in Dollars per share) | $ 0.04 | $ 0.05 | $ (0.06) | $ (0.15) | $ 0.02 | $ 0 | $ 0.04 | $ 0.02 | $ (0.12) | $ 0.08 | $ 0.21 |
Finished Pharmaceutical Products | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Total net revenues | $ 82,934 | $ 71,767 | $ 63,241 | $ 53,117 | $ 55,985 | $ 54,455 | $ 63,765 | $ 55,934 | $ 271,059 | $ 230,139 | $ 240,221 |
Gross profit | 35,364 | 30,571 | 27,649 | 19,636 | 22,228 | 21,222 | 28,778 | 24,289 | 113,220 | 96,517 | 106,107 |
API | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Total net revenues | 6,756 | 3,776 | 7,799 | 5,276 | 4,417 | 3,461 | 1,422 | 736 | 23,607 | 10,036 | 14,944 |
Gross profit | $ (675) | $ (1,311) | $ (1,585) | $ (2,664) | $ (1,738) | $ (669) | $ (2,119) | $ (1,482) | $ (6,235) | $ (6,008) | $ (1,911) |
Quarterly Financial Data (Una_4
Quarterly Financial Data (Unaudited) (Narrative) (Details) - Restatement adjustment - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Impact of restatement on net income | $ (0.1) | $ (0.1) | $ (0.7) | $ (0.1) | $ (0.1) | $ (0.1) | $ (0.9) | $ (0.7) |
Impact of restatement on earnings per share, basic and diluted (in Dollars per share) | $ (0.01) | $ (0.01) |