Document and Entity Information
Document and Entity Information Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 13, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Penumbra Inc | ||
Entity Central Index Key | 1,321,732 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 34,131,004 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 2.6 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 50,637 | $ 13,236 |
Marketable investments | 163,954 | 115,517 |
Accounts receivable, net of doubtful accounts of $1,290 and $684 at December 31, 2017 and December 31, 2016, respectively | 58,007 | 43,335 |
Inventories | 94,901 | 73,012 |
Prepaid expenses and other current assets | 14,735 | 18,727 |
Total current assets | 382,234 | 263,827 |
Property and equipment, net | 30,899 | 21,464 |
Intangible assets, net | 23,778 | 0 |
Goodwill | 8,178 | 0 |
Long-term investments (Note 3) | 3,872 | 0 |
Deferred taxes | 26,690 | 22,476 |
Other non-current assets | 1,016 | 487 |
Total assets | 476,667 | 308,254 |
Current liabilities: | ||
Accounts payable | 6,757 | 4,110 |
Accrued liabilities | 44,825 | 31,690 |
Total current liabilities | 51,582 | 35,800 |
Deferred rent | 6,199 | 5,083 |
Other non-current liabilities | 18,478 | 824 |
Total liabilities | 76,259 | 41,707 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity: | ||
Preferred stock, $.001 par value per share - 5,000,000 shares authorized, none issued and outstanding at December 31, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $.001 par value per share - 300,000,000 shares authorized, 33,685,146 issued and outstanding at December 31, 2017; 300,000,000 shares authorized, 31,108,828 issued and outstanding at December 31, 2016 | 33 | 31 |
Additional paid-in capital | 396,810 | 273,865 |
Accumulated other comprehensive income (loss) | 1,569 | (4,688) |
Retained earnings (accumulated deficit) | 1,996 | (2,661) |
Total stockholders’ equity | 400,408 | 266,547 |
Total liabilities and stockholders’ equity | $ 476,667 | $ 308,254 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,290 | $ 684 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 33,685,146 | 31,108,828 |
Common stock, shares outstanding (in shares) | 33,685,146 | 31,108,828 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenue | $ 333,764 | $ 263,317 | $ 186,095 |
Cost of revenue | 116,622 | 92,488 | 62,037 |
Gross profit | 217,142 | 170,829 | 124,058 |
Operating expenses: | |||
Research and development | 31,661 | 23,875 | 18,027 |
Sales, general and administrative | 184,316 | 148,304 | 101,852 |
Total operating expenses | 215,977 | 172,179 | 119,879 |
Income (loss) from operations | 1,165 | (1,350) | 4,179 |
Interest income, net | 2,653 | 2,323 | 541 |
Other expense, net | (1,342) | (1,842) | (696) |
Income (loss) before income taxes and equity in losses of unconsolidated investees | 2,476 | (869) | 4,024 |
(Benefit from) provision for income taxes | (3,611) | (15,683) | 1,659 |
Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 6,087 | 14,814 | 2,365 |
Income before equity in losses of unconsolidated investees | 4,657 | 14,814 | 2,365 |
Equity in losses of unconsolidated investees | (1,430) | 0 | 0 |
Foreign currency translation adjustments, net of tax | 6,387 | (2,631) | (1,308) |
Net change in unrealized (losses) gains on available-for-sale securities, net of tax | (130) | 58 | 57 |
Total other comprehensive income (loss), net of tax | 6,257 | (2,573) | (1,251) |
Comprehensive income | 10,914 | 12,241 | 1,114 |
Net (loss) income attributable to common stockholders | $ 4,657 | $ 14,814 | $ 1,084 |
Net income (loss) per share attributable to common stockholders—Basic (in dollars per share) | $ 0.14 | $ 0.49 | $ 0.09 |
Net income (loss) per share attributable to common stockholders—Diluted (in dollars per share) | $ 0.13 | $ 0.44 | $ 0.08 |
Weighted average shares used to compute net income (loss) per share attributable to common stockholders—Basic (in shares) | 32,978,065 | 30,464,583 | 11,993,429 |
Weighted average shares used to compute net income (loss) per share attributable to common stockholders—Diluted (in shares) | 35,319,103 | 33,478,078 | 14,219,650 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Notes Receivable from Stockholders | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) |
Beginning balance at Dec. 31, 2014 | $ (12,370) | $ 5 | $ 8,446 | $ (117) | $ (864) | $ (19,840) |
Beginning balance (in shares) at Dec. 31, 2014 | 4,736,689 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Conversion of convertible preferred stock into common stock upon closing of IPO | 111,467 | $ 19 | 111,448 | |||
Conversion of convertible preferred stock into common stock upon closing of IPO (in shares) | 19,510,410 | |||||
Shares issued upon closing of IPO | 124,742 | $ 5 | 124,737 | |||
Shares issued upon closing of IPO (in shares) | 4,600,000 | |||||
Issuance of common stock | 1,126 | $ 1 | 1,125 | |||
Issuance of common stock (in shares) | 1,074,411 | |||||
Shares held for tax withholdings | (2,525) | (2,525) | ||||
Repurchase of common stock | (342) | (342) | ||||
Repurchase of common stock (in shares) | (23,650) | |||||
Stock-based compensation | 7,608 | 7,608 | ||||
Excess tax benefit from stock-based compensation | 1,590 | 1,590 | ||||
Forgiven notes receivable from stockholders | 91 | 91 | ||||
Note received from a stockholder | 21 | 21 | ||||
Other comprehensive loss | (1,251) | (1,251) | ||||
Foreign currency translation adjustment, net of tax | (1,308) | |||||
Unrealized gain (loss) on investments, net of tax | 57 | |||||
Net income | 2,365 | 2,365 | ||||
Ending balance at Dec. 31, 2015 | 232,522 | $ 30 | 252,087 | (5) | (2,115) | (17,475) |
Ending balance (in shares) at Dec. 31, 2015 | 29,897,860 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock | 3,168 | $ 1 | 3,167 | |||
Issuance of common stock (in shares) | 1,043,223 | |||||
Shares held for tax withholdings | $ (2,624) | (2,624) | ||||
Shares held for tax withholdings (in shares) | (46,280) | |||||
Issuance of common stock under employee stock purchase plan | 214,025 | 214,025 | ||||
Issuance of common stock under employee stock purchase plan | $ 6,578 | 6,578 | ||||
Stock-based compensation | 14,657 | 14,657 | ||||
Note received from a stockholder | 5 | 5 | ||||
Other comprehensive loss | (2,573) | (2,573) | ||||
Foreign currency translation adjustment, net of tax | (2,631) | |||||
Unrealized gain (loss) on investments, net of tax | 58 | |||||
Net income | 14,814 | 14,814 | ||||
Ending balance at Dec. 31, 2016 | 266,547 | $ 31 | 273,865 | 0 | (4,688) | (2,661) |
Ending balance (in shares) at Dec. 31, 2016 | 31,108,828 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issued upon closing of IPO | 106,269 | $ 2 | 106,267 | |||
Shares issued upon closing of IPO (in shares) | 1,495,000 | |||||
Issuance of common stock | 5,048 | $ 0 | 5,048 | |||
Issuance of common stock (in shares) | 1,131,344 | |||||
Shares held for tax withholdings | $ (11,686) | (11,686) | ||||
Shares held for tax withholdings (in shares) | (141,711) | |||||
Issuance of common stock under employee stock purchase plan | 91,685 | 91,685 | ||||
Issuance of common stock under employee stock purchase plan | $ 5,809 | 5,809 | ||||
Stock-based compensation | 17,507 | 17,507 | ||||
Other comprehensive loss | 6,257 | 6,257 | ||||
Foreign currency translation adjustment, net of tax | 6,387 | |||||
Unrealized gain (loss) on investments, net of tax | (130) | |||||
Net income | 4,657 | 4,657 | ||||
Ending balance at Dec. 31, 2017 | $ 400,408 | $ 33 | $ 396,810 | $ 0 | $ 1,569 | $ 1,996 |
Ending balance (in shares) at Dec. 31, 2017 | 33,685,146 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Cash Flows [Abstract] | |||
Net income | $ 4,657 | $ 14,814 | $ 2,365 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 3,781 | 2,297 | 1,752 |
Amortization of premium on marketable investments | 591 | 997 | 83 |
Stock-based compensation | 17,812 | 14,637 | 7,271 |
Loss on non-marketable equity investments | 1,430 | 0 | 0 |
Provision for doubtful accounts | 606 | 216 | (13) |
Inventory write-offs and write-downs | 1,037 | 2,667 | 1,163 |
Realized (gain) loss on marketable investments | (37) | (8) | 541 |
Deferred taxes | (4,288) | (12,378) | (3,204) |
Other | 591 | 143 | 134 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (9,118) | (14,560) | (11,063) |
Inventories | (18,826) | (19,737) | (25,126) |
Prepaid expenses and other current and non-current assets | 2,436 | (9,043) | (4,013) |
Accounts payable | 1,851 | 1,375 | 132 |
Accrued expenses and other non-current liabilities | 10,168 | 5,773 | 9,289 |
Net cash provided by (used in) operating activities | 12,691 | (12,807) | (20,689) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of a business, net of cash acquired | (9,253) | 0 | 0 |
Purchase of non-marketable investments | (5,265) | 0 | 0 |
Purchases of marketable investments | (189,658) | (63,346) | (135,340) |
Proceeds from sales of marketable investments | 28,752 | 12,997 | 54,998 |
Proceeds from maturities of marketable investments | 112,803 | 64,671 | 0 |
Acquisition of intangible assets from a licensing agreement | (2,500) | 0 | 0 |
Purchases of property and equipment | (12,532) | (13,635) | (5,474) |
Net cash (used in) provided by investing activities | (77,653) | 687 | (85,816) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of common stock issued in initial public offering, net of issuance costs | 0 | 0 | 124,742 |
Proceeds from issuance of common stock upon underwritten public offering, net of issuance cost | 106,267 | 0 | 0 |
Proceeds from exercises of stock options | 5,048 | 3,172 | 617 |
Proceeds from issuance of stock under employee stock purchase plan | 5,809 | 6,578 | 0 |
Payment of obligations on debt and credit facilities | (1,079) | 0 | 0 |
Payment of employee taxes related to vested common and restricted stock | (11,686) | (2,624) | (2,525) |
Net cash provided by financing activities | 104,359 | 7,126 | 122,834 |
Effect of foreign exchange rate changes on cash and cash equivalents | (1,996) | (1,317) | (72) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 37,401 | (6,311) | 16,257 |
CASH AND CASH EQUIVALENTS—Beginning of period | 13,236 | 19,547 | 3,290 |
CASH AND CASH EQUIVALENTS—End of period | 50,637 | 13,236 | 19,547 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for income taxes | 141 | 2,149 | 1,220 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Conversion of convertible preferred stock into common stock | 0 | 0 | 111,467 |
Purchase of property and equipment funded through accounts payable and accrued liabilities | 977 | 1,442 | 143 |
Acquisition-related contingent consideration and working capital adjustment liabilities | 6,067 | 0 | 0 |
Licensing agreement related contingent consideration | $ 12,717 | $ 0 | $ 0 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Penumbra, Inc. (the Company) is a global healthcare company focused on innovative therapies. The Company designs, develops, manufactures and markets medical devices and has a broad portfolio of products that addresses challenging medical conditions and significant clinical needs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). Certain changes in presentation were made in the consolidated financial statements for the year ended December 31, 2016 and 2015 , to conform to the presentation for the year ended December 31, 2017 . The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity accounts; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to provisions for doubtful accounts, sales return reserve, warranty reserves, valuation of inventories, useful lives of property and equipment, income taxes, the valuation of equity instruments and contingencies, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other data. Actual results could differ from those estimates. Segments The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company has one business activity: the design, development, manufacturing and marketing of innovative medical devices, and operates as one operating segment. The Company’s chief operating decision-maker (CODM), its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance. Foreign Currency Translation The Company’s consolidated financial statements are prepared in United States Dollars (USD). Its foreign subsidiaries use their local currency as their functional currency and maintain their records in the local currency. Accordingly, the assets and liabilities of these subsidiaries are translated into USD using the current exchange rates in effect at the balance sheet date and equity accounts are translated into USD using historical rates. Revenues and expenses are translated using the average exchange rates in effect for the year involved. The resulting foreign currency translation adjustments are recorded in accumulated other comprehensive income (loss) in the consolidated balance sheets. Transactions denominated in currencies other than the respective functional currencies are translated at exchange rates at the date of transaction with foreign currency gains and losses recorded in other expense, net in the consolidated statements of operations and comprehensive income . The Company recognized net foreign currency transaction losses of $1.0 million , $0.7 million and $0.1 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. As the Company’s international operations grow, its risks associated with fluctuation in currency rates will become greater, and the Company will continue to reassess its approach to managing this risk. In addition, currency fluctuations or a weakening USD can increase the costs of the Company’s international expansion. To date, the Company has not entered into any foreign currency hedging contracts. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, marketable investments (as described in greater detail in this footnote under the header “Cash, Cash Equivalents and Marketable Investments” below) and accounts receivable. The majority of the Company’s cash is held by one financial institution in the U. S. in excess of federally insured limits. The Company maintained investments in money market funds that were not federally insured during the year ended December 31, 2017 and held cash in foreign banks of approximately $15.0 million and $2.1 million at December 31, 2017 and 2016 , respectively, which was not federally insured. The Company’s revenue has been derived from sales of its products in the United States and international markets. The Company uses both its own salesforce and independent distributors to sell its products. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of entities comprising the Company’s customer base. The Company performs ongoing credit evaluations of its customers, including its distributors, does not require collateral, and maintains allowances for potential credit losses on customer accounts when deemed necessary. During the years ended December 31, 2017 , 2016 and 2015 , one customer (a distributor) accounted for 10.1% , 11.5% and 11.0% , respectively, of the Company’s revenue. No customer accounted for greater than 10% of the Company’s accounts receivable balance as of December 31, 2017 or 2016 . Significant Risks and Uncertainties The Company is subject to risks common to medical device companies including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, uncertainty of market acceptance of products and the potential need to obtain additional financing. The Company is dependent on third party suppliers, in some cases single-source suppliers. There can be no assurance that the Company’s products will continue to be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed, if at all. The Company’s products require approval or clearance from the FDA prior to commencing commercial sales in the United States . There can be no assurance that the Company’s products will receive all of the required approvals or clearances. Approvals or clearances are also required in foreign jurisdictions in which the Company sells its products. If the Company is denied such approvals or clearances or such approvals or clearances are delayed, it may have a material adverse impact on the Company’s results of operations, financial position and liquidity. Fair Value of Financial Instruments Carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Cash, Cash Equivalents and Marketable Investments The Company invests its cash primarily in highly liquid corporate debt securities, debt instruments of U.S. federal and municipal governments, and their agencies, and in money market funds. All highly liquid investments with stated maturities of three months or less from the date of purchase are classified as cash equivalents; all highly liquid investments with stated maturities of greater than three months are classified as marketable investments. The majority of the Company’s cash and investments are held in U.S. banks. The Company determines the appropriate classification of its investments in marketable investments at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable investments have been classified and accounted for as available-for-sale. Investments with remaining maturities of more than one year are viewed by the Company as available to support current operations and are classified as current assets under the caption marketable investments in the accompanying consolidated balance sheets. Investments in marketable investments are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) . Any realized gains or losses on the sale of marketable investments are determined on a specific identification method, and such gains and losses are reflected as a component of other income (expense), net. Impairment of Marketable Investments After determining the fair value of available-for-sale debt instruments, unrealized gains or losses on these securities are recorded to accumulated other comprehensive income (loss) until either the security is sold or the Company determines that the decline in value is other-than-temporary. The primary differentiating factors that the Company considers in classifying impairments as either temporary or other-than-temporary impairments is the intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value, the length of the time and the extent to which the market value of the investment has been less than cost, the financial condition and near-term prospects of the issuer. There were no other-than-temporary impairments for the years ended December 31, 2017 , 2016 or 2015 . Non-Marketable Equity Investments Entities in which the Company has at least a 20% , but not more than a 50% , interest are accounted for under the equity method unless it is determined that the Company has a controlling financial interest in the entity, in which case the entity would be consolidated. Non-marketable equity investments are classified as long-term investments on the consolidated balance sheet . The Company’s proportionate share of the operating results of its non-marketable equity method investments are recorded as profit or loss and presented in equity in losses of unconsolidated investees , in the consolidated statements of operations and comprehensive income . See Note “ 3. Investments and Fair Value of Financial Instruments ” for further details. Accounts Receivable Accounts receivable are stated at invoice value less estimated allowances for doubtful accounts. The Company continually monitors customer payments and maintains a reserve for estimated losses resulting from its customers’ inability to make required payments. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic related risks and economic conditions that may affect a customer’s ability to pay. In cases where there are circumstances that may impair a specific customer’s ability to meet its financial obligations, a specific allowance is recorded against amounts due, and thereby reduces the net recognized receivable to the amount reasonably believed to be collectible. Inventories Inventories are stated at the lower of cost (determined under the first-in first-out method) or net realizable value. Write-downs are provided for raw materials, components or finished goods that are determined to be excessive or obsolete. The Company regularly reviews inventory quantities in consideration of actual loss experience, projected future demand and remaining shelf life to record a provision for excess and obsolete inventory when appropriate. As a result of these evaluations, the Company recognized total write-offs of $1.0 million for the year ended December 31, 2017 and write-downs of $2.7 million and $1.2 million for the years ended December 31, 2016 and 2015 , respectively. Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. Machinery and equipment and furniture and fixtures are depreciated over a five to ten year period and computers and software are depreciated over two to five years. Upon retirement or sale, the cost and the related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to consolidated statements of operations and comprehensive income as incurred. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. There was no impairment of long-lived assets during the years ended December 31, 2017 , 2016 or 2015 . Contingent Consideration Certain agreements the Company enters into, including business combinations and licensing agreements, involve the potential payment of future consideration that is contingent upon certain performance and revenue milestones being achieved. Contingent consideration related is recorded at the acquisition date at fair value and is remeasured each reporting period with the change in fair value recognized generally within sales, general and administrative expense or cost of sales, depending on the nature of the contingent consideration liability, in the consolidated statements of operations and comprehensive income . As of December 31, 2017 , the Company’s contingent consideration relates to milestone payments for the acquisition of Crossmed and intangible assets through a licensing agreement. For more information with respect to the fair value of contingent consideration, refer to Note “ 5. Business Combination ” and Note “ 6. Intangible Assets ,” respectively. Intangible Assets Intangible assets consist of intangibles acquired through a licensing arrangement and the acquisition of Crossmed S.p.A. (“Crossmed”) during the year ended December 31, 2017 . Indefinite-lived intangible assets relate to an exclusive right to licensed technology. The acquired licensed technology is accounted for as an indefinite-lived intangible asset until it reaches technological feasibility, which is determined on the basis of obtaining regulatory approval to market and commercialize the underlying products. Upon the commercialization of the underlying product, the capitalized amount will be amortized over its estimated useful life. Indefinite-lived intangible assets will be tested for impairment at least annually, or more frequently if events or circumstances indicate their carrying value may no longer be recoverable and that an impairment loss may have occurred. Finite-lived intangible assets are amortized over the estimated economic useful lives of the assets, which is the period during which expected cash flows support the fair value of such intangible assets. The Company will review finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. When such an event occurs, management will determine whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset will be written down to the determined fair value based on discounted cash flows. Refer to Note “ 6. Intangible Assets ” for more information on the Company’s intangible assets. Goodwill Goodwill represents the excess of the purchase price of an acquired business or assets over the fair value of the identifiable assets acquired and liabilities assumed. Goodwill is not amortized, but is tested for impairment annually in the fourth quarter, or more frequently if events or circumstances indicate the carrying value may no longer be recoverable and that an impairment loss may have occurred. The Company operates as one segment, which is considered to be the sole reporting unit, and therefore goodwill is tested for impairment at the consolidated level. Refer to Note “ 5. Business Combination ” and Note “ 7. Goodwill ” for more information. Revenue Recognition Revenue is comprised of product revenue net of returns, discounts, administration fees and sales rebates. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Evidence of an arrangement consists of customer orders and the Company typically considers delivery to have occurred once title and risk of loss has been transferred and the product has been delivered to the customer. The Company typically recognizes revenue when products are delivered to hospital customers or distributors. However, with respect to products that the Company consigns to hospitals, which primarily consist of coils, the Company recognizes revenue at the time hospitals utilize products in a procedure. Deferred revenue represents amounts that the Company has already invoiced its customers and that are ultimately expected to be recognized as revenue, but for which not all revenue recognition criteria have been met. As of December 31, 2017 and 2016, respectively, the Company's deferred revenue balance was not material. The Company’s terms and conditions permit product returns and exchanges, and it records returns reserves in the period when revenue is recognized. Estimates are based on actual historical returns over the prior three years and are recorded as reductions in revenue at the time of sale. Upon recognition, the Company reduces revenue and cost of revenue for the estimated return. Return rates can fluctuate over time, but are sufficiently predictable to allow the Company to estimate expected future product returns. Cost of Revenue Cost of revenue includes direct and indirect costs associated with the manufacture of the Company’s products. Direct costs include material and labor, while indirect costs include inbound freight charges, receiving costs, inspection and testing costs, warehousing costs, royalty expense and other labor and overhead costs incurred in the manufacturing of products. Cost of revenue also includes stock-based compensation, warranty replacement costs, cost of revenue related to product return reserves and excess and obsolete inventory write-downs. Shipping Costs Shipping and handling costs charged to customers are recorded as revenue. Shipping and handling costs are included in cost of revenue. Research and Development (R&D) Costs R&D costs primarily consist of product development, clinical and regulatory expenses, materials, depreciation and other costs associated with the development of the Company’s products. R&D costs also include related personnel and consultants’ salaries, benefits and related costs, including stock-based compensation. The Company expenses R&D costs as they are incurred. The Company’s clinical trial accruals are based on estimates of patient enrollment and related costs at clinical investigator sites. The Company estimates preclinical and clinical trial expenses based on the services performed pursuant to contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on its behalf. In accruing service fees, the Company estimates the time period over which services will be performed and the level of patient enrollment and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. Payments made to third parties under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered. Advertising Costs Advertising costs are included in sales, general and administrative expenses and are expensed as incurred. Advertising costs were $0.7 million , $0.5 million and $0.5 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Stock-Based Compensation The Company recognizes the cost of stock-based compensation in the financial statements based upon fair value. The fair value of restricted stock and restricted stock unit (RSU) awards is determined based on the number of units granted and the closing price of the Company’s common stock as of the grant date. The fair value of each purchase under the employee stock purchase plan (ESPP) is estimated at the beginning of the offering period using the Black-Scholes option pricing model. The fair value of stock options is determined as of the grant date using the Black-Scholes option pricing model. The Company’s determination of the fair value of equity-settled awards is impacted by the price of the Company’s common stock as well as changes in assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected term that awards will remain outstanding, expected common stock price volatility over the term of the awards, risk-free interest rates and expected dividends. The fair value of an award is recognized over the requisite service period (usually the vesting period) on a straight-line basis. Stock-based compensation expense recognized at fair value includes the impact of estimated forfeitures. The Company estimates future forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. To the extent actual forfeiture results differ from the estimates, the difference is recorded as a cumulative adjustment in the period forfeiture estimates are revised. No compensation cost is recorded for awards that do not vest. Equity instruments issued to non-employees are recorded at their fair value on the measurement date and are subject to periodic adjustments as we remeasure the fair value of the non-employee awards at each reporting period prior to vesting and finally at the vesting date of the award. The fair value of these equity instruments are expensed over the service period. Estimates of the fair value of equity-settled awards as of the grant date using valuation models, such as the Black-Scholes option pricing model, are affected by assumptions regarding a number of complex variables. Changes in the assumptions can materially affect the fair value of the award and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop. For all stock options granted prior to the Company’s IPO, the Company estimated the volatility data based on a study of publicly traded industry peer companies. For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award. For all stock options granted to date, t he Company used the Staff Accounting Bulletin, No. 110 (SAB 110) simplified method to calculate the expected term, which is the average of the contractual term and vesting period. Income Taxes The Company accounts for income taxes using the asset and liability method, whereby deferred tax asset ( “ DTA”) and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance to reduce the net DTAs to their estimated realizable value. The calculation of the Company’s current provision for income taxes involves the use of estimates, assumptions and judgments while taking into account current tax laws, interpretation of current tax laws and possible outcomes of future tax audits. The Company has established reserves to address potential exposures related to tax positions that could be challenged by tax authorities. Although the Company believes its estimates, assumptions and judgments to be reasonable, any changes in tax law or its interpretation of tax laws and the resolutions of potential tax audits could significantly impact the amounts provided for income taxes in the Company’s consolidated financial statements. The calculation of the Company’s DTA balance involves the use of estimates, assumptions and judgments while taking into account estimates of the amounts and type of future taxable income. Actual future operating results and the underlying amount and type of income could differ materially from the Company’s estimates, assumptions and judgments thereby impacting the Company’s financial position and results of operations. The Company follows the guidance relating to accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s income tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Company includes interest and penalties related to unrecognized tax benefits within income tax expense in the accompanying consolidated statements of operations. Comprehensive Income Comprehensive income consists of net income, unrealized gains or losses on available-for-sale investments and the effects of foreign currency translation adjustments. The Company presents comprehensive income and its components as part of the consolidated statements of operations. Net Income (Loss) Per Share of Common Stock The Company’s basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period. The diluted net income (loss) per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock and restricted stock are considered common stock equivalents. The Company calculated its basic and diluted net income per share attributable to common stockholders for the year ended December 31, 2015 in conformity with the two-class method required for companies with participating securities. Under the two-class method, the Company determined whether it had net income attributable to common stockholders, which included the results of operations less current period preferred stock non-cumulative dividends. If it was determined that the Company did have net income attributable to common stockholders during a period, the related undistributed earnings were then allocated between common stock and the preferred stock based on the weighted average number of shares outstanding during the period to determine the numerator for the basic net income per share attributable to common stockholders. In computing diluted net income attributable to common stockholders, undistributed earnings were re-allocated to reflect the potential impact of dilutive securities to determine the numerator for the diluted net income per share attributable to common stockholders. Recent Accounting Guidance Recently Adopted Accounting Standards In July 2015, the Financial Accounting Standards Board ( “ FASB ”) issued ASU No. 2015-11, Simplifying the Measurement of Inventory , which requires an entity to measure most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. In January 2017, the Company adopted the standard on a prospective basis and the adoption did not have a material impact on its financial position. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment . The new guidance eliminates step two of the goodwill impairment test. Under the new guidance, an entity should recognize an impairment charge for the amount by which a reporting unit’s carrying value exceeds its fair value. The standard is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company elected to early adopt the standard in the fourth quarter of 2017 on a prospective basis. The adoption did not have a material impact on our financial position or results of operations. Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which outlines a comprehensive new revenue recognition model designed to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers — Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which further clarifies the implementation guidance on principal versus agent considerations contained in ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers — Identifying Performance Obligations and Licensing , which further clarifies the implementation guidance relating to identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers — Narrow-Scope improvements and Practical Expedients , which further clarifies the implementation on narrow scope improvements and practical expedients. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606 — Revenue from Contracts with Customer s , which makes minor corrections or minor improvements to the Codification related to ASU No. 2014-09 that are not expected to have a significant effect on the Company ’ s current accounting practice. In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments , (“ASU No. 2017-13”) which provides additional clarification and implementation guidance on the previously issued ASU No. 2014-09. In November 2017, the FASB issued ASU No. 2017-14, Income Statement— Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) which makes minor corrections to the Codification related to ASU No. 2014-09. These standards will be effective for the Company on January 1, 2018, pursuant to ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date , issued by the FASB in August 20 15. The Company intends to adopt the new standard on a modified retrospective basis on January 1, 2018. Under this method, the C ompany will record a cumulative-effect adjustment to the opening balance of retained earnings in the initial year of adoption. The timing of revenue recognition based on the guidance related to transfer of control may result in acceleration of revenue recognition for some contracts. The Company has completed its assessment of the impact of the new revenue standard on the Company’s financial statements and internal controls. The Company will adopt the new authoritative guidance under Accounting Standards Codification (ASC) 606 on a modified retrospective basis effective January 1, 2018. Therefore, comparative information will not be adjusted and will continue to be reported under ASC 605 with the impact of the transition reflected in opening retained earnings. The adoption of ASC 606 represents a change in accounting principle that more closely aligns the timing of revenue recognition with the point in time that a performance obligation is satisfied. Subs |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | 4. Balance Sheet Components Accounts Receivable, Net The Company’s allowance for doubtful accounts comprised of the following (in thousands): Balance At Charged To Costs And Expenses Deductions Balance At End Of Year For the year ended: December 31, 2015 $ 602 $ (13 ) $ — $ 589 December 31, 2016 589 216 (121 ) 684 December 31, 2017 684 606 — 1,290 Prepaid Expenses and Other Current Assets The Company’s prepaid expenses and other current assets comprised of the following (in thousands): December 31, 2017 2016 Prepaid taxes $ 3,334 $ 4,656 Prepaid expenses 4,112 4,573 Other current assets 7,289 9,498 Prepaid expenses and other current assets $ 14,735 $ 18,727 Inventories The components of inventories consisted of the following (in thousands): December 31, 2017 2016 Raw materials $ 13,529 $ 11,367 Work in process 6,073 3,663 Finished goods 75,299 57,982 Inventories $ 94,901 $ 73,012 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2017 2016 Machinery and equipment $ 12,456 $ 9,734 Furniture and fixtures 6,458 4,246 Leasehold improvements 15,926 10,207 Software 3,547 1,221 Computers 1,737 884 Construction in progress 1,326 2,193 Total property and equipment 41,450 28,485 Less: Accumulated depreciation and amortization (10,551 ) (7,021 ) Property and equipment, net $ 30,899 $ 21,464 Depreciation and amortization expense, excluding intangible assets, was $3.4 million , $2.3 million and $1.8 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Accrued Liabilities The following table shows the components of accrued liabilities as of December 31, 2017 and 2016 (in thousands): December 31, 2017 2016 Payroll and employee-related cost $ 22,001 $ 16,956 Sales return reserve 3,035 2,753 Preclinical and clinical trial cost 1,514 2,054 Royalty 1,115 802 Product warranty 1,088 1,254 Leasehold improvement expenditures 1,012 260 Acquisition related liabilities (1) 4,752 — Other accrued liabilities 10,308 7,611 Total accrued liabilities $ 44,825 $ 31,690 (1) Acquisition-related liabilities consist of purchase price payments due to the Sellers of Crossmed related to working capital and financial debt adjustments as well as milestone payments due for the acquisition. Refer to Note “ 5. Business Combination ” for more information. The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, as of December 31, 2017 and 2016 (in thousands): December 31, 2017 2016 2015 Balance at the beginning of the year $ 1,254 $ 713 $ 314 Accruals of warranties issued 471 1,176 752 Settlements of warranty claims (637 ) (635 ) (353 ) Balance at the end of the year $ 1,088 $ 1,254 $ 713 Other Non-Current Liabilities The following table shows the components of other non-current liabilities as of December 31, 2017 and 2016 (in thousands): December 31, 2017 2016 Deferred tax liabilities $ 3,299 $ 824 Licensing-related cost (1) 12,717 — Other non-current liabilities 2,462 — Total other non-current liabilities $ 18,478 $ 824 (1) Amount relates to the liability recorded for probable future milestone payments to be made under the licensing agreement described in Note “ 6. Intangible Assets .” Refer therein for more information. |
Investments and Fair Value of F
Investments and Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Investments and Fair Value of Financial Instruments | 3. Investments and Fair Value of Financial Instruments Marketable Investments The Company’s marketable investments have been classified and accounted for as available-for-sale. The Company’s marketable investments as of December 31, 2017 and 2016 were as follows (in thousands): December 31, 2017 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 19,941 $ — $ (8 ) $ 19,933 U.S. treasury 6,402 — (28 ) 6,374 U.S. agency securities and government sponsored securities 4,787 — (18 ) 4,769 U.S. states and municipalities 12,510 — (23 ) 12,487 Corporate bonds 120,648 23 (280 ) 120,391 Total $ 164,288 $ 23 $ (357 ) $ 163,954 December 31, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 4,237 $ 1 $ — $ 4,238 U.S. treasury 4,996 — — 4,996 U.S. agency securities and government sponsored securities 8,803 3 (12 ) 8,794 U.S. states and municipalities 27,429 1 (75 ) 27,355 Corporate bonds 69,009 36 (120 ) 68,925 Non-U.S. government debt securities 1,209 — — 1,209 Total $ 115,683 $ 41 $ (207 ) $ 115,517 The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than and more than twelve months as of December 31, 2017 and 2016 (in thousands): December 31, 2017 Less than 12 months More than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 19,933 $ (8 ) $ — $ — $ 19,933 $ (8 ) U.S. treasury 6,374 (28 ) — — 6,374 (28 ) U.S. agency securities and government sponsored securities 2,778 (9 ) 1,991 (9 ) 4,769 (18 ) U.S. states and municipalities 10,092 (23 ) — — 10,092 (23 ) Corporate bonds 93,284 (188 ) 10,201 (92 ) 103,485 (280 ) Total $ 132,461 $ (256 ) $ 12,192 $ (101 ) $ 144,653 $ (357 ) December 31, 2016 Less than 12 months Fair Value Gross Unrealized Losses U.S. agency securities $ 3,291 $ (12 ) U.S. states and municipalities 22,286 (75 ) Corporate bonds 29,748 (120 ) Total $ 55,325 $ (207 ) As of December 31, 2016 there were no securities that had been in a loss position for more than twelve months. The contractual maturities of the Company’s marketable investments as of December 31, 2017 and 2016 were as follows (in thousands): December 31, 2017 2016 Marketable Investments Fair Value Fair Value Due in one year $ 104,272 $ 71,051 Due in one to five years 59,682 44,466 Total $ 163,954 $ 115,517 Non-Marketable Equity Investments In May 2017, the Company and Sixense Enterprises, Inc. formed a privately-held company, MVI Health Inc. (MVI), with each party holding 50% of the issued and outstanding equity of MVI. The Company accounted for its investment under the equity method and is not required to consolidate MVI under the voting model. As of December 31, 2017 , the Company determined that MVI was not a variable interest entity ( VIE ). The Company will reassess in subsequent periods whether MVI becomes a VIE due to changes in facts and circumstances, including changes to the sufficiency of the equity investment at risk, management and governance structure or capital structure. The Company held no non-marketable equity investments in 2016 or 2015. As of December 31, 2017 , the investment in MVI is presented in long-term investments on the consolidated balance sheet and is comprised as follows: December 31, 2017 Non-Marketable Equity Investments Cost $ 5,289 Equity in losses (1,430 ) Carrying value of non-marketable equity investment $ 3,859 The Company reflected its 50% share of investee losses for the year ended December 31, 2017 , as a component of equity in losses of unconsolidated investees in the consolidated statements of operations and comprehensive income. As of December 31, 2017 , the unconsolidated balance sheet of MVI primarily consists of $2.9 million cash remaining from the initial investment. The unconsolidated statement of operations for MVI primarily consists of $2.9 million of expenses incurred for the year ended December 31, 2017 . Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company classifies its cash equivalents and marketable investments within Level 1 and Level 2, as it uses quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments. Marketable investments classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, historical pricing trends of a security as relative to its peers. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. In addition, the Company assesses the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy. The following tables set forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy (in thousands): As of December 31, 2017 Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash equivalents: Commercial paper $ — $ 9,185 $ — $ 9,185 Money market funds 2,264 — — 2,264 Marketable investments: Commercial paper — 19,933 — 19,933 U.S. treasury 6,374 — — 6,374 U.S. agency securities — 4,769 — 4,769 U.S. states and municipalities — 12,487 — 12,487 Corporate bonds — 120,391 — 120,391 Total $ 8,638 $ 166,765 $ — $ 175,403 Financial Liabilities: Contingent consideration obligations (1) — — 17,392 17,392 Total $ — $ — $ 17,392 $ 17,392 (1) More information on the contingent consideration obligations and the changes in fair value are presented further below. As of December 31, 2016 Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash equivalents: Money market funds $ 873 $ — $ — $ 873 Marketable investments: Commercial paper — 4,238 — 4,238 U.S. treasury 4,996 — — 4,996 U.S. agency securities — 8,794 — 8,794 U.S. states and municipalities — 27,355 — 27,355 Corporate bonds — 68,925 — 68,925 Non-U.S. government debt securities — 1,209 — 1,209 Total $ 5,869 $ 110,521 $ — $ 116,390 The following table summarizes the changes in fair value of the contingent consideration obligation for the year ended December 31, 2017 (in thousands): Fair Value of Contingent Consideration Crossmed Technology Licensing Agreement Total Balance at December 31, 2016 $ — $ — $ — Additions to contingent consideration obligations 4,343 12,717 17,060 Changes in fair value 109 — 109 Balance at Foreign currency remeasurement 223 — 223 Balance at December 31, 2017 $ 4,675 $ 12,717 $ 17,392 During the year ended December 31, 2017 , the Company acquired Crossmed and recorded contingent consideration in the amount of $4.3 million . Also during the year ended December 31, 2017 , the Company entered into an exclusive technology license agreement and recorded contingent consideration in the amount of $12.7 million . These contingent consideration liabilities are classified as Level 3 measurements for which fair value is derived from significant unobservable inputs, such as projected revenue and estimates in the timing and likelihood of achieving revenue-based milestones. During the year ended December 31, 2017 , changes in fair value of the contingent consideration obligations of $0.1 million were recorded in sales, general and administrative expense in the consolidated statements of operations and comprehensive income . For more information with respect to the fair value of contingent consideration, refer to Note “ 5. Business Combination ” and Note “ 6. Intangible Assets ,” respectively. During year ended December 31, 2017 and 2016 , the Company did not record impairment charges related to its marketable investments and the Company did not hold any Level 3 marketable investments as of December 31, 2017 or December 31, 2016 . During the year ended December 31, 2017 and 2016 , the Company did not have any transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy. Additionally, the Company did not have any financial assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2017 or December 31, 2016 . |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combination | 5. Business Combination On July 3, 2017 (the “Closing Date”), the Company completed the acquisition of Crossmed S.p.A. (Crossmed), a joint stock company organized under the laws of Italy. Crossmed is engaged in the business of distributing medical supplies and equipment in Italy, San Marino, the Vatican, and Switzerland. Crossmed was the Company’s exclusive distributor in Italy, San Marino and the Vatican and the acquisition provides the Company with a direct relationship with its customers in these regions. As of the Closing Date, Crossmed became a wholly-owned subsidiary of the Company and is being integrated into the Company’s core business. The acquisition of Crossmed does not result in any changes to the Company’s operating or reportable segment structure and the Company continues to operate as one operating segment. The following table summarizes the Closing Date fair value of the consideration to be transferred, reflecting measurement period adjustments described below (in thousands): Cash, net of working capital and financial debt adjustments $ 11,088 Fair value of contingent consideration for milestone payments 4,343 Contract purchase price $ 15,431 Consideration for settlement of pre-existing receivable due from Crossmed to Penumbra 3,273 Total value of consideration transferred $ 18,704 Upon the Closing Date, the Company paid the sellers of Crossmed an initial payment of €8.2 million , or approximately $9.4 million , subject to post-closing adjustments for working capital and financial debt. The Company will pay additional consideration in the form of milestone payments based on Crossmed’s net revenue, and may pay additional consideration based on incremental net revenue, for each of the years ending December 31, 2017, 2018 and 2019. There is no limit on the milestone payments that can be paid out. The Company recorded a current and non-current liability in the amount of $2.9 million and $1.7 million as of December 31, 2017 , respectively, for the fair value of contingent consideration related to the cash milestone payments. The contingent consideration is classified as a Level 3 measurement for which fair value is derived from inputs that are unobservable and significant to the overall fair value measurement. The fair value of such milestone payments is estimated using a Monte Carlo simulation model that utilizes key assumptions including forecasted revenues during the earn-out period and revenue volatilities. The fair value of the contingent consideration liability will be evaluated each reporting period and changes in its fair value will be included in the Company’s results of operations. During the year ended December 31, 2017 , the Company recorded $0.1 million of expense in sales, general and administrative expense related to a change in fair value of the contingent consideration. The Company will make a $2.9 million payment to the Sellers related to the achievement of the 2017 milestones in the first quarter of 2018. The preliminary allocation of the purchase price working capital, primarily related to taxes, is subject to change within the measurement period (generally one year from the Closing Date). The following table presents the preliminary allocation of the purchase price, reflecting measurement period adjustments to the working capital and financial debt adjustments, for Crossmed (in thousands): Acquisition-Date Fair Value Estimated Useful Life of Finite-Lived Intangible Assets Tangible assets acquired and (liabilities) assumed: Accounts receivable $ 4,406 Inventories 1,343 Other current and non-current assets (1) 1,596 Property and equipment, net 829 Accounts payable (740 ) Accrued liabilities and obligations for short-term debt and credit facilities (1) (1,868 ) Deferred tax liabilities (2,472 ) Other non-current liabilities (797 ) Intangible assets acquired: Customer relationships $ 6,790 15 years Other 1,750 5 years Goodwill (1) 7,867 Total purchase price (1) $ 18,704 (1) During the fourth quarter of 2017 , the Company recorded $1.2 million in measurement period adjustments which increased the purchase price, primarily related to working capital and financial debt adjustments. Acquired intangible assets are classified as Level 3 measurements for which fair value is derived from valuations based on inputs that are unobservable and significant to the overall fair value measurement. The Company used the income approach, specifically the discounted cash flow method and the incremental cash flow approach, to derive the fair value of the customer relationships and other intangible assets. Customer relationships are direct relationships with physicians and hospitals performing procedures with the distributed products. Other intangibles consists of non-Penumbra supplier relationships and sub-distributor relationships with third parties used to sell products, both as of the Closing Date. The intangible assets are amortized on a straight-line basis over their assigned estimated useful lives. The amortization of the acquired intangible assets are not deductible for tax purposes. As a result, a $2.5 million deferred tax liability was recorded as of the Closing Date. The goodwill arising from the Crossmed acquisition is primarily attributed to expected synergies from future growth and assembled workforce. Goodwill will not be deductible for tax purposes. For the year ended December 31, 2017 , Crossmed’s net revenue and net income included in the Company’s consolidated statements of operations and comprehensive income was $6.2 million and $0.2 million , respectively. The following table presents certain unaudited pro forma information, for illustrative purposes only, for the years ended December 31, 2017 and 2016 , as if Crossmed had been acquired on January 1, 2016. The unaudited estimated pro forma information combines the historical results of Crossmed with the Company’s consolidated historical results and includes certain pro forma adjustments, including intangible asset amortization and the elimination of pre-acquisition sales Penumbra made to Crossmed for the respective periods. The pro forma information may not be indicative of what would have occurred had the acquisition taken place on January 1, 2016, and may not be indicative of the Company’s future consolidated results. Additionally, the pro forma financial information does not include the impact of possible business model changes and does not reflect pro forma adjustments to conform accounting policies between Crossmed and the Company. The unaudited pro forma information is presented below (unaudited, in thousands): December 31, 2017 2016 Pro forma net revenue $ 336,557 $ 268,262 Pro forma net income 5,992 14,816 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets The following table presents details of the Company’s acquired finite-lived and indefinite-lived intangible assets (in thousands, except weighted-average amortization period): As of December 31, 2017 Remaining Weighted-Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Customer relationships 14.5 years $ 7,141 $ (238 ) $ 6,903 Other 4.5 years 1,841 (183 ) 1,658 Total intangible assets subject to amortization 12.6 years $ 8,982 $ (421 ) $ 8,561 Intangible assets related to licensed technology 15,217 — 15,217 Total intangible assets $ 24,199 $ (421 ) $ 23,778 The total intangible assets subject amortization relate to the acquisition of Crossmed during the third quarter of 2017. Gross intangible assets, accumulated amortization and net intangible assets were all subject to foreign currency translation effects. During the year ended December 31, 2017 , the Company recorded amortization expense of $0.4 million in sales, general and administrative expense related to the Company’s finite-lived intangible assets . No amortization expense was recorded in sales, general and administrative expense related to the Company’s finite-lived intangible assets for the years ended December 31, 2016 and 2015 . Refer to Note “ 5. Business Combination ” for more information. As of December 31, 2017 , expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in thousands): Amortization Expense 2018 $ 844 2019 844 2020 844 2021 844 2022 662 Thereafter 4,523 Total amortization $ 8,561 Licensed technology During the third quarter of 2017, the Company entered into an exclusive technology license agreement (the “License Agreement”) that required the Company to pay an upfront payment to the licensor of $2.5 million and future revenue milestone-based payments on sales of products covered by the licensed intellectual property. The Company recorded an intangible asset of $15.2 million and a corresponding liability for the future milestone payments. The licensed technology is accounted for as an indefinite-lived intangible asset. Once regulatory approval is received to market and commercialize products utilizing the underlying technology, the Company will begin amortizing the intangible asset. As of December 31, 2017 , the Company has recorded a contingent consideration liability of $12.7 million included in other non-current liabilities on the consolidated balance sheet related to probable future milestone payments under the Licensing Agreement. The contingent consideration is classified as Level 3 measurement for which fair value is derived based on inputs that are unobservable and significant to the overall fair value measurement. The fair value of such milestone payments is estimated using key assumptions which include projected revenue and estimates in the timing of when the revenue-based milestones are earned. The fair value of the contingent consideration liability is evaluated at the end of reporting period, noting there was no change in fair value as of December 31, 2017 . Refer to Note “ 3. Investments and Fair Value of Financial Instruments ” for more information. During the year ended December 31, 2017, the Company noted no events or circumstances that indicate the carrying value of the licensed technology may no longer be recoverable and that an impairment loss may have occurred. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. Goodwill The following table presents the changes in goodwill during the year ended December 31, 2017 (in thousands): Total Company Balance as of December 31, 2016 $ — Acquisition of Crossmed 7,867 Foreign currency translation 311 Balance as of December 31, 2017 $ 8,178 Goodwill Impairment Review The Company reviews goodwill for impairment annually during the fourth quarter, on October 31st, or more frequently if events or circumstances indicate that an impairment loss may have occurred. The Company determined that, based on its organizational structure and the financial information that is provided to and reviewed by the CODM during 2017 , that there is only one operating segment and reporting unit at the consolidated level. During the fourth quarter of 2017, the Company reviewed goodwill under the qualitative assessment of the authoritative guidance for impairment testing. In assessing the qualitative factors, the Company considered the impact of key factors, including changes in industry and competitive environment, market capitalization, and consolidated company stock price and performance. Based on this analysis, the Company concluded that it was more likely than not that the fair value of the Company exceeded its carrying amount. As such, it was not necessary to perform other specific quantitative goodwill impairment testing at this time. As of December 31, 2017 , no impairment of goodwill has been identified. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Lease Commitments The Company leases its offices primarily under non-cancelable operating leases that expire at various dates through 2031 , subject to our option to renew certain leases for an additional five to fifteen years. From time to time through December 31, 2025, if any space in any of the buildings located in the same business park as our corporate headquarter’s campus becomes vacant, that space will be added to the lease at the then current base monthly rental rate. The maximum additional space that could be added under this provision of the lease as of December 31, 2017, is approximately 100,000 . The additional space could potentially result in approximately $1.6 million of annual rent expense based on current terms of the lease. The table below does not include the Company ’s potential obligation for the additional space(s) that may be added to the lease by the landlord. The Company leases other equipment and vehicles primarily under non-cancelable operating leases that expire at various dates through 2021 . Rent expense for the years ended December 31, 2017 , 2016 and 2015 was $5.8 million , $5.2 million and $3.2 million , respectively. In addition to the amounts included in the table below, certain lease agreements require the Company to make payments during the lease term for taxes, insurance and other operating expenses. Future minimum lease payments under the non-cancelable leases as of December 31, 2017 are as follows (in thousands): Lease Payments Year Ending December 31: 2018 $ 6,429 2019 6,413 2020 6,387 2021 5,592 2022 5,589 Thereafter 45,493 Total future minimum lease payments $ 75,903 Purchase Commitments The Company had non-cancelable purchase obligations to suppliers at December 31, 2017 of $4.4 million . Royalty Obligations In March 2005, the Company entered into a license agreement that requires the Company to make minimum royalty payments to the licensor, on a quarterly basis. As of December 31, 2017 and 2016 , the license agreement requires minimum annual royalty payments of $0.1 million in equal quarterly installments. On each January 1, the quarterly calendar year minimum royalty shall be adjusted to equal the prior year’s minimum royalty adjusted by a percentage equal to the percentage change in the “consumer price index for all urban consumers” for the prior calendar year as reported by the U.S. Department of Labor. Unless terminated earlier, the term of the license agreement shall continue until the expiration of the last to expire patent that covers that licensed product or for the period of 15 years following the first commercial sale of such licensed product, whichever is longer. The first commercial sale of covered products occurred in June 2007. In April 2012, the Company entered into an agreement that requires the Company to pay a 5% royalty on sales of products covered under applicable patents, on a quarterly basis. The first commercial sale of covered products occurred in April 2014. Unless terminated earlier, the royalty term for each applicable product shall continue for 15 years following the first commercial sale of such patented product, or when the applicable patent covering such product has expired, whichever is sooner. In November 2013, the Company entered into an agreement that requires the Company to pay, on a quarterly basis, a 3% royalty on the first $5 million in sales and a 1% royalty on sales thereafter of products covered under applicable patents. The agreement was terminated effective January 1, 2018. In April 2015, the Company entered into a royalty agreement that requires the Company to pay a 2% royalty on sales of certain products covered by the agreement, on a quarterly basis. The Company began the first commercial sale of the covered products in July 2015. Unless terminated earlier, the royalty term for each covered product shall continue for 20 years following the first commercial sale of the covered products. Royalty expense included in cost of sales for the years ended December 31, 2017 , 2016 and 2015 was $4.1 million , $2.9 million and $2.0 million , respectively. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Refer to Note “ 5. Business Combination ” and Note “ 6. Intangible Assets ” for more information on contingent liabilities recorded on the consolidated balance sheet. Indemnification The Company enters into standard indemnification arrangements in the ordinary course of business. In many such arrangements, the Company agrees to indemnify, hold harmless, and reimburse the indemnified parties for losses suffered or incurred by the indemnified parties in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The Company also agrees to indemnify many purchasers for product defect and similar claims. The term of these indemnification agreements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. No liability associated with any of these indemnification requirements has been recorded to date. Litigation On February 19, 2016, a complaint for damages was filed against the Company and others on behalf of a claimant who allegedly suffered injuries as a result of an aneurysm procedure in which the Penumbra Coil 400 was used (Montgomery v. Penumbra, Inc., et al., Case No. 16-2-04050-1 SEA, Superior Court of the State of Washington, King County). The parties reached an agreement to settle this matter on confidential terms in November 2017. From time to time, the Company is subject to other claims and assessments in the ordinary course of business. The Company is not currently a party to any such litigation matter that, individually or in the aggregate, is expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | 9. Stockholders’ Equity Stockholders’ Equity Preferred Stock The Company has 5,000,000 of authorized preferred stock issuable. There is no preferred stock outstanding as of December 31, 2017 and 2016 . Common Stock Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. Common and Preferred Stock Repurchase The Company’s board of directors approved the repurchase of 70,612 shares of common stock, 45,000 stock options and 45,611 of preferred stock from shareholders in May 2014 for $13.20 per share for a total purchase price of $2.0 million . For the repurchased shares of common stock and stock options, the Company charged the difference between the purchase and market prices of $0.5 million to expense. For the repurchased preferred shares, the excess between the purchase and the issuance price of $0.5 million was treated as a deemed dividend. In addition, the Company closed a tender offer in July 2014 to repurchase shares of preferred stock from existing shareholders at a purchase price of $13.20 per share, repurchasing 584,052 shares of preferred stock for a total purchase price of $7.7 million . The excess between the purchase and the issuance price of $5.8 million was treated as a deemed dividend. The repurchased shares of common and preferred stock were retired and remained as authorized but unissued. Issuance of Common Stock in Public Offerings The Company closed its IPO on September 23, 2015, in which it sold 4.6 million shares of common stock at an offering price of $30.00 per share and raised $124.7 million in net proceeds after deducting underwriting discounts and commissions of $9.7 million and other offering expenses of $3.6 million . Upon the closing of the IPO, all outstanding shares of convertible preferred stock of the Company were automatically converted into 19,510,410 shares of common stock on a one -for-one basis. In March 2017, the Company issued and sold an aggregate of 1,495,000 shares of common stock at a public offering price of $76.00 per share, less the underwriters ’ discounts and commissions, pursuant to an underwritten public offering . The Company received approximately $106.3 million in net cash proceeds after deducting underwriting discounts and commissions of $6.8 million and other offering expenses of $0.5 million . Stock-Based Benefit Plans 2005 Stock Plan The Company adopted the Penumbra, Inc. 2005 Stock Plan (the 2005 Plan) in January 2005. The 2005 Plan was subsequently amended and restated in 2006, 2007, 2008 and 2010. Under the 2005 Plan, the board of directors could grant incentive stock options (ISO s ), nonqualified stock options (NSOs), and/or stock awards to eligible persons, including employees, nonemployees, directors, consultants and other independent advisors who provide services to the Company. Stock purchase rights could also be granted under the 2005 Plan. The board of directors had the authority to determine to whom options would be granted, the number of options, the term and the exercise price. ISOs could only be granted to Company employees, which include officers and directors of the Company. NSOs and stock purchase rights could be granted to employees and consultants. For individuals holding more than 10% of the voting rights of all classes of stock, the exercise price for an ISO could not be less than 110% of fair market value. Options granted under the 2005 Plan permitted an optionee to exercise options immediately upon grant irrespective of the vesting term. Options generally vest annually at a rate of 1/4 after the first year and 1/48 per month thereafter. The term of the options is no longer than five years for ISOs, for which the grantee owns greater than 10% of the voting power of all classes of stock and no longer than 10 years for all other options. On September 17, 2015, the 2014 Equity Incentive Plan (as amended and restated, the 2014 Plan) replaced the 2005 Plan and no further equity awards may be granted under the 2005 Plan. The remaining 564 shares of common stock available for issuance from the 2005 Plan were transfered to and may be granted under the 2014 Plan. As of December 31, 2017 , 437,852 shares of common stock were reserved for issuance under the 2005 Plan. 2011 Equity Incentive Plan The Company adopted the Penumbra, Inc. 2011 Equity Incentive Plan (the 2011 Plan) in October 2011. Under the 2011 Plan, the board of directors could grant ISOs, NSOs, restricted stock, and/or RSUs to eligible persons, including employees, directors and consultants who provide services to the Company. Stock Appreciation Rights (SAR) could also be granted under the 2011 Plan. The board of directors had the authority to determine to whom options would be granted, the number of options, the term and the exercise price. ISOs could only be granted to Company employees, which include officers and directors of the Company. NSOs, SARs, restricted stock and RSUs could be granted to employees and consultants. For individuals holding more than 10% of the voting rights of all classes of stock, the exercise price for an ISO could not be less than 110% of fair market value. Stock options granted under the 2011 Plan generally have a contractual life of ten years, and generally vest over a period of four years. On September 17, 2015, the 2014 Plan replaced the 2011 Plan and no further equity awards may be granted under the 2011 Plan. The remaining 62,807 shares of common stock available for issuance from the 2011 Plan were transfered to and may be granted under the 2014 Plan. As of December 31, 2017 , 145,000 shares of common stock were reserved for issuance under the 2011 Plan. Amended and Restated 2014 Equity Incentive Plan The Company adopted the Penumbra, Inc. 2014 Equity Incentive Plan in May 2014. The plan was amended and restated as of September 17, 2015 (as amended and restated, the 2014 Plan). The 2014 Plan replaced the 2011 Plan and the 2005 Plan and no further equity awards may be granted under the 2011 Plan or the 2005 Plan. As of December 31, 2017 , 7,184,818 shares of common stock were reserved for issuance and 5,316,092 shares of common stock were available for grant under the 2014 Plan. Employee Stock Purchase Plan The Penumbra, Inc. Employee Stock Purchase Plan (the ESPP ) , became effective on September 17, 2015. The ESPP initially reserved 600,000 shares of common stock for purchase under the ESPP, with the number of shares reserved for purchase automatically increasing each year pursuant to an “evergreen” provision set forth in the ESPP. As of December 31, 2017 , 910,849 shares of common stock were reserved and available for issuance under the plan. All qualifying employees of the Company and its designated subsidiaries are eligible to participate in the ESPP. Each offering to the Company’s employees to purchase stock under the ESPP will begin on each May 20 and November 20 and will end on the following November 19 and May 19, respectively, each referred to as offering periods, except that the first offering period under the ESPP began on September 17, 2015 and ended on May 19, 2016. Under the ESPP, each employee may purchase shares by authorizing payroll deductions at a minimum of 1% and up to 15% of his or her eligible compensation for each pay period during the offering period. Unless the participating employee withdraws from the offering, his or her accumulated payroll deductions will be used to purchase the Company’s common stock on the last business day of the offering period at a price equal to 85% of the fair market value of the common stock on either the first or the last day of the offering period, whichever is lower, provided that no more than 2,000 shares of the Company’s common stock or such other lesser maximum number established by the ESPP administrator may be purchased by any one employee during each offering period. Under applicable tax rules, an employee may purchase no more than $25,000 worth of common stock, valued at the start of the purchase period (corresponding to an offering period), under the ESPP in any calendar year. Early Exercises Stock options granted under the 2005 Plan, 2011 Plan and 2014 Plan allow the board of directors to grant awards to provide employee option holders the right to elect to exercise unvested options in exchange for restricted common stock. Unvested shares, which amounted to 409 and 4,263 as of December 31, 2017 and 2016 , respectively, were subject to a repurchase right held by the Company at the original issue price in the event the optionees’ employment was terminated either voluntarily or involuntarily. For exercises of employee options, this right lapses according to the vesting schedule designated on the associated option grant. The repurchase terms are considered to be a forfeiture provision. The shares purchased by the employees pursuant to the early exercise of stock options are not deemed to be issued or outstanding for accounting purposes until those shares vest, though they are legally issued and outstanding. In addition, cash received from employees for exercise of unvested options is treated as a refundable deposit shown as a liability on the consolidated balance sheets and are transferred into common stock and additional paid-in-capital as the shares vest. Stock-Based Benefit Activity and Stock-Based Compensation Stock Options Activity of stock options under the 2005 Plan, 2011 Plan and 2014 Plan is set forth below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (in thousands) Balance, December 31, 2016 2,876,955 $ 14.63 Exercised (766,926 ) 6.54 Canceled/Forfeited (2,925 ) 16.98 Balance, December 31, 2017 2,107,104 $ 17.58 Vested and expected to vest—December 31, 2017 2,099,078 $ 17.56 6.66 $ 160,660 Exercisable—December 31, 2017 1,434,964 $ 15.18 6.24 $ 113,252 The total intrinsic value of stock options exercised during the year ended December 31, 2017 , 2016 and 2015 was $56.4 million , $53.1 million and $13.1 million , respectively. The intrinsic value is calculated as the difference between the estimated fair value of the Company’s common stock at the exercise date and the exercise price of the stock option. The weighted average grant date fair value of the employee stock options was $9.69 per share during the year ended 2015 . The Company did not grant stock options during the years ended December 31, 2017 and 2016 . Restricted Stock and Restricted Stock Units The activity of unvested restricted stock and restricted stock units under the Plans is set forth below: Number of Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2016 1,002,944 $ 29.44 Granted 122,538 84.03 Vested (360,564 ) 27.52 Canceled/Forfeited (22,513 ) 46.90 Unvested at December 31, 2017 742,405 $ 38.86 The fair value of the restricted stock and restricted stock units that vested during the years ended December 31, 2017 , 2016 and 2015 was $29.1 million , $9.9 million and $4.0 million , respectively. As of December 31, 2017 , 727,842 restricted stock and restricted stock units are expected to vest. Employee Stock Purchase Plan Under the Penumbra, Inc. ESPP, employees purchased 91,685 and 214,025 shares for $5.8 million and $6.6 million during the years ended December 31, 2017 and December 31, 2016 , respectively. Stock-based Compensation The Company uses the Black-Scholes option pricing model to determine the fair value of stock options and ESPP. The valuation model for stock compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation including the expected term (weighted average period of time that the options granted are expected to be outstanding); volatility of the Company’s common stock and an assumed-risk-free interest rate. The Company used the following assumptions in its Black-Scholes option pricing model to determine the fair value of equity settled awards: Equity Settled Awards Year Ended December 31, 2017 2016 2015 Expected term (in years) .50 .50 6.08—6.25 Expected volatility 34% 40% 45% Risk-free interest rate 1.26% 0.48% 1.56%—1.78% Expected dividend rate 0% 0% 0% The assumptions in the table above for fiscal 2017 and 2016 , respectively relate only to ESPP, where as the assumptions in 2015 relate to options and ESPP. Fair Value of Common Stock. Prior to the IPO, the fair value of the shares of common stock underlying the Company’s stock options was determined by the Company’s board of directors. Because there was no public market for the Company’s common stock and in the absence of recent arm’s-length cash sales transactions of the Company’s common stock with independent third parties, the Company’s board of directors determined the fair value of the Company’s common stock by considering at the time of grant a number of objective and subjective factors. The intent of the Company’s board of directors was for all options granted to be exercisable at a price per share not less than the per share fair value of the Company’s common stock underlying those options on the date of grant. The estimated fair value of the Company’s common stock was determined at each valuation date in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Weighted Average Expected Term. The Company derived the expected term using the “simplified” method (the expected term is determined as the average of the time-to-vesting and the contractual life of the options), as the Company had limited historical information to develop expectations about future exercise patterns and post vesting employment termination behavior. The Company’s expected term for ESPP is in line with the six month look-back period of its ESPP. Volatility . Since there was no public market through mid-September 2015 for the Company’s common stock and lack of company-specific historical volatility, the Company has determined the share price volatility for options granted based on an analysis of the volatility used by a peer group of publicly traded medical device companies. In evaluating similarity, the Company considered factors such as industry, stage of life cycle and size. In 2016 and 2017 , volatility assumptions used in the valuation of ESPP were calculated based on the historical volatility of the Company’s stock. Risk-Free Interest Rate. The risk-free interest rate is based upon U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the options or ESPP shares . Dividend Yield. The Company has never paid any dividends and does not plan to pay dividends in the foreseeable future, and therefore, used an expected dividend yield of zero in the valuation model. Forfeitures. The Company is required to estimate forfeitures at the time of grant, and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record stock based compensation expense only for those awards that are expected to vest. To the extent actual forfeitures differ from the estimates, the difference will be recorded as a cumulative adjustment in the period that the estimates are revised. The following table sets forth the stock-based compensation expense included in the consolidated statements of operations (in thousands): Year Ended December 31, 2017 2016 2015 Cost of sales $ 1,009 $ 1,132 $ 316 Research and development 1,289 1,020 444 Sales, general and administrative 15,514 12,485 6,511 $ 17,812 $ 14,637 $ 7,271 As of December 31, 2017 , total unrecognized compensation cost was $29.0 million related to unvested share-based compensation arrangements which is expected to be recognized over a weighted average period of 2.4 years. The total stock-based compensation cost capitalized in inventory was $0.2 million and $0.4 million as of December 31, 2017 and 2016 , respectively. The total stock-based compensation cost capitalized in inventory was insignificant as of December 31, 2015 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 10. Accumulated Other Comprehensive Income (Loss) Other comprehensive income (loss) consists of two components: unrealized gains or losses on the Company’s available-for-sale marketable investments and gains or losses from foreign currency translation adjustments. Until realized and reported as a component of net (loss) income, these comprehensive income (loss) items accumulate and are included within accumulated other comprehensive income (loss). Unrealized gains and losses on our marketable investments are reclassified from accumulated other comprehensive income (loss) into earnings when realized upon sale, and are determined based on specific identification of securities sold. Gains and losses from the translation of assets and liabilities denominated in non-U.S. dollar functional currencies are included in accumulated other comprehensive income (loss). The following table summarizes the changes in the accumulated balances during the period, and includes information regarding the manner in which the reclassifications out of accumulated other comprehensive income (loss) into earnings affect our consolidated statements of operations and comprehensive income (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Marketable Currency Translation Total Marketable Currency Translation Total Balance, beginning of the year $ (105 ) $ (4,583 ) $ (4,688 ) $ (163 ) $ (1,952 ) $ (2,115 ) Other comprehensive income (loss) before reclassifications: Unrealized (losses) gains —marketable investments (133 ) — (133 ) 98 — 98 Foreign currency translation gains (losses) — 6,387 6,387 — (2,628 ) (2,628 ) Income tax effect—benefit (expense) 31 — 31 (35 ) (3 ) (38 ) Net of tax (102 ) 6,387 6,285 63 (2,631 ) (2,568 ) Amounts reclassified from accumulated other comprehensive loss to earnings: Realized gains—marketable investments (37 ) — (37 ) (8 ) — (8 ) Income tax effect—benefit 9 — 9 3 — 3 Net of tax (28 ) — (28 ) (5 ) — (5 ) Net current-year other comprehensive income (loss) (130 ) 6,387 6,257 58 (2,631 ) (2,573 ) Balance, end of the year $ (235 ) $ 1,804 $ 1,569 $ (105 ) $ (4,583 ) $ (4,688 ) |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 11. Employee Benefit Plan The Company offers a retirement savings plan under Section 401(k) of the Internal Revenue Code (IRC) to its eligible U.S. employees whereby they may contribute up to the maximum amount permitted by the IRC. In the third quarter of 2015, the Company began 401(k) matching of eligible compensation under the plan, subject to a maximum dollar threshold. Contribution expense was $1.1 million , $0.8 million and $0.3 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The Company’s income tax (benefit) expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. The Company is subject to income taxes in both the United States and foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax (benefit) expense. The Company is incorporated in the United States and operates in various countries with different tax laws and rates. A portion of the Company’s income or (loss) before taxes and the (benefit from) provision for income taxes are generated from international operations. Income or (loss) before income taxes and equity in losses of unconsolidated investees for the years ended December 31, 2017 , 2016 and 2015 is summarized as follows: Year Ended December 31, 2017 2016 2015 United States $ 543 $ (944 ) $ 2,955 Foreign 1,933 75 1,069 Total income (loss) before income taxes and equity in losses of unconsolidated investees $ 2,476 $ (869 ) $ 4,024 Income tax (benefit) or provision in 2017 , 2016 and 2015 is comprised of federal, state, and foreign taxes. The components of the (benefit from) provision for income taxes are summarized as follows: Year Ended December 31, 2017 2016 2015 Current: Federal $ (13 ) $ (3,872 ) $ 3,815 State 259 304 603 Foreign 739 772 492 Total current 985 (2,796 ) 4,910 Deferred: Federal (2,502 ) (11,909 ) (3,025 ) State (1,742 ) (785 ) (251 ) Foreign (352 ) (193 ) 25 Total deferred (4,596 ) (12,887 ) (3,251 ) (Benefit from) provision for income taxes $ (3,611 ) $ (15,683 ) $ 1,659 The Company’s actual (benefit from) or provision for tax differed from the amounts computed by applying the Company’s U.S. federal income tax rate of 34% to pretax income as a result of the following: Year Ended December 31, 2017 2016 2015 Income tax at federal statutory rate 34.0 % 34.0 % 34.0 % State income taxes, net of federal benefit (94.6 ) 417.1 (0.7 ) Foreign taxes differential (4.2 ) (63.0 ) 4.8 Prepaid tax ASC 810-10 (39.8 ) 59.0 2.1 IRC 199 deduction — — (7.4 ) Stock-based compensation (802.0 ) 1,474.0 14.8 Non-deductible meals and entertainment 19.4 (92.6 ) 5.6 Imputed interest 19.1 (30.7 ) 4.7 Tax credits (0.5 ) 395.5 (11.6 ) Remeasurement of deferred tax assets and liabilities 622.5 — — Transfer pricing tax benefit (35.3 ) — (13.8 ) Other 8.0 (47.4 ) 3.6 Change in valuation allowance 127.6 (340.8 ) 5.1 Effective tax rate (145.8 )% 1,805.1 % 41.2 % Deferred income tax assets and liabilities consist of the following: December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 20,622 $ 5,983 Tax credits 7,095 6,260 Accruals and reserves 5,430 7,668 Stock-based compensation 3,083 3,703 Translation adjustment 486 690 UNICAP adjustments 3,813 4,721 Other 487 938 Gross deferred tax assets 41,016 29,963 Valuation allowance (10,295 ) (6,062 ) Total deferred tax assets 30,721 23,901 Deferred tax liabilities: Depreciation and amortization (6,363 ) (1,425 ) Total deferred tax liabilities (6,363 ) (1,425 ) Net deferred tax assets $ 24,358 $ 22,476 At December 31, 2017 , the Company had approximately $72.7 million , $67.9 million and $1.1 million of federal, state and foreign net operating loss carryforwards, respectively, available to offset future taxable income. The federal net operating loss may be carried forward for 20 years and will begin to expire in 2036. The state net operating loss carryforwards will begin to expire in 2020. At December 31, 2017 , the Company had federal research credits of $4.2 million and California state tax credits of $5.9 million . The federal research credits are generally carried forward for 20 years. California state tax credits may be carried forward indefinitely. On December 22, 2017, the Tax Cuts and Jobs Act of 2017, (the Tax Reform Act) was enacted. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, including but not limited to, lowering the U.S. corporate income tax rate to 21% effective January 1, 2018, implementing a territorial tax system, imposing a one-time transition tax on previously untaxed accumulated earnings and profits of foreign subsidiaries, and creating new taxes on foreign sourced earnings. Also on December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Reform Act. SAB 118 provides a measurement period, that should not extend beyond one year from the Tax Reform Act enactment date, for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Reform Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Reform Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. The provisional amounts incorporate assumptions made based on our current interpretation of the Tax Reform Act and may change as we receive additional clarification and implementation guidance. Due to the broad complexities of the Tax Reform Act, the Company’s ASC 740 accounting for the tax law change is still under evaluation and is not complete.The Company has not made sufficient progress on the global intangible low-taxed income tax analysis to reasonably estimate the effects, and therefore, has not recorded provisional amounts in the financial statements nor selected an accounting policy with respect to deferred taxes for the new tax on foreign sourced earnings. To reasonably estimate future U.S. income inclusions attributable to the global intangible low-taxed income tax, the Company must analyze its current tax structure, international operations, projections of future foreign income, and its business presence worldwide. The Company recorded an adjustment for the reduction of the U.S. corporate income tax rate to 21% effective January 1, 2018, resulting with a decrease to its DTAs in the amount of $15.4 million with a corresponding charge to income tax expense. The Tax Reform Act also includes a requirement to pay a one-time transition tax on the cumulative value of earnings and profits that were previously not repatriated for U.S. income tax purposes. Based on the Company’s analysis to date, the one-time transition tax is not expected to be material. The Company generated significant domestic DTAs in the years ended December 31, 2016 and 2017, primarily due to the excess tax benefits from stock option exercises and vesting of restricted stock upon application of ASU 2016-09. The Company assessed its ability to realize the benefits of its domestic DTAs by evaluating all available positive and negative evidence, objective and subjective in nature, including (1) cumulative results of operations in recent years, (2) sources of recent pre-tax income, (3) estimates of future taxable income, (4) the length of net operating loss (“NOL”) carryforward periods, and (5) the ability to carry back losses to prior years. The Company determined it would be in a three-year cumulative taxable income position, had it not been for the impact of excess tax deductions from stock-based compensation under ASU 2016-09. The Company also measured its current DTA balances against estimates of future income based on objectively verifiable operating results from the Company’s recent history. The Company considered its projections of future taxable income in conjunction with relevant provisions of the Tax Reform Act, including but not limited to, the indefinite carryforward period for NOLs generated in years beginning on or after January 1, 2018. The Company also considered its three-year cumulative taxable income position, exclusive of the impact of excess tax deductions from stock-based compensation under ASU 2016-09. After an evaluation of all available qualitative and quantitative evidence, both positive and negative in nature, the Company concluded that sufficient future taxable income will be generated to realize the benefits of its federal DTAs prior to expiration other than its federal research and development tax credit DTAs. The tax attribute ordering rules provide that net operating losses must be used in full to offset taxable income prior to the utilization of tax credits. Accordingly, the Company’s federal research and development tax credit DTAs, which have a 20 year carryforward period, is expected to expire prior to utilization based on future projected taxable income. As a result, a valuation allowance was established against the Company’s federal research and development tax credit DTAs, resulting with a $2.4 million charge to income tax expense and impacted the effective tax rate. For years ended December 31, 2017 , 2016 and 2015 , a full valuation allowance remains against the Company’s California DTA balances. The change in the Company’s deferred tax valuation allowance against net DTAs changed from January 1, 2015 to December 31, 2017 , is as follows : Beginning Balance Additions Charged To Expenses or Other Accounts (1) Deductions Credited to Expenses or Other Accounts (2) Ending Balance For the year ended: December 31, 2017 $ 6,062 $ 4,400 $ (167 ) $ 10,295 December 31, 2016 $ 2,702 $ 3,360 $ — $ 6,062 December 31, 2015 $ 2,945 $ — $ (243 ) $ 2,702 (1) Additions include current year additions charged to expenses and current year build due to increases in net DTAs, return to provision true-ups, and other adjustments. (2) Deductions include current year releases credited to expenses and current year reductions due to decreases in net DTAs, return to provision true-ups, and other adjustments. The Company will continue to closely monitor the need for an additional valuation allowance against its existing domestic and foreign DTAs and any additional DTAs that are generated in each subsequent reporting period . The need for a valuation allowance can be impacted by actual operating results, forecasted financial performance, and variances between the two, and the rate at which future DTAs are generated. IRC Sections 382 and 383 limit the use of net operating losses and business credits if there is a change in ownership. In 2009, the Company determined there were changes in ownership in 2004 and 2008, which did not cause any impairment of tax attributes. A reconciliation of the change in the gross unrecognized tax benefits from January 1, 2015 to December 31, 2017 , is as follows: December 31, 2017 2016 2015 Beginning Balance $ 3,827 $ 3,619 $ 1,726 Gross increase for tax positions of current year 871 1,213 1,023 Gross increase for tax positions of prior years 130 250 1,062 Gross decrease for tax positions of prior years (659 ) (648 ) — Settlement — (387 ) — Lapse of statute of limitations (17 ) (220 ) (192 ) Ending Balance $ 4,152 $ 3,827 $ 3,619 The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Income tax expense for the years ended December 31, 2017 , 2016 and 2015 included interest and penalties that were not material. As of December 31, 2017 and 2016 the Company had approximately $0.1 million and $0.1 million respectively, of accrued interest and penalties attributable to uncertain tax positions. Included in the $4.2 million balance of unrecognized tax benefits as of December 31, 2017 is $0.8 million of tax benefits that, if recognized, would affect the effective tax rate. The Company files U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. Due to net operating loss and credit carryovers, the tax years ending December 31, 2004 through December 31, 2017 remain subject to examination by federal and state tax authorities. In Australia and Canada, tax years ending December 31, 2009 through December 31, 2017 generally remain subject to examination by tax authorities. In Germany and Italy, tax years ending December 31, 2013 through December 31, 2017 remain subject to examination by tax authorities. The Company does not anticipate any significant changes in the balance of gross unrecognized tax benefits over the next 12 months. |
Net Income per Share
Net Income per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income per Share | 13. Net Income per Share The Company’s basic net income per share is calculated by dividing the net income by the weighted average number of shares of common stock outstanding for the period. The diluted net income per share is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For the purposes of this calculation, options to purchase common stock, restricted stock, restricted stock units and stock sold through the Company’s employee stock purchase plan are considered common stock equivalents. A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income per share attributable to common stockholders is as follows (in thousands, except share and per share amounts): Year Ended December 31, 2017 2016 2015 Numerator: Net income $ 4,657 $ 14,814 $ 2,365 Less: Undistributed income attributable to convertible preferred stockholders — — (1,281 ) Net income attributable to common stockholders—basic and diluted $ 4,657 $ 14,814 $ 1,084 Denominator: Weighted average shares used to compute net income attributable to common stockholders: Basic 32,978,065 30,464,583 11,993,429 Effect of dilutive securities from stock-based benefit plans, as calculated using treasury stock method 2,341,038 3,013,495 2,226,221 Diluted 35,319,103 33,478,078 14,219,650 Net income per share attributable to common stockholders: Basic $ 0.14 $ 0.49 $ 0.09 Diluted $ 0.13 $ 0.44 $ 0.08 For the years ended December 31, 2017 , 2016 and 2015 , outstanding stock-based awards of 0.1 million , 0.3 million and 1.4 million shares, respectively, were excluded from the computation of diluted net income per share because their effect would have been anti-dilutive. |
Geographic Areas and Product Sa
Geographic Areas and Product Sales | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Geographic Areas and Product Sales | 14. Geographic Areas and Product Sales The Company’s revenue by geographic area, based on the destination to which the Company ships its products, was as follows (in thousands): Year Ended December 31, 2017 2016 2015 United States $ 219,173 $ 176,104 $ 127,311 Japan 33,790 30,284 19,016 Other International 80,801 56,929 39,768 Total $ 333,764 $ 263,317 $ 186,095 The following table sets forth revenue by product category (in thousands): Year Ended December 31, 2017 2016 2015 Neuro $ 232,446 $ 185,533 $ 141,410 Peripheral Vascular 101,318 77,784 44,685 Total $ 333,764 $ 263,317 $ 186,095 The Company does not have significant long-lived assets outside the U.S. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 15. Selected Quarterly Financial Data (Unaudited) The following table provides the selected quarterly financial data for 2017 (in thousands, except share and per share amounts): Quarter Ended 2017 March 31 June 30 September 30 (2) December 31 (1) Selected Statement of Operations Data: Revenue $ 73,213 $ 80,589 $ 83,911 $ 96,051 Cost of revenue 25,504 29,660 29,134 32,324 Gross profit $ 47,709 $ 50,929 $ 54,777 $ 63,727 (Loss) income before income taxes and equity in losses of unconsolidated investees $ (1,751 ) $ (918 ) $ 1,239 $ 3,906 Provision for (benefit from) income taxes $ 1,355 $ 482 $ 456 $ (5,904 ) (Loss) income before equity in losses of unconsolidated investees $ (3,106 ) $ (1,400 ) $ 783 $ 9,810 Equity in losses of unconsolidated investees $ — $ (158 ) $ (545 ) $ (727 ) Net (loss) income $ (3,106 ) $ (1,558 ) $ 238 $ 9,083 Net (loss) income per share: Basic $ (0.10 ) $ (0.05 ) $ 0.01 $ 0.27 Diluted $ (0.10 ) $ (0.05 ) $ 0.01 $ 0.25 Weighted average shares used to compute net (loss) income per share: Basic 31,611,841 33,219,487 33,446,841 33,606,943 Diluted 31,611,841 33,219,487 35,664,272 35,833,621 The following table provides the selected quarterly financial data for 2016 reflecting adjustments for the adoption of ASU 2016-09 (in thousands, except share and per share amounts): Quarter Ended 2016 March 31 (3) June 30 (3) September 30 (3) December 31 (3) Selected Statement of Operations Data: Revenue $ 57,919 $ 65,106 $ 67,187 $ 73,105 Cost of revenue 18,014 23,636 24,313 26,525 Gross profit $ 39,905 $ 41,470 $ 42,874 $ 46,580 Income (loss) before income taxes and equity in losses of unconsolidated investees $ 2,121 $ (383 ) $ (1,092 ) $ (1,515 ) (Benefit from) provision for income taxes $ (170 ) $ (3,396 ) $ (12,998 ) $ 881 Income (loss) before equity in losses of unconsolidated investees $ 2,291 $ 3,013 $ 11,906 $ (2,396 ) Equity in losses of unconsolidated investees $ — $ — $ — $ — Net income (loss) $ 2,291 $ 3,013 $ 11,906 $ (2,396 ) Net income (loss) per share: Basic $ 0.08 $ 0.10 $ 0.39 $ (0.08 ) Diluted $ 0.07 $ 0.09 $ 0.35 $ (0.08 ) Weighted average shares used to compute net income (loss) per share: Basic 29,990,006 30,210,322 30,604,384 31,045,700 Diluted 33,023,495 33,308,193 33,755,383 31,045,700 (1) Income tax expense for the quarter ended December 31, 2017, includes $19.8 million of tax benefit related to the release of valuation allowance, offset by a $2.4 million of valuation allowance against the Company’s federal research and development tax credits, and $15.4 million of deferred income tax due to the remeasurement of the Company’s DTAs at a 21% corporate income tax rate pursuant to the Tax Reform Act. Please refer to Note “ 12. Income Taxes ” for more information. (2) Operating expenses for the three months ended, September 30, 2017, included a $1.2 million benefit from a net refund of previously paid medical device excise tax. (3) In the fourth quarter of 2016, the Company elected to early adopt ASU 2016-09 which required excess tax benefit attributable to stock-based compensation to be recognized in the income statement and the Company recorded a modified retrospective adjustment of $17.4 million in accumulated deficit. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). Certain changes in presentation were made in the consolidated financial statements for the year ended December 31, 2016 and 2015 , to conform to the presentation for the year ended December 31, 2017 . The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity accounts; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to provisions for doubtful accounts, sales return reserve, warranty reserves, valuation of inventories, useful lives of property and equipment, income taxes, the valuation of equity instruments and contingencies, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other data. Actual results could differ from those estimates. |
Segments | Segments The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company has one business activity: the design, development, manufacturing and marketing of innovative medical devices, and operates as one operating segment. The Company’s chief operating decision-maker (CODM), its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance. |
Foreign Currency Translation | Foreign Currency Translation The Company’s consolidated financial statements are prepared in United States Dollars (USD). Its foreign subsidiaries use their local currency as their functional currency and maintain their records in the local currency. Accordingly, the assets and liabilities of these subsidiaries are translated into USD using the current exchange rates in effect at the balance sheet date and equity accounts are translated into USD using historical rates. Revenues and expenses are translated using the average exchange rates in effect for the year involved. The resulting foreign currency translation adjustments are recorded in accumulated other comprehensive income (loss) in the consolidated balance sheets. Transactions denominated in currencies other than the respective functional currencies are translated at exchange rates at the date of transaction with foreign currency gains and losses recorded in other expense, net in the consolidated statements of operations and comprehensive income . The Company recognized net foreign currency transaction losses of $1.0 million , $0.7 million and $0.1 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. As the Company’s international operations grow, its risks associated with fluctuation in currency rates will become greater, and the Company will continue to reassess its approach to managing this risk. In addition, currency fluctuations or a weakening USD can increase the costs of the Company’s international expansion. To date, the Company has not entered into any foreign currency hedging contracts. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, marketable investments (as described in greater detail in this footnote under the header “Cash, Cash Equivalents and Marketable Investments” below) and accounts receivable. The majority of the Company’s cash is held by one financial institution in the U. S. in excess of federally insured limits. The Company maintained investments in money market funds that were not federally insured during the year ended December 31, 2017 and held cash in foreign banks of approximately $15.0 million and $2.1 million at December 31, 2017 and 2016 , respectively, which was not federally insured. The Company’s revenue has been derived from sales of its products in the United States and international markets. The Company uses both its own salesforce and independent distributors to sell its products. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of entities comprising the Company’s customer base. The Company performs ongoing credit evaluations of its customers, including its distributors, does not require collateral, and maintains allowances for potential credit losses on customer accounts when deemed necessary. |
Significant Risks and Uncertainties | Significant Risks and Uncertainties The Company is subject to risks common to medical device companies including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, uncertainty of market acceptance of products and the potential need to obtain additional financing. The Company is dependent on third party suppliers, in some cases single-source suppliers. There can be no assurance that the Company’s products will continue to be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed, if at all. The Company’s products require approval or clearance from the FDA prior to commencing commercial sales in the United States . There can be no assurance that the Company’s products will receive all of the required approvals or clearances. Approvals or clearances are also required in foreign jurisdictions in which the Company sells its products. If the Company is denied such approvals or clearances or such approvals or clearances are delayed, it may have a material adverse impact on the Company’s results of operations, financial position and liquidity. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. |
Cash and Cash Equivalents | Cash, Cash Equivalents and Marketable Investments The Company invests its cash primarily in highly liquid corporate debt securities, debt instruments of U.S. federal and municipal governments, and their agencies, and in money market funds. All highly liquid investments with stated maturities of three months or less from the date of purchase are classified as cash equivalents; all highly liquid investments with stated maturities of greater than three months are classified as marketable investments. The majority of the Company’s cash and investments are held in U.S. banks. |
Marketable Investments | The Company determines the appropriate classification of its investments in marketable investments at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable investments have been classified and accounted for as available-for-sale. Investments with remaining maturities of more than one year are viewed by the Company as available to support current operations and are classified as current assets under the caption marketable investments in the accompanying consolidated balance sheets. Investments in marketable investments are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) . Any realized gains or losses on the sale of marketable investments are determined on a specific identification method, and such gains and losses are reflected as a component of other income (expense), net. Impairment of Marketable Investments After determining the fair value of available-for-sale debt instruments, unrealized gains or losses on these securities are recorded to accumulated other comprehensive income (loss) until either the security is sold or the Company determines that the decline in value is other-than-temporary. The primary differentiating factors that the Company considers in classifying impairments as either temporary or other-than-temporary impairments is the intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value, the length of the time and the extent to which the market value of the investment has been less than cost, the financial condition and near-term prospects of the issuer. |
Non-Marketable Equity Investments | Non-Marketable Equity Investments Entities in which the Company has at least a 20% , but not more than a 50% , interest are accounted for under the equity method unless it is determined that the Company has a controlling financial interest in the entity, in which case the entity would be consolidated. Non-marketable equity investments are classified as long-term investments on the consolidated balance sheet . The Company’s proportionate share of the operating results of its non-marketable equity method investments are recorded as profit or loss and presented in equity in losses of unconsolidated investees , in the consolidated statements of operations and comprehensive income . See Note “ 3. Investments and Fair Value of Financial Instruments ” for further details. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at invoice value less estimated allowances for doubtful accounts. The Company continually monitors customer payments and maintains a reserve for estimated losses resulting from its customers’ inability to make required payments. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic related risks and economic conditions that may affect a customer’s ability to pay. In cases where there are circumstances that may impair a specific customer’s ability to meet its financial obligations, a specific allowance is recorded against amounts due, and thereby reduces the net recognized receivable to the amount reasonably believed to be collectible. |
Inventories | Inventories Inventories are stated at the lower of cost (determined under the first-in first-out method) or net realizable value. Write-downs are provided for raw materials, components or finished goods that are determined to be excessive or obsolete. The Company regularly reviews inventory quantities in consideration of actual loss experience, projected future demand and remaining shelf life to record a provision for excess and obsolete inventory when appropriate. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. Machinery and equipment and furniture and fixtures are depreciated over a five to ten year period and computers and software are depreciated over two to five years. Upon retirement or sale, the cost and the related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to consolidated statements of operations and comprehensive income as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. |
Contingent Consideration | Contingent Consideration Certain agreements the Company enters into, including business combinations and licensing agreements, involve the potential payment of future consideration that is contingent upon certain performance and revenue milestones being achieved. Contingent consideration related is recorded at the acquisition date at fair value and is remeasured each reporting period with the change in fair value recognized generally within sales, general and administrative expense or cost of sales, depending on the nature of the contingent consideration liability, in the consolidated statements of operations and comprehensive income . As of December 31, 2017 , the Company’s contingent consideration relates to milestone payments for the acquisition of Crossmed and intangible assets through a licensing agreement. For more information with respect to the fair value of contingent consideration, refer to Note “ 5. Business Combination ” and Note “ 6. Intangible Assets ,” respectively. |
Intangible Assets | Intangible Assets Intangible assets consist of intangibles acquired through a licensing arrangement and the acquisition of Crossmed S.p.A. (“Crossmed”) during the year ended December 31, 2017 . Indefinite-lived intangible assets relate to an exclusive right to licensed technology. The acquired licensed technology is accounted for as an indefinite-lived intangible asset until it reaches technological feasibility, which is determined on the basis of obtaining regulatory approval to market and commercialize the underlying products. Upon the commercialization of the underlying product, the capitalized amount will be amortized over its estimated useful life. Indefinite-lived intangible assets will be tested for impairment at least annually, or more frequently if events or circumstances indicate their carrying value may no longer be recoverable and that an impairment loss may have occurred. Finite-lived intangible assets are amortized over the estimated economic useful lives of the assets, which is the period during which expected cash flows support the fair value of such intangible assets. The Company will review finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. When such an event occurs, management will determine whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset will be written down to the determined fair value based on discounted cash flows. Refer to Note “ 6. Intangible Assets ” for more information on the Company’s intangible assets. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price of an acquired business or assets over the fair value of the identifiable assets acquired and liabilities assumed. Goodwill is not amortized, but is tested for impairment annually in the fourth quarter, or more frequently if events or circumstances indicate the carrying value may no longer be recoverable and that an impairment loss may have occurred. The Company operates as one segment, which is considered to be the sole reporting unit, and therefore goodwill is tested for impairment at the consolidated level. Refer to Note “ 5. Business Combination ” and Note “ 7. Goodwill ” for more information. |
Revenue Recognition | Revenue Recognition Revenue is comprised of product revenue net of returns, discounts, administration fees and sales rebates. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Evidence of an arrangement consists of customer orders and the Company typically considers delivery to have occurred once title and risk of loss has been transferred and the product has been delivered to the customer. The Company typically recognizes revenue when products are delivered to hospital customers or distributors. However, with respect to products that the Company consigns to hospitals, which primarily consist of coils, the Company recognizes revenue at the time hospitals utilize products in a procedure. Deferred revenue represents amounts that the Company has already invoiced its customers and that are ultimately expected to be recognized as revenue, but for which not all revenue recognition criteria have been met. As of December 31, 2017 and 2016, respectively, the Company's deferred revenue balance was not material. The Company’s terms and conditions permit product returns and exchanges, and it records returns reserves in the period when revenue is recognized. Estimates are based on actual historical returns over the prior three years and are recorded as reductions in revenue at the time of sale. Upon recognition, the Company reduces revenue and cost of revenue for the estimated return. Return rates can fluctuate over time, but are sufficiently predictable to allow the Company to estimate expected future product returns. |
Cost of Revenue | Cost of Revenue Cost of revenue includes direct and indirect costs associated with the manufacture of the Company’s products. Direct costs include material and labor, while indirect costs include inbound freight charges, receiving costs, inspection and testing costs, warehousing costs, royalty expense and other labor and overhead costs incurred in the manufacturing of products. Cost of revenue also includes stock-based compensation, warranty replacement costs, cost of revenue related to product return reserves and excess and obsolete inventory write-downs. |
Shipping Costs | Shipping Costs Shipping and handling costs charged to customers are recorded as revenue. Shipping and handling costs are included in cost of revenue. |
Research and Development (R&D) Costs | Research and Development (R&D) Costs R&D costs primarily consist of product development, clinical and regulatory expenses, materials, depreciation and other costs associated with the development of the Company’s products. R&D costs also include related personnel and consultants’ salaries, benefits and related costs, including stock-based compensation. The Company expenses R&D costs as they are incurred. The Company’s clinical trial accruals are based on estimates of patient enrollment and related costs at clinical investigator sites. The Company estimates preclinical and clinical trial expenses based on the services performed pursuant to contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on its behalf. In accruing service fees, the Company estimates the time period over which services will be performed and the level of patient enrollment and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. Payments made to third parties under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered. |
Advertising Costs | Advertising Costs Advertising costs are included in sales, general and administrative expenses and are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes the cost of stock-based compensation in the financial statements based upon fair value. The fair value of restricted stock and restricted stock unit (RSU) awards is determined based on the number of units granted and the closing price of the Company’s common stock as of the grant date. The fair value of each purchase under the employee stock purchase plan (ESPP) is estimated at the beginning of the offering period using the Black-Scholes option pricing model. The fair value of stock options is determined as of the grant date using the Black-Scholes option pricing model. The Company’s determination of the fair value of equity-settled awards is impacted by the price of the Company’s common stock as well as changes in assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected term that awards will remain outstanding, expected common stock price volatility over the term of the awards, risk-free interest rates and expected dividends. The fair value of an award is recognized over the requisite service period (usually the vesting period) on a straight-line basis. Stock-based compensation expense recognized at fair value includes the impact of estimated forfeitures. The Company estimates future forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. To the extent actual forfeiture results differ from the estimates, the difference is recorded as a cumulative adjustment in the period forfeiture estimates are revised. No compensation cost is recorded for awards that do not vest. Equity instruments issued to non-employees are recorded at their fair value on the measurement date and are subject to periodic adjustments as we remeasure the fair value of the non-employee awards at each reporting period prior to vesting and finally at the vesting date of the award. The fair value of these equity instruments are expensed over the service period. Estimates of the fair value of equity-settled awards as of the grant date using valuation models, such as the Black-Scholes option pricing model, are affected by assumptions regarding a number of complex variables. Changes in the assumptions can materially affect the fair value of the award and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop. For all stock options granted prior to the Company’s IPO, the Company estimated the volatility data based on a study of publicly traded industry peer companies. For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award. For all stock options granted to date, t he Company used the Staff Accounting Bulletin, No. 110 (SAB 110) simplified method to calculate the expected term, which is the average of the contractual term and vesting period. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, whereby deferred tax asset ( “ DTA”) and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance to reduce the net DTAs to their estimated realizable value. The calculation of the Company’s current provision for income taxes involves the use of estimates, assumptions and judgments while taking into account current tax laws, interpretation of current tax laws and possible outcomes of future tax audits. The Company has established reserves to address potential exposures related to tax positions that could be challenged by tax authorities. Although the Company believes its estimates, assumptions and judgments to be reasonable, any changes in tax law or its interpretation of tax laws and the resolutions of potential tax audits could significantly impact the amounts provided for income taxes in the Company’s consolidated financial statements. The calculation of the Company’s DTA balance involves the use of estimates, assumptions and judgments while taking into account estimates of the amounts and type of future taxable income. Actual future operating results and the underlying amount and type of income could differ materially from the Company’s estimates, assumptions and judgments thereby impacting the Company’s financial position and results of operations. The Company follows the guidance relating to accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s income tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Company includes interest and penalties related to unrecognized tax benefits within income tax expense in the accompanying consolidated statements of operations. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income, unrealized gains or losses on available-for-sale investments and the effects of foreign currency translation adjustments. The Company presents comprehensive income and its components as part of the consolidated statements of operations. |
Net Income (Loss) Per Share of Common Stock | Net Income (Loss) Per Share of Common Stock The Company’s basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period. The diluted net income (loss) per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock and restricted stock are considered common stock equivalents. The Company calculated its basic and diluted net income per share attributable to common stockholders for the year ended December 31, 2015 in conformity with the two-class method required for companies with participating securities. Under the two-class method, the Company determined whether it had net income attributable to common stockholders, which included the results of operations less current period preferred stock non-cumulative dividends. If it was determined that the Company did have net income attributable to common stockholders during a period, the related undistributed earnings were then allocated between common stock and the preferred stock based on the weighted average number of shares outstanding during the period to determine the numerator for the basic net income per share attributable to common stockholders. In computing diluted net income attributable to common stockholders, undistributed earnings were re-allocated to reflect the potential impact of dilutive securities to determine the numerator for the diluted net income per share attributable to common stockholders. |
Recently Issued Accounting Standards | Recent Accounting Guidance Recently Adopted Accounting Standards In July 2015, the Financial Accounting Standards Board ( “ FASB ”) issued ASU No. 2015-11, Simplifying the Measurement of Inventory , which requires an entity to measure most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. In January 2017, the Company adopted the standard on a prospective basis and the adoption did not have a material impact on its financial position. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment . The new guidance eliminates step two of the goodwill impairment test. Under the new guidance, an entity should recognize an impairment charge for the amount by which a reporting unit’s carrying value exceeds its fair value. The standard is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company elected to early adopt the standard in the fourth quarter of 2017 on a prospective basis. The adoption did not have a material impact on our financial position or results of operations. Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which outlines a comprehensive new revenue recognition model designed to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers — Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which further clarifies the implementation guidance on principal versus agent considerations contained in ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers — Identifying Performance Obligations and Licensing , which further clarifies the implementation guidance relating to identifying performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers — Narrow-Scope improvements and Practical Expedients , which further clarifies the implementation on narrow scope improvements and practical expedients. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606 — Revenue from Contracts with Customer s , which makes minor corrections or minor improvements to the Codification related to ASU No. 2014-09 that are not expected to have a significant effect on the Company ’ s current accounting practice. In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments , (“ASU No. 2017-13”) which provides additional clarification and implementation guidance on the previously issued ASU No. 2014-09. In November 2017, the FASB issued ASU No. 2017-14, Income Statement— Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) which makes minor corrections to the Codification related to ASU No. 2014-09. These standards will be effective for the Company on January 1, 2018, pursuant to ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date , issued by the FASB in August 20 15. The Company intends to adopt the new standard on a modified retrospective basis on January 1, 2018. Under this method, the C ompany will record a cumulative-effect adjustment to the opening balance of retained earnings in the initial year of adoption. The timing of revenue recognition based on the guidance related to transfer of control may result in acceleration of revenue recognition for some contracts. The Company has completed its assessment of the impact of the new revenue standard on the Company’s financial statements and internal controls. The Company will adopt the new authoritative guidance under Accounting Standards Codification (ASC) 606 on a modified retrospective basis effective January 1, 2018. Therefore, comparative information will not be adjusted and will continue to be reported under ASC 605 with the impact of the transition reflected in opening retained earnings. The adoption of ASC 606 represents a change in accounting principle that more closely aligns the timing of revenue recognition with the point in time that a performance obligation is satisfied. Substantially all of the Company’s contracts with customers contain a single performance obligation which is satisfied at a point in time. Revenue will be recognized in the amount that reflects the consideration to which the Company expects to be entitled to in exchange for the goods or services provided under the arrangement. The implementation of the new standard will not have a material impact on the Company’s financial statements or significantly alter the quantitative disclosures around revenue due to the nature of Company’s contracts with customers, however the implementation will result in some additional qualitative disclosures. The timing of revenue recognition based on the guidance related to transfer of control will result in acceleration of revenue recognition for some contracts. In February 2016, the FASB issued ASU No. 2016-02, Leases, which amends the existing accounting standards for leases. In September 2017, the FASB issued ASU No. 2017-13 which provides additional clarification and implementation guidance on the previously issued ASU No. 2016-02. Under the new guidance, a lessee will be required to recognize a lease liability and right-of-use asset for all leases with terms in excess of twelve months. The new guidance also modifies the classification criteria and accounting for sales-type and direct financing leases, and requires additional disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. Consistent with current guidance, a lessee’s recognition, measurement, and presentation of expenses and cash flows arising from a lease will continue to depend primarily on its classification. The accounting standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and must be applied using a modified retrospective approach. Early adoption is permitted. While the Company is continuing to assess all potential impacts of the standard, it expects that most of its lease commitments will be subject to the updated standard and recognized as lease liabilities and right-of-use assets upon adoption. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses . The standard changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The Company will recognize an allowance for credit losses on available-for-sale securities rather than deductions in amortized cost. The standard is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted for all periods beginning after December 15, 2018. The Company is currently evaluating the impact of adopting this standard. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash , a consensus of the FASB Emerging Issues Task Force . The standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling the total beginning and end of period amounts shown on the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company does not expect the adoption of ASU 2016-18 to have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation - Scope of Modification Accounting. The standard provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The standard is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. The guidance will be applied prospectively upon adoption. The Company does not expect the adoption of ASU 2017-09 to have a material impact on its consolidated financial statements, however the impact to share-based compensation expense will depend on the terms specified in any new changes to share-based payment awards subsequent to the adoption. |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Allowance for Doubtful Accounts | The Company’s allowance for doubtful accounts comprised of the following (in thousands): Balance At Charged To Costs And Expenses Deductions Balance At End Of Year For the year ended: December 31, 2015 $ 602 $ (13 ) $ — $ 589 December 31, 2016 589 216 (121 ) 684 December 31, 2017 684 606 — 1,290 |
Schedule of Prepaid Expenses and Other Current Assets | The Company’s prepaid expenses and other current assets comprised of the following (in thousands): December 31, 2017 2016 Prepaid taxes $ 3,334 $ 4,656 Prepaid expenses 4,112 4,573 Other current assets 7,289 9,498 Prepaid expenses and other current assets $ 14,735 $ 18,727 |
Schedule of Inventories | The components of inventories consisted of the following (in thousands): December 31, 2017 2016 Raw materials $ 13,529 $ 11,367 Work in process 6,073 3,663 Finished goods 75,299 57,982 Inventories $ 94,901 $ 73,012 |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 31, 2017 2016 Machinery and equipment $ 12,456 $ 9,734 Furniture and fixtures 6,458 4,246 Leasehold improvements 15,926 10,207 Software 3,547 1,221 Computers 1,737 884 Construction in progress 1,326 2,193 Total property and equipment 41,450 28,485 Less: Accumulated depreciation and amortization (10,551 ) (7,021 ) Property and equipment, net $ 30,899 $ 21,464 |
Schedule of Accrued Liabilities | The following table shows the components of accrued liabilities as of December 31, 2017 and 2016 (in thousands): December 31, 2017 2016 Payroll and employee-related cost $ 22,001 $ 16,956 Sales return reserve 3,035 2,753 Preclinical and clinical trial cost 1,514 2,054 Royalty 1,115 802 Product warranty 1,088 1,254 Leasehold improvement expenditures 1,012 260 Acquisition related liabilities (1) 4,752 — Other accrued liabilities 10,308 7,611 Total accrued liabilities $ 44,825 $ 31,690 (1) Acquisition-related liabilities consist of purchase price payments due to the Sellers of Crossmed related to working capital and financial debt adjustments as well as milestone payments due for the acquisition. Refer to Note “ 5. Business Combination ” for more information. |
Schedule of Estimated Product Warranty Accrual | The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, as of December 31, 2017 and 2016 (in thousands): December 31, 2017 2016 2015 Balance at the beginning of the year $ 1,254 $ 713 $ 314 Accruals of warranties issued 471 1,176 752 Settlements of warranty claims (637 ) (635 ) (353 ) Balance at the end of the year $ 1,088 $ 1,254 $ 713 |
Other Noncurrent Liabilities [Table Text Block] | Other Non-Current Liabilities The following table shows the components of other non-current liabilities as of December 31, 2017 and 2016 (in thousands): December 31, 2017 2016 Deferred tax liabilities $ 3,299 $ 824 Licensing-related cost (1) 12,717 — Other non-current liabilities 2,462 — Total other non-current liabilities $ 18,478 $ 824 (1) Amount relates to the liability recorded for probable future milestone payments to be made under the licensing agreement described in Note “ 6. Intangible Assets .” Refer therein for more information. |
Investments and Fair Value of24
Investments and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Investments | Marketable Investments The Company’s marketable investments have been classified and accounted for as available-for-sale. The Company’s marketable investments as of December 31, 2017 and 2016 were as follows (in thousands): December 31, 2017 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 19,941 $ — $ (8 ) $ 19,933 U.S. treasury 6,402 — (28 ) 6,374 U.S. agency securities and government sponsored securities 4,787 — (18 ) 4,769 U.S. states and municipalities 12,510 — (23 ) 12,487 Corporate bonds 120,648 23 (280 ) 120,391 Total $ 164,288 $ 23 $ (357 ) $ 163,954 December 31, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 4,237 $ 1 $ — $ 4,238 U.S. treasury 4,996 — — 4,996 U.S. agency securities and government sponsored securities 8,803 3 (12 ) 8,794 U.S. states and municipalities 27,429 1 (75 ) 27,355 Corporate bonds 69,009 36 (120 ) 68,925 Non-U.S. government debt securities 1,209 — — 1,209 Total $ 115,683 $ 41 $ (207 ) $ 115,517 |
Schedule of the Fair Value of Marketable Investments in an Unrealized Loss Position for Less than Twelve Months | The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than and more than twelve months as of December 31, 2017 and 2016 (in thousands): December 31, 2017 Less than 12 months More than 12 months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 19,933 $ (8 ) $ — $ — $ 19,933 $ (8 ) U.S. treasury 6,374 (28 ) — — 6,374 (28 ) U.S. agency securities and government sponsored securities 2,778 (9 ) 1,991 (9 ) 4,769 (18 ) U.S. states and municipalities 10,092 (23 ) — — 10,092 (23 ) Corporate bonds 93,284 (188 ) 10,201 (92 ) 103,485 (280 ) Total $ 132,461 $ (256 ) $ 12,192 $ (101 ) $ 144,653 $ (357 ) December 31, 2016 Less than 12 months Fair Value Gross Unrealized Losses U.S. agency securities $ 3,291 $ (12 ) U.S. states and municipalities 22,286 (75 ) Corporate bonds 29,748 (120 ) Total $ 55,325 $ (207 ) As of December 31, 2016 there were no securities that had been in a loss position for more than twelve months. |
Schedule of Contractual Maturities of Marketable Investments | The contractual maturities of the Company’s marketable investments as of December 31, 2017 and 2016 were as follows (in thousands): December 31, 2017 2016 Marketable Investments Fair Value Fair Value Due in one year $ 104,272 $ 71,051 Due in one to five years 59,682 44,466 Total $ 163,954 $ 115,517 |
Investments | As of December 31, 2017 , the investment in MVI is presented in long-term investments on the consolidated balance sheet and is comprised as follows: December 31, 2017 Non-Marketable Equity Investments Cost $ 5,289 Equity in losses (1,430 ) Carrying value of non-marketable equity investment $ 3,859 |
Schedule of Fair Value of Assets and Liabilities | The following tables set forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy (in thousands): As of December 31, 2017 Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash equivalents: Commercial paper $ — $ 9,185 $ — $ 9,185 Money market funds 2,264 — — 2,264 Marketable investments: Commercial paper — 19,933 — 19,933 U.S. treasury 6,374 — — 6,374 U.S. agency securities — 4,769 — 4,769 U.S. states and municipalities — 12,487 — 12,487 Corporate bonds — 120,391 — 120,391 Total $ 8,638 $ 166,765 $ — $ 175,403 Financial Liabilities: Contingent consideration obligations (1) — — 17,392 17,392 Total $ — $ — $ 17,392 $ 17,392 (1) More information on the contingent consideration obligations and the changes in fair value are presented further below. As of December 31, 2016 Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash equivalents: Money market funds $ 873 $ — $ — $ 873 Marketable investments: Commercial paper — 4,238 — 4,238 U.S. treasury 4,996 — — 4,996 U.S. agency securities — 8,794 — 8,794 U.S. states and municipalities — 27,355 — 27,355 Corporate bonds — 68,925 — 68,925 Non-U.S. government debt securities — 1,209 — 1,209 Total $ 5,869 $ 110,521 $ — $ 116,390 |
Schedule of Contingent Consideration Obligation | The following table summarizes the changes in fair value of the contingent consideration obligation for the year ended December 31, 2017 (in thousands): Fair Value of Contingent Consideration Crossmed Technology Licensing Agreement Total Balance at December 31, 2016 $ — $ — $ — Additions to contingent consideration obligations 4,343 12,717 17,060 Changes in fair value 109 — 109 Balance at Foreign currency remeasurement 223 — 223 Balance at December 31, 2017 $ 4,675 $ 12,717 $ 17,392 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisition Consideration Transferred | The following table summarizes the Closing Date fair value of the consideration to be transferred, reflecting measurement period adjustments described below (in thousands): Cash, net of working capital and financial debt adjustments $ 11,088 Fair value of contingent consideration for milestone payments 4,343 Contract purchase price $ 15,431 Consideration for settlement of pre-existing receivable due from Crossmed to Penumbra 3,273 Total value of consideration transferred $ 18,704 |
Schedule of Purchase Price Allocation | The following table presents the preliminary allocation of the purchase price, reflecting measurement period adjustments to the working capital and financial debt adjustments, for Crossmed (in thousands): Acquisition-Date Fair Value Estimated Useful Life of Finite-Lived Intangible Assets Tangible assets acquired and (liabilities) assumed: Accounts receivable $ 4,406 Inventories 1,343 Other current and non-current assets (1) 1,596 Property and equipment, net 829 Accounts payable (740 ) Accrued liabilities and obligations for short-term debt and credit facilities (1) (1,868 ) Deferred tax liabilities (2,472 ) Other non-current liabilities (797 ) Intangible assets acquired: Customer relationships $ 6,790 15 years Other 1,750 5 years Goodwill (1) 7,867 Total purchase price (1) $ 18,704 (1) During the fourth quarter of 2017 , the Company recorded $1.2 million in measurement period adjustments which increased the purchase price, primarily related to working capital and financial debt adjustments. |
Pro Forma Information | The unaudited pro forma information is presented below (unaudited, in thousands): December 31, 2017 2016 Pro forma net revenue $ 336,557 $ 268,262 Pro forma net income 5,992 14,816 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-lived Intangible Assets | The following table presents details of the Company’s acquired finite-lived and indefinite-lived intangible assets (in thousands, except weighted-average amortization period): As of December 31, 2017 Remaining Weighted-Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Customer relationships 14.5 years $ 7,141 $ (238 ) $ 6,903 Other 4.5 years 1,841 (183 ) 1,658 Total intangible assets subject to amortization 12.6 years $ 8,982 $ (421 ) $ 8,561 Intangible assets related to licensed technology 15,217 — 15,217 Total intangible assets $ 24,199 $ (421 ) $ 23,778 |
Schedule of Indefinite-lived Intangible Assets | The following table presents details of the Company’s acquired finite-lived and indefinite-lived intangible assets (in thousands, except weighted-average amortization period): As of December 31, 2017 Remaining Weighted-Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Customer relationships 14.5 years $ 7,141 $ (238 ) $ 6,903 Other 4.5 years 1,841 (183 ) 1,658 Total intangible assets subject to amortization 12.6 years $ 8,982 $ (421 ) $ 8,561 Intangible assets related to licensed technology 15,217 — 15,217 Total intangible assets $ 24,199 $ (421 ) $ 23,778 |
Schedule of Future Amortization Expense | As of December 31, 2017 , expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in thousands): Amortization Expense 2018 $ 844 2019 844 2020 844 2021 844 2022 662 Thereafter 4,523 Total amortization $ 8,561 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents the changes in goodwill during the year ended December 31, 2017 (in thousands): Total Company Balance as of December 31, 2016 $ — Acquisition of Crossmed 7,867 Foreign currency translation 311 Balance as of December 31, 2017 $ 8,178 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments under Operating Leases | Future minimum lease payments under the non-cancelable leases as of December 31, 2017 are as follows (in thousands): Lease Payments Year Ending December 31: 2018 $ 6,429 2019 6,413 2020 6,387 2021 5,592 2022 5,589 Thereafter 45,493 Total future minimum lease payments $ 75,903 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | Activity of stock options under the 2005 Plan, 2011 Plan and 2014 Plan is set forth below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (in thousands) Balance, December 31, 2016 2,876,955 $ 14.63 Exercised (766,926 ) 6.54 Canceled/Forfeited (2,925 ) 16.98 Balance, December 31, 2017 2,107,104 $ 17.58 Vested and expected to vest—December 31, 2017 2,099,078 $ 17.56 6.66 $ 160,660 Exercisable—December 31, 2017 1,434,964 $ 15.18 6.24 $ 113,252 |
Summary of Unvested Restricted Stock Activity | Restricted Stock and Restricted Stock Units The activity of unvested restricted stock and restricted stock units under the Plans is set forth below: Number of Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2016 1,002,944 $ 29.44 Granted 122,538 84.03 Vested (360,564 ) 27.52 Canceled/Forfeited (22,513 ) 46.90 Unvested at December 31, 2017 742,405 $ 38.86 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Company used the following assumptions in its Black-Scholes option pricing model to determine the fair value of equity settled awards: Equity Settled Awards Year Ended December 31, 2017 2016 2015 Expected term (in years) .50 .50 6.08—6.25 Expected volatility 34% 40% 45% Risk-free interest rate 1.26% 0.48% 1.56%—1.78% Expected dividend rate 0% 0% 0% |
Schedule of Stock-based Compensation Expense | The following table sets forth the stock-based compensation expense included in the consolidated statements of operations (in thousands): Year Ended December 31, 2017 2016 2015 Cost of sales $ 1,009 $ 1,132 $ 316 Research and development 1,289 1,020 444 Sales, general and administrative 15,514 12,485 6,511 $ 17,812 $ 14,637 $ 7,271 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in the accumulated balances during the period, and includes information regarding the manner in which the reclassifications out of accumulated other comprehensive income (loss) into earnings affect our consolidated statements of operations and comprehensive income (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Marketable Currency Translation Total Marketable Currency Translation Total Balance, beginning of the year $ (105 ) $ (4,583 ) $ (4,688 ) $ (163 ) $ (1,952 ) $ (2,115 ) Other comprehensive income (loss) before reclassifications: Unrealized (losses) gains —marketable investments (133 ) — (133 ) 98 — 98 Foreign currency translation gains (losses) — 6,387 6,387 — (2,628 ) (2,628 ) Income tax effect—benefit (expense) 31 — 31 (35 ) (3 ) (38 ) Net of tax (102 ) 6,387 6,285 63 (2,631 ) (2,568 ) Amounts reclassified from accumulated other comprehensive loss to earnings: Realized gains—marketable investments (37 ) — (37 ) (8 ) — (8 ) Income tax effect—benefit 9 — 9 3 — 3 Net of tax (28 ) — (28 ) (5 ) — (5 ) Net current-year other comprehensive income (loss) (130 ) 6,387 6,257 58 (2,631 ) (2,573 ) Balance, end of the year $ (235 ) $ 1,804 $ 1,569 $ (105 ) $ (4,583 ) $ (4,688 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income or (Loss) before Income Taxes | Income or (loss) before income taxes and equity in losses of unconsolidated investees for the years ended December 31, 2017 , 2016 and 2015 is summarized as follows: Year Ended December 31, 2017 2016 2015 United States $ 543 $ (944 ) $ 2,955 Foreign 1,933 75 1,069 Total income (loss) before income taxes and equity in losses of unconsolidated investees $ 2,476 $ (869 ) $ 4,024 |
Components of the Provision for (Benefit from) Income Taxes | The components of the (benefit from) provision for income taxes are summarized as follows: Year Ended December 31, 2017 2016 2015 Current: Federal $ (13 ) $ (3,872 ) $ 3,815 State 259 304 603 Foreign 739 772 492 Total current 985 (2,796 ) 4,910 Deferred: Federal (2,502 ) (11,909 ) (3,025 ) State (1,742 ) (785 ) (251 ) Foreign (352 ) (193 ) 25 Total deferred (4,596 ) (12,887 ) (3,251 ) (Benefit from) provision for income taxes $ (3,611 ) $ (15,683 ) $ 1,659 |
Schedule of Effective Income Tax Reconciliation | The Company’s actual (benefit from) or provision for tax differed from the amounts computed by applying the Company’s U.S. federal income tax rate of 34% to pretax income as a result of the following: Year Ended December 31, 2017 2016 2015 Income tax at federal statutory rate 34.0 % 34.0 % 34.0 % State income taxes, net of federal benefit (94.6 ) 417.1 (0.7 ) Foreign taxes differential (4.2 ) (63.0 ) 4.8 Prepaid tax ASC 810-10 (39.8 ) 59.0 2.1 IRC 199 deduction — — (7.4 ) Stock-based compensation (802.0 ) 1,474.0 14.8 Non-deductible meals and entertainment 19.4 (92.6 ) 5.6 Imputed interest 19.1 (30.7 ) 4.7 Tax credits (0.5 ) 395.5 (11.6 ) Remeasurement of deferred tax assets and liabilities 622.5 — — Transfer pricing tax benefit (35.3 ) — (13.8 ) Other 8.0 (47.4 ) 3.6 Change in valuation allowance 127.6 (340.8 ) 5.1 Effective tax rate (145.8 )% 1,805.1 % 41.2 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred income tax assets and liabilities consist of the following: December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 20,622 $ 5,983 Tax credits 7,095 6,260 Accruals and reserves 5,430 7,668 Stock-based compensation 3,083 3,703 Translation adjustment 486 690 UNICAP adjustments 3,813 4,721 Other 487 938 Gross deferred tax assets 41,016 29,963 Valuation allowance (10,295 ) (6,062 ) Total deferred tax assets 30,721 23,901 Deferred tax liabilities: Depreciation and amortization (6,363 ) (1,425 ) Total deferred tax liabilities (6,363 ) (1,425 ) Net deferred tax assets $ 24,358 $ 22,476 |
Summary of Valuation Allowance | The change in the Company’s deferred tax valuation allowance against net DTAs changed from January 1, 2015 to December 31, 2017 , is as follows : Beginning Balance Additions Charged To Expenses or Other Accounts (1) Deductions Credited to Expenses or Other Accounts (2) Ending Balance For the year ended: December 31, 2017 $ 6,062 $ 4,400 $ (167 ) $ 10,295 December 31, 2016 $ 2,702 $ 3,360 $ — $ 6,062 December 31, 2015 $ 2,945 $ — $ (243 ) $ 2,702 (1) Additions include current year additions charged to expenses and current year build due to increases in net DTAs, return to provision true-ups, and other adjustments. (2) Deductions include current year releases credited to expenses and current year reductions due to decreases in net DTAs, return to provision true-ups, and other adjustments. |
Schedule of Unrecognized Tax Benefits | A reconciliation of the change in the gross unrecognized tax benefits from January 1, 2015 to December 31, 2017 , is as follows: December 31, 2017 2016 2015 Beginning Balance $ 3,827 $ 3,619 $ 1,726 Gross increase for tax positions of current year 871 1,213 1,023 Gross increase for tax positions of prior years 130 250 1,062 Gross decrease for tax positions of prior years (659 ) (648 ) — Settlement — (387 ) — Lapse of statute of limitations (17 ) (220 ) (192 ) Ending Balance $ 4,152 $ 3,827 $ 3,619 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Numerator and Denominator used in the Calculation of the Basic and Diluted Earnings per Share | A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income per share attributable to common stockholders is as follows (in thousands, except share and per share amounts): Year Ended December 31, 2017 2016 2015 Numerator: Net income $ 4,657 $ 14,814 $ 2,365 Less: Undistributed income attributable to convertible preferred stockholders — — (1,281 ) Net income attributable to common stockholders—basic and diluted $ 4,657 $ 14,814 $ 1,084 Denominator: Weighted average shares used to compute net income attributable to common stockholders: Basic 32,978,065 30,464,583 11,993,429 Effect of dilutive securities from stock-based benefit plans, as calculated using treasury stock method 2,341,038 3,013,495 2,226,221 Diluted 35,319,103 33,478,078 14,219,650 Net income per share attributable to common stockholders: Basic $ 0.14 $ 0.49 $ 0.09 Diluted $ 0.13 $ 0.44 $ 0.08 |
Geographic Areas and Product 33
Geographic Areas and Product Sales Geographic Areas and Product Sales (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Revenue by Geographic Area | The Company’s revenue by geographic area, based on the destination to which the Company ships its products, was as follows (in thousands): Year Ended December 31, 2017 2016 2015 United States $ 219,173 $ 176,104 $ 127,311 Japan 33,790 30,284 19,016 Other International 80,801 56,929 39,768 Total $ 333,764 $ 263,317 $ 186,095 |
Revenue by Product Category | The following table sets forth revenue by product category (in thousands): Year Ended December 31, 2017 2016 2015 Neuro $ 232,446 $ 185,533 $ 141,410 Peripheral Vascular 101,318 77,784 44,685 Total $ 333,764 $ 263,317 $ 186,095 |
Selected Quarterly Financial 34
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table provides the selected quarterly financial data for 2017 (in thousands, except share and per share amounts): Quarter Ended 2017 March 31 June 30 September 30 (2) December 31 (1) Selected Statement of Operations Data: Revenue $ 73,213 $ 80,589 $ 83,911 $ 96,051 Cost of revenue 25,504 29,660 29,134 32,324 Gross profit $ 47,709 $ 50,929 $ 54,777 $ 63,727 (Loss) income before income taxes and equity in losses of unconsolidated investees $ (1,751 ) $ (918 ) $ 1,239 $ 3,906 Provision for (benefit from) income taxes $ 1,355 $ 482 $ 456 $ (5,904 ) (Loss) income before equity in losses of unconsolidated investees $ (3,106 ) $ (1,400 ) $ 783 $ 9,810 Equity in losses of unconsolidated investees $ — $ (158 ) $ (545 ) $ (727 ) Net (loss) income $ (3,106 ) $ (1,558 ) $ 238 $ 9,083 Net (loss) income per share: Basic $ (0.10 ) $ (0.05 ) $ 0.01 $ 0.27 Diluted $ (0.10 ) $ (0.05 ) $ 0.01 $ 0.25 Weighted average shares used to compute net (loss) income per share: Basic 31,611,841 33,219,487 33,446,841 33,606,943 Diluted 31,611,841 33,219,487 35,664,272 35,833,621 The following table provides the selected quarterly financial data for 2016 reflecting adjustments for the adoption of ASU 2016-09 (in thousands, except share and per share amounts): Quarter Ended 2016 March 31 (3) June 30 (3) September 30 (3) December 31 (3) Selected Statement of Operations Data: Revenue $ 57,919 $ 65,106 $ 67,187 $ 73,105 Cost of revenue 18,014 23,636 24,313 26,525 Gross profit $ 39,905 $ 41,470 $ 42,874 $ 46,580 Income (loss) before income taxes and equity in losses of unconsolidated investees $ 2,121 $ (383 ) $ (1,092 ) $ (1,515 ) (Benefit from) provision for income taxes $ (170 ) $ (3,396 ) $ (12,998 ) $ 881 Income (loss) before equity in losses of unconsolidated investees $ 2,291 $ 3,013 $ 11,906 $ (2,396 ) Equity in losses of unconsolidated investees $ — $ — $ — $ — Net income (loss) $ 2,291 $ 3,013 $ 11,906 $ (2,396 ) Net income (loss) per share: Basic $ 0.08 $ 0.10 $ 0.39 $ (0.08 ) Diluted $ 0.07 $ 0.09 $ 0.35 $ (0.08 ) Weighted average shares used to compute net income (loss) per share: Basic 29,990,006 30,210,322 30,604,384 31,045,700 Diluted 33,023,495 33,308,193 33,755,383 31,045,700 (1) Income tax expense for the quarter ended December 31, 2017, includes $19.8 million of tax benefit related to the release of valuation allowance, offset by a $2.4 million of valuation allowance against the Company’s federal research and development tax credits, and $15.4 million of deferred income tax due to the remeasurement of the Company’s DTAs at a 21% corporate income tax rate pursuant to the Tax Reform Act. Please refer to Note “ 12. Income Taxes ” for more information. (2) Operating expenses for the three months ended, September 30, 2017, included a $1.2 million benefit from a net refund of previously paid medical device excise tax. (3) In the fourth quarter of 2016, the Company elected to early adopt ASU 2016-09 which required excess tax benefit attributable to stock-based compensation to be recognized in the income statement and the Company recorded a modified retrospective adjustment of $17.4 million in accumulated deficit. |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Additional Disclosures (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)segmentactivity | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||
Number of business activities | activity | 1 | ||
Number of operating segments | segment | 1 | ||
Foreign currency transaction gains (losses) | $ (1,000,000) | $ (700,000) | $ 100,000 |
Other-than-temporary impairments for marketable investments | 0 | 0 | 0 |
Inventory write-offs and write-downs | 1,037,000 | 2,667,000 | 1,163,000 |
Impairment of long-lived assets | $ 0 | 0 | 0 |
Actual historical return period used for estimating sales return reserves | 3 years | ||
Advertising expense | $ 700,000 | $ 500,000 | $ 500,000 |
Minimum | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method ownership percentage | 20.00% | ||
Maximum | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method ownership percentage | 50.00% |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)customerfinancial_instituion | Dec. 31, 2016USD ($)customer | Dec. 31, 2015customer | |
Customer Concentration Risk | Revenue | One Major Customer | |||
Concentration Risk [Line Items] | |||
Concentration risk number of customers that accounted for greater than specified benchmark | 1 | 1 | 1 |
Concentration risk, percentage | 10.10% | 11.50% | 11.00% |
Customer Concentration Risk | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk number of customers that accounted for greater than specified benchmark | 0 | 0 | |
Concentration risk, percentage | 10.00% | 10.00% | |
United States | |||
Concentration Risk [Line Items] | |||
Number of financial institutions holding cash in excess of federally insured limits | financial_instituion | 1 | ||
Foreign Countries | |||
Concentration Risk [Line Items] | |||
Cash that is not federally insured | $ | $ 15 | $ 2.1 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Property and Equipment, Net (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum | Machinery and Equipment and Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life of property and equipment | 5 years |
Minimum | Computers and Software | |
Property, Plant and Equipment [Line Items] | |
Useful life of property and equipment | 2 years |
Maximum | Machinery and Equipment and Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life of property and equipment | 10 years |
Maximum | Computers and Software | |
Property, Plant and Equipment [Line Items] | |
Useful life of property and equipment | 5 years |
- Gains and Losses of Marketabl
- Gains and Losses of Marketable Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | $ 164,288 | $ 115,683 |
Gross Unrealized Gains | 23 | 41 |
Gross Unrealized Losses | (357) | (207) |
Fair Value | 163,954 | 115,517 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 19,941 | 4,237 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (8) | 0 |
Fair Value | 19,933 | 4,238 |
U.S. treasury | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 6,402 | 4,996 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (28) | 0 |
Fair Value | 6,374 | 4,996 |
U.S. agency and government sponsored securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 4,787 | 8,803 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (18) | (12) |
Fair Value | 4,769 | 8,794 |
U.S. states and municipalities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 12,510 | 27,429 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (23) | (75) |
Fair Value | 12,487 | 27,355 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 120,648 | 69,009 |
Gross Unrealized Gains | 23 | 36 |
Gross Unrealized Losses | (280) | (120) |
Fair Value | $ 120,391 | 68,925 |
Non-U.S. government debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 1,209 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | $ 1,209 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance At Beginning Of Year | $ 684 | $ 589 | $ 602 |
Charged To Costs And Expenses | 606 | 216 | (13) |
Deductions | 0 | (121) | 0 |
Balance At End Of Year | $ 1,290 | $ 684 | $ 589 |
- Marketable Securities in an U
- Marketable Securities in an Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)security |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | $ 132,461 | $ 55,325 |
Less than 12 months: Gross Unrealized Losses | (256) | $ (207) |
12 Months of more: Fair Value | 12,192 | |
12 months or more: Gross Unrealized Losses | (101) | |
Total: Fair Value | 144,653 | |
Total: Gross Unrealized Losses | (357) | |
Number of securities in a loss position for more than twelve months | security | 0 | |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 19,933 | |
Less than 12 months: Gross Unrealized Losses | (8) | |
12 Months of more: Fair Value | 0 | |
12 months or more: Gross Unrealized Losses | 0 | |
Total: Fair Value | 19,933 | |
Total: Gross Unrealized Losses | (8) | |
U.S. treasury | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 6,374 | |
Less than 12 months: Gross Unrealized Losses | (28) | |
12 Months of more: Fair Value | 0 | |
12 months or more: Gross Unrealized Losses | 0 | |
Total: Fair Value | 6,374 | |
Total: Gross Unrealized Losses | (28) | |
U.S. agency and government sponsored securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 2,778 | $ 3,291 |
Less than 12 months: Gross Unrealized Losses | (9) | (12) |
12 Months of more: Fair Value | 1,991 | |
12 months or more: Gross Unrealized Losses | (9) | |
Total: Fair Value | 4,769 | |
Total: Gross Unrealized Losses | (18) | |
U.S. states and municipalities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 10,092 | 22,286 |
Less than 12 months: Gross Unrealized Losses | (23) | (75) |
12 Months of more: Fair Value | 0 | |
12 months or more: Gross Unrealized Losses | 0 | |
Total: Fair Value | 10,092 | |
Total: Gross Unrealized Losses | (23) | |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 93,284 | 29,748 |
Less than 12 months: Gross Unrealized Losses | (188) | $ (120) |
12 Months of more: Fair Value | 10,201 | |
12 months or more: Gross Unrealized Losses | (92) | |
Total: Fair Value | 103,485 | |
Total: Gross Unrealized Losses | $ (280) |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid taxes | $ 3,334 | $ 4,656 |
Prepaid expenses | 4,112 | 4,573 |
Other current assets | 7,289 | 9,498 |
Prepaid expenses and other current assets | $ 14,735 | $ 18,727 |
- Contractual Maturities of Mar
- Contractual Maturities of Marketable Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Due in less than one year | $ 104,272 | $ 71,051 |
Due in one to five years | 59,682 | 44,466 |
Total | $ 163,954 | $ 115,517 |
- Non-Marketable Equity Investm
- Non-Marketable Equity Investments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | |||||||||||
Net loss from equity investments | $ 727,000 | $ 545,000 | $ 158,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 1,430,000 | $ 0 | $ 0 |
Carrying value of investment | $ 0 | $ 0 | |||||||||
MVI | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Cost | 5,289,000 | 5,289,000 | |||||||||
Carrying value of investment | $ 3,859,000 | $ 3,859,000 | |||||||||
Equity method ownership percentage | 50.00% | 50.00% | |||||||||
Equity Method Investment, initial investment remaining | $ 2,900,000 | $ 2,900,000 | |||||||||
Equity method investment, expenses | 2,900,000 | ||||||||||
Parent Company [Member] | Other Expenses, net | MVI | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Net loss from equity investments | $ (1,430,000) |
- Financial Assets and Liabilit
- Financial Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial Assets | ||
Marketable investments | $ 175,403 | |
Total | $ 116,390 | |
Financial Liabilities | 17,392 | |
Commercial paper | ||
Financial Assets | ||
Marketable investments | 19,933 | 4,238 |
U.S. treasury | ||
Financial Assets | ||
Marketable investments | 6,374 | 4,996 |
U.S. agency securities | ||
Financial Assets | ||
Marketable investments | 4,769 | 8,794 |
U.S. states and municipalities | ||
Financial Assets | ||
Marketable investments | 12,487 | 27,355 |
Corporate bonds | ||
Financial Assets | ||
Marketable investments | 120,391 | 68,925 |
Non-U.S. government debt securities | ||
Financial Assets | ||
Marketable investments | 1,209 | |
Commercial paper | ||
Financial Assets | ||
Cash equivalents | 9,185 | |
Money market funds | ||
Financial Assets | ||
Cash equivalents | 2,264 | 873 |
Level 1 | ||
Financial Assets | ||
Marketable investments | 8,638 | |
Total | 5,869 | |
Financial Liabilities | 0 | |
Level 1 | Commercial paper | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 1 | U.S. treasury | ||
Financial Assets | ||
Marketable investments | 6,374 | 4,996 |
Level 1 | U.S. agency securities | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 1 | U.S. states and municipalities | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 1 | Corporate bonds | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 1 | Non-U.S. government debt securities | ||
Financial Assets | ||
Marketable investments | 0 | |
Level 1 | Commercial paper | ||
Financial Assets | ||
Cash equivalents | 0 | |
Level 1 | Money market funds | ||
Financial Assets | ||
Cash equivalents | 2,264 | 873 |
Level 2 | ||
Financial Assets | ||
Marketable investments | 166,765 | |
Total | 110,521 | |
Financial Liabilities | 0 | |
Level 2 | Commercial paper | ||
Financial Assets | ||
Marketable investments | 19,933 | 4,238 |
Level 2 | U.S. treasury | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 2 | U.S. agency securities | ||
Financial Assets | ||
Marketable investments | 4,769 | 8,794 |
Level 2 | U.S. states and municipalities | ||
Financial Assets | ||
Marketable investments | 12,487 | 27,355 |
Level 2 | Corporate bonds | ||
Financial Assets | ||
Marketable investments | 120,391 | 68,925 |
Level 2 | Non-U.S. government debt securities | ||
Financial Assets | ||
Marketable investments | 1,209 | |
Level 2 | Commercial paper | ||
Financial Assets | ||
Cash equivalents | 9,185 | |
Level 2 | Money market funds | ||
Financial Assets | ||
Cash equivalents | 0 | 0 |
Level 3 | ||
Financial Assets | ||
Marketable investments | 0 | |
Total | 0 | |
Financial Liabilities | 17,392 | |
Level 3 | Commercial paper | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 3 | U.S. treasury | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 3 | U.S. agency securities | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 3 | U.S. states and municipalities | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 3 | Corporate bonds | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 3 | Non-U.S. government debt securities | ||
Financial Assets | ||
Marketable investments | 0 | |
Level 3 | Commercial paper | ||
Financial Assets | ||
Cash equivalents | 0 | |
Level 3 | Money market funds | ||
Financial Assets | ||
Cash equivalents | 0 | $ 0 |
Contingent Consideration Liability | ||
Financial Assets | ||
Financial Liabilities | 17,392 | |
Contingent Consideration Liability | Level 1 | ||
Financial Assets | ||
Financial Liabilities | 0 | |
Contingent Consideration Liability | Level 2 | ||
Financial Assets | ||
Financial Liabilities | 0 | |
Contingent Consideration Liability | Level 3 | ||
Financial Assets | ||
Financial Liabilities | $ 17,392 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 13,529 | $ 11,367 |
Work in process | 6,073 | 3,663 |
Finished goods | 75,299 | 57,982 |
Inventories | $ 94,901 | $ 73,012 |
Investments and Fair Value of46
Investments and Fair Value of Financial Instruments - Contingent Consideration (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
December 31, 2016 | $ 0 |
Additions to contingent consideration obligations | 17,060 |
December 31, 2017 | 17,392 |
Technology Licensing Agreement | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
December 31, 2016 | 0 |
Additions to contingent consideration obligations | 12,717 |
December 31, 2017 | 12,717 |
Crossmed | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
December 31, 2016 | 0 |
Additions to contingent consideration obligations | 4,343 |
December 31, 2017 | 4,675 |
Sales, general and administrative | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Changes in fair value | 109 |
Sales, general and administrative | Technology Licensing Agreement | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Changes in fair value | 0 |
Sales, general and administrative | Crossmed | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Changes in fair value | 109 |
Other Expenses, net | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Foreign currency remeasurement | 223 |
Other Expenses, net | Technology Licensing Agreement | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Foreign currency remeasurement | 0 |
Other Expenses, net | Crossmed | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Foreign currency remeasurement | $ 223 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 41,450 | $ 28,485 | |
Less: Accumulated depreciation and amortization | (10,551) | (7,021) | |
Property and equipment, net | 30,899 | 21,464 | |
Depreciation and amortization expense | 3,781 | 2,297 | $ 1,752 |
Property, Plant and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | 3,400 | 2,300 | $ 1,800 |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 12,456 | 9,734 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 6,458 | 4,246 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 15,926 | 10,207 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 3,547 | 1,221 | |
Computers | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 1,737 | 884 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 1,326 | $ 2,193 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Payroll and employee-related cost | $ 22,001 | $ 16,956 |
Sales return reserve | 3,035 | 2,753 |
Preclinical and clinical trial cost | 1,514 | 2,054 |
Royalty | 1,115 | 802 |
Product warranty | 1,088 | 1,254 |
Leasehold improvement expenditures | 1,012 | 260 |
Acquisition related liabilities | 4,752 | 0 |
Other accrued liabilities | 10,308 | 7,611 |
Total accrued liabilities | $ 44,825 | $ 31,690 |
Balance Sheet Components - Prod
Balance Sheet Components - Product Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Product Warranty, Increase (Decrease) [Roll Forward] | |||
Balance at the beginning of the year | $ 1,254 | $ 713 | $ 314 |
Accruals of warranties issued | 471 | 1,176 | 752 |
Settlements of warranty claims | (637) | (635) | (353) |
Balance at the end of the year | $ 1,088 | $ 1,254 | $ 713 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Non-Current Liabilities Disclosure [Abstract] | ||
Deferred tax liabilities | $ 3,299 | $ 824 |
Licensing-related cost | 12,717 | 0 |
Other non-current liabilities | 2,462 | 0 |
Other non-current liabilities | $ 18,478 | $ 824 |
Business Combination - Narrativ
Business Combination - Narrative (Details) $ in Thousands, € in Millions | Jul. 03, 2017EUR (€) | Jul. 03, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | |||||||||||||
Number of operating segments | segment | 1 | ||||||||||||
Revenue | $ 96,051 | $ 83,911 | $ 80,589 | $ 73,213 | $ 73,105 | $ 67,187 | $ 65,106 | $ 57,919 | $ 333,764 | $ 263,317 | $ 186,095 | ||
Net income (loss) | 4,657 | $ 14,814 | $ 1,084 | ||||||||||
Crossmed | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Payments to acquire business | € 8.2 | $ 9,400 | |||||||||||
Contingent consideration arrangements, maximum | 0 | ||||||||||||
Deferred tax liability | $ 2,472 | $ 2,500 | 2,500 | ||||||||||
Revenue | 6,200 | ||||||||||||
Net income (loss) | 200 | ||||||||||||
Current Liabilities | Crossmed | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent consideration for milestone payments | $ 2,900 | ||||||||||||
Noncurrent Liabilities | Crossmed | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent consideration for milestone payments | $ 1,700 | ||||||||||||
Sales, general and administrative | Crossmed | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent consideration, changes in fair value | $ 100 |
- Consideration Transferred (De
- Consideration Transferred (Details) - USD ($) $ in Thousands | Jul. 03, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||
Additions to contingent consideration obligations | $ 17,060 | |
Crossmed | ||
Business Acquisition [Line Items] | ||
Cash, net of working capital and financial debt adjustments | $ 11,088 | |
Additions to contingent consideration obligations | $ 4,343 | |
Contract purchase price | 15,431 | |
Consideration for settlement of pre-existing receivable due from Crossmed to Penumbra | 3,273 | |
Total value of consideration transferred | $ 18,704 |
Business Combination - Purchase
Business Combination - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jul. 03, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Estimated Useful Life of Finite-Lived Intangible Assets | 12 years 7 months 6 days | |||
Goodwill | $ 8,178 | $ 8,178 | $ 0 | |
Crossmed | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable, net | $ 4,406 | |||
Inventories | 1,343 | |||
Other current and non-current assets | 1,596 | |||
Property and equipment, net | 829 | |||
Accounts payable | (740) | |||
Accrued liabilities and obligations for short-term debt and credit facilities | (1,868) | |||
Deferred tax liability | (2,472) | (2,500) | $ (2,500) | |
Other non-current liabilities | (797) | |||
Goodwill | 7,867 | |||
Total purchase price | 18,704 | |||
Purchase price adjustment, working capital and financial debt adjustment | $ 1,200 | |||
Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life of Finite-Lived Intangible Assets | 14 years 6 months | |||
Customer relationships | Crossmed | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 6,790 | |||
Estimated Useful Life of Finite-Lived Intangible Assets | 15 years | |||
Other | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life of Finite-Lived Intangible Assets | 4 years 6 months | |||
Other | Crossmed | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 1,750 | |||
Estimated Useful Life of Finite-Lived Intangible Assets | 5 years |
Business Combination - Pro Form
Business Combination - Pro Forma (Details) - Crossmed - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||
Pro forma net revenue | $ 336,557 | $ 268,262 |
Pro forma net income | $ 5,992 | $ 14,816 |
Intangible Assets - Intangible
Intangible Assets - Intangible Assets, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 12 years 7 months 6 days | ||
Finite lived intangible assets: gross carrying amount | $ 8,982,000 | ||
Accumulated amortization | (421,000) | ||
Total amortization | 8,561,000 | ||
Indefinite-lived intangible assets | 15,217,000 | ||
Intangible assets, gross | 24,199,000 | ||
Intangible assets, net | 23,778,000 | $ 0 | |
Amortization of Intangible Assets | 400,000 | 0 | $ 0 |
Payments to acquire intangible assets | 2,500,000 | 0 | $ 0 |
Indefinite-lived license agreements | 15,200,000 | ||
Licensing-related cost, Noncurrent | 12,717,000 | $ 0 | |
Contingent Consideration Liability | |||
Finite-Lived Intangible Assets [Line Items] | |||
Period increase (decrease) of fair value of liability | $ 0 | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 14 years 6 months | ||
Finite lived intangible assets: gross carrying amount | $ 7,141,000 | ||
Accumulated amortization | (238,000) | ||
Total amortization | $ 6,903,000 | ||
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 4 years 6 months | ||
Finite lived intangible assets: gross carrying amount | $ 1,841,000 | ||
Accumulated amortization | (183,000) | ||
Total amortization | $ 1,658,000 |
Intangible Assets - Future Amor
Intangible Assets - Future Amortization (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 844 |
2,019 | 844 |
2,020 | 844 |
2,021 | 844 |
2,022 | 662 |
Thereafter | 4,523 |
Total amortization | $ 8,561 |
Goodwill (Details)
Goodwill (Details) | 12 Months Ended |
Dec. 31, 2017USD ($)segment | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Number of operating segments | segment | 1 |
Goodwill [Roll Forward] | |
Balance as of December 31, 2016 | $ 0 |
Acquisition of Crossmed(1) | 7,867,000 |
Foreign currency translation and other adjustments | 311,000 |
Balance as of September 30, 2017 | 8,178,000 |
Goodwill impairment | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Lease and Purchase Commitments (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)ft² | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Operating Leases [Line Items] | |||
Rent expense | $ 5,800 | $ 5,200 | $ 3,200 |
Future minimum lease payments under non-cancelable operating leases | |||
2,018 | 6,429 | ||
2,019 | 6,413 | ||
2,020 | 6,387 | ||
2,021 | 5,592 | ||
2,022 | 5,589 | ||
Thereafter | 45,493 | ||
Total future minimum lease payments | 75,903 | ||
Purchase obligations | $ 4,400 | ||
Headquarters, Additional Lease | Minimum | |||
Operating Leases [Line Items] | |||
Renewal term | 5 years | ||
Headquarters, Additional Lease | Maximum | |||
Operating Leases [Line Items] | |||
Renewal term | 15 years | ||
Rentable area (in sqft) | ft² | 100,000 | ||
Potential | Headquarters, Additional Lease | |||
Operating Leases [Line Items] | |||
Rent expense | $ 1,600 |
Commitments and Contingencies59
Commitments and Contingencies - Royalty Obligations (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cost of Sales | |||
Other Commitments [Line Items] | |||
Royalty expense | $ 4,100,000 | $ 2,900,000 | $ 2,000,000 |
Royalty Agreement, March 2005 | |||
Other Commitments [Line Items] | |||
Minimum annual royalty payments | $ 100,000 | ||
Term of royalty agreement | 15 years | ||
Royalty Agreement, April 2012 | |||
Other Commitments [Line Items] | |||
Term of royalty agreement | 15 years | ||
Royalty as a percent of sales | 5.00% | ||
Royalty Agreement, November 2013, Less than $5 Million in Sales [Member] | |||
Other Commitments [Line Items] | |||
Royalty as a percent of sales | 3.00% | ||
Royalty Agreement, November 2013, Greater than $5 Million in Sales [Member] | |||
Other Commitments [Line Items] | |||
Royalty as a percent of sales | 1.00% | ||
Royalty agreement, threshold | $ 5,000,000 | ||
Royalty Agreement, April 2015 | |||
Other Commitments [Line Items] | |||
Term of royalty agreement | 20 years | ||
Royalty as a percent of sales | 2.00% |
- Preferred Stock and Common St
- Preferred Stock and Common Stock (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2014USD ($)$ / sharesshares | May 31, 2014USD ($)$ / sharesshares | Dec. 31, 2017voteshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||
Common stock, number of votes per share | vote | 1 | ||||
Share repurchase program, price per share (in dollars per share) | $ / shares | $ 13.20 | ||||
Value of shares authorized to be repurchased | $ | $ 2,000 | ||||
Value of shares repurchased and retired | $ | $ 342 | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized to be repurchased (in shares) | 45,000 | ||||
Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized to be repurchased (in shares) | 70,612 | ||||
Shares repurchased and retired (in shares) | 23,650 | ||||
Common Stock | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Excess between the purchase and issuance price | $ | $ 500 | ||||
Preferred Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized to be repurchased (in shares) | 45,611 | ||||
Share repurchase program, price per share (in dollars per share) | $ / shares | $ 13.20 | ||||
Excess between the purchase and issuance price | $ | $ 5,800 | $ 500 | |||
Shares repurchased and retired (in shares) | 584,052 | ||||
Value of shares repurchased and retired | $ | $ 7,700 |
Stockholders' Equity - Issuance
Stockholders' Equity - Issuance of Stock (Details) $ / shares in Units, $ in Thousands | Sep. 23, 2015USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | May 31, 2014shares |
Class of Stock [Line Items] | ||||||
Proceeds from issuance of common stock issued in initial public offering, net of issuance costs | $ 0 | $ 0 | $ 124,742 | |||
Net cash proceeds from shares issued and sold | $ 106,269 | $ 124,742 | ||||
Initial Public Offering | ||||||
Class of Stock [Line Items] | ||||||
Shares issued (in shares) | shares | 4,600,000 | |||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 30 | |||||
Proceeds from issuance of common stock issued in initial public offering, net of issuance costs | $ 124,700 | |||||
Payments for underwriting discounts and commissions | 9,700 | |||||
Payments for other offering expenses | $ 3,600 | |||||
Preferred stock conversion to common stock, number of shares (in shares) | shares | 19,510,410 | |||||
Preferred stock conversion to common stock, conversion ratio | 1 | |||||
Public Stock Offering | ||||||
Class of Stock [Line Items] | ||||||
Shares issued (in shares) | shares | 1,495,000 | |||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 76 | |||||
Net cash proceeds from shares issued and sold | $ 106,300 | |||||
Underwriting discounts and commissions | 6,800 | |||||
Other issuance costs | $ 500 | |||||
Stock Options | ||||||
Class of Stock [Line Items] | ||||||
Number of shares authorized to be repurchased (in shares) | shares | 45,000 |
Stockholders' Equity - Stock Pl
Stockholders' Equity - Stock Plans (Details) - USD ($) | 12 Months Ended | 24 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 17, 2017 | Sep. 17, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options outstanding ( in shares) | 2,107,104 | 2,876,955 | |||
Number of options unvested and subject to repurchase (in shares) | 409 | 4,263 | |||
Shares purchased by employees under the employee stock purchase plan (in shares) | 91,685 | 214,025 | |||
Intrinsic value of options exercised in period | $ 56,400,000 | $ 53,100,000 | $ 13,100,000 | ||
Weighted average grant date fair value (in dollars per share) | $ 9.69 | ||||
Unrecognized compensation cost related to unvested share-based compensation arrangements | $ 29,000,000 | ||||
Unrecognized compensation cost, expected recognition period | 2 years 4 months 7 days | ||||
Share-based compensation expense capitalized in inventory | $ 200,000 | 400,000 | |||
Issuance of common stock under employee stock purchase plan | $ 5,809,000 | $ 6,578,000 | |||
Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares purchased by employees under the employee stock purchase plan (in shares) | 91,685 | 214,025 | |||
Restricted stock and restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards outstanding (in shares) | 742,405 | 1,002,944 | |||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock reserved for future issuance (in shares) | 910,849 | 600,000 | |||
Number of shares available for grant (in shares) | 910,849 | ||||
Minimum percent of eligible compensation per pay period to be used to purchase shares under plan | 1.00% | ||||
Maximum percent of eligible compensation per pay period to be used to purchase shares under plan | 15.00% | ||||
Purchase price of common stock, percent of fair market value | 85.00% | ||||
Maximum number of shares that may be purchased by any one employee (in shares) | 2,000 | ||||
Maximum value of shares that may be purchased by any one employee | $ 25,000 | ||||
2005 Stock Plan | Stock Options | Vesting, First Year | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rate | 25.00% | ||||
2005 Stock Plan | Stock Options | Vesting, After First Year, Monthly Vesting Rate | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rate | 2.00% | ||||
2005 Stock Plan | Incentive Stock Options (ISO) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Minimum voting rights for determination of exercise price, percent | 10.00% | ||||
Shares transferred to different plan (in shares) | 564 | ||||
Minimum exercise price, percent over fair market value | 110.00% | ||||
Shares of common stock reserved for future issuance (in shares) | 437,852 | ||||
2005 Stock Plan | Incentive Stock Options (ISO) | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of award | 5 years | ||||
2005 Stock Plan | Other Options | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of award | 10 years | ||||
2011 Equity Incentive Plan | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of award | 10 years | ||||
Shares transferred to different plan (in shares) | 62,807 | ||||
Award vesting period | 4 years | ||||
Shares of common stock reserved for future issuance (in shares) | 145,000 | ||||
2011 Equity Incentive Plan | Incentive Stock Options (ISO) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Minimum voting rights for determination of exercise price, percent | 10.00% | ||||
Minimum exercise price, percent over fair market value | 110.00% | ||||
2014 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock reserved for future issuance (in shares) | 7,184,818 | ||||
Number of shares available for grant (in shares) | 5,316,092 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Number of Shares | |
Beginning balance (in shares) | shares | 2,876,955 |
Exercised (in shares) | shares | (766,926) |
Cancelled/Forfeited (in shares) | shares | (2,925) |
Ending balance (in shares) | shares | 2,107,104 |
Weighted Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 14.63 |
Exercised (in dollars per share) | $ / shares | 6.54 |
Cancelled/Forfeited (in dollars per share) | $ / shares | 16.98 |
Ending balance (in dollars per share) | $ / shares | $ 17.58 |
Options Vested and Expected to Vest | |
Number of Shares | shares | 2,099,078 |
Weighted Average Exercise Price | $ / shares | $ 17.56 |
Weighted Average Remaining Contractual Life (in Years) | 6 years 7 months 28 days |
Aggregate Intrinsic Value (in thousands) | $ | $ 160,660 |
Options Exercisable | |
Number of Shares | shares | 1,434,964 |
Weighted Average Exercise Price | $ / shares | $ 15.18 |
Weighted Average Remaining Contractual Life (in Years) | 6 years 2 months 27 days |
Aggregate Intrinsic Value (in thousands) | $ | $ 113,252 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Activity (Details) - Restricted stock and restricted stock units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | |||
Unvested beginning balance (in shares) | 1,002,944 | ||
Granted (in shares) | 122,538 | ||
Vested (in shares) | (360,564) | ||
Cancelled/Forfeited (in shares) | (22,513) | ||
Unvested ending balance (in shares) | 742,405 | 1,002,944 | |
Weighted Average Grant Date Fair Value | |||
Unvested beginning balance (in dollars per share) | $ 29.44 | ||
Granted (in dollars per share) | 84.03 | ||
Vested (in dollars per share) | 27.52 | ||
Cancelled/Forfeited (in dollars per share) | 46.90 | ||
Unvested ending balance (in dollars per share) | $ 38.86 | $ 29.44 | |
Fair value of restricted stock vested | $ 29.1 | $ 9.9 | $ 4 |
Expected to vest (in shares) | 727,842 |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Shares purchased by employees under the employee stock purchase plan (in shares) | 91,685 | 214,025 |
Shares purchase by employees under the employee stock purchase plan | $ 5,809 | $ 6,578 |
Stockholders' Equity - Stock 66
Stockholders' Equity - Stock Options Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | 6 months | |
Expected volatility | 34.00% | 40.00% | 45.00% |
Risk-free interest rate, minimum | 1.56% | ||
Risk-free interest rate | 1.26% | 48.00% | |
Risk-free interest rate, maximum | 1.78% | ||
Expected dividend rate | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 29 days | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 3 months |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 17,812 | $ 14,637 | $ 7,271 |
Cost of sales | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,009 | 1,132 | 316 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,289 | 1,020 | 444 |
Sales, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 15,514 | $ 12,485 | $ 6,511 |
Accumulated Other Comprehensi68
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 266,547 | $ 232,522 | $ (12,370) |
Other comprehensive income (loss) before reclassifications: | |||
Income tax effect—benefit (expense) | 31 | (38) | |
Net of tax | 6,285 | (2,568) | |
Amounts reclassified from accumulated other comprehensive loss to earnings: | |||
Realized gains—marketable investments | (37) | (8) | |
Income tax effect—benefit | 9 | 3 | |
Net of tax | (28) | (5) | |
Net current-year other comprehensive income (loss) | 6,257 | (2,573) | (1,251) |
Ending balance | 400,408 | 266,547 | 232,522 |
Marketable Investments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (105) | (163) | |
Other comprehensive income (loss) before reclassifications: | |||
OCI, before reclassifications, before tax, attributable to parent | (133) | 98 | |
Income tax effect—benefit (expense) | 31 | (35) | |
Net of tax | (102) | 63 | |
Amounts reclassified from accumulated other comprehensive loss to earnings: | |||
Realized gains—marketable investments | (37) | (8) | |
Income tax effect—benefit | 9 | 3 | |
Net of tax | (28) | (5) | |
Net current-year other comprehensive income (loss) | (130) | 58 | |
Ending balance | (235) | (105) | (163) |
Currency Translation Adjustments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (4,583) | (1,952) | |
Other comprehensive income (loss) before reclassifications: | |||
OCI, before reclassifications, before tax, attributable to parent | 6,387 | (2,628) | |
Income tax effect—benefit (expense) | 0 | (3) | |
Net of tax | 6,387 | (2,631) | |
Amounts reclassified from accumulated other comprehensive loss to earnings: | |||
Realized gains—marketable investments | 0 | 0 | |
Income tax effect—benefit | 0 | 0 | |
Net of tax | 0 | 0 | |
Net current-year other comprehensive income (loss) | 6,387 | (2,631) | |
Ending balance | 1,804 | (4,583) | (1,952) |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (4,688) | (2,115) | (864) |
Amounts reclassified from accumulated other comprehensive loss to earnings: | |||
Net current-year other comprehensive income (loss) | 6,257 | (2,573) | (1,251) |
Ending balance | $ 1,569 | $ (4,688) | $ (2,115) |
Employee Benefit Plans Narrativ
Employee Benefit Plans Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Employer contribution cost | $ 1.1 | $ 0.8 | $ 0.3 |
Income Taxes - Income (Loss) be
Income Taxes - Income (Loss) before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
United States | $ 543 | $ (944) | $ 2,955 | ||||||||
Foreign | 1,933 | 75 | 1,069 | ||||||||
Income (loss) before income taxes | $ 3,906 | $ 1,239 | $ (918) | $ (1,751) | $ (1,515) | $ (1,092) | $ (383) | $ 2,121 | $ 2,476 | $ (869) | $ 4,024 |
Income Taxes - Provision for (B
Income Taxes - Provision for (Benefit from) for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||||||||||
Federal | $ (13) | $ (3,872) | $ 3,815 | ||||||||
State | 259 | 304 | 603 | ||||||||
Foreign | 739 | 772 | 492 | ||||||||
Total current | 985 | (2,796) | 4,910 | ||||||||
Deferred: | |||||||||||
Federal | (2,502) | (11,909) | (3,025) | ||||||||
State | (1,742) | (785) | (251) | ||||||||
Foreign | (352) | (193) | 25 | ||||||||
Total deferred | (4,596) | (12,887) | (3,251) | ||||||||
(Benefit from) provision for income taxes | $ (5,904) | $ 456 | $ 482 | $ 1,355 | $ 881 | $ (12,998) | $ (3,396) | $ (170) | $ (3,611) | $ (15,683) | $ 1,659 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income tax at federal statutory rate | 34.00% | 34.00% | 34.00% |
State income taxes, net of federal benefit | (94.60%) | 417.10% | (0.70%) |
Foreign taxes differential | (4.20%) | (63.00%) | 4.80% |
Prepaid tax ASC 810-10 | (39.80%) | 59.00% | 2.10% |
IRC 199 deduction | 0.00% | 0.00% | (7.40%) |
Stock-based compensation | (802.00%) | 1474.00% | 14.80% |
Non-deductible meals and entertainment | 19.40% | (92.60%) | 5.60% |
Imputed interest | 19.10% | (30.70%) | 4.70% |
Tax credits | (0.50%) | 395.50% | (11.60%) |
Remeasurement of deferred tax assets and liabilities | 622.50% | 0.00% | 0.00% |
Transfer pricing tax benefit | (35.30%) | 0.00% | (13.80%) |
Other | 8.00% | (47.40%) | 3.60% |
Change in valuation allowance | 127.60% | (340.80%) | 5.10% |
Effective tax rate | (145.80%) | 1805.10% | 41.20% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||||
Net operating loss carryforwards | $ 20,622 | $ 5,983 | ||
Tax credits | 7,095 | 6,260 | ||
Accruals and reserves | 5,430 | 7,668 | ||
Stock-based compensation | 3,083 | 3,703 | ||
Translation adjustment | 486 | 690 | ||
UNICAP adjustments | 3,813 | 4,721 | ||
Other | 487 | 938 | ||
Gross deferred tax assets | 41,016 | 29,963 | ||
Valuation allowance | (10,295) | (6,062) | $ (2,702) | $ (2,945) |
Total deferred tax assets | 30,721 | 23,901 | ||
Deferred tax liabilities: | ||||
Depreciation and amortization | (6,363) | (1,425) | ||
Total deferred tax liabilities | (6,363) | (1,425) | ||
Net deferred tax assets | $ 24,358 | $ 22,476 |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowance (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Reconciliation of valuation allowance | |
Beginning Balance | $ 2,945 |
Additions Charged To Expenses or Other Accounts | 0 |
Deductions Credited to Expenses or Other Accounts | (243) |
Ending Balance | $ 2,702 |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 72.7 |
Operating loss carryforwards, carryforward period | 20 years |
State | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 67.9 |
Foreign | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 1.1 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Research Tax Credit | Federal | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforwards | $ 4.2 |
Period for which credits are carried forward | 20 years |
Research Tax Credit | State | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforwards | $ 5.9 |
Federal | |
Tax Credit Carryforward [Line Items] | |
Operating loss carryforwards, carryforward period | 20 years |
Income Taxes - Tax Reform Act (
Income Taxes - Tax Reform Act (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Tax Cuts And Jobs Act Of 2017, change in tax rate, deferred tax asset, provisional income tax expense | $ 15.4 |
Effective income tax rate reconciliation, change in enacted tax rate | $ 2.4 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the change in gross unrecognized tax benefits | |||||
Beginning balance | $ 3,827 | $ 3,619 | $ 1,726 | ||
Gross increase for tax positions of current year | 871 | 1,213 | 1,023 | ||
Gross increase for tax positions of prior years | 130 | 250 | 1,062 | ||
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | (659) | (648) | 0 | ||
Settlement | 0 | (387) | 0 | ||
Lapse of statute of limitations | (17) | (220) | (192) | ||
Ending balance | 4,152 | 3,827 | 3,619 | ||
Accrued interest and penalties related to uncertain tax positions | $ 100 | $ 100 | |||
Unrecognized tax benefits | $ 3,827 | $ 3,619 | $ 1,726 | 4,152 | $ 3,827 |
Unrecognized tax benefits that would affect the effective tax rate if recognized | $ 800 |
Net Income per Share - Basic an
Net Income per Share - Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Income before equity in losses of unconsolidated investees | $ 9,083 | $ 238 | $ (1,558) | $ (3,106) | $ (2,396) | $ 11,906 | $ 3,013 | $ 2,291 | $ 4,657 | $ 14,814 | $ 2,365 |
Numerator: | |||||||||||
Less: Undistributed income attributable to convertible preferred stockholders | 0 | 0 | (1,281) | ||||||||
Net income (loss) attributable to common stockholders, basic | $ 4,657 | $ 14,814 | $ 1,084 | ||||||||
Denominator: | |||||||||||
Weighted average shares used to compute net income (loss) per share attributable to common stockholders—Basic (in shares) | 33,606,943 | 33,446,841 | 33,219,487 | 31,611,841 | 31,045,700 | 30,604,384 | 30,210,322 | 29,990,006 | 32,978,065 | 30,464,583 | 11,993,429 |
Potential dilutive common stock securities, as calculated using treasury stock method (in shares) | 2,341,038 | 3,013,495 | 2,226,221 | ||||||||
Weighted average shares used to compute net income (loss) per share attributable to common stockholders—Diluted (in shares) | 35,833,621 | 35,664,272 | 33,219,487 | 31,611,841 | 31,045,700 | 33,755,383 | 33,308,193 | 33,023,495 | 35,319,103 | 33,478,078 | 14,219,650 |
Net income (loss) per share attributable to common stockholders—Basic (in dollars per share) | $ 0.27 | $ 0.01 | $ (0.05) | $ (0.10) | $ (0.08) | $ 0.39 | $ 0.10 | $ 0.08 | $ 0.14 | $ 0.49 | $ 0.09 |
Net income (loss) per share attributable to common stockholders—Diluted (in dollars per share) | $ 0.25 | $ 0.01 | $ (0.05) | $ (0.10) | $ (0.08) | $ 0.35 | $ 0.09 | $ 0.07 | $ 0.13 | $ 0.44 | $ 0.08 |
Net Income per Share - Antidilu
Net Income per Share - Antidilutive Securities (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from the computation of earnings per share (in shares) | 0.1 | 0.3 | 1.4 |
Geographic Areas and Product 81
Geographic Areas and Product Sales - Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 96,051 | $ 83,911 | $ 80,589 | $ 73,213 | $ 73,105 | $ 67,187 | $ 65,106 | $ 57,919 | $ 333,764 | $ 263,317 | $ 186,095 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 219,173 | 176,104 | 127,311 | ||||||||
Japan | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 33,790 | 30,284 | 19,016 | ||||||||
Other International | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 80,801 | $ 56,929 | $ 39,768 |
Geographic Areas and Product 82
Geographic Areas and Product Sales - Revenue by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 96,051 | $ 83,911 | $ 80,589 | $ 73,213 | $ 73,105 | $ 67,187 | $ 65,106 | $ 57,919 | $ 333,764 | $ 263,317 | $ 186,095 |
Neuro | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 232,446 | 185,533 | 141,410 | ||||||||
Peripheral Vascular | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 101,318 | $ 77,784 | $ 44,685 |
Selected Quarterly Financial 83
Selected Quarterly Financial Data (Unaudited) - Selected Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 96,051 | $ 83,911 | $ 80,589 | $ 73,213 | $ 73,105 | $ 67,187 | $ 65,106 | $ 57,919 | $ 333,764 | $ 263,317 | $ 186,095 |
Cost of revenue | 32,324 | 29,134 | 29,660 | 25,504 | 26,525 | 24,313 | 23,636 | 18,014 | 116,622 | 92,488 | 62,037 |
Gross Profit | 63,727 | 54,777 | 50,929 | 47,709 | 46,580 | 42,874 | 41,470 | 39,905 | 217,142 | 170,829 | 124,058 |
Income (loss) before income taxes and equity in losses of unconsolidated investees | 3,906 | 1,239 | (918) | (1,751) | (1,515) | (1,092) | (383) | 2,121 | 2,476 | (869) | 4,024 |
(Benefit from) provision for income taxes | (5,904) | 456 | 482 | 1,355 | 881 | (12,998) | (3,396) | (170) | (3,611) | (15,683) | 1,659 |
Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 9,810 | 783 | (1,400) | (3,106) | (2,396) | 11,906 | 3,013 | 2,291 | 6,087 | 14,814 | 2,365 |
Equity in losses of unconsolidated investees | $ (727) | $ (545) | $ (158) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ (1,430) | $ 0 | $ 0 |
Net income (loss) per share attributable to common stockholders—Basic (in dollars per share) | $ 0.27 | $ 0.01 | $ (0.05) | $ (0.10) | $ (0.08) | $ 0.39 | $ 0.10 | $ 0.08 | $ 0.14 | $ 0.49 | $ 0.09 |
Net income (loss) per share attributable to common stockholders—Diluted (in dollars per share) | $ 0.25 | $ 0.01 | $ (0.05) | $ (0.10) | $ (0.08) | $ 0.35 | $ 0.09 | $ 0.07 | $ 0.13 | $ 0.44 | $ 0.08 |
Weighted average shares used to compute net income (loss) per share attributable to common stockholders—Basic (in shares) | 33,606,943 | 33,446,841 | 33,219,487 | 31,611,841 | 31,045,700 | 30,604,384 | 30,210,322 | 29,990,006 | 32,978,065 | 30,464,583 | 11,993,429 |
Weighted average shares used to compute net income (loss) per share attributable to common stockholders—Diluted (in shares) | 35,833,621 | 35,664,272 | 33,219,487 | 31,611,841 | 31,045,700 | 33,755,383 | 33,308,193 | 33,023,495 | 35,319,103 | 33,478,078 | 14,219,650 |
Income before equity in losses of unconsolidated investees | $ 9,083 | $ 238 | $ (1,558) | $ (3,106) | $ (2,396) | $ 11,906 | $ 3,013 | $ 2,291 | $ 4,657 | $ 14,814 | $ 2,365 |
Selected Quarterly Financial 84
Selected Quarterly Financial Data (Unaudited) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Release of valuation allowance | $ 19.8 | ||
Effective income tax rate reconciliation, change in enacted tax rate | 2.4 | ||
Tax Cuts And Jobs Act Of 2017, change in tax rate, deferred tax asset, provisional income tax expense | $ 15.4 | ||
Medical device excise tax refund | $ 1.2 | ||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2016-09 | Retained Earnings (Accumulated Deficit) | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Recognition of excess tax benefits | $ 17.4 |