Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 21, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-37557 | |
Entity Registrant Name | Penumbra Inc | |
Entity Address, Address Description | One Penumbra Place | |
Entity Address, City or Town | Alameda | |
Entity Address, State or Province | CA | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 05-0605598 | |
Entity Address, Postal Zip Code | 94502 | |
City Area Code | 510 | |
Local Phone Number | 748-3200 | |
Title of 12(b) Security | Common Stock, Par value $0.001 per share | |
Trading Symbol | PEN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 35,074,352 | |
Entity Central Index Key | 0001321732 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 72,456 | $ 72,779 |
Marketable investments | 95,766 | 116,610 |
Accounts receivable, net of allowance for credit losses of $2,055 and net of doubtful accounts of $2,946 at March 31, 2020 and December 31, 2019, respectively | 103,963 | 105,901 |
Inventories | 166,152 | 152,992 |
Prepaid expenses and other current assets | 15,403 | 14,852 |
Total current assets | 453,740 | 463,134 |
Property and equipment, net | 58,698 | 51,812 |
Operating lease right-of-use assets | 43,168 | 43,717 |
Finance lease right-of-use assets | 39,287 | 39,924 |
Intangible assets, net | 25,024 | 25,407 |
Goodwill | 7,509 | 7,656 |
Deferred taxes | 32,945 | 31,305 |
Other non-current assets | 3,869 | 2,946 |
Total assets | 664,240 | 665,901 |
Current liabilities: | ||
Accounts payable | 15,843 | 15,111 |
Accrued liabilities | 65,335 | 67,630 |
Current operating lease liabilities | 4,435 | 4,142 |
Current finance lease liabilities | 2,461 | 4,165 |
Total current liabilities | 88,074 | 91,048 |
Non-current operating lease liabilities | 46,416 | 47,242 |
Non-current finance lease liabilities | 26,483 | 26,748 |
Other non-current liabilities | 15,150 | 15,250 |
Total liabilities | 176,123 | 180,288 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock | 35 | 35 |
Additional paid-in capital | 435,724 | 430,659 |
Accumulated other comprehensive loss | (4,575) | (2,324) |
Retained earnings | 57,749 | 57,522 |
Total Penumbra, Inc. stockholders’ equity | 488,933 | 485,892 |
Non-controlling interest | (816) | (279) |
Total stockholders’ equity | 488,117 | 485,613 |
Total liabilities and stockholders’ equity | $ 664,240 | $ 665,901 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, Allowance For Credit Loss | $ 2,055 | $ 2,946 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 137,329 | $ 128,439 |
Cost of revenue | 49,320 | 44,529 |
Gross profit | 88,009 | 83,910 |
Operating expenses: | ||
Research and development | 12,946 | 11,667 |
Sales, general and administrative | 74,453 | 61,091 |
Total operating expenses | 87,399 | 72,758 |
Income from operations | 610 | 11,152 |
Interest income, net | 299 | 733 |
Other (expense) income, net | (1,655) | 24 |
(Loss) income before income taxes | (746) | 11,909 |
(Benefit from) provision for income taxes | (1,634) | 1,455 |
Consolidated net income | 888 | 10,454 |
Net loss attributable to non-controlling interest | (537) | (244) |
Net income attributable to Penumbra, Inc. | $ 1,425 | $ 10,698 |
Net income attributable to Penumbra, Inc. per share: | ||
Basic (in dollars per share) | $ 0.04 | $ 0.31 |
Diluted (in dollars per share) | $ 0.04 | $ 0.30 |
Weighted average shares outstanding: | ||
Basic (in shares) | 35,042,912 | 34,507,279 |
Diluted (in shares) | 36,362,726 | 36,213,164 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Consolidated net income | $ 888 | $ 10,454 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments, net of tax | (1,634) | (1,098) |
Net change in unrealized (losses) gains on available-for-sale securities, net of tax | (617) | 462 |
Total other comprehensive loss, net of tax | (2,251) | (636) |
Consolidated comprehensive (loss) income | (1,363) | 9,818 |
Net loss attributable to non-controlling interest | (537) | (244) |
Comprehensive (loss) income attributable to Penumbra, Inc. | $ (826) | $ 10,062 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | Total Penumbra, Inc. Stockholders’ Equity | Non-controlling Interest |
Beginning balance (in shares) at Dec. 31, 2018 | 34,437,339 | ||||||
Beginning balance at Dec. 31, 2018 | $ 422,415 | $ 34 | $ 415,084 | $ (1,942) | $ 9,064 | $ 422,240 | $ 175 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock (in shares) | 140,598 | ||||||
Issuance of common stock | 1,071 | $ 0 | 1,071 | 1,071 | |||
Shares held for tax withholdings (in shares) | (14,284) | ||||||
Shares held for tax withholdings | (2,098) | (2,098) | (2,098) | ||||
Stock-based compensation | 5,457 | 5,457 | 5,457 | ||||
Other comprehensive income (loss) | (636) | (636) | (636) | ||||
Net income (loss) | 10,698 | 10,698 | 10,698 | ||||
Net loss attributable to non-controlling interest | (244) | (244) | |||||
Consolidated net income | 10,454 | ||||||
Ending balance (in shares) at Mar. 31, 2019 | 34,563,653 | ||||||
Ending balance at Mar. 31, 2019 | 436,663 | $ 34 | 419,514 | (2,578) | 19,762 | 436,732 | (69) |
Beginning balance (in shares) at Dec. 31, 2019 | 35,001,581 | ||||||
Beginning balance at Dec. 31, 2019 | 485,613 | $ 35 | 430,659 | (2,324) | 57,522 | 485,892 | (279) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock (in shares) | 81,485 | ||||||
Issuance of common stock | 396 | $ 0 | 396 | 396 | |||
Shares held for tax withholdings (in shares) | (12,058) | ||||||
Shares held for tax withholdings | (2,105) | (2,105) | (2,105) | ||||
Stock-based compensation | 6,774 | 6,774 | 6,774 | ||||
Other comprehensive income (loss) | (2,251) | (2,251) | (2,251) | ||||
Net income (loss) | 1,425 | 1,425 | 1,425 | ||||
Net loss attributable to non-controlling interest | (537) | (537) | |||||
Consolidated net income | 888 | ||||||
Ending balance (in shares) at Mar. 31, 2020 | 35,071,008 | ||||||
Ending balance at Mar. 31, 2020 | $ 488,117 | $ 35 | $ 435,724 | $ (4,575) | $ 57,749 | $ 488,933 | $ (816) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Cash Flows [Abstract] | ||
Consolidated net income | $ 888 | $ 10,454 |
Adjustments to reconcile consolidated net income to net cash used in operating activities: | ||
Depreciation and amortization | 2,959 | 1,804 |
Stock-based compensation | 5,689 | 5,095 |
Inventory write-downs | 1,097 | 658 |
Deferred taxes | (1,502) | 1,078 |
Other | 168 | 396 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (238) | (13,373) |
Inventories | (15,090) | (6,728) |
Prepaid expenses and other current and non-current assets | (1,544) | 45 |
Accounts payable | 921 | (1,503) |
Accrued expenses and other non-current liabilities | 732 | 6 |
Net cash provided by (used in) operating activities | (5,920) | (2,068) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sales of marketable investments | 7,188 | 1,018 |
Proceeds from maturities of marketable investments | 12,980 | 33,300 |
Purchases of property and equipment | (10,131) | (2,463) |
Net cash provided by (used in) investing activities | 10,037 | 31,855 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercises of stock options | 396 | 1,071 |
Payment of employee taxes related to vested stock | (2,105) | (2,098) |
Payments of finance lease obligations | (1,958) | 0 |
Payment of acquisition-related obligations | (683) | (683) |
Net cash used in financing activities | (4,350) | (1,710) |
Effect of foreign exchange rate changes on cash and cash equivalents | (90) | (321) |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (323) | 27,756 |
CASH AND CASH EQUIVALENTS—Beginning of period | 72,779 | 67,850 |
CASH AND CASH EQUIVALENTS—End of period | 72,456 | 95,606 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Purchase of property and equipment funded through accounts payable and accrued liabilities | 1,702 | 860 |
Right-of-use assets obtained in exchange for lease obligations | $ 325 | $ 94 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
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 novel products and has a broad portfolio that addresses challenging medical conditions in markets with significant unmet need. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying condensed consolidated balance sheet as of March 31, 2020, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income (loss), and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2020 and 2019, and the condensed consolidated statements of cash flows for the three months ended March 31, 2020 and 2019 are unaudited. The unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet data as of December 31, 2019 was derived from the audited financial statements as of that date. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company’s financial position as of March 31, 2020, the results of its operations for the three months ended March 31, 2020 and 2019, the changes in comprehensive income and stockholders’ equity for the three months ended March 31, 2020 and 2019, and the cash flows for the three months ended March 31, 2020 and 2019. The results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future annual or interim period. Certain changes in presentation were made in the condensed consolidated financial statements for the three months ended March 31, 2019 to conform to the presentation for the three months ended March 31, 2020. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K. There have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2020, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, other than the changes described below in connection with the adoption of the guidance under Accounting Standard Update (“ASU”) No. 2016-13. The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its majority-owned subsidiary. The portion of equity and consolidated net income not attributable to the Company is considered non-controlling interest and is classified separately in the condensed consolidated financial statements. Any subsequent changes in the Company’s ownership interest while the Company retains its controlling interest in its majority-owned subsidiary will be accounted for as equity transactions. All intercompany balances 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 marketable investments, allowances for credit losses, the amount of variable consideration included in the transaction price, warranty reserve, valuation of inventories, useful lives of property and equipment, operating and financing lease right-of-use (“ROU”) assets and liabilities, income taxes, contingent consideration and other 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 devices, and operates as one operating segment. The Company’s chief operating decision-maker, its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance. Recently Adopted Accounting Standards On January 1, 2020, the Company adopted ASU No. 2016-13, Financial Instruments—Credit Losses (“ASU 2016-13”) using the modified retrospective transition approach, with the impact upon adoption reflected in opening retained earnings. The comparative prior year information has not been adjusted and continues to be reported under legacy GAAP. The standard significantly changed the impairment model for most financial assets and certain other instruments, including accounts receivable and available-for-sale securities. For financial assets measured at amortized cost, including our accounts receivable, the standard requires an entity to (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected, (2) recognize this allowance and changes in the allowance during subsequent periods through net income and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. For available-for-sale debt securities, this standard made several targeted amendments to the existing other-than-temporary impairment model, including (1) requiring disclosure of the allowance for credit losses, (2) allowing reversals of the previously recognized credit losses until the entity has the intent to sell, is more-likely-than-not required to sell the securities or the maturity of the securities, (3) limiting impairment to the difference between the amortized cost basis and fair value and (4) not allowing entities to consider the length of time that fair value has been less than amortized cost as a factor in evaluating whether a credit loss exists. As a result of adoption, the cumulative impact related to accounts receivable expected credit losses to our opening retained earnings at January 1, 2020 was $1.2 million. As of the adoption date, the difference between the amortized cost basis and fair value of the Company’s impaired available-for-sale securities held was not material. Accordingly, upon adoption there was no impact to our opening retained earnings for credit losses related to available-for-sale securities. For additional information on the impact of the adoption and disclosures required by ASU 2016-13, refer to the updates to significant accounting policies section below, Note “3. Investments and Fair Value of Financial Instruments” and Note “4. Balance Sheet Components.” On January 1, 2020, the Company adopted ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The primary focus of the standard is to improve the effectiveness of the disclosure requirements for fair value measurements. The Company had no significant changes to the fair value measurement related disclosures due to the adoption of the standard. Updates to Significant Accounting Policies As a result of the adoption of the ASU 2016-13, the Company has made the following updates to its significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Significant Accounting Policies Update - Credit Losses The Company is exposed to credit losses primarily through our accounts receivable from sales of products on credit terms of one year or less. The Company performs ongoing credit evaluations of its customers, does not require collateral, and maintains allowances for potential credit losses on customer accounts. The Company monitors its ongoing credit exposure and concentration through active review of customers balances against contract terms, due dates, geographic related risks and current economic conditions impacting our customers. Our activities include timely account reconciliation, dispute resolution and payment confirmation. Refer to “Significant Accounting Policies - Accounts Receivable” for more information on the allowance for credit losses on the Company’s accounts receivables. The Company is also exposed to credit losses through its investments in available-for-sale securities. An investment is impaired if the fair value of the investment is less than its amortized cost basis. The Company reviews each impaired available-for-sale security held in its portfolio to determine whether the decline in fair value below its amortized cost basis is the result of credit losses or other factors. An allowance for credit losses is to be recorded as a charge to net income in an amount equal to the difference between the impaired security’s amortized cost basis and the amount expected to be collected over the lifetime of security, limited by the amount that the fair value is less than its amortized cost basis. Any remaining difference between its amortized cost basis and fair value is deemed not to be due to expected credit losses and is recorded as a component of accumulated other comprehensive loss. The Company’s impairment review considers several factors to determine if an expected credit loss is present including the discounted present value of expected cash flows of the security, the capacity to hold a security or sell a security before recovery of the decline in amortized cost, the credit rating of the security and forecasted and historical factors that affect the value of the security. See Note “3. Investments and Fair Value of Financial Instruments” for more information. Significant Accounting Policies Update - Accounts Receivable Accounts receivable are measured at amortized cost less the allowances for credit losses. In accordance with ASU 2016-13, as of January 1, 2020, the Company measures expected credit losses for its accounts receivables utilizing a loss-rate approach. The allowance for expected credit losses assessment requires a degree of estimation and judgement. The expected loss-rate is calculated by utilizing historical credit losses incurred as percentage of the Company’s historical accounts receivable balances, pooled by customers with similar geographic credit risk characteristics. The loss-rate is adjusted for management’s expectations regarding current conditions and forecasts about future conditions which impact expected credit losses. The Company considers factors such as customers credit risk, geographic related risks and economic conditions that may affect a customer’s credit quality classification. Prior to the adoption of ASU 2016-13, the Company recognized losses when a loss was incurred or deemed probable. At March 31, 2020, the Company reported $104.0 million of accounts receivable, net of credit losses of $2.1 million. Changes in the allowance for credit losses were not material for the three months ended March 31, 2020. Recently Issued Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes— Simplifying the Accounting for Income Taxes. The standard intends to simplify and reduce the cost of accounting for income taxes. The new guidance removes certain exceptions for recognizing deferred taxes for foreign investments, the incremental approach to performing intraperiod allocation, and calculating income taxes in interim periods for year to date losses that exceed anticipated full year losses. The standard also adds guidance to reduce complexity in certain areas, including accounting for franchise taxes that are partially based on income, transactions with a government that result with a step up in the tax basis of goodwill, enacted changes in tax law during interim periods, and allocating taxes to members of a consolidated group which are not subject to tax. For public business entities, the amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all periods in which financial statements have not yet been issued, including interim periods. The Company is currently evaluating the impact of adopting the new guidance. In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendments in this standard are effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period. The amendments in this standard should be applied prospectively. Under a prospective transition, the Company would apply the amendments at the beginning of the interim period that includes the adoption date. The Company is currently evaluating the impact of adopting the new standard. |
Investments and Fair Value of F
Investments and Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
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 following table presents the Company’s marketable investments as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance Fair Value Commercial paper $ 4,989 $ 2 $ — $ — $ 4,991 U.S. treasury 2,497 3 — — 2,500 U.S. agency and government sponsored securities 2,499 30 — — 2,529 U.S. states and municipalities 4,887 50 — — 4,937 Corporate bonds 81,272 69 (532) — 80,809 Total $ 96,144 $ 154 $ (532) $ — $ 95,766 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 7,456 $ 1 $ — $ 7,457 U.S. treasury 4,972 7 — 4,979 U.S. agency and government sponsored securities 2,499 19 — 2,518 U.S. states and municipalities 4,889 4 — 4,893 Corporate bonds 96,484 282 (3) 96,763 Total $ 116,300 $ 313 $ (3) $ 116,610 As of March 31, 2020, the total amortized cost basis of the Company’s impaired available-for-sale securities exceeded its fair value by $0.5 million. The Company reviewed its impaired available-for-sale securities and concluded that the decline in fair value was not related to credit losses and is recoverable. Accordingly, during the three months ended March 31, 2020 no allowance for credit losses was recorded and instead the unrealized losses are reported as a component of accumulated other comprehensive loss. Prior to the adoption of ASU 2016-13, the Company recognized losses, if any, in consolidated net income when the security was sold. 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 twelve months or for twelve months or more as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds $ 60,387 $ (532) $ — $ — $ 60,387 $ (532) Total $ 60,387 $ (532) $ — $ — $ 60,387 $ (532) December 31, 2019 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds $ 7,875 $ (3) $ — $ — $ 7,875 $ (3) Total $ 7,875 $ (3) $ — $ — $ 7,875 $ (3) The following table presents the contractual maturities of the Company’s marketable investments as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Fair Value Fair Value Due in less than one year $ 37,433 $ 51,990 Due in one to five years 58,333 64,620 Total $ 95,766 $ 116,610 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 measurement 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. Financial instruments 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, or historical pricing trends of a security 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 measured at fair value by level within the fair value hierarchy as of March 31, 2020 and December 31, 2019 (in thousands): As of March 31, 2020 Level 1 Level 2 Level 3 Fair Value Financial Assets Cash equivalents: Money market funds $ 42,546 $ — $ — $ 42,546 Marketable investments: Commercial paper — 4,991 — 4,991 U.S. treasury 2,500 — — 2,500 U.S. agency and government sponsored securities — 2,529 — 2,529 U.S. states and municipalities — 4,937 — 4,937 Corporate bonds — 80,809 — 80,809 Total 2,500 93,266 — 95,766 Total $ 45,046 $ 93,266 $ — $ 138,312 As of December 31, 2019 Level 1 Level 2 Level 3 Fair Value Financial Assets Cash equivalents: Commercial paper $ — $ 9,474 $ — $ 9,474 Money market funds 24,054 — — 24,054 Marketable investments: Commercial paper — 7,457 — 7,457 U.S. treasury 4,979 — — 4,979 U.S. agency and government sponsored securities — 2,518 — 2,518 U.S. states and municipalities — 4,893 — 4,893 Corporate bonds — 96,763 — 96,763 Total 4,979 111,631 — 116,610 Total $ 29,033 $ 121,105 $ — $ 150,138 Contingent Consideration Obligations As of March 31, 2020 and December 31, 2019, there were no contingent consideration liabilities classified as Level 3. As of December 31, 2019, the Company’s contingent consideration liability balance of $1.2 million relates to milestone payments due in connection with the 2017 acquisition of Crossmed S.p.a. (“Crossmed”) and was based on actual revenue performance for the year ended December 31, 2019 and not based on unobservable inputs. The Company made this payment during the three months ended March 31, 2020. For more information related to the payment of the contingent consideration liabilities refer to Note “5. Business Combinations.” The following tables summarize the changes in fair value of the contingent consideration obligation for the three months ended March 31, 2020 and March 31, 2019 (in thousands): Fair Value of Contingent Consideration Balance at December 31, 2019 $ 1,206 Payments of contingent consideration liabilities (1,186) Changes in fair value — Foreign currency remeasurement (20) Balance at March 31, 2020 $ — Fair Value of Contingent Consideration Balance at December 31, 2018 $ 2,571 Payments of contingent consideration liabilities (1,296) Changes in fair value — Foreign currency remeasurement (27) Balance at March 31, 2019 $ 1,248 The Company did not hold any Level 3 marketable investments as of March 31, 2020 or December 31, 2019. During the three months ended March 31, 2020 and 2019, 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 March 31, 2020 or December 31, 2019. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | 4. Balance Sheet Components Allowance for Credit Losses - Accounts Receivable The Company’s allowance for credit losses related to accounts receivable balances was comprised of the following (in thousands): Balance At Write-offs Provision for Balance At January 1, 2020 (1) $ 2,946 $ (2,361) $ 1,307 $ 1,892 January 1, 2020 - March 31, 2020 (2) $ 1,892 $ — $ 163 $ 2,055 (1) On January 1, 2020, the Company recorded a $1.3 million adjustment to opening retained earnings upon the adoption of ASU 2016-13. (2) The Company recorded a $0.2 million allowance for credit losses during the three months ended March 31, 2020. Inventories The following table shows the components of inventories as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Raw materials $ 23,721 $ 21,646 Work in process 20,865 21,651 Finished goods 121,566 109,695 Inventories $ 166,152 $ 152,992 Accrued Liabilities The following table shows the components of accrued liabilities as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Payroll and employee-related cost $ 38,700 $ 37,727 Accrued expenses 7,655 7,811 Sales return provision 1,803 1,821 Product warranty 2,331 2,318 Other acquisition-related costs (1) 3,000 4,291 Other accrued liabilities 11,846 13,662 Total accrued liabilities $ 65,335 $ 67,630 (1) Amount consists of a contingent liability related to an anti-dilution provision from the asset acquisition of MVI Health Inc (“MVI”) in 2018. The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Balance at the beginning of the period $ 2,318 $ 1,875 Accruals of warranties issued 195 1,065 Settlements of warranty claims (182) (622) Balance at the end of the period $ 2,331 $ 2,318 Other Non-Current Liabilities The following table shows the components of other non-current liabilities as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Deferred tax liabilities $ 3,903 $ 4,005 Licensing-related cost (1) 10,290 10,878 Other non-current liabilities 957 367 Total other non-current liabilities $ 15,150 $ 15,250 (1) Amount relates to the non-current liability recorded for probable future milestone payments to be made under the indefinite-lived intangible assets related to licensed technology described in Note “6. Intangible Assets.” Refer therein for more information. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | 5. Business Combinations Payments Related to 2017 Crossmed Acquisition On July 3, 2017, the Company completed its acquisition of Crossmed, a joint stock company organized under the laws of Italy. The purchase price measurement period was closed as of June 30, 2018. The Company is obligated to pay additional consideration to the sellers of Crossmed (the “Sellers”) in the form of milestone payments based on Crossmed’s net revenue and may be required to pay additional consideration based on incremental net revenue for each of the periods ended. There is no limit on the milestone payments that can be paid out. As of December 31, 2019, the Company’s condensed consolidated balance sheet included $1.2 million, in current liabilities primarily related to the final milestone payment due which was paid during the first quarter of 2020. During the three months ended March 31, 2020, the Company made $1.2 million in milestone payments of which $0.5 million is presented in operating activities and $0.7 million is presented in financing activities in the condensed consolidated statement of cash flows. During the three months ended March 31, 2019, the Company made $1.3 million in milestone payments of which $0.6 million is presented in operating activities and $0.7 million is presented in financing activities in the condensed consolidated statement of cash flows. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | 6. Intangible Assets Acquired Intangible Assets The following tables present details of the Company’s acquired finite-lived and indefinite-lived intangible assets, as of March 31, 2020 and December 31, 2019 (in thousands, except weighted-average amortization period): As of March 31, 2020 Weighted-Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Customer relationships 15.0 years $ 6,558 $ (1,203) $ 5,355 Trade secrets and processes 20.0 years 5,256 (591) 4,665 Other 5.0 years 1,691 (930) 761 Total intangible assets subject to amortization 16.5 years $ 13,505 $ (2,724) $ 10,781 Intangible assets related to licensed technology 14,243 — 14,243 Total intangible assets $ 27,748 $ (2,724) $ 25,024 As of December 31, 2019 Weighted-Average Gross Carrying Amount Accumulated Amortization Net Customer relationships 15.0 years $ 6,686 $ (1,114) $ 5,572 Trade secrets and processes 20.0 years 5,256 (526) 4,730 Other 5.0 years 1,724 (862) 862 Total intangible assets subject to amortization 16.4 years $ 13,666 $ (2,502) $ 11,164 Intangible assets related to licensed technology 14,243 — 14,243 Total intangible assets $ 27,909 $ (2,502) $ 25,407 The customer relationships and other intangible assets subject to amortization relate to the acquisition of Crossmed during the third quarter of 2017. The gross carrying amount and accumulated amortization of these intangible assets are subject to foreign currency translation effects. Refer to Note “5. Business Combinations” for more information. The Company’s $5.3 million trade secrets and processes intangible asset was recognized in connection with a royalty buyout agreement during the first quarter of 2018, which is discussed further in Note “9. Commitments and Contingencies”. The following table presents the amortization expense recorded related to the Company’s finite-lived intangible assets for the three months ended March 31, 2020 and March 31, 2019 (in thousands): Three Months Ended March 31, 2020 2019 Cost of revenue $ 66 $ 66 Sales, general and administrative 194 200 Total $ 260 $ 266 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 accounted for the transaction as an asset acquisition and recorded an indefinite-lived intangible asset as it was determined to have alternative future use. The Company recorded an indefinite-lived intangible asset equal to the total payments made and expected to be made under the License Agreement and a corresponding contingent liability for the probable future milestone payments not yet paid. Upon the commercialization of the underlying product utilizing the licensed technology, the capitalized amount will be amortized over its estimated useful life. At the end of each reporting period the Company adjusts the contingent liabilities to reflect the amount of future milestone payments that are probable to be paid. Prior to the commercialization of products utilizing the underlying technology, any changes in the contingent liability are recorded as an adjustment between the liability balances and the gross carrying amount of the indefinite-lived intangible asset. During the three months ended March 31, 2020, there were no changes to the contingent liability related to the exclusive technology license agreement. As of March 31, 2020, the balance of the contingent liability related to probable future milestone payments under the License Agreement was $11.7 million, of which $0.8 million and $10.9 million were included in accrued liabilities and other non-current liabilities on the condensed consolidated balance sheet, respectively. As of December 31, 2019, the balance of the contingent liability related to probable future milestone payments under the License Agreement was $11.7 million, of which $0.8 million and $10.9 million were included in accrued liabilities and other non-current liabilities on the condensed consolidated balance sheet, respectively. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. Goodwill The following table presents the changes in goodwill during the three months ended March 31, 2020 (in thousands): Total Company Balance as of December 31, 2019 $ 7,656 Foreign currency translation (147) Balance as of March 31, 2020 $ 7,509 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 8. Leases Lease Overview As of December 31, 2019 and March 31, 2020, the Company’s contracts that contained a lease consisted of real estate, equipment and vehicle leases. The Company leases real estate for office and warehouse space primarily under noncancelable operating leases that expire at various dates through 2035, subject to the Company’s option to renew certain leases for an additional five March 31, 2020, the Company did not have material finance leases. The following table presents the components of the Company’s lease cost, lease term and discount rate during the three months ended March 31, 2020 (in thousands, except years and percentages): Three Months Ended March 31, 2020 March 31, 2019 Lease Cost Operating lease cost $ 1,887 $ 1,768 Finance lease cost: Amortization of right-of-use assets 671 — Interest on lease liabilities 395 — Variable lease cost (1) 1,453 758 Total lease costs $ 4,406 $ 2,526 Weighted Average Remaining Lease Term Operating leases 9.8 years 10.6 years Finance leases 14.8 years — Weighted Average Discount Rate Operating leases 6.19 % 6.20 % Finance leases 5.42 % — % (1) Variable lease costs represent payments that are dependent on usage, a rate or index. Variable lease cost primarily relates to common area maintenance charges for its real estate leases as the Company elected not to separate non-lease components from lease components upon adoption of ASC 842. During the third quarter of 2019, the Company signed a 15 year lease for additional space at the Company’s headquarters located at 1310 Harbor Bay Business Park, Alameda, California (the “1310 Harbor Bay Lease”) which has not yet commenced as of March 31, 2020. The 1310 Harbor Bay Lease is expected to commence upon substantial completion of lessor owned improvements in connection with the development of the building which the Company anticipates will occur in the next two years. In the fourth quarter of 2019, the 15 year term Roseville lease commenced once the building was made ready and available for its intended use. The Company determined that the Roseville lease is a non-cancelable finance lease which will expire in 2035. The following table is a schedule, by years, of maturities of the Company's operating and finance lease liabilities as of March 31, 2020 (in thousands): Operating Lease Payments Finance Lease Payments Remainder of 2020 $ 7,417 $ 3,922 2021 6,896 2,455 2022 6,647 2,501 2023 6,466 2,550 2024 6,231 2,601 Thereafter 34,904 27,949 Total undiscounted lease payments (1) 68,561 41,978 Less imputed interest (17,710) (13,034) Present value of lease liabilities $ 50,851 $ 28,944 (1) The table above excludes the estimated future minimum lease payment for the 1310 Harbor Bay Lease due to uncertainty around the timing of when the 1310 Harbor Bay Lease will commence and payments will be due. The total estimated lease payments over the 15 year lease term will be calculated based on the total development costs incurred in connection with the development of the building which will be determined upon substantial completion of the building. Supplemental cash flow information related to leases during the three months ended March 31, 2020 and March 31, 2019 are as follows (in thousands): Three Months Ended March 31, 2020 March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,842 $ 1,623 Financing cash flows from finance leases $ 1,958 $ — Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 325 $ 94 Finance leases $ — $ — |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies 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 March 31, 2019, the license agreement required minimum royalty payments of $0.1 million quarterly. 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 fifteen 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 July 2019, the Company amended the license agreement to extend the term for an additional ten In April 2012, the Company entered into an agreement that requires the Company to pay, on a quarterly basis, a 5% royalty on sales of products covered under applicable patents. The first commercial sale of covered products occurred in April 2014. Unless terminated earlier, the royalty term for each applicable product shall continue for fifteen years following the first commercial sale of such patented product, or when the applicable patent covering such product has expired, whichever is sooner. Royalty expense included in cost of revenue for the three months ended March 31, 2020 and 2019, was $0.7 million and $1.1 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 “3. Investments and Fair Value of Financial Instruments,” Note “5. Business Combinations” and Note “6. Intangible Assets” for more information on contingent liabilities recorded on the condensed 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 indemnified parties 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 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. |
Stockholder's Equity
Stockholder's Equity | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholder's Equity | 10. Stockholders’ Equity Equity Incentive Plans Stock Options Activity of stock options under the 2005 Plan, 2011 Plan and 2014 Plan (collectively, the "Plans") is set forth below: Number of Shares Weighted-Average Balance at December 31, 2019 1,379,075 $ 21.02 Exercised (42,913) 9.23 Canceled/Forfeited — — Balance at March 31, 2020 1,336,162 21.40 Restricted Stock and Restricted Stock Units Activity of unvested restricted stock awards and restricted stock units under the Plans during the three months ended March 31, 2020 is set forth below: Number of Shares Weighted -Average Unvested at December 31, 2019 371,206 $ 130.47 Granted 68,436 161.47 Released/Vested - Restricted Stock/RSUs (38,572) 92.23 Canceled/Forfeited (725) 135.68 Unvested at March 31, 2020 400,345 139.44 As of March 31, 2020, 377,044 restricted stock awards and restricted stock units are expected to vest. Stock-based Compensation The following table sets forth the stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Cost of revenue $ 648 $ 291 Research and development 874 524 Sales, general and administrative 4,167 4,280 Total $ 5,689 $ 5,095 As of March 31, 2020, total unrecognized compensation cost was $46.8 million related to unvested share-based compensation arrangements which is expected to be recognized over a weighted average period of 3.0 years. The total stock-based compensation cost capitalized in inventory was $0.8 million and $0.8 million as of March 31, 2020 and December 31, 2019, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 11. Accumulated Other Comprehensive Loss Other comprehensive 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 consolidated net income, these comprehensive income (loss) items accumulate and are included within accumulated other comprehensive loss. Unrealized gains and losses on the Company’s marketable investments are reclassified from accumulated other comprehensive 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 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 loss into earnings affect the Company’s condensed consolidated statements of operations and consolidated statements of comprehensive income (loss) (in thousands): Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Marketable Currency Translation Total Marketable Currency Translation Total Balance, beginning of the period $ 238 $ (2,562) $ (2,324) $ (500) $ (1,442) $ (1,942) Other comprehensive income (loss) before reclassifications: Unrealized (loss) gain — marketable investments (689) — (689) 462 — 462 Foreign currency translation losses — (1,634) (1,634) — (1,098) (1,098) Income tax effect — expense (benefit) 72 — 72 — — — Net of tax $ (617) $ (1,634) $ (2,251) $ 462 $ (1,098) $ (636) Amounts reclassified from accumulated other comprehensive income (loss) to consolidated net income: Realized gain — marketable investments — — — — — — Income tax effect — expense (benefit) — — — — — — Net of tax — — — — — — Net current-year other comprehensive income (loss) (617) (1,634) (2,251) 462 (1,098) (636) Balance, end of the period $ (379) $ (4,196) $ (4,575) $ (38) $ (2,540) $ (2,578) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The Company’s income tax 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 judgment and estimates are required in determining the consolidated income tax expense. During interim periods, the Company generally utilizes the estimated annual effective tax rate method which involves the use of forecasted information. Under this method, the provision is calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Jurisdictions with tax assets for which the Company believes a tax benefit cannot be realized are excluded from the computation of its annual effective tax rate. The Company’s benefit from income taxes was $1.6 million for the three months ended March 31, 2020, which was primarily due to tax benefits attributable to its worldwide loss as a result of the COVID-19 pandemic impact and excess tax benefits from stock-based compensation attributable to its United States jurisdiction. The effective tax rate was 219.0% for the three months ended March 31, 2020, which was due to larger tax benefits over smaller worldwide loss. The Company’s provision for income taxes was $1.5 million for the three months ended March 31, 2019, which was primarily due to income taxes attributable to its worldwide profit offset by excess tax benefits from stock-based compensation attributable to its United States jurisdiction. The effective tax rate was 12.2% for the three months ended March 31, 2019, which was due to smaller tax expenses over larger worldwide profit. On March 27, 2020, the President signed into law the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act), which provides certain tax relief. The CARES Act did not have a material impact to the income tax provision of the Company for the three months ended March 31, 2020. Significant domestic deferred tax assets (“DTAs”) were generated in recent years, primarily due to excess tax benefits from stock option exercises and vesting of restricted stock. The Company evaluates all available positive and negative evidence, objective and subjective in nature, in each reporting period to determine if sufficient taxable income will be generated to realize the benefits of its DTAs and, if not, a valuation allowance to reduce the DTAs is recorded. As of March 31, 2020 and 2019, the Company maintains a valuation allowance against its Federal Research and Development Tax Credit and California DTAs as the Company could not conclude at the required more-likely-than-not level of certainty, that the benefit of these tax attributes would be realized prior to expiration. As of March 31, 2020 and 2019, the Company also maintains a valuation allowance against DTAs acquired from MVI which are subject to Separate Return Limitation Year (“SRLY”) rules that limit the utilization of the pre-acquisition tax attributes to offset future taxable income solely generated by MVI. The Company maintains that all foreign earnings, with the exception of a portion of the earnings of its German subsidiary, are permanently reinvested outside the United States and therefore deferred taxes attributable to such are not provided for in the Company’s condensed consolidated financial statements as of March 31, 2020. The Company will repatriate foreign earnings only to the extent doing so will not result in any material United States tax consequences. Thus, deferred taxes on any potential future repatriation of a portion of the earnings of its German subsidiary were not reflected in the Company’s condensed consolidated financial statements as of March 31, 2020. |
Net Income Attributable to Penu
Net Income Attributable to Penumbra, Inc. Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Attributable to Penumbra, Inc. Per Share | 13. Net Income Attributable to Penumbra, Inc. Per Share The Company computed basic net income attributable to Penumbra, Inc. per share based on the weighted average number of shares of common stock outstanding during the period. The Company computed diluted net income attributable to Penumbra, Inc. per share based on the weighted average number of shares of common stock outstanding plus potentially dilutive common stock equivalents outstanding during the period using the treasury stock method. For the purposes of this calculation, stock options, restricted stock, restricted stock units and stock sold through the ESPP are considered common stock equivalents. A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income attributable to Penumbra, Inc. is as follows (in thousands, except share and per share amounts): Three Months Ended March 31, 2020 2019 Numerator: Net income attributable to Penumbra, Inc. $ 1,425 $ 10,698 Denominator: Weighted average shares used to compute net income attributable to common stockholders: Basic 35,042,912 34,507,279 Potential dilutive stock-based options and awards 1,319,814 1,705,885 Diluted 36,362,726 36,213,164 Net income attributable to Penumbra, Inc. per share: Basic $ 0.04 $ 0.31 Diluted $ 0.04 $ 0.30 For the three months ended March 31, 2020 and 2019 outstanding stock-based awards of 18 thousand and 57 thousand shares respectively, were excluded from the computation of diluted net income attributable to Penumbra, Inc. per share because their effect would have been anti-dilutive. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | 14. Revenues Revenue Recognition Revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. All revenue recognized in the condensed consolidated statements of operations is considered to be revenue from contracts with customers. The following table presents the Company’s revenues disaggregated by geography, based on the destination to which the Company ships its products, for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 United States $ 95,774 $ 82,511 Other International 41,555 45,928 Total $ 137,329 $ 128,439 The following table presents the Company’s revenues disaggregated by product category, for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Neuro $ 78,076 $ 81,471 Vascular 59,253 46,968 Total $ 137,329 $ 128,439 Performance Obligations Delivery of products - The Company’s contracts with customers typically contain a single performance obligation, delivery of Penumbra products. Satisfaction of that performance obligation occurs when control of the promised goods transfers to the customer, which is generally upon shipment for non-consignment sale agreements and upon utilization for consignment sale agreements. Payment terms - The Company’s payment terms vary by the type and location of our customer. The timing between fulfillment of performance obligations and when payment is due is not significant and does not give rise to financing transactions. The Company did not have any contracts with significant financing components as of March 31, 2020. Product returns - The Company may allow customers to return products purchased at the Company’s discretion. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using its own historic sales information, trends, industry data, and other relevant data points. Warranties - The Company offers its standard warranty to all customers and it is not available for sale on a standalone basis. The Company’s standard warranty represents its guarantee that its products function as intended, are free from defects, and comply with agreed-upon specifications and quality standards. This assurance does not constitute a service and is not a separate performance obligation. Transaction Price Revenue is recorded at the net sales price, which includes estimates of variable consideration such as product returns utilizing historical return rates, rebates, discounts, and other adjustments to net revenue. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price. When determining if variable consideration should be constrained, management considers whether there are factors that could result in a significant reversal of revenue and the likelihood of a potential reversal. Variable consideration is included in revenue only to the extent that it is probable that a significant reversal of the revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. These estimates are reassessed each |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Credit Agreement |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Consolidation The accompanying condensed consolidated balance sheet as of March 31, 2020, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income (loss), and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2020 and 2019, and the condensed consolidated statements of cash flows for the three months ended March 31, 2020 and 2019 are unaudited. The unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet data as of December 31, 2019 was derived from the audited financial statements as of that date. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company’s financial position as of March 31, 2020, the results of its operations for the three months ended March 31, 2020 and 2019, the changes in comprehensive income and stockholders’ equity for the three months ended March 31, 2020 and 2019, and the cash flows for the three months ended March 31, 2020 and 2019. The results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future annual or interim period. Certain changes in presentation were made in the condensed consolidated financial statements for the three months ended March 31, 2019 to conform to the presentation for the three months ended March 31, 2020. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K. There have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2020, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, other than the changes described below in connection with the adoption of the guidance under Accounting Standard Update (“ASU”) No. 2016-13. |
Consolidation | The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its majority-owned subsidiary. The portion of equity and consolidated net income not attributable to the Company is considered non-controlling interest and is classified separately in the condensed consolidated financial statements. Any subsequent changes in the Company’s ownership interest while the Company retains its controlling interest in its majority-owned subsidiary will be accounted for as equity transactions. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of EstimatesThe 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 marketable investments, allowances for credit losses, the amount of variable consideration included in the transaction price, warranty reserve, valuation of inventories, useful lives of property and equipment, operating and financing lease right-of-use (“ROU”) assets and liabilities, income taxes, contingent consideration and other 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 devices, and operates as one operating segment. The Company’s chief operating decision-maker, its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance. |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards | Recently Adopted Accounting Standards On January 1, 2020, the Company adopted ASU No. 2016-13, Financial Instruments—Credit Losses (“ASU 2016-13”) using the modified retrospective transition approach, with the impact upon adoption reflected in opening retained earnings. The comparative prior year information has not been adjusted and continues to be reported under legacy GAAP. The standard significantly changed the impairment model for most financial assets and certain other instruments, including accounts receivable and available-for-sale securities. For financial assets measured at amortized cost, including our accounts receivable, the standard requires an entity to (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected, (2) recognize this allowance and changes in the allowance during subsequent periods through net income and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. For available-for-sale debt securities, this standard made several targeted amendments to the existing other-than-temporary impairment model, including (1) requiring disclosure of the allowance for credit losses, (2) allowing reversals of the previously recognized credit losses until the entity has the intent to sell, is more-likely-than-not required to sell the securities or the maturity of the securities, (3) limiting impairment to the difference between the amortized cost basis and fair value and (4) not allowing entities to consider the length of time that fair value has been less than amortized cost as a factor in evaluating whether a credit loss exists. As a result of adoption, the cumulative impact related to accounts receivable expected credit losses to our opening retained earnings at January 1, 2020 was $1.2 million. As of the adoption date, the difference between the amortized cost basis and fair value of the Company’s impaired available-for-sale securities held was not material. Accordingly, upon adoption there was no impact to our opening retained earnings for credit losses related to available-for-sale securities. For additional information on the impact of the adoption and disclosures required by ASU 2016-13, refer to the updates to significant accounting policies section below, Note “3. Investments and Fair Value of Financial Instruments” and Note “4. Balance Sheet Components.” On January 1, 2020, the Company adopted ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The primary focus of the standard is to improve the effectiveness of the disclosure requirements for fair value measurements. The Company had no significant changes to the fair value measurement related disclosures due to the adoption of the standard. Updates to Significant Accounting Policies As a result of the adoption of the ASU 2016-13, the Company has made the following updates to its significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Recently Issued Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Income Taxes— Simplifying the Accounting for Income Taxes. The standard intends to simplify and reduce the cost of accounting for income taxes. The new guidance removes certain exceptions for recognizing deferred taxes for foreign investments, the incremental approach to performing intraperiod allocation, and calculating income taxes in interim periods for year to date losses that exceed anticipated full year losses. The standard also adds guidance to reduce complexity in certain areas, including accounting for franchise taxes that are partially based on income, transactions with a government that result with a step up in the tax basis of goodwill, enacted changes in tax law during interim periods, and allocating taxes to members of a consolidated group which are not subject to tax. For public business entities, the amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all periods in which financial statements have not yet been issued, including interim periods. The Company is currently evaluating the impact of adopting the new guidance. In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendments in this standard are effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period. The amendments in this standard should be applied prospectively. Under a prospective transition, the Company would apply the amendments at the beginning of the interim period that includes the adoption date. The Company is currently evaluating the impact of adopting the new standard. |
Credit Losses | Credit LossesThe Company is exposed to credit losses primarily through our accounts receivable from sales of products on credit terms of one year or less. The Company performs ongoing credit evaluations of its customers, does not require collateral, and maintains allowances for potential credit losses on customer accounts. The Company monitors its ongoing credit exposure and concentration through active review of customers balances against contract terms, due dates, geographic related risks and current economic conditions impacting our customers. Our activities include timely account reconciliation, dispute resolution and payment confirmation. |
Accounts Receivable | Accounts Receivable Accounts receivable are measured at amortized cost less the allowances for credit losses. In accordance with ASU 2016-13, as of January 1, 2020, the Company measures expected credit losses for its accounts receivables utilizing a loss-rate approach. The allowance for expected credit losses assessment requires a degree of estimation and judgement. The expected loss-rate is calculated by utilizing historical credit losses incurred as percentage of the Company’s historical accounts receivable balances, pooled by customers with similar geographic credit risk characteristics. The loss-rate is adjusted for management’s expectations regarding current conditions and forecasts about future conditions which impact expected credit losses. The Company considers factors such as customers credit risk, geographic related risks and economic conditions that may affect a customer’s credit quality classification. Prior to the adoption of ASU 2016-13, the Company recognized losses when a loss was incurred or deemed probable. |
Marketable Investments | Marketable InvestmentsThe Company’s marketable investments have been classified and accounted for as available-for-sale. |
Investments and Fair Value of_2
Investments and Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Investments | The following table presents the Company’s marketable investments as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance Fair Value Commercial paper $ 4,989 $ 2 $ — $ — $ 4,991 U.S. treasury 2,497 3 — — 2,500 U.S. agency and government sponsored securities 2,499 30 — — 2,529 U.S. states and municipalities 4,887 50 — — 4,937 Corporate bonds 81,272 69 (532) — 80,809 Total $ 96,144 $ 154 $ (532) $ — $ 95,766 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 7,456 $ 1 $ — $ 7,457 U.S. treasury 4,972 7 — 4,979 U.S. agency and government sponsored securities 2,499 19 — 2,518 U.S. states and municipalities 4,889 4 — 4,893 Corporate bonds 96,484 282 (3) 96,763 Total $ 116,300 $ 313 $ (3) $ 116,610 |
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 twelve months or for twelve months or more as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds $ 60,387 $ (532) $ — $ — $ 60,387 $ (532) Total $ 60,387 $ (532) $ — $ — $ 60,387 $ (532) December 31, 2019 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds $ 7,875 $ (3) $ — $ — $ 7,875 $ (3) Total $ 7,875 $ (3) $ — $ — $ 7,875 $ (3) |
Schedule of Contractual Maturities of Marketable Investments | The following table presents the contractual maturities of the Company’s marketable investments as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Fair Value Fair Value Due in less than one year $ 37,433 $ 51,990 Due in one to five years 58,333 64,620 Total $ 95,766 $ 116,610 |
Schedule of Fair Value of Assets and Liabilities | The following tables set forth the Company’s financial assets measured at fair value by level within the fair value hierarchy as of March 31, 2020 and December 31, 2019 (in thousands): As of March 31, 2020 Level 1 Level 2 Level 3 Fair Value Financial Assets Cash equivalents: Money market funds $ 42,546 $ — $ — $ 42,546 Marketable investments: Commercial paper — 4,991 — 4,991 U.S. treasury 2,500 — — 2,500 U.S. agency and government sponsored securities — 2,529 — 2,529 U.S. states and municipalities — 4,937 — 4,937 Corporate bonds — 80,809 — 80,809 Total 2,500 93,266 — 95,766 Total $ 45,046 $ 93,266 $ — $ 138,312 As of December 31, 2019 Level 1 Level 2 Level 3 Fair Value Financial Assets Cash equivalents: Commercial paper $ — $ 9,474 $ — $ 9,474 Money market funds 24,054 — — 24,054 Marketable investments: Commercial paper — 7,457 — 7,457 U.S. treasury 4,979 — — 4,979 U.S. agency and government sponsored securities — 2,518 — 2,518 U.S. states and municipalities — 4,893 — 4,893 Corporate bonds — 96,763 — 96,763 Total 4,979 111,631 — 116,610 Total $ 29,033 $ 121,105 $ — $ 150,138 |
Schedule of Fair Value of Contingent Consideration Obligation | The following tables summarize the changes in fair value of the contingent consideration obligation for the three months ended March 31, 2020 and March 31, 2019 (in thousands): Fair Value of Contingent Consideration Balance at December 31, 2019 $ 1,206 Payments of contingent consideration liabilities (1,186) Changes in fair value — Foreign currency remeasurement (20) Balance at March 31, 2020 $ — Fair Value of Contingent Consideration Balance at December 31, 2018 $ 2,571 Payments of contingent consideration liabilities (1,296) Changes in fair value — Foreign currency remeasurement (27) Balance at March 31, 2019 $ 1,248 |
Balance Sheet Components Balanc
Balance Sheet Components Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Allowance for Credit Losses | The Company’s allowance for credit losses related to accounts receivable balances was comprised of the following (in thousands): Balance At Write-offs Provision for Balance At January 1, 2020 (1) $ 2,946 $ (2,361) $ 1,307 $ 1,892 January 1, 2020 - March 31, 2020 (2) $ 1,892 $ — $ 163 $ 2,055 (1) On January 1, 2020, the Company recorded a $1.3 million adjustment to opening retained earnings upon the adoption of ASU 2016-13. (2) The Company recorded a $0.2 million allowance for credit losses during the three months ended March 31, 2020. |
Schedule of Inventories | The following table shows the components of inventories as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Raw materials $ 23,721 $ 21,646 Work in process 20,865 21,651 Finished goods 121,566 109,695 Inventories $ 166,152 $ 152,992 |
Schedule of Accrued Liabilities | The following table shows the components of accrued liabilities as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Payroll and employee-related cost $ 38,700 $ 37,727 Accrued expenses 7,655 7,811 Sales return provision 1,803 1,821 Product warranty 2,331 2,318 Other acquisition-related costs (1) 3,000 4,291 Other accrued liabilities 11,846 13,662 Total accrued liabilities $ 65,335 $ 67,630 |
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 March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Balance at the beginning of the period $ 2,318 $ 1,875 Accruals of warranties issued 195 1,065 Settlements of warranty claims (182) (622) Balance at the end of the period $ 2,331 $ 2,318 |
Schedule of Other Non-Current Liabilities | The following table shows the components of other non-current liabilities as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Deferred tax liabilities $ 3,903 $ 4,005 Licensing-related cost (1) 10,290 10,878 Other non-current liabilities 957 367 Total other non-current liabilities $ 15,150 $ 15,250 (1) Amount relates to the non-current liability recorded for probable future milestone payments to be made under the indefinite-lived intangible assets related to licensed technology described in Note “6. Intangible Assets.” Refer therein for more information. |
Intangible Assets Intangible As
Intangible Assets Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of indefinite-lived intangible assets | The following tables present details of the Company’s acquired finite-lived and indefinite-lived intangible assets, as of March 31, 2020 and December 31, 2019 (in thousands, except weighted-average amortization period): As of March 31, 2020 Weighted-Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Customer relationships 15.0 years $ 6,558 $ (1,203) $ 5,355 Trade secrets and processes 20.0 years 5,256 (591) 4,665 Other 5.0 years 1,691 (930) 761 Total intangible assets subject to amortization 16.5 years $ 13,505 $ (2,724) $ 10,781 Intangible assets related to licensed technology 14,243 — 14,243 Total intangible assets $ 27,748 $ (2,724) $ 25,024 As of December 31, 2019 Weighted-Average Gross Carrying Amount Accumulated Amortization Net Customer relationships 15.0 years $ 6,686 $ (1,114) $ 5,572 Trade secrets and processes 20.0 years 5,256 (526) 4,730 Other 5.0 years 1,724 (862) 862 Total intangible assets subject to amortization 16.4 years $ 13,666 $ (2,502) $ 11,164 Intangible assets related to licensed technology 14,243 — 14,243 Total intangible assets $ 27,909 $ (2,502) $ 25,407 |
Finite-lived Intangible Assets Amortization Expense | The following table presents the amortization expense recorded related to the Company’s finite-lived intangible assets for the three months ended March 31, 2020 and March 31, 2019 (in thousands): Three Months Ended March 31, 2020 2019 Cost of revenue $ 66 $ 66 Sales, general and administrative 194 200 Total $ 260 $ 266 |
Goodwill Goodwill (Tables)
Goodwill Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The following table presents the changes in goodwill during the three months ended March 31, 2020 (in thousands): Total Company Balance as of December 31, 2019 $ 7,656 Foreign currency translation (147) Balance as of March 31, 2020 $ 7,509 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | The following table presents the components of the Company’s lease cost, lease term and discount rate during the three months ended March 31, 2020 (in thousands, except years and percentages): Three Months Ended March 31, 2020 March 31, 2019 Lease Cost Operating lease cost $ 1,887 $ 1,768 Finance lease cost: Amortization of right-of-use assets 671 — Interest on lease liabilities 395 — Variable lease cost (1) 1,453 758 Total lease costs $ 4,406 $ 2,526 Weighted Average Remaining Lease Term Operating leases 9.8 years 10.6 years Finance leases 14.8 years — Weighted Average Discount Rate Operating leases 6.19 % 6.20 % Finance leases 5.42 % — % (1) Variable lease costs represent payments that are dependent on usage, a rate or index. Variable lease cost primarily relates to common area maintenance charges for its real estate leases as the Company elected not to separate non-lease components from lease components upon adoption of ASC 842. |
Lessee, Operating Lease, Liability, Maturity | The following table is a schedule, by years, of maturities of the Company's operating and finance lease liabilities as of March 31, 2020 (in thousands): Operating Lease Payments Finance Lease Payments Remainder of 2020 $ 7,417 $ 3,922 2021 6,896 2,455 2022 6,647 2,501 2023 6,466 2,550 2024 6,231 2,601 Thereafter 34,904 27,949 Total undiscounted lease payments (1) 68,561 41,978 Less imputed interest (17,710) (13,034) Present value of lease liabilities $ 50,851 $ 28,944 (1) The table above excludes the estimated future minimum lease payment for the 1310 Harbor Bay Lease due to uncertainty around the timing of when the 1310 Harbor Bay Lease will commence and payments will be due. The total estimated lease payments over the 15 year lease term will be calculated based on the total development costs incurred in connection with the development of the building which will be determined upon substantial completion of the building. |
Finance Lease, Liability, Maturity | The following table is a schedule, by years, of maturities of the Company's operating and finance lease liabilities as of March 31, 2020 (in thousands): Operating Lease Payments Finance Lease Payments Remainder of 2020 $ 7,417 $ 3,922 2021 6,896 2,455 2022 6,647 2,501 2023 6,466 2,550 2024 6,231 2,601 Thereafter 34,904 27,949 Total undiscounted lease payments (1) 68,561 41,978 Less imputed interest (17,710) (13,034) Present value of lease liabilities $ 50,851 $ 28,944 (1) The table above excludes the estimated future minimum lease payment for the 1310 Harbor Bay Lease due to uncertainty around the timing of when the 1310 Harbor Bay Lease will commence and payments will be due. The total estimated lease payments over the 15 year lease term will be calculated based on the total development costs incurred in connection with the development of the building which will be determined upon substantial completion of the building. |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental cash flow information related to leases during the three months ended March 31, 2020 and March 31, 2019 are as follows (in thousands): Three Months Ended March 31, 2020 March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,842 $ 1,623 Financing cash flows from finance leases $ 1,958 $ — Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 325 $ 94 Finance leases $ — $ — |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 (collectively, the "Plans") is set forth below: Number of Shares Weighted-Average Balance at December 31, 2019 1,379,075 $ 21.02 Exercised (42,913) 9.23 Canceled/Forfeited — — Balance at March 31, 2020 1,336,162 21.40 |
Summary of Unvested Restricted Stock and Restricted Stock Unit Activity | Activity of unvested restricted stock awards and restricted stock units under the Plans during the three months ended March 31, 2020 is set forth below: Number of Shares Weighted -Average Unvested at December 31, 2019 371,206 $ 130.47 Granted 68,436 161.47 Released/Vested - Restricted Stock/RSUs (38,572) 92.23 Canceled/Forfeited (725) 135.68 Unvested at March 31, 2020 400,345 139.44 |
Schedule of Stock-based Compensation Expense | The following table sets forth the stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Cost of revenue $ 648 $ 291 Research and development 874 524 Sales, general and administrative 4,167 4,280 Total $ 5,689 $ 5,095 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 loss into earnings affect the Company’s condensed consolidated statements of operations and consolidated statements of comprehensive income (loss) (in thousands): Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Marketable Currency Translation Total Marketable Currency Translation Total Balance, beginning of the period $ 238 $ (2,562) $ (2,324) $ (500) $ (1,442) $ (1,942) Other comprehensive income (loss) before reclassifications: Unrealized (loss) gain — marketable investments (689) — (689) 462 — 462 Foreign currency translation losses — (1,634) (1,634) — (1,098) (1,098) Income tax effect — expense (benefit) 72 — 72 — — — Net of tax $ (617) $ (1,634) $ (2,251) $ 462 $ (1,098) $ (636) Amounts reclassified from accumulated other comprehensive income (loss) to consolidated net income: Realized gain — marketable investments — — — — — — Income tax effect — expense (benefit) — — — — — — Net of tax — — — — — — Net current-year other comprehensive income (loss) (617) (1,634) (2,251) 462 (1,098) (636) Balance, end of the period $ (379) $ (4,196) $ (4,575) $ (38) $ (2,540) $ (2,578) |
Net Income Attributable to Pe_2
Net Income Attributable to Penumbra, Inc. Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 attributable to Penumbra, Inc. is as follows (in thousands, except share and per share amounts): Three Months Ended March 31, 2020 2019 Numerator: Net income attributable to Penumbra, Inc. $ 1,425 $ 10,698 Denominator: Weighted average shares used to compute net income attributable to common stockholders: Basic 35,042,912 34,507,279 Potential dilutive stock-based options and awards 1,319,814 1,705,885 Diluted 36,362,726 36,213,164 Net income attributable to Penumbra, Inc. per share: Basic $ 0.04 $ 0.31 Diluted $ 0.04 $ 0.30 |
Revenues Revenues (Tables)
Revenues Revenues (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the Company’s revenues disaggregated by geography, based on the destination to which the Company ships its products, for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 United States $ 95,774 $ 82,511 Other International 41,555 45,928 Total $ 137,329 $ 128,439 The following table presents the Company’s revenues disaggregated by product category, for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 2019 Neuro $ 78,076 $ 81,471 Vascular 59,253 46,968 Total $ 137,329 $ 128,439 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Disclosures (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)activitysegment | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect adjustments | $ (1,198) | ||
Number of business activities | activity | 1 | ||
Number of Operating Segments | segment | 1 | ||
Accounts receivable, net | $ 103,963 | $ 105,901 | |
Accounts Receivable, Allowance For Credit Loss | $ 2,055 | $ 2,946 | |
Retained Earnings (Accumulated Deficit) | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect adjustments | (1,198) | ||
Retained Earnings (Accumulated Deficit) | Accounting Standards Update 2016-13 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect adjustments | $ 1,200 |
Investments and Fair Value of_3
Investments and Fair Value of Financial Instruments - Gains and Losses of Marketable Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 96,144 | $ 116,300 |
Gross Unrealized Gains | 154 | 313 |
Gross Unrealized Losses | (532) | (3) |
Allowance for Credit Loss | 0 | |
Fair Value | 95,766 | 116,610 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,989 | 7,456 |
Gross Unrealized Gains | 2 | 1 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Loss | 0 | |
Fair Value | 4,991 | 7,457 |
U.S. treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,497 | 4,972 |
Gross Unrealized Gains | 3 | 7 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Loss | 0 | |
Fair Value | 2,500 | 4,979 |
U.S. agency and government sponsored securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,499 | 2,499 |
Gross Unrealized Gains | 30 | 19 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Loss | 0 | |
Fair Value | 2,529 | 2,518 |
U.S. states and municipalities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,887 | 4,889 |
Gross Unrealized Gains | 50 | 4 |
Gross Unrealized Losses | 0 | 0 |
Allowance for Credit Loss | 0 | |
Fair Value | 4,937 | 4,893 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 81,272 | 96,484 |
Gross Unrealized Gains | 69 | 282 |
Gross Unrealized Losses | (532) | (3) |
Allowance for Credit Loss | 0 | |
Fair Value | $ 80,809 | $ 96,763 |
Investments and Fair Value of_4
Investments and Fair Value of Financial Instruments - Marketable Securities in an Unrealized Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months: Fair Value | $ 60,387 | $ 7,875 |
Less than 12 months: Gross Unrealized Losses | (532) | (3) |
12 Months of more: Fair Value | 0 | 0 |
12 months or more: Gross Unrealized Losses | 0 | 0 |
Total: Fair Value | 60,387 | 7,875 |
Total: Gross Unrealized Losses | (532) | (3) |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months: Fair Value | 60,387 | 7,875 |
Less than 12 months: Gross Unrealized Losses | (532) | (3) |
12 Months of more: Fair Value | 0 | 0 |
12 months or more: Gross Unrealized Losses | 0 | 0 |
Total: Fair Value | 60,387 | 7,875 |
Total: Gross Unrealized Losses | $ (532) | $ (3) |
Investments and Fair Value of_5
Investments and Fair Value of Financial Instruments - Contractual Maturities of Marketable Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Due in less than one year | $ 37,433 | $ 51,990 |
Due in one to five years | 58,333 | 64,620 |
Total | $ 95,766 | $ 116,610 |
Investments and Fair Value of_6
Investments and Fair Value of Financial Instruments - Financial Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financial Assets | ||
Marketable investments | $ 95,766 | $ 116,610 |
Total | 138,312 | 150,138 |
Commercial paper | ||
Financial Assets | ||
Marketable investments | 4,991 | 7,457 |
U.S. treasury | ||
Financial Assets | ||
Marketable investments | 2,500 | 4,979 |
U.S. agency and government sponsored securities | ||
Financial Assets | ||
Marketable investments | 2,529 | 2,518 |
U.S. states and municipalities | ||
Financial Assets | ||
Marketable investments | 4,937 | 4,893 |
Corporate bonds | ||
Financial Assets | ||
Marketable investments | 80,809 | 96,763 |
Commercial paper | ||
Financial Assets | ||
Cash equivalents | 9,474 | |
Money market funds | ||
Financial Assets | ||
Cash equivalents | 42,546 | 24,054 |
Level 1 | ||
Financial Assets | ||
Marketable investments | 2,500 | 4,979 |
Total | 45,046 | 29,033 |
Level 1 | Commercial paper | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 1 | U.S. treasury | ||
Financial Assets | ||
Marketable investments | 2,500 | 4,979 |
Level 1 | U.S. agency and government sponsored 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 | Commercial paper | ||
Financial Assets | ||
Cash equivalents | 0 | |
Level 1 | Money market funds | ||
Financial Assets | ||
Cash equivalents | 42,546 | 24,054 |
Level 2 | ||
Financial Assets | ||
Marketable investments | 93,266 | 111,631 |
Total | 93,266 | 121,105 |
Level 2 | Commercial paper | ||
Financial Assets | ||
Marketable investments | 4,991 | 7,457 |
Level 2 | U.S. treasury | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Level 2 | U.S. agency and government sponsored securities | ||
Financial Assets | ||
Marketable investments | 2,529 | 2,518 |
Level 2 | U.S. states and municipalities | ||
Financial Assets | ||
Marketable investments | 4,937 | 4,893 |
Level 2 | Corporate bonds | ||
Financial Assets | ||
Marketable investments | 80,809 | 96,763 |
Level 2 | Commercial paper | ||
Financial Assets | ||
Cash equivalents | 9,474 | |
Level 2 | Money market funds | ||
Financial Assets | ||
Cash equivalents | 0 | 0 |
Level 3 | ||
Financial Assets | ||
Marketable investments | 0 | 0 |
Total | 0 | 0 |
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 and government sponsored 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 | Commercial paper | ||
Financial Assets | ||
Cash equivalents | 0 | |
Level 3 | Money market funds | ||
Financial Assets | ||
Cash equivalents | $ 0 | $ 0 |
Investments and Fair Value of_7
Investments and Fair Value of Financial Instruments - Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Payments of contingent consideration liabilities | $ (1,186) | ||
Foreign currency remeasurement | (20) | ||
Ending balance | 0 | ||
Fair Value of Contingent Consideration | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Payments of contingent consideration liabilities | $ (1,296) | ||
Fair Value of Contingent Consideration | Measurement Input, Actual Revenue Results | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration liability balance | $ 1,200 | ||
Monte Carlo Simulation | Level 3 | Fair Value of Contingent Consideration | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 1,206 | 2,571 | |
Ending balance | 1,248 | ||
Sales, general and administrative | Fair Value of Contingent Consideration | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Changes in fair value | $ 0 | 0 | |
Other Expense | Fair Value of Contingent Consideration | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Foreign currency remeasurement | $ (27) |
Balance Sheet Components - Allo
Balance Sheet Components - Allowance For Credit Losses (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Mar. 31, 2020 |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Balance at beginning of period | $ 2,946 | $ 1,892 |
Write-offs | (2,361) | 0 |
Provision for credit losses | 1,307 | $ 163 |
Balance at end of period | $ 1,892 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 23,721 | $ 21,646 |
Work in process | 20,865 | 21,651 |
Finished goods | 121,566 | 109,695 |
Inventories | $ 166,152 | $ 152,992 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Payroll and employee-related cost | $ 38,700 | $ 37,727 |
Accrued expenses | 7,655 | 7,811 |
Sales return provision | 1,803 | 1,821 |
Product warranty | 2,331 | 2,318 |
Other acquisition-related costs | 3,000 | 4,291 |
Other accrued liabilities | 11,846 | 13,662 |
Total accrued liabilities | $ 65,335 | $ 67,630 |
Balance Sheet Components - Prod
Balance Sheet Components - Product Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance at the beginning of the period | $ 2,318 | $ 1,875 |
Accruals of warranties issued | 195 | 1,065 |
Settlements of warranty claims | (182) | (622) |
Balance at the end of the period | $ 2,331 | $ 2,318 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred tax liabilities | $ 3,903 | $ 4,005 |
Licensing-related cost | 10,290 | 10,878 |
Other non-current liabilities | 957 | 367 |
Total other non-current liabilities | $ 15,150 | $ 15,250 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - Fair Value of Contingent Consideration - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Milestone payments | $ 1.2 | $ 1.3 | |
Payment for contingent consideration, operating activities | 0.5 | 0.6 | |
Payment for contingent consideration, financing activities | $ 0.7 | $ 0.7 | |
Current Liabilities | |||
Business Acquisition [Line Items] | |||
Contingent consideration for milestone payments | $ 1.2 |
Intangible Assets - Intangible
Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2017 | Jun. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted-Average Amortization Period | 16 years 6 months | 16 years 4 months 24 days | ||||
Finite lived intangible assets: gross carrying amount | $ 13,505 | $ 13,666 | ||||
Accumulated amortization | (2,724) | (2,502) | ||||
Finite lived intangible assets: net | 10,781 | 11,164 | ||||
Indefinite-lived intangible assets | 14,243 | 14,243 | ||||
Total intangible assets, gross | 27,748 | 27,909 | ||||
Total intangible assets, net | 25,024 | 25,407 | ||||
Total amortization of finite lived intangible assets | $ 260 | $ 266 | ||||
Acquisition of intangible assets from a licensing agreement | $ 2,500 | |||||
Customer relationships | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted-Average Amortization Period | 15 years | 15 years | ||||
Finite lived intangible assets: gross carrying amount | $ 6,558 | 6,686 | ||||
Accumulated amortization | (1,203) | (1,114) | ||||
Finite lived intangible assets: net | $ 5,355 | 5,572 | ||||
Trade secrets and processes | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted-Average Amortization Period | 20 years | 20 years | ||||
Finite lived intangible assets: gross carrying amount | $ 5,256 | 5,256 | $ 5,300 | |||
Accumulated amortization | (591) | (526) | ||||
Finite lived intangible assets: net | $ 4,665 | 4,730 | ||||
Other Intangible Assets | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted-Average Amortization Period | 5 years | 5 years | ||||
Finite lived intangible assets: gross carrying amount | $ 1,691 | 1,724 | ||||
Accumulated amortization | (930) | (862) | ||||
Finite lived intangible assets: net | 761 | 862 | ||||
Technology Licensing Agreement | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Indefinite-lived intangible assets | 14,243 | 14,243 | ||||
Changes to contingent liability | 0 | |||||
Contingent liability | 11,700 | 11,700 | ||||
Cost of revenue | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Total amortization of finite lived intangible assets | 66 | 66 | ||||
Sales, general and administrative | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Total amortization of finite lived intangible assets | 194 | $ 200 | ||||
Accrued Liabilities | Technology Licensing Agreement | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Contingent liability accrual, current | 800 | 800 | ||||
Noncurrent Liabilities | Technology Licensing Agreement | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Contingent liability, non-current | $ 10,900 | $ 10,900 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Goodwill | $ 7,656 |
Foreign currency translation | (147) |
Goodwill | $ 7,509 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended | ||
Sep. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Building development period | 2 years | ||
1310 Harbor Bay Lease | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease term, lease not yet commenced | 15 years | 15 years | |
Roseville Lease | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 15 years | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, renewal term | 5 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, renewal term | 15 years |
Leases - Summary of Lease Cost
Leases - Summary of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease Cost | ||
Operating lease cost | $ 1,887 | $ 1,768 |
Finance lease cost: | ||
Amortization of right-of-use assets | 671 | 0 |
Interest on lease liabilities | 395 | 0 |
Variable lease cost | 1,453 | 758 |
Total lease costs | $ 4,406 | $ 2,526 |
Weighted Average Remaining Lease Term | ||
Operating leases | 9 years 9 months 18 days | 10 years 7 months 6 days |
Finance leases | 14 years 9 months 18 days | |
Weighted Average Discount Rate | ||
Operating leases | 6.19% | 6.20% |
Finance leases | 5.42% |
Leases - Schedule of Maturity o
Leases - Schedule of Maturity of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Operating Lease Payments | |
Remainder of 2020 | $ 7,417 |
2021 | 6,896 |
2022 | 6,647 |
2023 | 6,466 |
2024 | 6,231 |
Thereafter | 34,904 |
Total undiscounted lease payments(1) | 68,561 |
Less imputed interest | (17,710) |
Present value of lease liabilities | 50,851 |
Finance Lease Payments | |
Remainder of 2020 | 3,922 |
2021 | 2,455 |
2022 | 2,501 |
2023 | 2,550 |
2024 | 2,601 |
Thereafter | 27,949 |
Total undiscounted lease payments | 41,978 |
Less imputed interest | (13,034) |
Present value of lease liabilities | $ 28,944 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 1,842 | $ 1,623 |
Financing cash flows from finance leases | 1,958 | 0 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Right-of-use assets obtained in exchange for lease obligations | 325 | 94 |
Finance leases | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Royalty Obligations (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jul. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Cost of revenue | |||
Other Commitments [Line Items] | |||
Royalty expense | $ 0.7 | $ 1.1 | |
Royalty Agreement, March 2005 | |||
Other Commitments [Line Items] | |||
Minimum quarterly royalty payments | $ 0.3 | $ 0.1 | |
Term of agreement | 15 years | ||
Extended term of agreement | 10 years | ||
Royalty Agreement, April 2012 | |||
Other Commitments [Line Items] | |||
Term of agreement | 15 years | ||
Royalty as a percent of sales | 5.00% |
Stockholder's Equity - Stock Op
Stockholder's Equity - Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of Shares | |
Beginning balance (in shares) | shares | 1,379,075 |
Options exercised (in shares) | shares | (42,913) |
Options cancelled (in shares) | shares | 0 |
Ending balance (in shares) | shares | 1,336,162 |
Weighted-Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 21.02 |
Options exercised (in dollars per share) | $ / shares | 9.23 |
Options cancelled (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 21.40 |
Stockholder's Equity - Restrict
Stockholder's Equity - Restricted Stock and Restricted Stock Units Activity (Details) - Restricted stock and restricted stock units | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of Shares | |
Unvested beginning balance (in shares) | 371,206 |
Granted (in shares) | 68,436 |
Vested (in shares) | (38,572) |
Canceled/Forfeited (in shares) | (725) |
Unvested and expected to vest ending balance (in shares) | 400,345 |
Weighted -Average Grant Date Fair Value | |
Unvested beginning balance (in dollars per share) | $ / shares | $ 130.47 |
Granted (in dollars per share) | $ / shares | 161.47 |
Vested (in dollars per share) | $ / shares | 92.23 |
Canceled/Forfeited (in dollars per share) | $ / shares | 135.68 |
Unvested and expected to vest ending balance (in dollars per share) | $ / shares | $ 139.44 |
Restricted stock and RSUs expected to vest (shares) | 377,044 |
Stockholder's Equity - Stock-ba
Stockholder's Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 5,689 | $ 5,095 | |
Unrecognized compensation cost related to unvested share-based compensation arrangements | $ 46,800 | ||
Unrecognized compensation cost, expected recognition period | 3 years | ||
Share-based compensation expense, capitalized in inventory | $ 800 | $ 800 | |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 648 | 291 | |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 874 | 524 | |
Sales, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 4,167 | $ 4,280 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ 485,892 | |
Amounts reclassified from accumulated other comprehensive income (loss) to consolidated net income: | ||
Total other comprehensive (loss) income, net of tax | (2,251) | $ (636) |
Ending balance | 488,933 | |
Marketable Investments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | 238 | (500) |
Other comprehensive income (loss) before reclassifications: | ||
Other comprehensive income before reclassifications | (689) | 462 |
Income tax effect — expense (benefit) | 72 | 0 |
Net of tax | (617) | 462 |
Amounts reclassified from accumulated other comprehensive income (loss) to consolidated net income: | ||
Realized gain — marketable investments | 0 | 0 |
Income tax effect — expense (benefit) | 0 | 0 |
Net of tax | 0 | 0 |
Total other comprehensive (loss) income, net of tax | (617) | 462 |
Ending balance | (379) | (38) |
Currency Translation Adjustments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (2,562) | (1,442) |
Other comprehensive income (loss) before reclassifications: | ||
Other comprehensive income before reclassifications | (1,634) | (1,098) |
Income tax effect — expense (benefit) | 0 | 0 |
Net of tax | (1,634) | (1,098) |
Amounts reclassified from accumulated other comprehensive income (loss) to consolidated net income: | ||
Realized gain — marketable investments | 0 | 0 |
Income tax effect — expense (benefit) | 0 | 0 |
Net of tax | 0 | 0 |
Total other comprehensive (loss) income, net of tax | (1,634) | (1,098) |
Ending balance | (4,196) | (2,540) |
Total | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (2,324) | (1,942) |
Other comprehensive income (loss) before reclassifications: | ||
Income tax effect — expense (benefit) | 72 | 0 |
Net of tax | (2,251) | (636) |
Amounts reclassified from accumulated other comprehensive income (loss) to consolidated net income: | ||
Realized gain — marketable investments | 0 | 0 |
Income tax effect — expense (benefit) | 0 | 0 |
Net of tax | 0 | 0 |
Total other comprehensive (loss) income, net of tax | (2,251) | (636) |
Ending balance | $ (4,575) | $ (2,578) |
Income Taxes Income Taxes (Deta
Income Taxes Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Benefit from income taxes | $ 1,634 | $ (1,455) |
Effective tax rate | 219.00% | 12.20% |
Net Income Attributable to Pe_3
Net Income Attributable to Penumbra, Inc. Per Share - Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net income attributable to Penumbra, Inc. | $ 1,425 | $ 10,698 |
Weighted average shares used to compute net income attributable to common stockholders: | ||
Basic (in shares) | 35,042,912 | 34,507,279 |
Potential dilutive stock-based options and awards (in shares) | 1,319,814 | 1,705,885 |
Diluted (in shares) | 36,362,726 | 36,213,164 |
Net income attributable to Penumbra, Inc. per share: | ||
Basic (in dollars per share) | $ 0.04 | $ 0.31 |
Diluted (in dollars per share) | $ 0.04 | $ 0.30 |
Net Income Attributable to Pe_4
Net Income Attributable to Penumbra, Inc. Per Share - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from the computation of earnings per share (in shares) | 18 | 57 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | $ 137,329 | $ 128,439 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 95,774 | 82,511 |
Other International | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 41,555 | 45,928 |
Neuro | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 78,076 | 81,471 |
Vascular | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | $ 59,253 | $ 46,968 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event | Apr. 24, 2020USD ($) |
Revolving Credit Facility | |
Subsequent Event [Line Items] | |
Borrowing capacity | $ 100,000,000 |
Line of credit, increase limit | 150,000,000 |
Line of credit, maximum principal increase limit | 50,000,000 |
Letter of Credit | Bank Of America And Citibank | Line of Credit | |
Subsequent Event [Line Items] | |
Borrowing capacity | 10,000,000 |
Bridge Loan | Bank Of America And Citibank | Line of Credit | |
Subsequent Event [Line Items] | |
Borrowing capacity | 10,000,000 |
Foreign Line of Credit | Bank Of America And Citibank | Line of Credit | |
Subsequent Event [Line Items] | |
Borrowing capacity | $ 15,000,000 |
Uncategorized Items - pen-20200
Label | Element | Value |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,198,000) |