Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 24, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ATRC | |
Entity Registrant Name | AtriCure, Inc. | |
Entity Central Index Key | 1,323,885 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 35,040,049 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 21,229 | $ 21,809 |
Short-term investments | 14,809 | 12,642 |
Accounts receivable, less allowance for doubtful accounts of $32 and $32 | 22,325 | 23,083 |
Inventories | 22,571 | 22,451 |
Other current assets | 3,835 | 2,273 |
Total current assets | 84,769 | 82,258 |
Property and equipment, net | 28,549 | 28,749 |
Intangible assets, net | 50,422 | 50,764 |
Goodwill | 105,257 | 105,257 |
Other noncurrent assets | 705 | 676 |
Total Assets | 269,702 | 267,704 |
Current liabilities: | ||
Accounts payable | 11,583 | 12,431 |
Accrued liabilities | 14,714 | 18,911 |
Other current liabilities and current maturities of capital leases | 575 | 561 |
Total current liabilities | 26,872 | 31,903 |
Capital leases | 12,626 | 12,761 |
Long-term debt | 39,313 | 24,100 |
Other noncurrent liabilities | 37,768 | 37,774 |
Total Liabilities | 116,579 | 106,538 |
Commitments and contingencies (Note 10) | ||
Stockholders' Equity: | ||
Common stock, $0.001 par value, 90,000 shares authorized and 35,039 and 34,586 issued and outstanding | 35 | 35 |
Additional paid-in capital | 388,976 | 386,963 |
Accumulated other comprehensive income | 112 | 34 |
Accumulated deficit | (236,000) | (225,866) |
Total Stockholders' Equity | 153,123 | 161,166 |
Total Liabilities and Stockholders' Equity | $ 269,702 | $ 267,704 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 32 | $ 32 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 35,039,000 | 34,586,000 |
Common stock, shares outstanding | 35,039,000 | 34,586,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss [Abstract] | ||
Revenue | $ 46,994 | $ 41,273 |
Cost of revenue | 12,491 | 11,265 |
Gross profit | 34,503 | 30,008 |
Operating expenses: | ||
Research and development expenses | 9,057 | 9,550 |
Selling, general and administrative expenses | 34,876 | 30,100 |
Total operating expenses | 43,933 | 39,650 |
Loss from operations | (9,430) | (9,642) |
Other income (expense): | ||
Interest expense | (820) | (554) |
Interest income | 76 | 54 |
Other | 88 | (18) |
Loss before income tax expense | (10,086) | (10,160) |
Income tax expense | 48 | 23 |
Net loss | $ (10,134) | $ (10,183) |
Basic and diluted net loss per share | $ (0.31) | $ (0.32) |
Weighted average shares outstanding — basic and diluted | 32,926 | 32,020 |
Comprehensive loss: | ||
Unrealized (loss) gain on investments | $ (8) | $ 2 |
Foreign currency translation adjustment | 86 | 73 |
Other comprehensive income | 78 | 75 |
Net loss | (10,134) | (10,183) |
Comprehensive loss, net of tax | $ (10,056) | $ (10,108) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (10,134) | $ (10,183) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation expense | 3,890 | 3,628 |
Depreciation | 1,857 | 1,962 |
Amortization of intangible assets | 342 | 342 |
Amortization of deferred financing costs | 93 | 66 |
(Gain) loss on disposal of property and equipment | (5) | 62 |
Realized (gain) loss from foreign exchange on intercompany transactions | (82) | 21 |
(Accretion) amortization of investments | (15) | 38 |
Change in allowance for doubtful accounts | 51 | (136) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 783 | (397) |
Inventories | (43) | (1,145) |
Other current assets | (1,540) | (1,175) |
Accounts payable | (408) | 353 |
Accrued liabilities | (4,244) | (2,827) |
Other noncurrent assets and liabilities | 21 | (155) |
Net cash used in operating activities | (9,434) | (9,546) |
Cash flows from investing activities: | ||
Purchases of available-for-sale securities | (10,359) | (3,096) |
Sales and maturities of available-for-sale securities | 8,200 | 10,550 |
Purchases of property and equipment | (2,086) | (1,728) |
Net cash (used in) provided by investing activities | (4,245) | 5,726 |
Cash flows from financing activities: | ||
Proceeds from debt borrowings | 17,381 | |
Payments on debt and capital leases | (1,326) | (120) |
Payment of debt fees | (1,114) | |
Proceeds from stock option exercises | 1,787 | 631 |
Shares repurchased for payment of taxes on stock awards | (3,665) | (1,735) |
Net cash provided by (used in) financing activities | 13,063 | (1,224) |
Effect of exchange rate changes on cash and cash equivalents | 36 | (10) |
Net decrease in cash and cash equivalents | (580) | (5,054) |
Cash and cash equivalents-beginning of period | 21,809 | 24,208 |
Cash and cash equivalents-end of period | 21,229 | 19,154 |
Supplemental cash flow information: | ||
Cash paid for interest | 416 | 488 |
Cash paid for income taxes | ||
Non-cash investing and financing activities: | ||
Accrued purchases of property and equipment | 178 | 559 |
Assets acquired through capital lease | 27 | |
Capital lease asset early termination | $ (9) |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Description of Business and Summary of Significant Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | 1. DESC RIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business —The “Company” or “AtriCure” consists of AtriCure, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company is a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management and sells its products to medical centers globally through its direct sales force and distributors. Basis of Presentation —The accompanying interim financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). The accompanying interim financial statements are unaudited, but in the opinion of the Company’s management, contain all normal, recurring adjustments considered necessary to present fairly the financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America (GAAP) applicable to interim periods. Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted or condensed. The Company believes the disclosures herein are adequate to make the information presented not misleading. Results of operations are not necessarily indicative of the results expected for the full year or for any future period. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC. Cash and Cash Equivalents —The Company considers highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents in the accompanying Condensed Consolidated Financial Statements. Investments —The Company invests primarily in U.S. Government agencies and securities, corporate bonds, commercial paper and asset-backed securities and classifies all investments as available-for-sale. Investments with maturities of less than one year are classified as short-term investments. Investments are recorded at fair value, with unrealized gains and losses recorded as accumulated other comprehensive income. Gains and losses are recognized using the specific identification method when securities are sold and are included in interest income or expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Revenue Recognition— The Company recognizes revenue when control of promised goods is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. This generally occurs upon shipment of goods to customers. See Note 8 for further discussion on revenue. Sales Returns and Allowances —The Company maintains a provision for sales returns and allowances for potential returns of defective or damaged products and products shipped in error and invoice adjustments. The Company adjusts the provision quarterly using a combination of specific identification and an estimated general reserve based on historical experience. Increases to the provision result in a reduction of revenue. The provision is included in accrued liabilities in the Condensed Consolidated Balance Sheets. Allowance for Doubtful Accounts Receivable —The Company evaluates the collectability of accounts receivable to determine the appropriate allowance for doubtful accounts. In determining the amount of the allowance, the Company considers aging of accounts, historical credit losses, customer-specific information and other relevant factors. Increases to the allowance result in an increase in selling, general and administrative expenses. The Company reviews accounts and adjusts the allowance based on current circumstances and charges off uncollectible receivables against the allowance when all attempts to collect the receivable have failed. The Company’s history of write-offs against the allowance has not been significant. Inventories —Inventories are stated at the lower of cost or net realizable value based on the first-in, first-out cost method (FIFO). The Company’s industry is characterized by rapid product development and frequent new product introductions. Uncertain timing of product approvals, variability in product launch strategies and variation in product use all impact inventory reserves for excess, obsolete and expired products. An estimated inventory reserve for excess, obsolete and expired inventory is recorded quarterly. Increases to inventory reserves result in an increase in cost of revenue. Inventories are written off against the reserve when they are physically disposed. Inventories consist of the following: March 31, December 31, 2018 2017 Raw materials $ 8,804 $ 7,755 Work in process 1,803 1,299 Finished goods 11,964 13,397 Inventories $ 22,571 $ 22,451 Property and Equipment —Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of assets. The estimated useful life by major asset category is the following: Estimated Useful Life Generators and related equipment 1 - 3 years Building under capital lease 15 years Computers, software and office equipment 3 years Machinery and equipment 3 - 7 years Furniture and fixtures 3 - 7 years Leasehold improvements 5 - 15 years Equipment under capital leases 3 - 5 years The Company reassesses the useful lives of property and equipment at least annually and retires assets if they are no longer in service. Maintenance and repair costs are expensed as incurred. The Company’s radiofrequency (RF) and cryo generators are generally placed with customers that use the Company’s disposable products. The estimated useful lives of generators are based on anticipated usage by customers and may change in future periods with changes in usage or introduction of new technologies. Depreciation related to generators and related equipment, which is recorded in cost of revenue in the Condensed Consolidated Statements of Operations and Comprehensive Loss, was $827 and $916 for the three months ended March 31, 2018 and 2017 . As of March 31, 2018 and December 31, 2017 , the net carrying value of generators and related equipment included in net property and equipment in the Condensed Consolidated Balance Sheets was $4,754 and $4,656 . The Company at least annually reviews property and equipment for impairment using its best estimates based on reasonable and supportable assumptions and expected future cash flows. Property and equipment impairments recorded by the Company have not been significant. Intangible Assets —Intangible assets with determinable useful lives are amortized on a straight-line basis over the estimated periods benefited. Intangible assets include In Process Research and Development (IPR&D), which represents the value of technology acquired in business combinations that has not yet reached technological feasibility. The primary basis for determining technological feasibility is obtaining specific regulatory approval. IPR&D is accounted for as an indefinite-lived intangible asset until completion or abandonment of the IPR&D project. Upon completion of the development project, IPR&D will be amortized over its estimated useful life. If the IPR&D project is abandoned, the IPR&D would be written off. IPR&D represents an estimate of the fair value of the pre-market approval (PMA) that could result from the CONVERGE IDE clinical trial. The Company at least annually reviews intangible assets for impairment using its best estimates based on reasonable and supportable assumptions and projections. Goodwill— Goodwill represents the excess of purchase price over the fair value of the net assets acquired in business combinations. The Company has historically tested goodwill for impairment annually on November 30, or more often if impairment indicators are present. The Company’s goodwill is accounted for in a single reporting unit representing the Company as a whole. Other Noncurrent Liabilities— Other noncurrent liabilities consist of contingent consideration recorded in business combinations and other contractual obligations. Although the Company expects to settle a portion of the contingent consideration liability in 2018, the balance is included in noncurrent liabilities as such settlement is both required and expected to be made in shares of the Company’s common stock pursuant to the nContact Surgical, Inc. (nContact) merger agreement. Other Income (Expense) — Other income (expense) consists primarily of foreign currency transaction gains and losses generated by settlements of intercompany balances denominated in Euros and invoices transacted in British Pounds. Taxes —Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities from a change in tax rates is recognized in the period that includes the enactment date. The Company’s estimate of the valuation allowance for deferred income tax assets requires significant estimates and judgments about future operating results. Deferred income tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more-likely-than-not that the deferred income tax asset will not be realized. Significant weight is given to evidence that can be objectively verified. The Company evaluates deferred income tax assets on an annual basis to determine if valuation allowances are required. Deferred income tax assets are realized by having sufficient future taxable income to allow the related tax benefits to reduce taxes otherwise payable. The sources of taxable income that may be available to realize the benefit of deferred income tax assets are future reversals of existing taxable temporary differences, future taxable income, exclusive of reversing temporary differences and carryforwards, taxable income in carry-back years and tax planning strategies that are both prudent and feasible. In evaluating the need for a valuation allowance, the existence of cumulative losses in recent years is significant objectively verifiable negative evidence that must be overcome by objectively verifiable positive evidence to avoid the need to record a valuation allowance. The Company has recorded a full valuation allowance against substantially all net deferred income tax assets as it is more-likely-than-not that the benefit of the deferred income tax assets will not be recognized in future periods. Net Loss Per Share —As required under GAAP, basic and diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Since the Company has experienced net losses for all periods presented, net loss per share excludes the effect of 4,216 and 4,580 stock options, restricted stock shares, restricted stock units and performance award shares as of March 31, 2018 and 2017 because they are anti-dilutive. Therefore, the number of shares calculated for basic net loss per share is also used for the diluted net loss per share calculation. Comprehensive Loss and Accumulated Other Comprehensive Income —In addition to net losses, the comprehensive loss includes foreign currency translation adjustments and unrealized losses on investments. Accumulated other comprehensive income (loss) consisted of the following (net of tax): Three Months Ended March 31, 2018 2017 Total accumulated other comprehensive income (loss) at beginning of period $ 34 $ (468) Unrealized Losses on Investments Balance at beginning of period $ (6) $ (21) Other comprehensive (loss) income before reclassifications (8) 2 Amounts reclassified from accumulated other comprehensive income (loss) to other income (loss) — — Balance at end of period $ (14) $ (19) Foreign Currency Translation Adjustment Balance at beginning of period $ 40 $ (447) Other comprehensive income before reclassifications 168 52 Amounts reclassified from accumulated other comprehensive income (loss) to other income (loss) (82) 21 Balance at end of period $ 126 $ (374) Total accumulated other comprehensive income (loss) at end of period $ 112 $ (393) Research and Development Costs —Research and development costs are expensed as incurred. These costs include compensation and other internal and external costs associated with the development of and research related to new and existing products or concepts, preclinical studies, clinical trials and regulatory affairs. Advertising Costs — The Company expenses advertising costs as incurred. Advertising costs were not significant during the three months ended March 31, 2018 and 2017 . Share-Based Compensation —As required under GAAP, the Company records share-based compensation for all employee share-based payment awards, including stock options, restricted stock, restricted stock units, performance shares and stock purchases related to an employee stock purchase plan, based on estimated fair values. The Company recognized share-based compensation expense of $3,890 and $3,628 for the three months ended March 31, 2018 and 2017 . The fair value of share-based payment awards is estimated on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest, net of estimated forfeitures, is recognized as expense over the service periods in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company estimates forfeitures at the time of grant and revises them in subsequent periods if actual forfeitures differ from those estimates. The Company estimates the fair value of time-based options on the date of grant using the Black-Scholes option-pricing model (Black-Scholes model). The Company’s determination of fair value is affected by the Company’s stock price, as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors. The fair value of market-based performance option grants is estimated at the date of grant using a Monte-Carlo simulation. The value of the portion of the awards that is ultimately expected to vest is recognized as expense over the service periods in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company estimates the fair value of restricted stock, restricted stock units and performance shares based upon the grant date closing market price of the Company’s common stock. The Company also has an employee stock purchase plan (ESPP) which is available to all eligible employees as defined by the plan document. Under the ESPP, shares of the Company’s common stock may be purchased at a discount. The Company estimates the number of shares to be purchased under the ESPP at the beginning of each purchase period based upon the fair value of the stock at the beginning of the purchase period using the Black-Scholes model and records estimated compensation expense during the period. Expense is trued up to actual at the time of stock purchase. Use of Estimates —The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 2. RECENT ACCOUNTING PRONOUNCEMENTS In May 2014 , the FASB issued Accounting Standards Update (ASU) 2014-09, “ Revenue from Contracts with Customers” (ASU 2014-09), which requires an entity to recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled in exchange for those goods or services. ASU 2014-09 supersedes most previous revenue recognition guidance and is effective for interim and annual reporting periods beginning within 2018. The Company adopted the new guidance as of January 1, 2018 using the modified retrospective adoption method. See Note 8 for further details. In February 2016 , the FASB issued ASU 2016-02, “Leases” (ASU 2016-02) which requires lessees to record most leases onto their balance sheet but recognize expenses on their income statement in a manner similar to today’s accounting. The guidance is effective for interim and annual reporting periods beginning within 2019 . Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. The Company is evaluating the provisions of ASU 2016-02 to determine the impact on its consolidated financial position, results of operations and related disclosures. In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income (AOCI)” (ASU 2018-02) to address industry concerns related to the application of ASC 740, “Income Taxes” to certain provisions of the new tax reform legislation. Upon adopting ASU 2018-02, an entity is required to disclose (1) its accounting policy related to releasing income tax effects from AOCI, (2) whether it has elected to reclassify, to retained earnings in the statement of stockholders’ equity, the stranded tax effects in AOCI related to the new tax reform legislation and (3) if it has elected to reclassify to retained earnings the stranded tax effects in AOCI related to the new tax reform legislation, what the reclassification encompasses. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. An entity will apply this guidance to each period in which the effect of the new tax reform legislation (or portion thereof) is recorded and may apply it either (1) retrospectively as of the date of enactment or (2) as of the beginning of the period of adoption. The Company has evaluated the impact of the provisions of ASU 2018-02 on its consolidated financial position, results of operations and related disclosures and determine d that the new guidance does not have a material impact on its financial reporting upon adoption . |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value [Abstract] | |
Fair Value | 3. FAIR VALUE GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The f air value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: · Level 1—Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The valuation under this approach does not entail a significant degree of judgment. · Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The valuation technique for the Company’s Level 2 assets is based on quoted market prices for similar assets from observable pricing sources at the reporting date. · 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. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The Company classifies cash and investments in U.S. government agencies and securities as Level 1 within the fair value hierarchy. Accounts receivable, short-term other assets, accounts payable and accrued liabilities are also classified as Level 1. The carrying amounts of these assets and liabilities approximate their fair value due to their relatively short-term nature. Cash equivalents and investments in corporate bonds, commercial paper and asset-backed securities are classified as Level 2 within the fair value hierarchy. The fair value of fixed term debt is estimated by calculating the net present value of future debt payments at current market interest rates and is classified as Level 2. The book value of the Company’s fixed term debt approximates its fair value. The following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total Assets: Money market funds $ — $ 4,087 $ — $ 4,087 Commercial paper — 11,750 — 11,750 U.S. government agencies and securities 1,250 — — 1,250 Corporate bonds — 5,606 — 5,606 Asset-backed securities — 3,038 — 3,038 Total assets $ 1,250 $ 24,481 $ — $ 25,731 Liabilities: Acquisition-related contingent consideration — — 37,098 37,098 Total liabilities $ — $ — $ 37,098 $ 37,098 There were no changes in the levels or methodology of measurement of financial assets and liabilities during the three months ended March 31, 2018 . The following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total Assets: Money market funds $ — $ 12,774 $ — $ 12,774 Commercial paper — 7,472 — 7,472 U.S. government agencies and securities 2,999 — — 2,999 Corporate bonds — 2,920 — 2,920 Total assets $ 2,999 $ 23,166 $ — $ 26,165 Liabilities: Acquisition-related contingent consideration — — 37,098 37,098 Total liabilities $ — $ — $ 37,098 $ 37,098 Acquisition-Related Contingent Consideration. Contingent consideration arrangements under the nContact merger agreement obligate the Company to pay certain defined amounts to former shareholders of nContact if specified milestones are met related to trial enrollment, regulatory approval and revenue targets. The Company measures contingent consideration liabil ities using unobservable inputs by applying an income approach, such as the discounted cash flow technique or the probability-weighted scenario method. Various key assumptions, such as the probability of achievement of the agreed milestones, projected revenues from acquisitions and the discount rate, are used in the determination of fair value of contingent consideration arrangements and are not observable in the market, thus representing a Level 3 measurement within the fair value hierarchy. Subsequent revisions to key assumptions, which impact the estimated fair value of contingent consideration liabilities, are reflected in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Acquisition-related contingent consideration is recorded in other noncurrent liabilities in the Condensed Consolidated Balance Sheets. There were no changes in the underlying estimates or discount rate used to calculate the fair value of contingent consideration d uring the three months ended March 31, 2018 . The following table represents the Company’s Level 3 fair value measurements using significant other unobservable inputs for acquisition-related contingent consideration: Three Months Ended Twelve Months Ended March 31, 2018 December 31, 2017 Beginning Balance $ 37,098 $ 41,176 Amounts acquired — — Changes in fair value included in earnings — (4,078) Ending Balance $ 37,098 $ 37,098 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets [Abstract] | |
Intangible Assets | 4. INTANGIBLE ASSETS The following table provides a summary of the Company’s intangible assets: March 31, 2018 December 31, 2017 Estimated Useful Life Cost Accumulated Amortization Cost Accumulated Amortization Fusion technology 10 years $ 9,242 $ 3,928 $ 9,242 $ 3,697 Clamp & probe technology 3 years 829 829 829 829 SUBTLE access technology 5 years 2,179 1,092 2,179 981 IPR&D 44,021 — 44,021 — Total $ 56,271 $ 5,849 $ 56,271 $ 5,507 Amortization expense of intangible assets with definite lives, which excludes IPR&D, was $342 for both the three months ended March 31, 2018 and 2017 . A mortization expense of intangible assets with definite lives is projected as follows: 2018 $ 1,025 April 1, 2018 through December 31, 2018 2019 1,367 2020 1,235 2021 924 2022 925 2023 and thereafter 925 Total $ 6,401 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | 5. ACCRUED LIABILITIES Accrued liabilities consisted of the following: March 31, December 31, 2018 2017 Accrued payroll and employee-related expenses $ 5,323 $ 4,097 Accrued commissions 4,353 6,964 Accrued bonus 1,987 4,726 Sales returns and allowances 1,174 1,169 Accrued royalties 645 626 Accrued taxes and value-added taxes payable 619 634 Other accrued liabilities 613 695 Total $ 14,714 $ 18,911 |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2018 | |
Indebtedness [Abstract] | |
Indebtedness | 6. INDEBTEDNESS Credit Facility. The Company has a Loan and Security Agreement (Loan Agreement) with Silicon Valley Bank (SVB). The Loan Agreement, as amended and restated effective February 23, 2018 , includes a $40,000 term loan an d a $20,000 revolving line of credit , with an option to increase the revolving line of credit by up to an additional $20,000 . Such term loan and revolving line of credit each have a five -year term , maturing or expiring , as applicable, in February 2023 . Principal payments o f the term loan are to be made ratably commencing eighteen months after the inception of the loan (September 2019) through the loan’s maturity date. If the Company meets certain conditions, as specified by the Loan A greement, the commencement of term loan principal payments may be deferred by an additional six months. The term loan accrues interest at the greater of the Prime Rate plus 3.75% or 8.25% a nd is subject to an additional 3.5% fee on the original $ 40 ,000 term loan principal payable at maturity or upon acceleration or prepayment of the term loan. The Company is accruing the 3.5 % fee over the term of the Loan Agreement. As of March 31, 2018 , the Company accrued $23 of this fee and included it in the outstanding loan balance in the Condensed Consolidated Balance Sheets. The refinancing is treated as a debt modification. F inancing costs related to the term loan of $722 are net ted against the outstanding loan balance in the Condensed Consolidated Balance Sheets and amortized ratably over the term of the Loan Agreement. The revolving line of credit is subject to an annual facility fee of 0.33% of the revolving line of credit, and any borrowings bear interest at the greater of the Prime Rate or 4.50% . Borrowing availability under the revolving credit facility is based on the lesser of $ 20 ,000 or a borrowing base calculation as defined by the Loan Agreement. As of March 31, 2018, the Company had no borrowings under the revolving credit facility and had borrowing availability of $18,750 . Financing costs related to the revolving line of credit are included in other assets in the Condensed Consolidated Balance Sheets and amortized ratably over the twelve-month period of the annual fee . The Loan Agreement contains prepayment and early termination fees and establishes a financial covenant related to sales growth, along with other customary terms and conditions similar to those in the Company’s previous agreement with SVB. Specified assets have been pledged as collateral. Capital Lease Obligations. As of March 31, 2018, the Company had capital leases for its corporate headquarters building and computer equipment that expire at various terms through 2030 . C apital lease assets are depreciated over their estimated useful lives. As of March 31, 2018 , the cost of the leased assets, both building and computer equipment, was $14,472 , and related accumul ated amortization was $2,478 . In connection with the terms of the Company’s corporate headquarters lease, a letter of credit in the amount of $1,250 was issued to the building lessor in October 2015. The letter of credit is renewed annually and remains outstanding as of March 31, 2018. Future maturities of long-term debt and capital lease obligations are projected as follows: 2018 $ 1,103 April 1, 2018 through December 31, 2018 2019 5,297 2020 12,936 2021 12,941 2022 12,965 2023 and thereafter 14,173 Total payments $ 59,415 Imputed interest (6,901) Net long-term debt and capital lease obligations, of which $575 is current and $51,939 is noncurrent $ 52,514 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 7. COMMITMENTS AND CONTINGENCIES Lease Commitments. Th e Company leases certain office and warehouse facilities under noncancelable operating leases that expire at various terms through 2022 . Royalty Agreements. The Company has certain royalty agreements in place with terms that include payment of royalties of 3% to 5% of specified product sales. The royalty agreements have effective dates as early as 2003 and terms ranging from eighteen to at least twenty years , unless terminated earlier . Royalty expense of $672 and $534 is included in cost of rev enue for the three months ended March 31, 2018 and 2017 . Purchase Agreements. The Company enters into standard purchase agreements with various suppliers in the ordinary course of business. Outstanding commitments at March 31, 2018 were not significant. Legal. The Company may, from time to time, become a party to legal proceedings. Such matters are subject to many uncertainties and to outcomes of which the financial impacts are not predictable with assurance and that may not be known for extended periods of time. When management has assessed that a loss is probable and an amount can be reasonably estimated, the Company records a liability in the Condensed Consolidated Financial Statements. Costs associated with legal proceedings could have a material adverse effect on the Company’s future consolidated results of operations, financial position, or cash flows. T he Company received a Civil Investigative Demand (CID) from the U.S. Department of Justice in December 2017 stating that it is investigating the Company to determine whether the Company has violated the False Claims Act, relating to the promotion of certain medical devices related to the treatment of atrial fibrillation for off-label use and submitted or caused to be submitted false claims to certain federal and state health care programs for medically unnecessary healthcare services related to the treatment of atrial fibrillation. The CID covers the period from January 2010 to December 2017 and requires the production of documents and answers to written interrogatories. The Company had no knowledge of the investigation prior to receipt of the CID. The Company maintains rigorous policies and procedures to promote compliance with the False Claims Act and other applicable regulatory requirements and is working with the U.S. Department of Justice to promptly respond to the CID. However, the Company cannot predict when the investigation will be resolved, the outcome of the investigation or its potential impact on the Company. The C ompany acquired nContact Surgical, Inc. pursuant to a merger agreement dated October 4, 2015. T he merger agreement provides for contingent consideration or "earnout" to be paid upon attaining specified regulatory approvals and clinical and revenue milestones. The merger agreement’s earnout provisions require the C ompany to deliver periodic earnout reports to a designated representative of former nContact stockholders. In response to the report delivered in February 2018 , the Company received a letter from the representative on March 16, 201 8 . The letter purports to serve as an “ earnout objection statement ” (as that term is defined in the merger agreement) and claims that for purposes of determining the commercial milestone payment, the C ompany should be including revenues of certain additional items and products that the C ompany has not been including in its earnout reports. The Company has responded to the representative with its own objection to the earnout objection statement and disputes the basis of the representative’s claims. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue [Abstract] | |
Revenue | 8. REVENUE The Company adopted FASB ASC 606, “Revenue from Contracts with Customers” (ASC 606) using the modified retrospective method effective January 1, 2018. The adoption of ASC 606 did not have a material impact on the amount and timing of revenue recognized in the condensed consolidated financial statements. Revenue is generated primarily from the sale of disposable surgical devices. The Company recognizes revenue in an amount that reflects the consideration the Company expects to be entitled to in exchange for those devices when control of promised devices is transferred to customers. At contract inception, the Company assesses the products promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a product that is distinct. The Company’s disposable surgical devices are distinct and represent performance obligations. These performance obligations are satisfied and revenue is recognized at a point in time upon shipment or delivery of products. Sales of devices are categorized as follows based on product indication: open-heart ablation, minimally invasive ablation (MIS), appendage management and valve tools. Shipping and handling activities performed after control over products transfers to customers are considered activities to fulfill the promise to transfer the products rather than as separate promises to customers. Products are sold primarily through a direct sales force and through distributors in select international markets. Terms of sale are generally consistent for both end-users and distributors except that payment terms are generally net 30 days for end-users and net 60 days for distributors, with limited exceptions. The Company does not maintain any post-shipping obligations to customers. No installation, calibration or testing of products is performed by the Company subsequent to shipment in order to render products operational. Significant judgments and estimates involved in the Company’s recognition of revenue include (i) the determination of the timing of transfer of control of products to customers, (ii) the allocation of transaction price to bundled products, as well as the allocation of certain product revenues between product categories, and (iii) the estimation of a provision for returns. The Company considers the following indicators when determining when the control of products transfers to customers: (i) the Company has a right to payment in accordance with the shipping terms set forth in its contracts with customers; (ii) customers have legal title to products in accordance with shipping terms; (iii) the Company transfers physical possession of products either when the Company presents the products to a third party carrier for delivery to a customer (FOB shipping point) or when a customer receives the delivered goods (FOB destination); (iv) customers have the significant risks and rewards of ownership of products; and (v) customers have accepted products in connection with contractual shipping terms. The Company sells certain disposable products in "kits" or "bundles" where the pricing for the kit or bundle is in total rather than by individual component. The Company allocates kit or bundle price to products based on product cost, which approximates allocation based on standalone selling price. Other products for which revenue is allocated include the Company’s multifunctional pens. The Company allocates revenue generated from the sale of multifunctional pens between the open-heart ablation ( 60% ) and MIS ( 40% ) product categories based on historical usage of products in procedures. In addition, the Company allocates shipping and handling revenue among the Company’s product categories based on the periodic percentage of total revenue for each product category. In the normal course of business, the Company does not accept product returns unless a product is defective as manufactured. The Company establishes estimated provisions for returns based on historical experience. The Company does not provide customers with the right to a refund. The Company expects to be entitled to the total consideration for the products ordered by customers as product pricing is fixed according to the terms of customer contracts and payment terms are short. Payment terms fall within the one-year guidance for the practical expedient which allows the Company to forgo adjustment of the promised amount of consideration for the effects of a significant financing component. The Company excludes taxes assessed by governmental authorities on revenue-producing transactions from the measurement of the transaction price. Costs associated with product sales include commissions and royalties. Considering that product sales are performance obligations in contracts that are satisfied at a point in time, commission expense associated with product sales and royalties paid based on sales of certain products is incurred at that point in time rather than over time. Therefore, the Company applies the practical expedient and recognizes commissions and royalties as expense when incurred because the expense is incurred at a point in time and the amortization period is less than one year. Commissions are recorded as selling expense and royalties are recorded as cost of rev enue in the Condensed Consolidated Statements of Operations and Comprehensive Loss . See Note 11 for disaggregated revenue by geographic area and by product category. |
Income Tax Provision
Income Tax Provision | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Provision [Abstract] | |
Income Tax Provision | 9 . INCOME TAX PROVISION The Company files federal, state, and foreign income tax returns in jurisdictions with varying statutes of limitations . The Company uses the asset and liability method to determine its provision for income taxes. The Company’s provision for income taxes in interim periods is computed by applying its estimated annual effective rate against its pre-tax results for the period. N on-recurring items are recorded during the period in which they occur. The effective tax rate for the three months ended March 31, 2018 and 2017 was (0.47%) and (0.23%) . The Tax Cuts and Jobs Act (TCJA) was enacted o n December 22, 2017 . The TCJA reduces the United States federal corporate income tax rate from 35% to 21% . As a result of the Company’s U . S . valuation allowance on its net U . S . deferred tax assets, the TCJA did not have an impact on the effective tax rate for the three months ended March 31, 2018 as compared to March 31, 2017. Also on December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the TCJA . The Company is applying the guidance in SAB 118 when accounting for the enactment-date effects of the Act. The Company ha s not completed its analysis of the tax effects of enactment of the TCJA as of March 31, 2018, but it has made a reasonable estimate of some of the effects. In other cases, the Company has not been able to make a reasonable estimate and continue s to account for those items under ASC 740, “ Income Taxes, ” and the provisions of the tax laws that were in effect immediately prior to enactment. In all cases, the Company will continue to make and refine its calculations as additional analysis is completed. E stimates may also be affected as the Company gain s a more thorough understanding of the tax law. These changes are not anticipated to be material to income tax expense as a result of the Company’s U . S . valuation allowance position. E stimate s of the effects on deferred tax balances and material provisions of the TCJA are reflected in the financial statements as follows: Deferred tax assets and liabilities : At December 31, 2017, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. As a result, t he Company reduced its federal deferred tax assets by $29,480 with an offsetting reduction in its valuation allowance at December 31, 2017. In addition, the Company’s state deferred tax assets and corresponding valuation allowance have been adjusted to account for the impact of the federal rate change on state deferred taxes. Upon further analyses of certain aspects of the TCJA and refinement of calculations during the three months ended March 31, 2018, the Company has not adjusted its provisional amount. The Company expects to finalize its remeasurement of deferred tax assets and liabilities as a result of the TCJA when its 2017 U.S. federal income tax return is filed in 2018. Deemed Repatriation Transition Tax : The TCJA provides for a one-time "deemed repatriation" of accumulated foreign earnings for the year ended December 31, 2017. The Company does not anticipate any tax on a deemed repatriation as a result of its foreign deficits. Compensation and Shared-Based Payment Awards: The TCJA modifies the deductibility of certain employees’ compensation and eliminates the exclusion of performance-based compensation under IRC § 162(m), prospectivel y. The TCJA includes a transition rule that permit s the continued in clusion of performance-based compensation paid pursuant to a written, binding contract which was in effect on November 2, 2017, and which was not modified in any material respect on or after such date. The Company has not completed its analysis of all of its relevant equity compensation agreements to determine if the transition rule appl ies and the deferred tax implications of this provision . Corporate Alternative Minimum Tax (AMT): The repeal of corporate AMT provides companies with the ability to obtain refunds of historic AMT credits. The Company realized a deferred tax benefit of $102 for the year ended December 31, 2017 associated with the release of the valuation allowance on its AMT credits. Bonus Depreciation: The TCJA provides for 100 percent bonus depreciation on personal tangible property expenditures beginning September 27, 2017 through 2022. The bonus depreciation percentage is phased down from 100 percent beginning in 2023 through 2026. The Company is continuing to evaluate its bonus depreciation election. The Company has not accrued any interest and penalties. However, if the situation occurs, the Company will recognize interest and penalties within income tax expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss and within the related tax liability in the Condensed Consolidated Balance Sheets. Federal, state and local tax returns of the Company are routinely subject to review by various taxing authorities. |
Equity Compensation Plans
Equity Compensation Plans | 3 Months Ended |
Mar. 31, 2018 | |
Equity Compensation Plans [Abstract] | |
Equity Compensation Plans | 10 . EQUITY COMPENSATION PLANS The Company has two share-based incentive plans: the 2014 Stock Incentive Plan (2014 Plan) and the 2008 Employee Stock Purchase Plan (ESPP). Stock Incentive Plan Under the 2014 Plan, the Board of Directors may grant incentive stock options to employees and may grant nonstatutory stock options, restricted stock , restricted stock units, performance shares or stock appreciation rights to employees, directors and consultants. The administrator (currently the Compensation Committee of the Board of Directors) has the authority to determine the terms of any awards, including the number of shares subject to each award, the exercisability of the awards and the form of consideration. As of March 31, 2018 , 10,249 shares of common stock had been reserved for issuance under the 2014 Plan , and 562 shares were available for future grants . Effective March 1, 2018, the Compensation Committee of the Board approved the grant o f performance share awards ( 2018 PSAs) to the Company’s named executive officers and certain other employees pursuant to the Company’s 2014 Stock Incentive Plan. The form of award agreement for the 2018 PSAs ( 2018 PSA Grant Form) provides, among other things, that (i) each 2018 PSA that vests represents the right to receive one share of the Company’s common stock; (ii) the 2018 PSAs vest based on the Company achieving specified performance measurements over a performance period of three years, beginning January 1, 2018; (iii) the performance measurements include revenue CAGR as defined in the 2018 PSA Grant Form; (iv) threshold, target and maximum payout opportunities established for the 2018 PSAs will be used to calculate the number of shares that will be issuable when the award vests, which may range from 0% to 200% of the target amount; (v) any 2018 PSAs that are earned are scheduled to vest and be settled in shares of the Company’s common stock at the end of the performance period; and (vi) all or a portion of the 2018 PSAs may vest following a change of control or a termination of service by reason of death or disability (each as described in greater detail in the 2018 PSA Grant Form). With respect to the 2018 PSAs, the number of shares that vest and are issued to the recipient is based upon the Company’s performance as measured against the specified targets at the end of the three-year performance period as determined by the Compensation Committee of the Board. The Company estimates the fair value of the 2018 PSAs based on its closing stock price on the grant date and will adjust compensation expense over the performance period based on its estimate of performance target achievement. Stock o ptions granted under the 2014 Plan prior to 2018 generally expire ten years from the date of grant and generally vest at a rate of 25% on the first anniversary date of the grant and ratably each month thereafter over the following three years. Restricted stock awards granted prior to 2018 generally vest between one and four years from the date of grant . Beginning in 2018, stock options granted generally vest in one -third increments on the first, second and third anniversaries of the grant date, and restricted stock awards granted generally vest on the grant date anniversaries between one and three years from the date of grant. Restricted stock units vest in one -third increments on the first, second and third anniversaries of the grant date. Employee Stock Purchase Plan The ESPP is available to eligible employees as defined in the plan document. Under the ESPP, shares of the Company’s common stock may be purchased at a discount (currently 15% ) of the lesser of the closing price of the Company’s common stock on the first trading day or the last trading day of the offering period. The offering period (currently six months) and the offering price are subject to change. Participants may not purchase more than $25 of the Company’s common stock in a calendar year and may not purchase a value of more than 3 shares during an offering period. On the first day of each year during the term of the ESPP, the number of shares available for sale under the ESPP may be increased by the lesser of (i) two percent ( 2% ) of the Company’s outstanding shares of common stock as of the close of business on the last business day of the prior calendar year, not to exceed 600 shares, or (ii) a lesser amount determined by the Board of Directors. Shares have not been added to the ESPP since 2011. A s of March 31, 2018 , there were 225 shares available for future issuance under the ESPP. The Company is recommending to stockholders at the 2018 annual meeting the approval of the 2018 Employee Stock Purchase Plan covering an additional 500 shares. Expense Information Under FASB ASC 718 The following table summarizes the allocation of share-based compensation expense related to employees, directors and consultants : Three Months Ended March 31, 2018 2017 Cost of revenue $ 237 $ 131 Research and development expenses 591 501 Selling, general and administrative expenses 3,062 2,996 Total $ 3,890 $ 3,628 |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment and Geographic Information [Abstract] | |
Segment and Geographic Information | 1 1 . SEGMENT AND GEOGRAPHIC INFORMATION The Company develops, manufactures, and sells devices designed primarily for the surgical ablation of cardiac tissue and systems designed for the exclusion of the left atrial appendage. These devices are developed and marketed to a broad base of medical centers globally. Management considers all such sales to be part of a single operating segment. Revenue a ttributed to geographic areas, based on the location of customers , w as as follows: Three Months Ended March 31, 2018 2017 United States $ 38,436 $ 33,268 Europe 5,871 5,189 Asia 2,439 2,651 Other international 248 165 Total international 8,558 8,005 Total revenue $ 46,994 $ 41,273 United States revenue by product type was as follows: Three Months Ended March 31, 2018 2017 Open-heart ablation $ 17,579 $ 15,705 Minimally invasive ablation 8,613 8,282 Appendage management 11,797 8,702 Total ablation and appendage management 37,989 32,689 Valve tools 447 579 Total United States $ 38,436 $ 33,268 International revenue by product type was as follows: Three Months Ended March 31, 2018 2017 Open-heart ablation $ 4,909 $ 4,590 Minimally invasive ablation 1,792 1,958 Appendage management 1,798 1,395 Total ablation and appendage management 8,499 7,943 Valve tools 59 62 Total international $ 8,558 $ 8,005 The Company’s long-lived assets are located primarily in the United States, except for $1,000 as of March 31, 2018 and $957 as of December 31, 201 7 , which are located primarily in Europe. |
Description of Business and S17
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Description of Business and Summary of Significant Accounting Policies [Abstract] | |
Nature of the Business | Nature of the Business —The “Company” or “AtriCure” consists of AtriCure, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company is a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management and sells its products to medical centers globally through its direct sales force and distributors. |
Basis of Presentation | Basis of Presentation —The accompanying interim financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). The accompanying interim financial statements are unaudited, but in the opinion of the Company’s management, contain all normal, recurring adjustments considered necessary to present fairly the financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America (GAAP) applicable to interim periods. Certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted or condensed. The Company believes the disclosures herein are adequate to make the information presented not misleading. Results of operations are not necessarily indicative of the results expected for the full year or for any future period. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC. |
Cash and Cash Equivalents | Cash and Cash Equivalents —The Company considers highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents in the accompanying Condensed Consolidated Financial Statements. |
Investments | Investments —The Company invests primarily in U.S. Government agencies and securities, corporate bonds, commercial paper and asset-backed securities and classifies all investments as available-for-sale. Investments with maturities of less than one year are classified as short-term investments. Investments are recorded at fair value, with unrealized gains and losses recorded as accumulated other comprehensive income. Gains and losses are recognized using the specific identification method when securities are sold and are included in interest income or expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. |
Revenue Recognition | Revenue Recognition— The Company recognizes revenue when control of promised goods is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. This generally occurs upon shipment of goods to customers. See Note 8 for further discussion on revenue. |
Sales Returns and Allowances | Sales Returns and Allowances —The Company maintains a provision for sales returns and allowances for potential returns of defective or damaged products and products shipped in error and invoice adjustments. The Company adjusts the provision quarterly using a combination of specific identification and an estimated general reserve based on historical experience. Increases to the provision result in a reduction of revenue. The provision is included in accrued liabilities in the Condensed Consolidated Balance Sheets. |
Allowance for Doubtful Accounts Receivable | Allowance for Doubtful Accounts Receivable —The Company evaluates the collectability of accounts receivable to determine the appropriate allowance for doubtful accounts. In determining the amount of the allowance, the Company considers aging of accounts, historical credit losses, customer-specific information and other relevant factors. Increases to the allowance result in an increase in selling, general and administrative expenses. The Company reviews accounts and adjusts the allowance based on current circumstances and charges off uncollectible receivables against the allowance when all attempts to collect the receivable have failed. The Company’s history of write-offs against the allowance has not been significant. |
Inventories | Inventories —Inventories are stated at the lower of cost or net realizable value based on the first-in, first-out cost method (FIFO). The Company’s industry is characterized by rapid product development and frequent new product introductions. Uncertain timing of product approvals, variability in product launch strategies and variation in product use all impact inventory reserves for excess, obsolete and expired products. An estimated inventory reserve for excess, obsolete and expired inventory is recorded quarterly. Increases to inventory reserves result in an increase in cost of revenue. Inventories are written off against the reserve when they are physically disposed. Inventories consist of the following: March 31, December 31, 2018 2017 Raw materials $ 8,804 $ 7,755 Work in process 1,803 1,299 Finished goods 11,964 13,397 Inventories $ 22,571 $ 22,451 |
Property and Equipment | Property and Equipment —Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of assets. The estimated useful life by major asset category is the following: Estimated Useful Life Generators and related equipment 1 - 3 years Building under capital lease 15 years Computers, software and office equipment 3 years Machinery and equipment 3 - 7 years Furniture and fixtures 3 - 7 years Leasehold improvements 5 - 15 years Equipment under capital leases 3 - 5 years The Company reassesses the useful lives of property and equipment at least annually and retires assets if they are no longer in service. Maintenance and repair costs are expensed as incurred. The Company’s radiofrequency (RF) and cryo generators are generally placed with customers that use the Company’s disposable products. The estimated useful lives of generators are based on anticipated usage by customers and may change in future periods with changes in usage or introduction of new technologies. Depreciation related to generators and related equipment, which is recorded in cost of revenue in the Condensed Consolidated Statements of Operations and Comprehensive Loss, was $827 and $916 for the three months ended March 31, 2018 and 2017 . As of March 31, 2018 and December 31, 2017 , the net carrying value of generators and related equipment included in net property and equipment in the Condensed Consolidated Balance Sheets was $4,754 and $4,656 . The Company at least annually reviews property and equipment for impairment using its best estimates based on reasonable and supportable assumptions and expected future cash flows. Property and equipment impairments recorded by the Company have not been significant. |
Intangible Assets | Intangible Assets —Intangible assets with determinable useful lives are amortized on a straight-line basis over the estimated periods benefited. Intangible assets include In Process Research and Development (IPR&D), which represents the value of technology acquired in business combinations that has not yet reached technological feasibility. The primary basis for determining technological feasibility is obtaining specific regulatory approval. IPR&D is accounted for as an indefinite-lived intangible asset until completion or abandonment of the IPR&D project. Upon completion of the development project, IPR&D will be amortized over its estimated useful life. If the IPR&D project is abandoned, the IPR&D would be written off. IPR&D represents an estimate of the fair value of the pre-market approval (PMA) that could result from the CONVERGE IDE clinical trial. The Company at least annually reviews intangible assets for impairment using its best estimates based on reasonable and supportable assumptions and projections. |
Goodwill | Goodwill— Goodwill represents the excess of purchase price over the fair value of the net assets acquired in business combinations. The Company has historically tested goodwill for impairment annually on November 30, or more often if impairment indicators are present. The Company’s goodwill is accounted for in a single reporting unit representing the Company as a whole. |
Other Noncurrent Liabilities | Other Noncurrent Liabilities— Other noncurrent liabilities consist of contingent consideration recorded in business combinations and other contractual obligations. Although the Company expects to settle a portion of the contingent consideration liability in 2018, the balance is included in noncurrent liabilities as such settlement is both required and expected to be made in shares of the Company’s common stock pursuant to the nContact Surgical, Inc. (nContact) merger agreement. |
Other Income (Expense) | Other Income (Expense) — Other income (expense) consists primarily of foreign currency transaction gains and losses generated by settlements of intercompany balances denominated in Euros and invoices transacted in British Pounds. |
Taxes | Taxes —Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities from a change in tax rates is recognized in the period that includes the enactment date. The Company’s estimate of the valuation allowance for deferred income tax assets requires significant estimates and judgments about future operating results. Deferred income tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more-likely-than-not that the deferred income tax asset will not be realized. Significant weight is given to evidence that can be objectively verified. The Company evaluates deferred income tax assets on an annual basis to determine if valuation allowances are required. Deferred income tax assets are realized by having sufficient future taxable income to allow the related tax benefits to reduce taxes otherwise payable. The sources of taxable income that may be available to realize the benefit of deferred income tax assets are future reversals of existing taxable temporary differences, future taxable income, exclusive of reversing temporary differences and carryforwards, taxable income in carry-back years and tax planning strategies that are both prudent and feasible. In evaluating the need for a valuation allowance, the existence of cumulative losses in recent years is significant objectively verifiable negative evidence that must be overcome by objectively verifiable positive evidence to avoid the need to record a valuation allowance. The Company has recorded a full valuation allowance against substantially all net deferred income tax assets as it is more-likely-than-not that the benefit of the deferred income tax assets will not be recognized in future periods. |
Net Loss Per Share | Net Loss Per Share —As required under GAAP, basic and diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Since the Company has experienced net losses for all periods presented, net loss per share excludes the effect of 4,216 and 4,580 stock options, restricted stock shares, restricted stock units and performance award shares as of March 31, 2018 and 2017 because they are anti-dilutive. Therefore, the number of shares calculated for basic net loss per share is also used for the diluted net loss per share calculation. |
Comprehensive Loss and Accumulated Other Comprehensive Income | Comprehensive Loss and Accumulated Other Comprehensive Income —In addition to net losses, the comprehensive loss includes foreign currency translation adjustments and unrealized losses on investments. Accumulated other comprehensive income (loss) consisted of the following (net of tax): Three Months Ended March 31, 2018 2017 Total accumulated other comprehensive income (loss) at beginning of period $ 34 $ (468) Unrealized Losses on Investments Balance at beginning of period $ (6) $ (21) Other comprehensive (loss) income before reclassifications (8) 2 Amounts reclassified from accumulated other comprehensive income (loss) to other income (loss) — — Balance at end of period $ (14) $ (19) Foreign Currency Translation Adjustment Balance at beginning of period $ 40 $ (447) Other comprehensive income before reclassifications 168 52 Amounts reclassified from accumulated other comprehensive income (loss) to other income (loss) (82) 21 Balance at end of period $ 126 $ (374) Total accumulated other comprehensive income (loss) at end of period $ 112 $ (393) |
Research and Development Costs | Research and Development Costs —Research and development costs are expensed as incurred. These costs include compensation and other internal and external costs associated with the development of and research related to new and existing products or concepts, preclinical studies, clinical trials and regulatory affairs. |
Advertising Costs | Advertising Costs — The Company expenses advertising costs as incurred. Advertising costs were not significant during the three months ended March 31, 2018 and 2017 . |
Share-Based Compensation | Share-Based Compensation —As required under GAAP, the Company records share-based compensation for all employee share-based payment awards, including stock options, restricted stock, restricted stock units, performance shares and stock purchases related to an employee stock purchase plan, based on estimated fair values. The Company recognized share-based compensation expense of $3,890 and $3,628 for the three months ended March 31, 2018 and 2017 . The fair value of share-based payment awards is estimated on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest, net of estimated forfeitures, is recognized as expense over the service periods in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company estimates forfeitures at the time of grant and revises them in subsequent periods if actual forfeitures differ from those estimates. The Company estimates the fair value of time-based options on the date of grant using the Black-Scholes option-pricing model (Black-Scholes model). The Company’s determination of fair value is affected by the Company’s stock price, as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors. The fair value of market-based performance option grants is estimated at the date of grant using a Monte-Carlo simulation. The value of the portion of the awards that is ultimately expected to vest is recognized as expense over the service periods in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company estimates the fair value of restricted stock, restricted stock units and performance shares based upon the grant date closing market price of the Company’s common stock. The Company also has an employee stock purchase plan (ESPP) which is available to all eligible employees as defined by the plan document. Under the ESPP, shares of the Company’s common stock may be purchased at a discount. The Company estimates the number of shares to be purchased under the ESPP at the beginning of each purchase period based upon the fair value of the stock at the beginning of the purchase period using the Black-Scholes model and records estimated compensation expense during the period. Expense is trued up to actual at the time of stock purchase. |
Use of Estimates | Use of Estimates —The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. |
Description of Business and S18
Description of Business and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Description of Business and Summary of Significant Accounting Policies [Abstract] | |
Summary Of Inventories | Inventories consist of the following: March 31, December 31, 2018 2017 Raw materials $ 8,804 $ 7,755 Work in process 1,803 1,299 Finished goods 11,964 13,397 Inventories $ 22,571 $ 22,451 |
Summary of Property and Equipment | Estimated Useful Life Generators and related equipment 1 - 3 years Building under capital lease 15 years Computers, software and office equipment 3 years Machinery and equipment 3 - 7 years Furniture and fixtures 3 - 7 years Leasehold improvements 5 - 15 years Equipment under capital leases 3 - 5 years |
Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) consisted of the following (net of tax): Three Months Ended March 31, 2018 2017 Total accumulated other comprehensive income (loss) at beginning of period $ 34 $ (468) Unrealized Losses on Investments Balance at beginning of period $ (6) $ (21) Other comprehensive (loss) income before reclassifications (8) 2 Amounts reclassified from accumulated other comprehensive income (loss) to other income (loss) — — Balance at end of period $ (14) $ (19) Foreign Currency Translation Adjustment Balance at beginning of period $ 40 $ (447) Other comprehensive income before reclassifications 168 52 Amounts reclassified from accumulated other comprehensive income (loss) to other income (loss) (82) 21 Balance at end of period $ 126 $ (374) Total accumulated other comprehensive income (loss) at end of period $ 112 $ (393) |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total Assets: Money market funds $ — $ 4,087 $ — $ 4,087 Commercial paper — 11,750 — 11,750 U.S. government agencies and securities 1,250 — — 1,250 Corporate bonds — 5,606 — 5,606 Asset-backed securities — 3,038 — 3,038 Total assets $ 1,250 $ 24,481 $ — $ 25,731 Liabilities: Acquisition-related contingent consideration — — 37,098 37,098 Total liabilities $ — $ — $ 37,098 $ 37,098 There were no changes in the levels or methodology of measurement of financial assets and liabilities during the three months ended March 31, 2018 . The following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 : Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Total Assets: Money market funds $ — $ 12,774 $ — $ 12,774 Commercial paper — 7,472 — 7,472 U.S. government agencies and securities 2,999 — — 2,999 Corporate bonds — 2,920 — 2,920 Total assets $ 2,999 $ 23,166 $ — $ 26,165 Liabilities: Acquisition-related contingent consideration — — 37,098 37,098 Total liabilities $ — $ — $ 37,098 $ 37,098 |
Level 3 Fair Value Measurements Using Significant Other Unobservable Inputs for Acquisition-Related Contingent Consideration | The following table represents the Company’s Level 3 fair value measurements using significant other unobservable inputs for acquisition-related contingent consideration: Three Months Ended Twelve Months Ended March 31, 2018 December 31, 2017 Beginning Balance $ 37,098 $ 41,176 Amounts acquired — — Changes in fair value included in earnings — (4,078) Ending Balance $ 37,098 $ 37,098 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets [Abstract] | |
Company's Intangible Assets | The following table provides a summary of the Company’s intangible assets: March 31, 2018 December 31, 2017 Estimated Useful Life Cost Accumulated Amortization Cost Accumulated Amortization Fusion technology 10 years $ 9,242 $ 3,928 $ 9,242 $ 3,697 Clamp & probe technology 3 years 829 829 829 829 SUBTLE access technology 5 years 2,179 1,092 2,179 981 IPR&D 44,021 — 44,021 — Total $ 56,271 $ 5,849 $ 56,271 $ 5,507 |
Future Amortization Expense Related to Intangible Assets with Definite Lives | A mortization expense of intangible assets with definite lives is projected as follows: 2018 $ 1,025 April 1, 2018 through December 31, 2018 2019 1,367 2020 1,235 2021 924 2022 925 2023 and thereafter 925 Total $ 6,401 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accrued liabilities consisted of the following: March 31, December 31, 2018 2017 Accrued payroll and employee-related expenses $ 5,323 $ 4,097 Accrued commissions 4,353 6,964 Accrued bonus 1,987 4,726 Sales returns and allowances 1,174 1,169 Accrued royalties 645 626 Accrued taxes and value-added taxes payable 619 634 Other accrued liabilities 613 695 Total $ 14,714 $ 18,911 |
Indebtedness (Tables)
Indebtedness (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Indebtedness [Abstract] | |
Future Maturities On Debt And Capital Lease Obligations | 2018 $ 1,103 April 1, 2018 through December 31, 2018 2019 5,297 2020 12,936 2021 12,941 2022 12,965 2023 and thereafter 14,173 Total payments $ 59,415 Imputed interest (6,901) Net long-term debt and capital lease obligations, of which $575 is current and $51,939 is noncurrent $ 52,514 |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity Compensation Plans [Abstract] | |
Share-Based Compensation Expense Related to Employee Share-Based Compensation | The following table summarizes the allocation of share-based compensation expense related to employees, directors and consultants : Three Months Ended March 31, 2018 2017 Cost of revenue $ 237 $ 131 Research and development expenses 591 501 Selling, general and administrative expenses 3,062 2,996 Total $ 3,890 $ 3,628 |
Segment and Geographic Inform24
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment and Geographic Information [Abstract] | |
Revenue by Geographic Area | w as as follows: Three Months Ended March 31, 2018 2017 United States $ 38,436 $ 33,268 Europe 5,871 5,189 Asia 2,439 2,651 Other international 248 165 Total international 8,558 8,005 Total revenue $ 46,994 $ 41,273 |
Revenue by Product Type | United States revenue by product type was as follows: Three Months Ended March 31, 2018 2017 Open-heart ablation $ 17,579 $ 15,705 Minimally invasive ablation 8,613 8,282 Appendage management 11,797 8,702 Total ablation and appendage management 37,989 32,689 Valve tools 447 579 Total United States $ 38,436 $ 33,268 International revenue by product type was as follows: Three Months Ended March 31, 2018 2017 Open-heart ablation $ 4,909 $ 4,590 Minimally invasive ablation 1,792 1,958 Appendage management 1,798 1,395 Total ablation and appendage management 8,499 7,943 Valve tools 59 62 Total international $ 8,558 $ 8,005 |
Description of Business and S25
Description of Business and Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Description Of Business And Significant Accounting Policies [Line Items] | |||
Depreciation | $ 1,857 | $ 1,962 | |
Net carrying amount of loaned equipment | $ 28,549 | $ 28,749 | |
Options, restricted stock and performance based shares excluded from calculation of net loss per share | 4,216 | 4,580 | |
Share-based compensation expense recognized | $ 3,890 | $ 3,628 | |
Generators [Member] | |||
Description Of Business And Significant Accounting Policies [Line Items] | |||
Depreciation | 827 | $ 916 | |
Carrying Amount of Loaned Equipment [Member] | |||
Description Of Business And Significant Accounting Policies [Line Items] | |||
Net carrying amount of loaned equipment | $ 4,754 | $ 4,656 | |
Short-term Debt [Member] | |||
Description Of Business And Significant Accounting Policies [Line Items] | |||
Maturity period of short term investment | 1 year |
Description of Business and S26
Description of Business and Summary of Significant Accounting Policies (Summary Of Inventories) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Description of Business and Summary of Significant Accounting Policies [Abstract] | ||
Raw materials | $ 8,804 | $ 7,755 |
Work in process | 1,803 | 1,299 |
Finished goods | 11,964 | 13,397 |
Inventories | $ 22,571 | $ 22,451 |
Description of Business and S27
Description of Business and Summary of Significant Accounting Policies (Summary Of Property And Equipment) (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Building under Capital Lease [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 15 years |
Computers, Software and Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Minimum [Member] | Generator and Related Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 1 year |
Minimum [Member] | Machinery And Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Minimum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Minimum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Minimum [Member] | Equipment under Capital Leases [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Maximum [Member] | Generator and Related Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Maximum [Member] | Machinery And Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Maximum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Maximum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 15 years |
Maximum [Member] | Equipment under Capital Leases [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Description of Business and S28
Description of Business and Summary of Significant Accounting Policies (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total accumulated other comprehensive income (loss) at beginning of period | $ 34 | $ (468) |
Total accumulated other comprehensive income (loss) at end of period | 112 | (393) |
Unrealized Losses On Investments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total accumulated other comprehensive income (loss) at beginning of period | (6) | (21) |
Other comprehensive (loss) income before reclassifications | (8) | 2 |
Amounts reclassified from accumulated other comprehensive income (loss) to other income (loss) | ||
Total accumulated other comprehensive income (loss) at end of period | (14) | (19) |
Foreign Currency Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total accumulated other comprehensive income (loss) at beginning of period | 40 | (447) |
Other comprehensive (loss) income before reclassifications | 168 | 52 |
Amounts reclassified from accumulated other comprehensive income (loss) to other income (loss) | (82) | 21 |
Total accumulated other comprehensive income (loss) at end of period | $ 126 | $ (374) |
Fair Value (Financial Assets an
Fair Value (Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Total assets | $ 25,731 | $ 26,165 |
Liabilities: | ||
Acquisition-related contingent consideration | 37,098 | 37,098 |
Total liabilities | 37,098 | 37,098 |
Money Market Funds [Member] | ||
Assets: | ||
Total assets | 4,087 | 12,774 |
Commercial Paper [Member] | ||
Assets: | ||
Total assets | 11,750 | 7,472 |
U.S. Government Agencies and Securities [Member] | ||
Assets: | ||
Total assets | 1,250 | 2,999 |
Corporate Bonds [Member] | ||
Assets: | ||
Total assets | 5,606 | 2,920 |
Asset-backed Securities [Member] | ||
Assets: | ||
Total assets | 3,038 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets: | ||
Total assets | 1,250 | 2,999 |
Liabilities: | ||
Acquisition-related contingent consideration | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. Government Agencies and Securities [Member] | ||
Assets: | ||
Total assets | 1,250 | 2,999 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets: | ||
Total assets | 24,481 | 23,166 |
Liabilities: | ||
Acquisition-related contingent consideration | ||
Significant Other Observable Inputs (Level 2) [Member] | Money Market Funds [Member] | ||
Assets: | ||
Total assets | 4,087 | 12,774 |
Significant Other Observable Inputs (Level 2) [Member] | Commercial Paper [Member] | ||
Assets: | ||
Total assets | 11,750 | 7,472 |
Significant Other Observable Inputs (Level 2) [Member] | Corporate Bonds [Member] | ||
Assets: | ||
Total assets | 5,606 | 2,920 |
Significant Other Observable Inputs (Level 2) [Member] | Asset-backed Securities [Member] | ||
Assets: | ||
Total assets | 3,038 | |
Significant Other Unobservable Inputs (Level 3) [Member] | ||
Liabilities: | ||
Acquisition-related contingent consideration | 37,098 | 37,098 |
Total liabilities | $ 37,098 | $ 37,098 |
Fair Value (Level 3 Fair Value
Fair Value (Level 3 Fair Value Measurements Using Significant Other Unobservable Inputs for Acquisition-Related Contingent Consideration) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value [Abstract] | ||
Beginning Balance | $ 37,098 | $ 41,176 |
Amounts acquired | ||
Changes in fair value included in earnings | (4,078) | |
Ending Balance | $ 37,098 | $ 37,098 |
Intangible Assets (Narative) (D
Intangible Assets (Narative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Intangible Assets [Abstract] | ||
Amortization of intangible assets | $ 342 | $ 342 |
Intangible Assets (Company's In
Intangible Assets (Company's Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 56,271 | $ 56,271 |
Accumulated Amortization | $ 5,849 | 5,507 |
Fusion Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 10 years | |
Cost | $ 9,242 | 9,242 |
Accumulated Amortization | $ 3,928 | 3,697 |
Clamp and Probe Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 3 years | |
Cost | $ 829 | 829 |
Accumulated Amortization | $ 829 | 829 |
SUBTLE Access Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 5 years | |
Cost | $ 2,179 | 2,179 |
Accumulated Amortization | 1,092 | 981 |
IPR&D [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 44,021 | $ 44,021 |
Intangible Assets (Future Amort
Intangible Assets (Future Amortization Expense Related to Intangible Assets with Definite Lives) (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Intangible Assets [Abstract] | |
2,018 | $ 1,025 |
2,019 | 1,367 |
2,020 | 1,235 |
2,021 | 924 |
2,022 | 925 |
2023 and thereafter | 925 |
Total | $ 6,401 |
Accrued Liabilities (Accrued Li
Accrued Liabilities (Accrued Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities [Abstract] | ||
Accrued payroll and employee-related expenses | $ 5,323 | $ 4,097 |
Accrued commissions | 4,353 | 6,964 |
Accrued bonus | 1,987 | 4,726 |
Sales returns and allowances | 1,174 | 1,169 |
Accrued royalties | 645 | 626 |
Accrued taxes and value-added taxes payable | 619 | 634 |
Other accrued liabilities | 613 | 695 |
Total | $ 14,714 | $ 18,911 |
Indebtedness (Narrative) (Detai
Indebtedness (Narrative) (Details) - USD ($) | Feb. 23, 2018 | Apr. 25, 2016 | Mar. 31, 2018 | Oct. 31, 2015 |
Line of Credit Facility [Line Items] | ||||
Accumulated amortization on the capital leases | $ 2,478,000 | |||
Maximum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Letter of credit required to landlord | 1,250,000 | |||
Silicon Valley Bank Agreement [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit | 0 | |||
Line of credit, availability | $ 18,750,000 | |||
Silicon Valley Bank, Second Amended And Restated Loan Agreement [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Principal payment starting period after inception of loan to maturity | 18 months | |||
Silicon Valley Bank, Amended And Restated Loan Agreement Effective 2/23/18 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Upon certain conditions met, deferred loan payment period | 6 months | |||
Silicon Valley Bank, Amended And Restated Loan Agreement Effective 2/23/18 [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit, maximum borrowing capacity | $ 20,000,000 | |||
Maturity date | Apr. 30, 2021 | |||
Optional increase in line of credit | $ 20,000,000 | |||
Additional fee on total term loan | 0.33% | |||
Silicon Valley Bank, Amended And Restated Loan Agreement Effective 2/23/18 [Member] | Revolving Credit Facility [Member] | Prime Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis rate | 4.50% | |||
Building And Computer Equipment [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Capital lease expiration period | Dec. 31, 2030 | |||
Cost of assets under lease | $ 14,472,000 | |||
Term Loan [Member] | Silicon Valley Bank, Second Amended And Restated Loan Agreement [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Loan term | 5 years | |||
Term Loan [Member] | Silicon Valley Bank, Amended And Restated Loan Agreement Effective 2/23/18 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Loan amount | $ 40,000,000 | |||
Additional fee on total term loan | 3.50% | |||
Accrued fee amount | 23,000 | |||
Financing costs | $ 722,000 | |||
Term Loan [Member] | Silicon Valley Bank, Amended And Restated Loan Agreement Effective 2/23/18 [Member] | Prime Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis rate | 3.75% | |||
Interest rate | 8.25% | |||
Mason Lease [Member] | Letter of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Letter of credit outstanding | $ 1,250,000 |
Indebtedness (Future Maturities
Indebtedness (Future Maturities On Debt And Capital Lease Obligations) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Indebtedness [Abstract] | ||
2,018 | $ 1,103 | |
2,019 | 5,297 | |
2,020 | 12,936 | |
2,021 | 12,941 | |
2,022 | 12,965 | |
2023 and thereafter | 14,173 | |
Total payments | 59,415 | |
Imputed interest | (6,901) | |
Net long-term debt and capital lease obligations, of which $575 is current and $51,939 is noncurrent | 52,514 | |
Net capital lease obligations, current | 575 | $ 561 |
Net capital lease obligations, noncurrent | $ 51,939 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Commitments and Contingencies [Line Items] | ||
Royalty expense | $ 672 | $ 534 |
Minimum [Member] | ||
Commitments and Contingencies [Line Items] | ||
Royalty rates | 3.00% | |
Royalty agreement term | 18 years | |
Maximum [Member] | ||
Commitments and Contingencies [Line Items] | ||
Royalty rates | 5.00% | |
Royalty agreement term | 20 years | |
Office, Manufacturing, Warehouse Facilities, And Equipment [Member] | ||
Commitments and Contingencies [Line Items] | ||
Operating leases expire at various terms | Dec. 31, 2022 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Open-heart Ablation [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue allocation percentage | 60.00% |
Minimally Invasive Ablation [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue allocation percentage | 40.00% |
Income Tax Provision (Narrative
Income Tax Provision (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Provision [Abstract] | |||
Effective tax rate | (0.47%) | (0.23%) | |
Federal tax at statutory rate | 21.00% | 35.00% | |
Reduction to federal deferred tax assets | $ 29,480 | ||
Corporate alternative minimum tax, deferred tax benefit | $ 102 |
Equity Compensation Plans (Narr
Equity Compensation Plans (Narrative) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)itemshares | Mar. 31, 2017USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of share-based incentive plans | item | 2 | |
Share-based compensation expense recognized | $ | $ 3,890 | $ 3,628 |
Share-based compensation expense | $ | $ 3,890 | $ 3,628 |
Participants purchase limit shares | 3,000 | |
Offering period | 6 months | |
Minimum [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Maximum [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
2014 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiry of options from the date of grant | 10 years | |
Common stock reserved for issuance | 10,249,000 | |
Shares available for future grants | 562,000 | |
2014 Plan [Member] | Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercisable period beginning | 3 years | |
2008 Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for issuance | 225,000 | |
Company's common stock may be purchased at a discount | 15.00% | |
Participants purchase limit value | $ | $ 25 | |
Shares available for sale under the ESPP increased | 2.00% | |
Outstanding shares of common stock exceed | 600,000 | |
2018 PSAs [Member] | Performance Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting right of shares of common stock | 1 | |
Vesting period | 3 years | |
2018 PSAs [Member] | Minimum [Member] | Performance Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance stock award threshold, target and maximum payout opportunity percentage | 0.00% | |
2018 PSAs [Member] | Maximum [Member] | Performance Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance stock award threshold, target and maximum payout opportunity percentage | 200.00% | |
2018 Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for issuance | 500,000 | |
First Anniversary Date Of Grant [Member] | 2014 Plan [Member] | Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Annual vesting percentage | 25.00% | |
First, Second, And Third Anniversaries [Member] | Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Annual vesting percentage | 0.33% | |
First, Second, And Third Anniversaries [Member] | Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Annual vesting percentage | 0.33% |
Equity Compensation Plans (Shar
Equity Compensation Plans (Share-Based Compensation Expense Related to Employee Share-Based Compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total | $ 3,890 | $ 3,628 |
Cost of Revenue [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total | 237 | 131 |
Research and Development Expenses [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total | 591 | 501 |
Selling, General and Administrative Expenses [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total | $ 3,062 | $ 2,996 |
Segment and Geographic Inform42
Segment and Geographic Information (Narrative)(Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Netherlands [Member] | ||
Long-lived assets | $ 1,000 | $ 957 |
Segment and Geographic Inform43
Segment and Geographic Information (Revenue by Geographic Area) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 46,994 | $ 41,273 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 38,436 | 33,268 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 5,871 | 5,189 |
Asia [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 2,439 | 2,651 |
Other International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 248 | 165 |
International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 8,558 | $ 8,005 |
Segment and Geographic Inform44
Segment and Geographic Information (Revenue by Product Type) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue from External Customer [Line Items] | ||
Revenue | $ 46,994 | $ 41,273 |
United States [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 38,436 | 33,268 |
United States [Member] | Open-heart Ablation [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 17,579 | 15,705 |
United States [Member] | Minimally Invasive Ablation [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 8,613 | 8,282 |
United States [Member] | Appendage Management [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 11,797 | 8,702 |
United States [Member] | Ablation And Appendage Management [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 37,989 | 32,689 |
United States [Member] | Valve Tools [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 447 | 579 |
International [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 8,558 | 8,005 |
International [Member] | Open-heart Ablation [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 4,909 | 4,590 |
International [Member] | Minimally Invasive Ablation [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 1,792 | 1,958 |
International [Member] | Appendage Management [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 1,798 | 1,395 |
International [Member] | Ablation And Appendage Management [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 8,499 | 7,943 |
International [Member] | Valve Tools [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | $ 59 | $ 62 |