Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 15, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | MIMEDX GROUP, INC. | ||
Entity Central Index Key | 1,376,339 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 108,840,839 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 787,686 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 34,391 | $ 28,486 |
Short term investments | 0 | 3,000 |
Accounts receivable, net | 67,151 | 53,755 |
Inventory, net | 17,814 | 7,460 |
Prepaid expenses | 5,894 | 3,394 |
Other current assets | 1,288 | 215 |
Total current assets | 126,538 | 96,310 |
Property and equipment, net of accumulated depreciation | 13,786 | 9,475 |
Goodwill | 20,203 | 4,040 |
Intangible assets, net of accumulated amortization | 23,268 | 10,763 |
Deferred tax asset, net | 9,114 | 14,838 |
Deferred financing costs and other assets | 354 | 487 |
Total assets | 193,263 | 135,913 |
Current liabilities: | ||
Accounts payable | 11,436 | 6,633 |
Accrued compensation | 12,365 | 15,034 |
Accrued expenses | 10,941 | 4,644 |
Current portion of earn out liability | 8,740 | 0 |
Income taxes | 5,768 | (67) |
Other current liabilities | 1,482 | 533 |
Total current liabilities | 50,732 | 26,777 |
Earn out liability | 8,710 | 0 |
Other liabilities | 821 | 1,148 |
Total liabilities | 60,263 | 27,925 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock; $.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding | 0 | 0 |
Common stock; $0.001 par value; 150,000,000 shares authorized; 110,212,547 issued and 109,862,787 outstanding at December 31, 2016 and 109,467,416 issued and 107,361,471 outstanding at December 31, 2015 | 110 | 109 |
Additional paid-in capital | 161,261 | 163,133 |
Treasury stock at cost: 349,760 shares at December 31, 2016 and 2,105,945 shares at December 31, 2015 | (2,216) | (17,125) |
Accumulated deficit | (26,155) | (38,129) |
Total stockholders' equity | 133,000 | 107,988 |
Total liabilities and stockholders' equity | $ 193,263 | $ 135,913 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 110,212,547 | 109,467,416 |
Common stock, shares outstanding (in shares) | 109,862,787 | 107,361,471 |
Treasury stock, shares (in shares) | 349,760 | 2,105,945 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Net sales | $ 245,015 | $ 187,296 | $ 118,223 |
Cost of sales | 32,407 | 20,202 | 12,665 |
Gross margin | 212,608 | 167,094 | 105,558 |
Operating expenses: | |||
Research and development expenses | 12,038 | 8,413 | 7,050 |
Selling, general and administrative expenses | 179,997 | 133,384 | 90,480 |
Amortization of intangible assets | 2,127 | 933 | 928 |
Operating income | 18,446 | 24,364 | 7,100 |
Other expense, net | |||
Interest expense, net | (339) | (86) | (48) |
Income before income tax provision | 18,107 | 24,278 | 7,052 |
Income tax provision (expense) benefit | (6,133) | 5,168 | (832) |
Net income | $ 11,974 | $ 29,446 | $ 6,220 |
Net income per common share - basic (in dollars per share) | $ 0.11 | $ 0.28 | $ 0.06 |
Net income per common share - diluted (in dollars per share) | $ 0.11 | $ 0.26 | $ 0.05 |
Weighted average shares outstanding - basic (in shares) | 105,928,348 | 105,929,205 | 105,793,008 |
Weighted average shares outstanding - diluted (in shares) | 112,441,709 | 113,628,482 | 113,295,504 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in | Treasury Stock | Accumulated Deficit |
Balance, beginning of period (in shares) at Dec. 31, 2013 | 104,425,614 | 50,000 | |||
Balance, beginning of period at Dec. 31, 2013 | $ 73,568 | $ 104 | $ 147,284 | $ (25) | $ (73,795) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 11,453 | 11,453 | |||
Exercise of stock options (in shares) | 1,653,690 | ||||
Exercise of stock options | 2,470 | $ 2 | 2,468 | ||
Exercise of warrants (in shares) | 1,242,416 | ||||
Exercise of warrants | 1,113 | $ 1 | 1,112 | ||
Issuance of restricted stock (in shares) | 1,438,569 | ||||
Issuance of restricted stock | $ 0 | $ 1 | (1) | ||
Shares issued for services performed (in shares) | 15,958 | 15,958 | |||
Shares issued for services performed | $ 117 | 117 | |||
Stock repurchase (in shares) | 936,636 | ||||
Stock repurchase | (5,612) | $ (5,612) | |||
Shares issued in conjunction with acquisition | 0 | ||||
Net income | 6,220 | 6,220 | |||
Balance, end of period (in shares) at Dec. 31, 2014 | 108,776,247 | 986,636 | |||
Balance, end of period at Dec. 31, 2014 | 89,329 | $ 108 | 162,433 | $ (5,637) | (67,575) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 16,896 | 16,896 | |||
Exercise of stock options (in shares) | 647,656 | (1,573,225) | |||
Exercise of stock options | 4,629 | $ 1 | (9,792) | $ 14,420 | |
Exercise of warrants (in shares) | (42,400) | ||||
Exercise of warrants | 46 | (379) | $ 425 | ||
Issuance of restricted stock (in shares) | 34,250 | (1,940,009) | |||
Issuance of restricted stock | $ 0 | (14,547) | $ 14,547 | ||
Shares issued for services performed (in shares) | 16,493 | 11,321 | (5,172) | ||
Shares issued for services performed | $ 164 | 113 | $ 51 | ||
Stock repurchase (in shares) | 4,610,166 | ||||
Stock repurchase | (40,279) | $ (40,279) | |||
Tax benefit of share-based compensation expense | 7,757 | 7,757 | |||
Restricted stock shares canceled/forfeited (in shares) | (2,058) | 69,949 | |||
Restricted stock shares canceled/forfeited | 0 | 652 | $ (652) | ||
Shares issued in conjunction with acquisition | 0 | ||||
Net income | 29,446 | 29,446 | |||
Balance, end of period (in shares) at Dec. 31, 2015 | 109,467,416 | 2,105,945 | |||
Balance, end of period at Dec. 31, 2015 | 107,988 | $ 109 | 163,133 | $ (17,125) | (38,129) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | $ 17,818 | 17,818 | |||
Exercise of stock options (in shares) | 1,164,138 | 243,928 | (918,544) | ||
Exercise of stock options | $ 3,494 | (3,767) | $ 7,261 | ||
Issuance of restricted stock (in shares) | 501,203 | (2,210,879) | |||
Issuance of restricted stock | $ 1 | $ 1 | (17,546) | $ 17,546 | |
Shares issued for services performed (in shares) | 43,344 | (43,344) | |||
Shares issued for services performed | $ 346 | 6 | $ 340 | ||
Stock repurchase (in shares) | 1,338,616 | 1,338,616 | |||
Stock repurchase | $ (10,378) | $ (10,378) | |||
Tax benefit of share-based compensation expense | (424) | (424) | |||
Restricted stock shares canceled/forfeited (in shares) | 377,317 | ||||
Restricted stock shares canceled/forfeited | 0 | 2,503 | $ (2,503) | ||
Shares repurchased for tax withholding (in shares) | 141,658 | ||||
Shares repurchased for tax withholding | $ (1,165) | $ (1,165) | |||
Shares issued in conjunction with acquisition (in shares) | (441,009) | (441,009) | |||
Shares issued in conjunction with acquisition | $ 3,346 | (462) | $ 3,808 | ||
Net income | 11,974 | 11,974 | |||
Balance, end of period (in shares) at Dec. 31, 2016 | 110,212,547 | 349,760 | |||
Balance, end of period at Dec. 31, 2016 | $ 133,000 | $ 110 | $ 161,261 | $ (2,216) | $ (26,155) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 11,974 | $ 29,446 | $ 6,220 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation | 3,333 | 1,799 | 1,197 |
Amortization of intangible assets | 2,127 | 933 | 928 |
Amortization of inventory fair value step-up | 1,485 | 0 | 0 |
Amortization of deferred financing costs | 181 | 42 | 0 |
Share-based compensation | 17,818 | 16,896 | 11,453 |
Change in deferred income taxes | (594) | (7,081) | 0 |
Increase (decrease) in cash, net of effects of acquisition, resulting from changes in: | |||
Accounts receivable | (11,396) | (27,083) | (10,579) |
Inventory | (2,837) | (2,327) | (1,252) |
Prepaid expenses | (2,400) | (1,854) | (203) |
Other current assets | (384) | (240) | 0 |
Accounts payable | (3,665) | 3,136 | 1,287 |
Accrued compensation | (2,669) | 3,511 | 5,935 |
Accrued expenses | 6,297 | 2,140 | 1,098 |
Income taxes | 5,835 | (519) | 452 |
Other liabilities | 723 | 8 | 266 |
Net cash flows from operating activities | 25,828 | 18,807 | 16,802 |
Cash flows from investing activities: | |||
Purchases of equipment | (6,269) | (5,827) | (2,558) |
Purchase of Stability Inc., net of cash acquired | (7,631) | 0 | 0 |
Fixed maturity securities redemption | 3,000 | 6,000 | (9,000) |
Patent application costs | (842) | (851) | (594) |
Net cash flows from investing activities | (11,742) | (678) | (12,152) |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options | 3,494 | 4,629 | 2,470 |
Proceeds from exercise of warrants | 0 | 46 | 1,113 |
Stock repurchase under repurchase plan | (10,378) | (40,279) | (5,612) |
Stock repurchase for tax withholdings on vesting of restricted stock | (1,165) | 0 | 0 |
Deferred financing costs | (30) | (504) | 0 |
Payments under capital lease obligations | (102) | (117) | (117) |
Net cash flows from financing activities | (8,181) | (36,225) | (2,146) |
Net change in cash | 5,905 | (18,096) | 2,504 |
Cash and cash equivalents, beginning of period | 28,486 | 46,582 | 44,078 |
Cash and cash equivalents, end of period | $ 34,391 | $ 28,486 | $ 46,582 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business The Company operates in one business segment, Regenerative Biomaterials, which includes the design, manufacture, and marketing of products and tissue processing services for the Wound Care, Surgical, Sports Medicine, Ophthalmic and Dental market categories. The MiMedx allograft product families include our: dHACM family with AmnioFix® ans EpiFix® brands; Amniotic Fluid family with OrthoFlo brand; Umbilical family with EpiCord® and AmnioCord® brands; Placental Collagen family with CollaFix™ and AmnioFill™ brands; and Bone family with Physio® brand. AmnioFix and EpiFix are our tissue technologies processed from human amniotic membrane; OrthoFlo is an amniotic fluid derived allograft; EpiCord and AmnioCord are derived from the umbilical cord; Physio is a bone grafting material comprised of 100% bone tissue with no added carrier; and CollaFix, our next brand we plan to commercialize, is our collagen fiber technology, developed with our patented cross-linking polymers, designed to mimic the natural composition, structure and mechanical properties of musculoskeletal tissues in order to augment their repair. The Company is focused primarily on the United States but is actively exploring international expansion opportunities. The adoption of the technologies may vary depending on each country’s regulations, but the opportunities to help individuals in the different disease states remain similar and large. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported consolidated statements of operations during the reporting period. Actual results could differ from those estimates. Principles of Consolidation The accompanying financial statements include the accounts of MiMedx Group, Inc. and its wholly-owned subsidiaries MiMedx, Inc., MiMedx Processing Services, LLC (formerly known as SpineMedica, LLC), MiMedx Tissue Services, LLC (formerly known as Surgical Biologics, LLC) and Stability Biologics, LLC (formerly known as Stability Inc.). All significant inter-company balances and transactions have been eliminated. Segment Reporting ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company has determined it has one operating segment. Disaggregation of the Company’s operating results is impracticable, because the Company’s research and development activities and its assets overlap, and management reviews its business as a single operating segment. Thus, discrete financial information is not available for more than one operating segment . Market Concentrations and Credit Risk The Company places its cash and cash equivalents on deposit with financial institutions in the United States. In July 2010, the Federal Deposit Insurance Corporation (“FDIC”) increased coverage to $250,000 for substantially all depository accounts. As of December 31, 2016 and 2015 , the Company had cash and cash equivalents of approximately $33,200,000 and $27,700,000 , respectively, in excess of the insured amounts. Cash and Cash Equivalents Cash and cash equivalents include cash and FDIC insured certificates of deposit held at various banks with an original maturity of three months or less. Accounts Receivable Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing receivables. The Company determines the allowance based on factors such as historical collection experience, customers' current creditworthiness, customer concentrations, age of accounts receivable balance and general economic conditions that may affect the customers' ability to pay. Inventories Inventories are valued at the lower of cost or market, using the first–in, first-out (FIFO) method. Inventory is tracked through Raw Material, WIP, and Finished Good stages as the product progresses through various production steps and stocking locations. Labor and overhead costs are absorbed through the various production processes up to when the work order closes. Historical yields and normal capacities are utilized in the calculation of production overhead rates. Reserves for inventory obsolescence are utilized to account for slow-moving inventory as well as inventory no longer needed due to diminished market demand. Goodwill and Purchased Intangible Assets Goodwill and purchased intangible assets with indefinite useful lives are not amortized but are tested for impairment at least annually. The Company reviews goodwill and purchased intangible assets with indefinite lives for impairment annually at the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Potential impairment indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, and the sale of disposition of a significant portion of the business. The Company first assesses certain qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of the Company was less than its carrying amount. If after assessing the totality of events or circumstances, the Company were to determine that it is more likely than not that the fair value of the Company is less than its carrying amount, then the Company would perform a two-step quantitative impairment testing. In the first step, the Company compares the fair value of the Company to its carrying value. The Company determines the fair value utilizing the market approach. Under the market approach, the Company uses its market capitalization which is calculated by taking the Company’s share price times the number of outstanding shares. If the fair value of the Company exceeds the carrying value of the net assets, goodwill is not impaired, and no further testing is required. If the fair value of the Company is less than the carrying value, the Company must perform the second step of the impairment test to measure the amount of impairment loss, if any. In the second step, the Company’s value is allocated to all of the assets and liabilities, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the Company was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than the carrying value, the difference is recorded as an impairment loss. The Company has determined that there are no goodwill and indefinite useful lives intangible impairments in 2016 and 2015. Impairment of Intangible Assets with Finite Lives The Company reviews purchased intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable using a two-step impairment test. In step one, we determine the sum of the undiscounted future cash flows of the assets based on management's estimates and compare it to the carrying value of the assets. If the carrying amount is greater than the sum of the undiscounted cash flows, then the asset is impaired and step two is required. In step two, the impairment loss is calculated as the difference between the fair value of the assets and the carrying value of the assets. Impairment reviews are based on an estimated future cash flow approach that requires significant judgment with respect to future revenue and expense growth rates, selection of appropriate discount rate, asset groupings, and other assumptions and estimates. The Company uses estimates that are consistent with our business plans and a market participant view of the assets being evaluated. Actual results may differ from our estimates. The Company has determined that there are no intangible assets with finite lives impairments in 2016 and 2015. Property and Equipment Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, principally three to seven years. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful lives or the life of the lease. The Company is party to various lease arrangements for its facility space and equipment. These arrangements include interest, scheduled rent increases and rent holidays which are included in the determination of minimum lease payments when assessing lease classification, and are included in rent expense on a straight line basis over the lease term. See Notes 7 and 16 for further information regarding capital leases, operating leases and rent expense. Patent Costs The Company incurs certain legal and related costs in connection with patent applications for tissue based products and processes. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company. The Company capitalized approximately $842,000 of patent costs during 2016 , $851,000 of patent costs during 2015 and $594,000 of patent costs during 2014 . Impairment of Long-lived Assets The Company evaluates the recoverability of its long-lived assets (property and equipment) whenever adverse events or changes in business climate indicate that the expected undiscounted future cash flows from the related assets may be less than previously anticipated. If the net book value of the related assets exceeds the expected undiscounted future cash flows of the assets, the carrying amount would be reduced to the present value of their expected future cash flows and an impairment loss would be recognized. Revenue Recognition The Company sells its products through a combination of a direct sales force, independent stocking distributors and third - party representatives in the U.S. and independent distributors in international markets. The Company recognizes revenue when title to the goods and risk of loss transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. The Company records revenues from sales to our independent stocking distributors at the time the product is shipped to the distributor. Our stocking distributors, who sell the products to their customers or sub-distributors, contractually take title to the products and assume all risks of ownership at the time of shipment. Our stocking distributors are obligated to pay us the contractually agreed upon invoice price within specified terms regardless of when, if ever, they sell the products. Our stocking distributors do not have any contractual rights of return or exchange other than for defective product or shipping error; however, in limited situations, we do accept returns or exchanges at our discretion. Some of the Company’s sales to Government accounts, including the Department of Veterans Affairs, are made through a distributor relationship with AvKARE, which is a veteran-owned General Services Administration Federal Supply Schedule (FSS) contractor. The Company's agreement with AvKARE expires, subject to certain for-cause termination rights, on June 30, 2017. The Company may also elect to terminate the agreement without cause and pay a termination fee to AvKARE as specified in the agreement. Upon termination of the agreement, the parties may mutually agree to extend the agreement or the Company has an obligation to repurchase AvKARE’s remaining inventory, if any, within ninety (90) days in accordance with the terms of the Agreement. At the end of the term, the parties expect AvKARE’s inventory to be minimal, based upon AvKARE's obligation to use commercially reasonable efforts to achieve target sales levels over the remaining term of the agreement. We continually evaluate new and current customers, including our stocking distributors, for collectability based on various factors including past history with the customer, evaluation of their credit worthiness, and current economic conditions. We only record revenue when collectability is reasonably assured. A portion of the Company’s revenue is generated from inventory maintained at hospitals or physician's offices. We make estimates of potential future sales returns, discounts and allowances related to current period product revenue and these are reflected as a reduction of revenue in the same period revenue is recognized. We base our estimate for sales returns, discounts and allowances on historical sales and product return information, including historical experience and actual and projected trend information as well as projected sales returns based on estimated usage and contractual arrangements with AvKARE. These estimates have historically been consistent with actual results. Research and Development Costs Research and development costs consist of direct and indirect costs associated with the development of the Company’s technologies. These costs are expensed as incurred. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Share-based Compensation The Company accounts for its share- based compensation plans in accordance with FASB ASC topic 718 “Compensation- Stock compensation”. FASB ASC 718 requires the measurement and recognition of compensation expense for all share-based awards made to employees and directors, including employee stock options, restricted stock and warrants. Under the provisions of FASB ASC 718, and U. S. Securities and Exchange Commission Staff Accounting Bulleting No. 107, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight line basis over the requisite service period of the entire award (generally the vesting period of the award). Fair Value of Financial Instruments The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature and type of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, short term investments, accounts payable and accrued expenses. The carrying cost of the Company’s investments also reflects their fair values due to the type of these investments and the fair value of capital leases approximates their carrying value based upon current rates available to the Company. Fair Value Measurements The Company records certain financial instruments at fair value, including: cash equivalents, short term investments and investments. The Company may make an irrevocable election to measure other financial instruments at fair value on an instrument-by-instrument basis; although as of December 31, 2016 , the Company has not chosen to make any such elections. Fair value financial instruments are recorded in accordance with the fair value measurement framework. The Company also measures certain non-financial assets at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as long-lived assets, and non-amortizing intangible assets for impairment; allocating value to assets in an acquired asset group, and accounting for business combinations. The Company uses the fair value measurement framework to value these assets and reports these fair values in the periods in which they are recorded or written down. The fair value measurement framework includes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair values in their broad levels. These levels from highest to lowest priority are as follows: • Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted on active markets, but corroborated by market data. • Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available. The determination of fair value and the assessment of a measurement’s placement within the hierarchy require judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include: estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist it in determining fair value, as appropriate. In connection with the acquisition of Stablity, the Company recorded a liability related to the Earn-Out portion of the purchase consideration. See Note 4, Acquisition, for further discussion of the Earn-Out liability. The Company has classified the Earn-Out liability as a Level 3 liability and the fair value of the Earn-Out liability will be evaluated each reporting period and changes in its fair value will be included in the Company’s results of operations. The fair value of the Earn-Out liability was calculated using a discount rate, approximating the pre-tax cost of debt and corroborated by Monte Carlo simulation, which was then applied to estimated earn out payments. To determine the fair value of the Earn-Out liability, management evaluates assumptions that require significant judgment. Changes in certain inputs to the valuation model, including the Company’s estimate of future revenues, can have a significant impact on the estimated fair value. The fair value recorded for the Earn-Out liability may vary significantly from period to period. This variability may result in the actual liability for a period either above or below the estimates recorded in the Company’s Consolidated Financial Statements, resulting in significant fluctuations in results of operations as a result of the corresponding non-cash gain or loss recorded. Although the Company believes that the recorded fair value of its financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. Recently Issued Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs"). In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers” (ASU 2014-09) that requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service. This update is effective for annual reporting periods beginning on or after December 15, 2017 and interim periods therein and requires expanded disclosures. The Company is currently assessing the impact the adoption of ASU 2014-09 will have on its consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, that eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. ASU 2015-16 is effective for public companies for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company has adopted this standard in the first quarter of 2016 and its application is shown in Note 4. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company has adopted this standard, prospectively, at the beginning of the fourth quarter 2015 to simplify reporting with the release of the valuation allowance as disclosed in Note 12. Prior periods were not retrospectively adjusted. In February 2016, the FASB issued Accounting Standards Update ASU No. 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. ASU 2016-02 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718)". The standard is intended to simplify several areas of accounting for share - based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. This ASU is effective for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements. As of December 31, 2016, the Company does not have any remaining deferred tax assets that will result in an increase to equity upon realization. See Note 12. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments”. The update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This ASU is effective for public business entities for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years. The amendments in this update may be applied retrospectively or prospectively and early adoption is permitted. The Company is currently assessing the impact of the adoption of ASU 2016-15 will have on its consolidated financial statements. All other ASUs issued and not yet effective for the year ended December 31, 2016 , and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's financial position or results of operations. |
Liquidity and Capital Resources
Liquidity and Capital Resources | 12 Months Ended |
Dec. 31, 2016 | |
Liquidity and Capital Resources [Abstract] | |
Liquidity and Capital Resources | Liquidity and Capital Resources Net Working Capital As of December 31, 2016 , the Company had approximately $34,391,000 of cash and cash equivalents. The Company reported total current assets of approximately $126,538,000 and current liabilities of approximately $50,732,000 and had net working capital of approximately $75,806,000 as of December 31, 2016 . Overall Liquidity and Capital Resources The Company's largest cash requirement for the twelve months ended December 31, 2016 was cash for general working capital needs as well as the acquisition of Stability described in Note 4. In addition, the Company's other cash requirements included capital expenditures, and repurchases of the Company's common stock. The Company funded its cash requirements through its existing cash reserves, and its operating activities which generated approximately $25,828,000 during the period. The Company believes that its anticipated cash from operating and financing activities and existing cash and cash equivalents, as well as availability under the Credit Agreement will enable the Company to meet its operational liquidity needs and fund its planned investing activities for the next year. |
Acquisition of Stability Inc.
Acquisition of Stability Inc. | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisition of Stability Inc. | Acquisition of Stability Inc. On January 13, 2016, the Company completed the acquisition of Stability Inc., d/b/a Stability Biologics ("Stability"), a provider of human tissue products to surgeons, facilities, and distributors serving the surgical, spine, and orthopedic sectors of the healthcare industry. As a result of this transaction, the Company acquired all of the outstanding shares of Stability in exchange for $6,000,000 cash, $3,346,000 in stock, represented by 441,009 shares of our common stock, and assumed debt of $1,771,000 . Additional one time costs incurred in connection with the transaction totaled $1,088,000 and are included within selling, general and administrative expenses on the consolidated statements of operations. Contingent consideration may be payable in a formula determined by sales less certain expenses for the years 2016 and 2017. The contingent consideration was valued at $17,450,000 as of December 31, 2016 and is shown in the schedule below as fair value of earn-out. The Company used a third party specialist to assist us with the valuation. The purchase price allocation figures should be attributed to the Company and not to the third party valuation firm. The contingent consideration was classified as a liability. The Company has evaluated the contingent consideration for accounting purposes under GAAP and has determined that the contingent consideration is within the scope of ASC 480 "Distinguishing Liabilities from Equity" whereby a financial instrument, other than an outstanding share, that embodies a conditional obligation that the issuer may settle by issuing a variable number of its equity shares shall be classified as a liability if, at inception, the monetary value of the obligation is based solely or predominantly on variations in something other than the fair value of the issuer’s equity shares. The actual purchase price was based on cash paid, the fair value of our stock on the date of the acquisition, and direct costs associated with the acquisition. The fair value of stock consideration was determined as set forth below: Common Share Price at Closing on 1/13/2016 $ 8.43 Multiplied by: Number of Common Shares Transferred to the Sellers 441,009 Indicated Value of Equity Consideration (on a Freely Tradable Interest Basis) $ 3,717,706 Less: Marketability Discount 10% [a] (371,771 ) Fair Value of Equity Consideration Transferred $ 3,345,935 [a] Shares transferred to the Sellers are restricted securities pursuant to Rule 144. As such, the Sellers are prevented from selling the shares for a period of six months. In addition, they are subject to contractual lockups which restrict sales for up to twelve months following the closing of the transaction. The actual purchase price has been allocated as follows (in thousands): Cash paid at closing $ 6,000 Working capital adjustment (480 ) Common stock issued (441,009 shares) 3,346 Assumed debt 1,771 Fair value of earn-out 17,450 Total fair value of purchase price $ 28,087 Net assets acquired: Debt-free working capital $ 2,456 Other long-term assets 199 Property, plant and equipment 1,375 Deferred tax liability (5,896 ) Subtotal (1,866 ) Intangible assets: Customer relationships 5,330 Patents and know-how 6,790 Trade names and trademarks 450 Non compete agreements 830 Licenses and permits 390 Subtotal 13,790 Goodwill 16,163 Total Assets Purchased $ 28,087 Working capital and other assets were composed of the following (in thousands): Working capital Cash $ 140 Prepaid Expenses and other current assets 100 Accounts receivable 2,001 Federal and state taxes receivable 28 Inventory 9,002 Accounts payable and accrued expenses (8,815 ) Debt-free working capital $ 2,456 Current portion of long term debt $ (194 ) Long-term debt (560 ) Line of Credit (932 ) Shareholder loan (85 ) Assumed debt $ (1,771 ) Net working capital $ 685 The acquisition was accounted for as a purchase business combination as defined by FASB Topic 805 - "Business Combinations". The fair value of the contingent consideration is measured as a Level 3 instrument. The contingent consideration liability is recorded at fair value on the acquisition date. Increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measured is based on significant inputs that are not observable in the market, they are categorized as Level 3. The income valuation approach was applied in determining the fair value of the contingent consideration using a discounted cash flow valuation technique with significant unobservable inputs comprised of projected sales and certain expenses. The values assigned to intangible assets are subject to amortization. The intangible assets were assigned the following lives for amortization purposes: Estimated useful life (in years) Intangible asset: Customer relationships 12 Patents and know-how 20 Trade name and Trademarks Indefinite Non compete agreements 4 Licenses and permits 2 Goodwill consists of the excess of the purchase price paid over the identifiable net assets and liabilities acquired at fair value. Goodwill is attributable to the assembled workforce of Stability and the synergies expected to arise following the acquisition. Goodwill is not expected to be deductible for tax purposes. Goodwill was determined using the residual method based on an independent appraisal of the assets and liabilities acquired in the transaction. Goodwill is tested for impairment on an annual basis as defined by FASB Topic 350 - "Intangibles - Goodwill and Other". Goodwill reconciliation (in thousands): Balance at 3/31/16 $ 22,912 Goodwill Adjustments (a) (6,749 ) Balance at 12/31/16 $ 16,163 (a) Goodwill is the result of a residual calculation The changes in the preliminary fair values of the acquired assets and liabilities were due to adjustments made to the prospective financial information ("PFI") to better reflect an expected case from a market participant's perspective. As the earn-out is limited to the gross profit margin for the first two years after the acquisition, the adjustment to the PFI had a decreasing impact on the estimated fair value of the earn-out at the acquisition date, which resulted in a lower total purchase consideration and a reduction of the estimated fair value of the identifiable intangible assets. During the measurement period, management determined that the initial PFI should be adjusted to better reflect an expected case from a market participant's perspective. At the time of the acquisition, management believed that certain of the acquired company's products had reached certain marketability milestones. Management subsequently concluded that these milestones had indeed not yet been achieved. Also, at the time of the acquisition Management believed that certain manufacturing processes were at standards aligned with our overall company standards. Management subsequently concluded that the standards required improvements. These factors have resulted in a lower revenue trajectory in the periods that apply to the earn-out thus reducing the fair value of the earn-out. The measurement period adjustments are as follows (in thousands): Provisional Per Measurement Period 3/31/2016 Form 10Q Adjustments 2016 Final Cash paid at closing $ 6,000 $ — $ 6,000 Working capital adjustment (480 ) — (480 ) Common stock issued 3,346 — 3,346 Assumed debt 1,771 — 1,771 Fair value of earn-out 25,620 (8,170 ) 17,450 Total fair value of purchase price $ 36,257 $ (8,170 ) $ 28,087 Net assets acquired: Debt-free working capital $ 2,179 $ 277 $ 2,456 Other assets, net 199 — 199 Property, plant and equipment 1,375 — 1,375 Deferred tax liability (8,268 ) 2,372 (5,896 ) Subtotal $ (4,515 ) $ 2,649 $ (1,866 ) Intangible assets: Customer relationships $ 6,090 $ (760 ) $ 5,330 Patents and know-how 9,170 (2,380 ) 6,790 Trade names and trademarks 830 (380 ) 450 Non compete agreements 1,080 (250 ) 830 Licenses and permits 690 (300 ) 390 Subtotal 17,860 (4,070 ) 13,790 Goodwill 22,912 (6,749 ) 16,163 Total Assets Purchased $ 36,257 $ (8,170 ) $ 28,087 Pursuant to the terms of the earn-out arrangement, the Company will pay, for each of the years ending December 31, 2016 and 2017, an amount equal to one times the gross profit margin from (a) the net sales of Stability products sold by Stability's or the Company's sales personnel and (b) the net sales of Company products sold by Stability's sales personnel; provided, however, if the amount of such net sales for either earn-out period is less than $12 million , the earn-out amount will decrease to 0.5 times the gross profit margin for such earn-out period. The full details of the earn-out arrangement are set forth in the acquisition agreement which is filed as Exhibit 2.1 to the Company's Form 8-K filed on January 13, 2016. The following unaudited pro forma summary financial information presents the consolidated results of operations for the Company as if the acquisition had occurred on January 1, 2015. The pro forma results are shown for illustrative purposes only and do not purport to be indicative of the results that would have been reported if the acquisition had occurred on the date indicated or indicative of the results that may occur in the future. Unaudited pro forma information for the twelve months ended December 31, 2016 and 2015 (in thousands) is as follows: Years Ended December 31, 2016 2015 Revenue $245,563 $204,481 Net income $12,611 $24,960 Income per share, fully diluted $0.11 $0.22 The 2016 supplemental pro forma earnings were adjusted to exclude $1,088,000 of acquisition-related legal, audit and other costs, net of tax. The 2015 supplemental pro forma earnings were adjusted to include $1,176,000 of amortization costs (net of tax) related to recorded intangible assets with defined useful lives, and $1,485,000 of inventory step-up charges (net of tax) as a result of the acquisition for comparability to 2016. The number of shares outstanding used in calculating the income per share for 2015 was adjusted to include 441,009 shares issued as part of the purchase price and assumed to be issued on January 1, 2015. As the Company is managed and operates in one segment, and since Stability was merged with the Company's existing operations, the Company has determined that disaggregation of the Company's operating results to provide the amount of revenue and earnings for Stability since the acquisition date is impracticable. |
Cash Equivalents and Short Term
Cash Equivalents and Short Term Investments | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Cash Equivalent and Short Term Investments | Cash Equivalents and Short Term Investments Short term investments consisted of approximately $3,000,000 of FDIC insured certificates of deposit held with various financial institutions as of December 31, 2015 . The cost of these instruments approximated their fair market value at December 31, 2015 . There were no short term investments as of December 31, 2016 . |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following items as of December 31, 2016 and 2015 (in thousands): December 31, 2016 2015 Raw materials $ 1,148 $ 602 Work in process 6,677 3,850 Finished goods 10,817 3,405 Inventory, gross 18,642 7,857 Reserve for obsolescence (828 ) (397 ) Inventory, net $ 17,814 $ 7,460 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following as of December 31, 2016 and 2015 (in thousands): December 31, 2016 2015 Leasehold improvements $ 3,274 $ 2,684 Lab and clean room equipment 8,666 4,564 Furniture and equipment 7,051 4,577 Construction in Progress 3,300 2,629 Property and equipment, gross 22,291 14,454 Less accumulated depreciation (8,505 ) (4,979 ) Property and equipment, net $ 13,786 $ 9,475 Included in property and equipment is approximately $427,000 of capital leases. The corresponding liability of approximately $31,000 is included in other liabilities in the accompanying consolidated balance sheet. Also included is approximately $1,000,000 in leasehold improvements paid for by the landlord of our main operating facility with a corresponding liability included in long term liabilities, which is amortized over the term of the lease. As of December 31, 2016 and 2015, the liability was $188,000 and $361,000 , respectively. Depreciation expense for the years ended December 31, 2016 , 2015 , and 2014 was approximately $3,333,000 , $1,799,000 , and $1,197,000 , respectively. |
Intangible Assets and Royalty A
Intangible Assets and Royalty Agreement | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Royalty Agreement | Intangible Assets and Royalty Agreement Intangible assets are summarized as follows (in thousands): December 31, 2016 2015 Weighted Cost Cost Licenses (a) (b) (c) (d) 7 years $ 1,399 $ 1,009 Patents & Know How (b) (d) 19 years 14,839 8,001 Customer & Supplier Relationships (b) (d) 13 years 9,091 3,761 Tradenames & Trademarks (d) indefinite 1,458 1,008 Non-Compete Agreements 4 years 830 — In Process Research & Development (b) various 25 25 Patents in Process (c) various 2,618 1,823 Total 30,260 15,627 Less Accumulated amortization and impairment charges (6,992 ) (4,864 ) Net $ 23,268 $ 10,763 (a) On January 29, 2007, the Company acquired a license from Shriners Hospitals for Children and University of South Florida Research Foundation, Inc. in the amount of $996,000 . Within 30 days after the receipt by the Company of approval by the FDA allowing the sale of the first licensed product, the Company is required to pay an additional $200,000 to the licensor. Due to its contingent nature, this amount is not recorded as a liability. The Company will also be required to pay a royalty of 3% on all commercial sales revenue from the licensed products. The Company is also obligated to pay a $50,000 minimum annual royalty payment over the life of the license. As of December 31, 2016 the license had a remaining net book value of approximately $10,000 . (b) On January 5, 2011, the Company acquired Surgical Biologics, LLC. As a result, the Company recorded intangible assets for Customer & Supplier Relationships of $3,761,000 , Patents & Know-How of $7,690,000 , Licenses of $13,000 , Tradenames & Trademarks of $1,008,000 and In-Process Research & Development of $25,000 . For the twelve months ended December 31, 2016 , approximately $48,000 of costs associated with patents granted during the period were capitalized and included in Patents & Know-How subject to amortization over the life of the patents. (c) Patents in Process consist of capitalized external legal and other registration costs in connection with internally developed tissue-based patents that are pending. Once issued, the costs associated with a given patent will be included in Patents & Know-How under intangible assets subject to amortization. (d) On January 13, 2016, the Company acquired Stability. As a result, the Company recorded intangible assets for Patents & Know - How of $6,790,000 , Customer Relationships of $5,330,000 , Non - compete agreements of $830,000 , Tradenames & Trademarks of $450,000 and Licenses of $390,000 . Amortization expense for the years ended December 31, 2016 , 2015 , and 2014 , was approximately $2,127,000 , $933,000 , and $928,000 , respectively. Expected future amortization of intangible assets as of December 31, 2016 , is as follows (in thousands): Estimated Amortization Year ending December 31, Expense 2017 $ 2,034 2018 1,829 2019 1,829 2020 1,622 2021 1,622 Thereafter 12,874 $ 21,810 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Credit Facility On October 12, 2015, the Company and its subsidiaries entered into a Credit Agreement (the "Credit Agreement") with certain lenders and Bank of America, N.A., as administrative agent. The Credit Agreement establishes a senior secured revolving credit facility in favor of the Company with a maturity date of October 12, 2018 and an aggregate lender commitment of up to $50 million . The Credit Agreement also provides for an uncommitted incremental facility of up to $35 million , which can be exercised as one or more revolving commitment increases or new term loans, all subject to certain customary terms and conditions set forth in the Credit Agreement. The obligations of the Company under the Credit Agreement are guaranteed by the Company's subsidiaries. The obligations of the loan parties under the Credit Agreement and the other credit documents are secured by liens on and security interests in substantially all of the assets of each of the loan parties and a pledge of the equity interests of each subsidiary owned by a loan party, subject to certain customary exclusions. Borrowings under the facility will bear interest at LIBOR plus 1.5% to 2.25% . Fees paid in connection with the initiation of the credit facility totaled approximately $500,000 . These deferred financing costs are being amortized to interest expense over the three -year life of the facility. The Credit Agreement contains customary representations, warranties, covenants, and events of default, including restrictions on certain payments of dividends by the Company. As of December 31, 2016 , there were no outstanding revolving loans under the credit facility. As of December 31, 2016 , the Company was in compliance with all covenants under the Credit Agreement. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed using the weighted-average number of common and dilutive common equivalent shares from stock options, warrants and restricted stock using the treasury stock method. The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands except per share data): Year Ended December 31, 2016 2015 2014 Net income $ 11,974 $ 29,446 $ 6,220 Denominator for basic earnings per share - weighted average shares 105,928,348 105,929,205 105,793,008 Effect of dilutive securities: Stock options, warrants, and restricted stock (a) 6,513,361 7,699,277 7,502,496 Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities 112,441,709 113,628,482 113,295,504 Income per common share - basic $ 0.11 $ 0.28 $ 0.06 Income per common share - diluted $ 0.11 $ 0.26 $ 0.05 (a) Securities that are included in the computation of the denominator above, utilizing the treasury stock method for the years ended December 31, 2016 , 2015 and 2014 are as follows: Effect of dilutive securities: 2016 2015 2014 Stock Options 5,845,377 7,121,774 7,035,728 Warrants — 33,676 226,926 Restricted Stock Awards 667,984 543,827 239,842 6,513,361 7,699,277 7,502,496 |
Equity
Equity | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity | Equity Stock Incentive Plans The Company has four share-based compensation plans which provide for the granting of equity awards, including qualified incentive and non-qualified stock options, stock appreciation awards and restricted stock awards to employees, directors, consultants and advisors: the MiMedx Group, Inc. 2016 Equity and Cash Incentive Plan (the "2016 Plan"), which was approved by shareholders on May 18, 2016; the MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan (the “Assumed 2006 Plan”); the MiMedx Inc. 2007 Assumed Stock Plan (the “Assumed 2007 Plan”); and the MiMedx Group Inc. Amended and Restated Assumed 2005 Stock Plan (the “Assumed 2005 Plan”). The awards are subject to a vesting schedule as set forth in each individual agreement. The Company currently intends to use only the 2016 Plan to make future grants. Activity with respect to the stock options is summarized as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at January 1, 2016 14,019,629 $ 3.62 Granted — $ — Exercised (1,164,138 ) $ 3.02 Unvested options forfeited (154,200 ) $ 6.77 Vested options expired (148,683 ) $ 6.16 Outstanding at December 31, 2016 12,552,608 $ 3.61 5.4 $ 66,137,378 Vested at December 31, 2016 11,680,455 $ 3.33 5.3 $ 64,733,964 Vested or expected to vest at December 31, 2016 (a) 12,539,865 $ 3.60 5.4 $ 66,119,285 (a) Includes forfeiture adjusted unvested shares. The intrinsic value of the options exercised during the years ended December 31, 2016 , 2015 and 2014 were approximately $6,460,000 , $17,181,000 , and $10,566,000 , respectively. The intrinsic value of options vested during the years ended December 31, 2016 , 2015 and 2014 were approximately $7,378,000 , $10,044,000 , and $6,615,000 , respectively. Following is a summary of stock options outstanding and exercisable at December 31, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Number outstanding Weighted- Average Remaining Contractual Term (in years) Weighted- Average Exercise Price Number Exercisable Weighted- Average Exercise Price $0.50 - $0.76 441,429 2.4 $ 0.72 441,429 $ 0.72 $0.87 - $1.35 4,385,570 4.7 1.19 4,385,570 1.19 $1.40 - $2.45 1,362,424 4.1 1.92 1,362,424 1.92 $2.66 - $3.99 878,680 5.8 3.06 878,680 3.06 $4.19 - $6.38 3,056,069 6.2 5.36 2,937,038 5.34 $6.45- $9.78 2,324,103 7.0 7.30 1,610,485 7.25 $9.90 - $10.99 104,333 7.7 10.42 64,829 10.46 12,552,608 5.4 $ 3.61 11,680,455 $ 3.33 A summary of the status of the Company’s unvested stock options as of December 31, 2016 is presented below: Unvested Stock Options Number of Weighted- Unvested at January 1, 2016 3,067,935 $ 3.81 Granted — $ — Cancelled (154,200 ) $ 6.77 Vested (2,041,582 ) $ 3.61 Unvested at December 31, 2016 872,153 $ 4.28 Total unrecognized compensation expense at December 31, 2016 , was approximately $1,064,000 and will be charged to expense through June 2017. The fair value of the options granted was estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the options. The term of employee options granted is derived using the “simplified method” which computes expected term as the midpoint between the weighted average time to vesting and the contractual maturity. The simplified method was used due to the Company’s lack of sufficient historical data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its equity shares have been publicly traded. The term for non-employee options is generally based upon the contractual term of the option. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term or contractual term as described. The assumptions used in calculating the fair value of options granted using the Black-Scholes-Merton option-pricing model are set forth in the following table: Year ended December 31, 2016 2015 2014 Expected volatility — % 54.35 - 58.14% 58.14 - 64.50% Expected life (in years) 0 6 6 Expected dividend yield — — — Risk-free interest rate 0 1.51 - 1.68% 1.64 - 1.96% The weighted-average grant date fair value for options granted during the years ended December 31, 2016 , 2015 and 2014 were approximately $0.00 , $5.15 and $4.18 , respectively. Restricted Stock Awards Following is summary information for restricted stock awards for the year ended December 31, 2016 . Shares vest over a one to three year period. As of December 31, 2016 , there was approximately $21,905,000 of total unrecognized stock-based compensation related to time-based, non-vested restricted stock. That expense is expected to be recognized on a straight-line basis over a weighted-average period of 1.9 years . Additionally, during the twelve months ended December 31, 2016 , 43,344 shares of common stock valued at approximately $345,700 were issued under the 2006 Plan to a consultant in return for services performed, and is included in the table that follows. Number of Weighted-Average Grant Date Unvested at January 1, 2016 2,613,267 $ 9.14 Granted 2,755,426 $ 8.05 Vested (1,162,931 ) $ 8.68 Forfeited (377,317 ) $ 8.71 Unvested at December 31, 2016 3,828,445 $ 8.53 For the years ended December 31, 2016 , 2015 , and 2014 the Company recognized stock-based compensation as follows (in thousands): Years Ended December 31, 2016 2015 2014 Cost of sales $ 426 $ 352 $ 322 Research and development 647 790 660 Selling, general and administrative 16,745 15,754 10,471 $ 17,818 $ 16,896 $ 11,453 Warrants On November 18, 2015, 42,400 common stock warrants representing the balance remaining from those granted in connection with equity share purchases by investors as an additional incentive for providing long - term equity capital to the Company and as additional compensation to consultants and advisors were exercised at an exercise price of $1.09 . The warrants were granted at negotiated prices in connection with the equity share purchases and at the market price of the common stock in other instances. The warrants were issued for terms of five years . Treasury Stock On May 12, 2014, our Board of Directors authorized the repurchase of up to $10 million of our common stock from time to time, through December 31, 2014. The Board subsequently extended the program until December 31, 2017. In December 2014, the Board increased the authorization to $20 million and further increased the authorization in 2015 to $60 million . In December 2016, the Board further increased the authorization to $66 million . The timing and amount of repurchases will depend upon the Company's stock price, economic and market conditions, regulatory requirements, and other corporate considerations. The Company may initiate, suspend or discontinue purchases under the stock repurchase program at any time. For the year ended December 31, 2016 , the Company purchased approximately 1,338,616 shares of its common stock for an aggregate purchase price of approximately $10,338,000 exclusive of commissions of approximately $40,000 . As of December 31, 2016 , the Company had approximately $9,936,000 remaining under the repurchase program. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): December 31, 2016 2015 Deferred tax assets and liabilities: Accruals and prepaids $ 4,992 $ 4,606 Intangible assets (5,130 ) 146 Property and equipment (1,338 ) (1,396 ) R&D and other tax credits 1,219 3,293 Stock Compensation 7,417 7,063 Net operating loss 2,395 1,763 Other 113 145 Net deferred tax assets $ 9,668 $ 15,620 Valuation allowance (554 ) (782 ) $ 9,114 $ 14,838 The reconciliation of the Federal statutory income tax rate of 35% to the effective rate is as follows: December 31, 2016 2015 Federal statutory rate 35.00 % 34.00 % State taxes, net of federal benefit 4.78 % 3.33 % Non deductible compensation 0.04 % 0.63 % Meals & entertainment 3.82 % 2.27 % Equity Compensation 5.51 % 6.39 % Domestic Production Activities Deduction (4.71 )% — % Tax Credits (8.79 )% (2.84 )% Prior Period Adjustments (3.79 )% — % Other 3.27 % (1.74 )% Valuation allowance (1.26 )% (63.33 )% 33.87 % (21.29 )% Current and deferred income tax expense (benefit) is as follows (in thousands): December 31, 2016 December 31, 2015 Current: Federal $ 4,700 $ 8,452 State 1,423 1,218 Total current 6,123 9,670 Deferred: Federal 26 (13,070 ) State (16 ) (1,768 ) Total deferred 10 (14,838 ) Total expense $ 6,133 $ (5,168 ) Income taxes are based on estimates of the annual effective tax rate and evaluations of possible future events and transactions and may be subject to subsequent refinement or revision. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefit that, based on available evidence, is not expected to be realized. The Company establishes a valuation allowance for deferred tax assets for which realization is not likely. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of December 31, 2016, our deferred tax assets were primarily the result of accrued liabilities, equity compensation, tax credits and net operating loss carryforwards. A valuation allowance of $554,000 and $782,000 was recorded against our gross deferred tax asset balance as of December 31, 2016, and December 31, 2015, respectively. At December 31, 2016, the Company had income tax net operating loss ("NOL") carryforwards for federal and state purposes of $2,327,000 and $27,912,000 respectively. At December 31, 2015, the Company has income tax net operating loss ("NOL") carryforwards for federal and state purposes of $579,000 and $27,552,000 respectively. As of December 31, 2016, the Company has recorded a deferred tax asset for both federal and state NOL carryforwards of approximately $815,000 and approximately $1,580,000 , respectively. As of December 31, 2015, the Company has recorded a deferred tax asset for both federal and state NOL carryforwards of approximately $197,000 and approximately $1,566,000 , respectively. The Company's net operating losses and tax credits are subject to annual limitations due to ownership change limitations provided by Internal Revenue Code Section 382. If not utilized, the federal and state tax loss carryforwards will expire between 2027 and 2035. A valuation allowance remains recorded against the deferred tax asset for certain state net operating loss carryovers in the amount of $554,000 that are not expected to be utilized prior to expiration. As a result of certain realization requirements of ASC 718, Compensation - Stock Compensation, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets that arose directly from (or the use of which was postponed by) tax deductions related to equity compensation that were greater than the compensation recognized for financial reporting. During 2016, deferred tax assets in the amount of $1,170,000 were realized resulting in an increase to equity in the same amount. As of December 31, 2016, the Company does not have any remaining deferred tax assets that will result in an increase to equity upon realization. The Company uses ASC 740 ordering when determining when excess tax benefits have been realized. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands): December 31, 2016 December 31, 2015 Unrecognized tax benefits - January 1 $ 170 $ — Gross increases - tax positions in current period 111 170 Unrecognized tax benefits - December 31 $ 281 $ 170 Included in the balance of unrecognized tax benefits as of December 31, 2016 and December 31, 2015, are $281,000 and $170,000 , respectively, of tax benefits that, if recognized, would affect the effective tax rate. Also included in the balance of unrecognized tax benefits as of December 31, 2016 and December 31, 2015, are $281,000 and $170,000 , respectively, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. This amount is recorded in Other Liabilities in the accompanying consolidated balance sheets. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company accrued no penalties or interest during 2016, and, in total, as of December 31, 2016 has not recognized any liabilities for penalties or interest. During 2015, we also did not accrue any penalties or interest and, in total, as of December 31, 2015, had not recognized any liability for penalties or interest. The Company is subject to taxation in the US and various state jurisdictions. As of December 31, 2016 the Company’s tax returns for 2013, 2014 and 2015 are subject to examination by the tax authorities. As of December 31, 2016, the Company is generally no longer subject to US federal, state, or local examinations by tax authorities for years before 2013. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities | Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities Selected cash payments, receipts, and noncash activities are as follows (in thousands) : Years Ended December 31, 2016 2015 2014 Cash paid for interest $ 162 $ 86 $ 48 Income taxes paid 642 2,293 384 Retirement of fixed assets — 319 — Deferred financing costs 10 504 — APIC related tax adjustments (424 ) 7,757 — Stock issuance of 441,009 shares in connection with acquisition of Stability 3,346 — — Stock issuance of 43,344, 16,493 and 15,958 shares in exchange for services performed in 2016, 2015 and 2014, respectively 346 164 117 |
401k Plan
401k Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
401k Plan | 401k Plan The Company has a 401(k) plan (the “Plan”) covering employees who have attained 21 years of age and have completed three months of service. Under the Plan, participants may defer up to 100% of their eligible wages to a maximum of $18,000 per year (annual limit for 2015). Employees age 50 or over in 2016 may make additional pre-tax contributions up to $6,000 above and beyond normal plan and legal limits. Annually, the Company may elect to match employee contributions up to 6% of the employee’s compensation. Additionally, the Company may elect to make a discretionary contribution to the Plan. The Company did not provide matching contributions for the years ended December 31, 2016, 2015, and 2014. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions On January 13, 2016, when the Company completed the acquisition of Stability Inc., d/b/a Stability Biologics ("Stability") there was an assumed payable of $5,954,555 to a related party. The Company made payments of $1,361,030 during 2016. The payable was further reduced by $3,367,250 as a result of the return or destruction of expired inventory. The outstanding payable at 12/31/16 is $1,226,275 and is included in Accounts Payable. The related party is a limited liability company that is controlled by a former stockholder of Stability Inc. who is now an employee of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contractual Commitments In addition to the capital leases noted under Property and Equipment (Note 7), the Company has entered into operating lease agreements for facility space and equipment. These leases expire over the next eight years and generally contain renewal options. The Company anticipates that most of these leases will be renewed or replaced upon expiration. The Company also has commitments for meeting space. The estimated annual lease payment and meeting space commitments are as follows (in thousands): Year ended December 31, 2017 $ 2,827 2018 3,079 2019 2,023 2020 490 2021 141 Thereafter 374 $ 8,934 Rent expense for the years ended December 31, 2016 , 2015 and 2014 , was approximately $1,764,000 , $1,317,000 and $1,130,000 , respectively, and is allocated among cost of sales, research and development, and selling, general and administrative expenses. Letters of Credit As a condition of the leases for the Company's facilities, we are obligated under standby letters of credit in the amount of approximately $103,000 . These obligations are reduced at various times over the lives of the leases. FDA Untitled Letter, Draft Guidance and Related Litigation FDA Untitled Letter and Draft Guidance On August 28, 2013, the FDA issued an Untitled Letter alleging that the Company's micronized allografts do not meet the criteria for regulation solely under Section 361 of the Public Health Service Act and that, as a result, MiMedx would need a biologics license to lawfully market those micronized products. Since the issuance of the Untitled Letter, the Company has been in discussions with the FDA to communicate its disagreement with the FDA's assertion that the Company's allografts are more than minimally manipulated. To date, the FDA has not changed its position that the Company's micronized products are not eligible for marketing solely under Section 361 of the Public Health Service Act. The Company continues to market its micronized products but is also pursuing the Biologics License Application (“BLA”) process for certain of its micronized products. On December 22, 2014, the FDA issued for comment “Draft Guidance for Industry and FDA Staff: Minimal Manipulation of Human Cells, Tissues, and Cellular and Tissue-Based Products.” Essentially the Minimal Manipulation draft guidance takes the same position with respect to micronized amniotic tissue that it took in the Untitled Letter to MiMedx 16 months earlier. The Company submitted comments asserting that the Minimal Manipulation draft guidance represents agency action that goes far beyond the FDA’s statutory authority, is inconsistent with existing HCT/P regulations and the FDA’s prior positions, and is internally inconsistent and scientifically unsound. On October 28, 2015, the FDA issued for comment, "Draft Guidance for Industry and FDA Staff: Homologous Use of Human Cells, Tissues, and Cellular and Tissue-Based Products." The Company submitted comments on this Homologous Use draft guidance as well. On September 12 and 13, 2016, the FDA held a public hearing to obtain input on the Homologous Use draft guidance and the previously released Minimal Manipulation draft guidance, as well as other recently issued guidance documents on HCT/Ps. The Company awaits further decision from FDA on the draft guidances, but anticipates this will be a lengthy process. If the FDA does allow the Company to continue to market a micronized form of its sheet allografts without a biologics license either prior to or after finalization of the draft guidance documents, it may impose conditions, such as labeling restrictions and compliance with cGMP. Although the Company is preparing for these requirements in connection with its pursuit of a BLA for certain of its micronized products, earlier compliance with these conditions requires significant additional time and cost investments by the Company. It is also possible that the FDA will not allow the Company to market any form of a micronized product without a biologics license even prior to finalization of the draft guidance documents and could even require the Company to recall its micronized products. Revenues from micronized products comprised approximately 10% of the Company's revenues in 2016. Securities Class Action Following the publication of the Untitled Letter from the FDA regarding the Company’s micronized products in September 2013, the trading price of the Company’s stock declined and several putative shareholder class action lawsuits were filed against the Company and certain of its executive officers asserting violations of the Securities Exchange Act of 1934. The cases were consolidated in the United States District Court for the Northern District of Georgia. On November 17, 2015, the parties entered into a stipulation of settlement to settle the consolidated case in its entirety. The stipulation of settlement was filed with the Court on November 18, 2015. On November 19, 2015, the Court preliminarily approved the settlement and confirmed the settlement on April 5, 2016. The settlement amount was paid by the Company's insurance carrier. Former Employee Litigation On December 13, 2016, the Company filed lawsuits against former employees Jess Kruchoski (in the lawsuit styled MiMedx Group, Inc. v. Academy Medical, LLC, et. al. in the County Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida (the “Florida Action”)) and Luke Tornquist (in the lawsuit styled MiMedx Group, Inc., v. Luke Tornquist in the Superior Court for Cobb County, Georgia, which was removed to the United States District Court for the Northern District of Georgia (the “Georgia Action”)). Both the Florida and Georgia Actions assert claims against Messrs. Kruchoski and Tornquist that each of them violated their restrictive covenants entered into with the Company, that each of them misappropriated trade secrets of the Company, that each of them tortiously interfered with contracts between the Company and its customers and employees, and that each of them breached his duty of loyalty owed to the Company, among other claims. On December 15, 2016, Messrs. Kruchoski and Tornquist filed a lawsuit in the United States District Court of Minnesota (the “Minnesota Action”) against the Company and the Company’s Chairman and Chief Executive Officer, Parker Petit. The plaintiffs in this lawsuit each claimed that their employment with the Company was terminated in retaliation for their complaints about the Company’s alleged business practices in violation of the Dodd-Frank Act, 15 U.S.C. § 78u-6(h); and was an unlawful discharge in violation of Minnesota Statutes Section 181.931 subdivision 1. Mr. Kruchoski also claimed that the termination of his employment with the Company constituted marital status discrimination and familial status discrimination in violation of the Minnesota Human Rights Act. Messrs. Kruchoski and Tornquist also claimed that Mr. Petit tortiously interfered with their employment relationships with the Company. On January 26, 2017, the Company and Mr. Petit filed motions to dismiss the Minnesota Action. In response, Messrs. Kruchoski and Tornquist voluntarily dismissed the Minnesota Action without prejudice on February 7, 2017. On February 7, 2017, Mr. Tornquist filed his Answer and Counterclaims in the Georgia Action wherein he asserted claims similar to those he had asserted in the Minnesota Action, with the exception that he did not include a claim of tortious interference against Mr. Petit. On February 15, 2017, Mr. Kruchoski filed a new lawsuit in Georgia against MiMedx and Mr. Petit, making many of the same allegations in that suit as were made in the Minnesota suit, with the addition of claims against the Company and Mr. Petit for defamation. The Company intends to vigorously pursue its claims asserted in the Florida and Georgia Actions and also to vigorously defend against the lawsuits and counterclaims asserted against them. Patent Litigation MiMedx continues to diligently enforce its intellectual property against several entities. Currently, there are four actions pending, as described below: The Liventa Action On April 22, 2014, the Company filed a patent infringement lawsuit in the United States District Court for the Northern District of Georgia against Liventa Bioscience, Inc. ("Liventa"), Medline Industries, Inc. ("Medline") and Musculoskeletal Transplant Foundation, Inc. ("MTF") for permanent injunctive relief and unspecified damages (the "Liventa Action"). In addition to the allegations of infringement of MiMedx's patents, the lawsuit asserts that Liventa and Medline knowingly and willfully made false and misleading representations about their respective products to providers, patients, and in some cases, prospective investors. Though the terms of the agreement are confidential, the parties have reached a settlement of the false advertising claims for an undisclosed sum. The patent infringement claims are still pending as described below. MiMedx asserts that Liventa (formerly known as AFCell Medical, Inc.), Medline and MTF infringed and continue to infringe certain of the Company's patents relating to the MiMedx dehydrated human amnion/chorion membrane ("dHACM") allografts. MTF is the tissue processor while Liventa and Medline are the distributors of the allegedly infringing products. On May 30, 2014, defendants filed answers to the Complaint, denying the allegations in the Complaint. They also raised affirmative defenses of non-infringement, invalidity, laches and estoppel. MTF and Medline also filed counterclaims seeking declaratory judgments of non-infringement and invalidity. Defendants filed parallel Inter Partes Review ("IPR") proceedings which are discussed below. We expect the case to go to trial in 2017. The Bone Bank Action On May 16, 2014, the Company also filed a patent infringement lawsuit against Transplant Technology, Inc. d/b/a Bone Bank Allografts ("Bone Bank") and Texas Human Biologics, Ltd. ("Biologics") for permanent injunctive relief and unspecified damages (the "Bone Bank Action"). The Bone Bank Action was filed in the United States District Court for the Western District of Texas. This lawsuit similarly asserts that Bone Bank and Biologics infringed certain of the Company's patents through the manufacturing and sale of their placental-derived tissue graft products. On July 10, 2014, Defendants filed an answer to the Complaint, denying the allegations in the Complaint. They also raised affirmative defenses of non-infringement and invalidity and filed counterclaims seeking declaratory judgments of non-infringement and invalidity. Defendants also filed parallel IPR proceedings which are further discussed below. Discovery is closed and we expect the case to go to trial in 2017. The NuTech Action On March 2, 2015, the Company filed a patent infringement lawsuit against NuTech Medical, Inc. ("NuTech") and DCI Donor Services, Inc. ("DCI") for permanent injunctive relief and unspecified damages. This lawsuit was filed in the United States District Court for the Northern District of Alabama. The lawsuit alleges that NuTech and DCI have infringed and continue to infringe the Company's patents through the manufacture, use, sale, and/or offering of their tissue graft product. The lawsuit also asserts that NuTech knowingly and willfully made false and misleading representations about its products to customers and/or prospective customers. The case is currently in the discovery phase. The Vivex Action On April 1, 2016, the Company also filed a patent infringement lawsuit against Vivex BioMedical (“Vivex”) for permanent injunctive relief and unspecified damages (the "Vivex Action"). The lawsuit was filed in the United States District Court for the Northern District of Georgia. The patent at issue is the 8,709,494 patent (the "494" patent). Vivex answered the Company’s complaint and filed counterclaims of non-infringement and invalidity. On January 4, 2017, the Court granted a joint motion to stay the proceedings pending the outcome of the Bone Bank Action. Pending IPRs In addition to defending the claims in the pending district court litigations, defendants in the Liventa and Bone Bank cases have challenged certain of the Company's patents in several IPR proceedings to avoid the high burden of proof of proving invalidity by "clear and convincing evidence" in the district court litigations. An inter partes review (or "IPR") is a request for a specialized group within the United States Patent and Trademark Office to review the validity of a plaintiff's patent claims. The defendants in the Bone Bank Action challenged the validity of the Company's 8,597,687 (the "687" patent) and the '494 patent; while the defendants in the Liventa Action challenged the validity of the Company's 8,372,437 and 8,323,701 patents (the "'437" and "'701" patents, respectively). On June 29, 2015, the Patent Trial and Appeals Board ("PTAB") denied the Bone Bank defendants' request for institution of an IPR with respect to the '494 patent (EpiFix) on all seven challenged grounds. On August 18, 2015, the PTAB also denied the Liventa defendants' request for institution of an IPR with respect to the '701 patent (AmnioFix) on all six challenged grounds. That is, the PTAB decided in each case that the defendants failed to establish a reasonable likelihood that defendants would prevail in showing any of the challenged claims of the '494 or the '701 patent were unpatentable. On July 10, 2015, the PTAB issued an opinion allowing a review of the '687 patent to proceed, although on only two of the five challenged grounds. On July 7, 2016, the PTAB issued an opinion finding that the challenged claims, which relate to embossment and not configuration, were invalid for obviousness. The Company decided not to appeal the decision, as it impacted a non-core patent. On August 18, 2015, the PTAB issued an opinion allowing a review of the '437 patent to proceed, although only on one of the seven challenged grounds. On August 16, 2016, the PTAB issued an opinion finding that the challenged claims were unpatentable. MiMedx has filed an appeal of the PTAB’s decision regarding the '437 patent. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) (in thousands except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter NET SALES 2016 $ 53,367 $ 57,342 $ 64,429 $ 69,877 2015 40,767 45,679 49,015 51,835 GROSS MARGIN 2016 $ 45,421 $ 49,948 $ 56,432 $ 60,807 2015 35,619 40,590 44,036 46,849 NET INCOME 2016 $ 1,197 $ 1,975 $ 3,321 $ 5,481 2015 4,087 5,430 6,551 13,378 NET INCOME 2016 $ 0.01 $ 0.02 $ 0.03 $ 0.05 2015 0.04 0.05 0.06 0.13 NET INCOME 2016 $ 0.01 $ 0.02 $ 0.03 $ 0.05 2015 0.04 0.05 0.06 0.11 |
Product Revenue Data
Product Revenue Data | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Product Revenue Data | Product Revenue Data We group our products into two categories: Wound Care and Surgical, Sports Medicine & Orthopedics (SSO) for purposes of the required disclosure under ASC 280-10-50-40. This grouping of products does not constitute a basis for resource allocation but is information intended to provide the reader with ability to better understand the Company's product categories. These groupings also do not meet the criteria under ASC 280-10-50-1 as separate segments. Net Sales by Categories (in thousands): Year Ended December 31, 2016 2015 2014 Wound Care $ 183,984 $ 141,096 $ 93,623 Surgical, Sports Medicine & Orthopedics (SSO) 61,031 46,200 24,600 Total $ 245,015 $ 187,296 $ 118,223 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Board of Directors in February 2017 authorized an increase of $20 million to the Company's Share Repurchase Program. This action brings the total amount authorized to $86 million since the Share Repurchase Program commenced in May 2014. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts MIMEDX GROUP, INC. AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2016, 2015 and 2014 (in thousands) Balance at Additions charged to Expense or Revenue Deductions Balance at For the Year ended December 31, 2016 Allowance for doubtful accounts $ 3,270 $ 2,127 $ (555 ) $ 4,842 Allowance for product returns 1,262 8,319 (4,687 ) 4,894 Allowance for obsolescence 397 2,280 (1,849 ) 828 For the Year ended December 31, 2015 Allowance for doubtful accounts $ 1,750 $ 1,698 $ (178 ) $ 3,270 Allowance for product returns 841 3,257 (2,836 ) 1,262 Allowance for obsolescence 527 540 (670 ) 397 For the Year ended December 31, 2014 Allowance for doubtful accounts $ 407 $ 1,357 $ (14 ) $ 1,750 Allowance for product returns 215 2,215 (1,589 ) 841 Allowance for obsolescence 322 405 (200 ) 527 |
Significant Accounting Polici27
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported consolidated statements of operations during the reporting period. Actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation The accompanying financial statements include the accounts of MiMedx Group, Inc. and its wholly-owned subsidiaries MiMedx, Inc., MiMedx Processing Services, LLC (formerly known as SpineMedica, LLC), MiMedx Tissue Services, LLC (formerly known as Surgical Biologics, LLC) and Stability Biologics, LLC (formerly known as Stability Inc.). All significant inter-company balances and transactions have been eliminated. |
Segment Reporting | Segment Reporting ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company has determined it has one operating segment. Disaggregation of the Company’s operating results is impracticable, because the Company’s research and development activities and its assets overlap, and management reviews its business as a single operating segment. Thus, discrete financial information is not available for more than one operating segment . |
Market Concentrations and Credit Risk | Market Concentrations and Credit Risk The Company places its cash and cash equivalents on deposit with financial institutions in the United States. In July 2010, the Federal Deposit Insurance Corporation (“FDIC”) increased coverage to $250,000 for substantially all depository accounts. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and FDIC insured certificates of deposit held at various banks with an original maturity of three months or less. |
Accounts Receivable | Accounts Receivable Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing receivables. The Company determines the allowance based on factors such as historical collection experience, customers' current creditworthiness, customer concentrations, age of accounts receivable balance and general economic conditions that may affect the customers' ability to pay. |
Inventories | Inventories Inventories are valued at the lower of cost or market, using the first–in, first-out (FIFO) method. Inventory is tracked through Raw Material, WIP, and Finished Good stages as the product progresses through various production steps and stocking locations. Labor and overhead costs are absorbed through the various production processes up to when the work order closes. Historical yields and normal capacities are utilized in the calculation of production overhead rates. Reserves for inventory obsolescence are utilized to account for slow-moving inventory as well as inventory no longer needed due to diminished market demand. |
Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets Goodwill and purchased intangible assets with indefinite useful lives are not amortized but are tested for impairment at least annually. The Company reviews goodwill and purchased intangible assets with indefinite lives for impairment annually at the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Potential impairment indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, and the sale of disposition of a significant portion of the business. The Company first assesses certain qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of the Company was less than its carrying amount. If after assessing the totality of events or circumstances, the Company were to determine that it is more likely than not that the fair value of the Company is less than its carrying amount, then the Company would perform a two-step quantitative impairment testing. In the first step, the Company compares the fair value of the Company to its carrying value. The Company determines the fair value utilizing the market approach. Under the market approach, the Company uses its market capitalization which is calculated by taking the Company’s share price times the number of outstanding shares. If the fair value of the Company exceeds the carrying value of the net assets, goodwill is not impaired, and no further testing is required. If the fair value of the Company is less than the carrying value, the Company must perform the second step of the impairment test to measure the amount of impairment loss, if any. In the second step, the Company’s value is allocated to all of the assets and liabilities, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the Company was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than the carrying value, the difference is recorded as an impairment loss. |
Impairment of Intangible Assets with Finite Lives | Impairment of Intangible Assets with Finite Lives The Company reviews purchased intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable using a two-step impairment test. In step one, we determine the sum of the undiscounted future cash flows of the assets based on management's estimates and compare it to the carrying value of the assets. If the carrying amount is greater than the sum of the undiscounted cash flows, then the asset is impaired and step two is required. In step two, the impairment loss is calculated as the difference between the fair value of the assets and the carrying value of the assets. Impairment reviews are based on an estimated future cash flow approach that requires significant judgment with respect to future revenue and expense growth rates, selection of appropriate discount rate, asset groupings, and other assumptions and estimates. The Company uses estimates that are consistent with our business plans and a market participant view of the assets being evaluated. Actual results may differ from our estimates. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, principally three to seven years. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful lives or the life of the lease. The Company is party to various lease arrangements for its facility space and equipment. These arrangements include interest, scheduled rent increases and rent holidays which are included in the determination of minimum lease payments when assessing lease classification, and are included in rent expense on a straight line basis over the lease term. |
Patent Costs | Patent Costs The Company incurs certain legal and related costs in connection with patent applications for tissue based products and processes. The Company capitalizes such costs to be amortized over the expected life of the patent to the extent that an economic benefit is anticipated from the resulting patent or alternative future use is available to the Company. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company evaluates the recoverability of its long-lived assets (property and equipment) whenever adverse events or changes in business climate indicate that the expected undiscounted future cash flows from the related assets may be less than previously anticipated. If the net book value of the related assets exceeds the expected undiscounted future cash flows of the assets, the carrying amount would be reduced to the present value of their expected future cash flows and an impairment loss would be recognized. |
Revenue Recognition | Revenue Recognition The Company sells its products through a combination of a direct sales force, independent stocking distributors and third - party representatives in the U.S. and independent distributors in international markets. The Company recognizes revenue when title to the goods and risk of loss transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. The Company records revenues from sales to our independent stocking distributors at the time the product is shipped to the distributor. Our stocking distributors, who sell the products to their customers or sub-distributors, contractually take title to the products and assume all risks of ownership at the time of shipment. Our stocking distributors are obligated to pay us the contractually agreed upon invoice price within specified terms regardless of when, if ever, they sell the products. Our stocking distributors do not have any contractual rights of return or exchange other than for defective product or shipping error; however, in limited situations, we do accept returns or exchanges at our discretion. Some of the Company’s sales to Government accounts, including the Department of Veterans Affairs, are made through a distributor relationship with AvKARE, which is a veteran-owned General Services Administration Federal Supply Schedule (FSS) contractor. The Company's agreement with AvKARE expires, subject to certain for-cause termination rights, on June 30, 2017. The Company may also elect to terminate the agreement without cause and pay a termination fee to AvKARE as specified in the agreement. Upon termination of the agreement, the parties may mutually agree to extend the agreement or the Company has an obligation to repurchase AvKARE’s remaining inventory, if any, within ninety (90) days in accordance with the terms of the Agreement. At the end of the term, the parties expect AvKARE’s inventory to be minimal, based upon AvKARE's obligation to use commercially reasonable efforts to achieve target sales levels over the remaining term of the agreement. We continually evaluate new and current customers, including our stocking distributors, for collectability based on various factors including past history with the customer, evaluation of their credit worthiness, and current economic conditions. We only record revenue when collectability is reasonably assured. A portion of the Company’s revenue is generated from inventory maintained at hospitals or physician's offices. We make estimates of potential future sales returns, discounts and allowances related to current period product revenue and these are reflected as a reduction of revenue in the same period revenue is recognized. We base our estimate for sales returns, discounts and allowances on historical sales and product return information, including historical experience and actual and projected trend information as well as projected sales returns based on estimated usage and contractual arrangements with AvKARE. These estimates have historically been consistent with actual results. |
Research and Development Costs | Research and Development Costs Research and development costs consist of direct and indirect costs associated with the development of the Company’s technologies. These costs are expensed as incurred. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. |
Share-based Compensation | Share-based Compensation The Company accounts for its share- based compensation plans in accordance with FASB ASC topic 718 “Compensation- Stock compensation”. FASB ASC 718 requires the measurement and recognition of compensation expense for all share-based awards made to employees and directors, including employee stock options, restricted stock and warrants. Under the provisions of FASB ASC 718, and U. S. Securities and Exchange Commission Staff Accounting Bulleting No. 107, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight line basis over the requisite service period of the entire award (generally the vesting period of the award). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature and type of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, short term investments, accounts payable and accrued expenses. The carrying cost of the Company’s investments also reflects their fair values due to the type of these investments and the fair value of capital leases approximates their carrying value based upon current rates available to the Company. |
Fair Value Measurements | Fair Value Measurements The Company records certain financial instruments at fair value, including: cash equivalents, short term investments and investments. The Company may make an irrevocable election to measure other financial instruments at fair value on an instrument-by-instrument basis; although as of December 31, 2016 , the Company has not chosen to make any such elections. Fair value financial instruments are recorded in accordance with the fair value measurement framework. The Company also measures certain non-financial assets at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as long-lived assets, and non-amortizing intangible assets for impairment; allocating value to assets in an acquired asset group, and accounting for business combinations. The Company uses the fair value measurement framework to value these assets and reports these fair values in the periods in which they are recorded or written down. The fair value measurement framework includes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair values in their broad levels. These levels from highest to lowest priority are as follows: • Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted on active markets, but corroborated by market data. • Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available. The determination of fair value and the assessment of a measurement’s placement within the hierarchy require judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include: estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist it in determining fair value, as appropriate. In connection with the acquisition of Stablity, the Company recorded a liability related to the Earn-Out portion of the purchase consideration. See Note 4, Acquisition, for further discussion of the Earn-Out liability. The Company has classified the Earn-Out liability as a Level 3 liability and the fair value of the Earn-Out liability will be evaluated each reporting period and changes in its fair value will be included in the Company’s results of operations. The fair value of the Earn-Out liability was calculated using a discount rate, approximating the pre-tax cost of debt and corroborated by Monte Carlo simulation, which was then applied to estimated earn out payments. To determine the fair value of the Earn-Out liability, management evaluates assumptions that require significant judgment. Changes in certain inputs to the valuation model, including the Company’s estimate of future revenues, can have a significant impact on the estimated fair value. The fair value recorded for the Earn-Out liability may vary significantly from period to period. This variability may result in the actual liability for a period either above or below the estimates recorded in the Company’s Consolidated Financial Statements, resulting in significant fluctuations in results of operations as a result of the corresponding non-cash gain or loss recorded. Although the Company believes that the recorded fair value of its financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs"). In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers” (ASU 2014-09) that requires companies to recognize revenue when a customer obtains control rather than when companies have transferred substantially all risks and rewards of a good or service. This update is effective for annual reporting periods beginning on or after December 15, 2017 and interim periods therein and requires expanded disclosures. The Company is currently assessing the impact the adoption of ASU 2014-09 will have on its consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, that eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. ASU 2015-16 is effective for public companies for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company has adopted this standard in the first quarter of 2016 and its application is shown in Note 4. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company has adopted this standard, prospectively, at the beginning of the fourth quarter 2015 to simplify reporting with the release of the valuation allowance as disclosed in Note 12. Prior periods were not retrospectively adjusted. In February 2016, the FASB issued Accounting Standards Update ASU No. 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. ASU 2016-02 is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company is currently assessing the impact the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718)". The standard is intended to simplify several areas of accounting for share - based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. This ASU is effective for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact the adoption of ASU 2016-09 will have on its consolidated financial statements. As of December 31, 2016, the Company does not have any remaining deferred tax assets that will result in an increase to equity upon realization. See Note 12. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments”. The update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This ASU is effective for public business entities for fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years. The amendments in this update may be applied retrospectively or prospectively and early adoption is permitted. The Company is currently assessing the impact of the adoption of ASU 2016-15 will have on its consolidated financial statements. All other ASUs issued and not yet effective for the year ended December 31, 2016 , and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's financial position or results of operations. |
Acquisitions | The acquisition was accounted for as a purchase business combination as defined by FASB Topic 805 - "Business Combinations". The fair value of the contingent consideration is measured as a Level 3 instrument. The contingent consideration liability is recorded at fair value on the acquisition date. Increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measured is based on significant inputs that are not observable in the market, they are categorized as Level 3. The income valuation approach was applied in determining the fair value of the contingent consideration using a discounted cash flow valuation technique with significant unobservable inputs comprised of projected sales and certain expenses. The values assigned to intangible assets are subject to amortization. |
Net Income Per Share | Net Income Per Share Basic net income per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed using the weighted-average number of common and dilutive common equivalent shares from stock options, warrants and restricted stock using the treasury stock method. |
Acquisition of Stability Inc. (
Acquisition of Stability Inc. (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of acquisition of Stability Inc. | The actual purchase price has been allocated as follows (in thousands): Cash paid at closing $ 6,000 Working capital adjustment (480 ) Common stock issued (441,009 shares) 3,346 Assumed debt 1,771 Fair value of earn-out 17,450 Total fair value of purchase price $ 28,087 Net assets acquired: Debt-free working capital $ 2,456 Other long-term assets 199 Property, plant and equipment 1,375 Deferred tax liability (5,896 ) Subtotal (1,866 ) Intangible assets: Customer relationships 5,330 Patents and know-how 6,790 Trade names and trademarks 450 Non compete agreements 830 Licenses and permits 390 Subtotal 13,790 Goodwill 16,163 Total Assets Purchased $ 28,087 Working capital and other assets were composed of the following (in thousands): Working capital Cash $ 140 Prepaid Expenses and other current assets 100 Accounts receivable 2,001 Federal and state taxes receivable 28 Inventory 9,002 Accounts payable and accrued expenses (8,815 ) Debt-free working capital $ 2,456 Current portion of long term debt $ (194 ) Long-term debt (560 ) Line of Credit (932 ) Shareholder loan (85 ) Assumed debt $ (1,771 ) Net working capital $ 685 The fair value of stock consideration was determined as set forth below: Common Share Price at Closing on 1/13/2016 $ 8.43 Multiplied by: Number of Common Shares Transferred to the Sellers 441,009 Indicated Value of Equity Consideration (on a Freely Tradable Interest Basis) $ 3,717,706 Less: Marketability Discount 10% [a] (371,771 ) Fair Value of Equity Consideration Transferred $ 3,345,935 [a] Shares transferred to the Sellers are restricted securities pursuant to Rule 144. As such, the Sellers are prevented from selling the shares for a period of six months. In addition, they are subject to contractual lockups which restrict sales for up to twelve months following the closing of the transaction. |
Finite-lived and indefinite-lived intangible assets acquired | The intangible assets were assigned the following lives for amortization purposes: Estimated useful life (in years) Intangible asset: Customer relationships 12 Patents and know-how 20 Trade name and Trademarks Indefinite Non compete agreements 4 Licenses and permits 2 |
Goodwill reconciliation | Goodwill reconciliation (in thousands): Balance at 3/31/16 $ 22,912 Goodwill Adjustments (a) (6,749 ) Balance at 12/31/16 $ 16,163 (a) Goodwill is the result of a residual calculation |
Measurement period adjustments | The measurement period adjustments are as follows (in thousands): Provisional Per Measurement Period 3/31/2016 Form 10Q Adjustments 2016 Final Cash paid at closing $ 6,000 $ — $ 6,000 Working capital adjustment (480 ) — (480 ) Common stock issued 3,346 — 3,346 Assumed debt 1,771 — 1,771 Fair value of earn-out 25,620 (8,170 ) 17,450 Total fair value of purchase price $ 36,257 $ (8,170 ) $ 28,087 Net assets acquired: Debt-free working capital $ 2,179 $ 277 $ 2,456 Other assets, net 199 — 199 Property, plant and equipment 1,375 — 1,375 Deferred tax liability (8,268 ) 2,372 (5,896 ) Subtotal $ (4,515 ) $ 2,649 $ (1,866 ) Intangible assets: Customer relationships $ 6,090 $ (760 ) $ 5,330 Patents and know-how 9,170 (2,380 ) 6,790 Trade names and trademarks 830 (380 ) 450 Non compete agreements 1,080 (250 ) 830 Licenses and permits 690 (300 ) 390 Subtotal 17,860 (4,070 ) 13,790 Goodwill 22,912 (6,749 ) 16,163 Total Assets Purchased $ 36,257 $ (8,170 ) $ 28,087 |
Business acquisition pro forma information | Unaudited pro forma information for the twelve months ended December 31, 2016 and 2015 (in thousands) is as follows: Years Ended December 31, 2016 2015 Revenue $245,563 $204,481 Net income $12,611 $24,960 Income per share, fully diluted $0.11 $0.22 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventories consisted of the following items as of December 31, 2016 and 2015 (in thousands): December 31, 2016 2015 Raw materials $ 1,148 $ 602 Work in process 6,677 3,850 Finished goods 10,817 3,405 Inventory, gross 18,642 7,857 Reserve for obsolescence (828 ) (397 ) Inventory, net $ 17,814 $ 7,460 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment consist of the following as of December 31, 2016 and 2015 (in thousands): December 31, 2016 2015 Leasehold improvements $ 3,274 $ 2,684 Lab and clean room equipment 8,666 4,564 Furniture and equipment 7,051 4,577 Construction in Progress 3,300 2,629 Property and equipment, gross 22,291 14,454 Less accumulated depreciation (8,505 ) (4,979 ) Property and equipment, net $ 13,786 $ 9,475 |
Intangible Assets and Royalty31
Intangible Assets and Royalty Agreement (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets activity summary | Intangible assets are summarized as follows (in thousands): December 31, 2016 2015 Weighted Cost Cost Licenses (a) (b) (c) (d) 7 years $ 1,399 $ 1,009 Patents & Know How (b) (d) 19 years 14,839 8,001 Customer & Supplier Relationships (b) (d) 13 years 9,091 3,761 Tradenames & Trademarks (d) indefinite 1,458 1,008 Non-Compete Agreements 4 years 830 — In Process Research & Development (b) various 25 25 Patents in Process (c) various 2,618 1,823 Total 30,260 15,627 Less Accumulated amortization and impairment charges (6,992 ) (4,864 ) Net $ 23,268 $ 10,763 (a) On January 29, 2007, the Company acquired a license from Shriners Hospitals for Children and University of South Florida Research Foundation, Inc. in the amount of $996,000 . Within 30 days after the receipt by the Company of approval by the FDA allowing the sale of the first licensed product, the Company is required to pay an additional $200,000 to the licensor. Due to its contingent nature, this amount is not recorded as a liability. The Company will also be required to pay a royalty of 3% on all commercial sales revenue from the licensed products. The Company is also obligated to pay a $50,000 minimum annual royalty payment over the life of the license. As of December 31, 2016 the license had a remaining net book value of approximately $10,000 . (b) On January 5, 2011, the Company acquired Surgical Biologics, LLC. As a result, the Company recorded intangible assets for Customer & Supplier Relationships of $3,761,000 , Patents & Know-How of $7,690,000 , Licenses of $13,000 , Tradenames & Trademarks of $1,008,000 and In-Process Research & Development of $25,000 . For the twelve months ended December 31, 2016 , approximately $48,000 of costs associated with patents granted during the period were capitalized and included in Patents & Know-How subject to amortization over the life of the patents. (c) Patents in Process consist of capitalized external legal and other registration costs in connection with internally developed tissue-based patents that are pending. Once issued, the costs associated with a given patent will be included in Patents & Know-How under intangible assets subject to amortization. (d) On January 13, 2016, the Company acquired Stability. As a result, the Company recorded intangible assets for Patents & Know - How of $6,790,000 , Customer Relationships of $5,330,000 , Non - compete agreements of $830,000 , Tradenames & Trademarks of $450,000 and Licenses of $390,000 . |
Estimated future amortization expense of intangible assets | Expected future amortization of intangible assets as of December 31, 2016 , is as follows (in thousands): Estimated Amortization Year ending December 31, Expense 2017 $ 2,034 2018 1,829 2019 1,829 2020 1,622 2021 1,622 Thereafter 12,874 $ 21,810 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands except per share data): Year Ended December 31, 2016 2015 2014 Net income $ 11,974 $ 29,446 $ 6,220 Denominator for basic earnings per share - weighted average shares 105,928,348 105,929,205 105,793,008 Effect of dilutive securities: Stock options, warrants, and restricted stock (a) 6,513,361 7,699,277 7,502,496 Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities 112,441,709 113,628,482 113,295,504 Income per common share - basic $ 0.11 $ 0.28 $ 0.06 Income per common share - diluted $ 0.11 $ 0.26 $ 0.05 (a) Securities that are included in the computation of the denominator above, utilizing the treasury stock method for the years ended December 31, 2016 , 2015 and 2014 are as follows: Effect of dilutive securities: 2016 2015 2014 Stock Options 5,845,377 7,121,774 7,035,728 Warrants — 33,676 226,926 Restricted Stock Awards 667,984 543,827 239,842 6,513,361 7,699,277 7,502,496 |
Summary of antidilutive securities | Securities that are included in the computation of the denominator above, utilizing the treasury stock method for the years ended December 31, 2016 , 2015 and 2014 are as follows: Effect of dilutive securities: 2016 2015 2014 Stock Options 5,845,377 7,121,774 7,035,728 Warrants — 33,676 226,926 Restricted Stock Awards 667,984 543,827 239,842 6,513,361 7,699,277 7,502,496 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock options activity | Activity with respect to the stock options is summarized as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at January 1, 2016 14,019,629 $ 3.62 Granted — $ — Exercised (1,164,138 ) $ 3.02 Unvested options forfeited (154,200 ) $ 6.77 Vested options expired (148,683 ) $ 6.16 Outstanding at December 31, 2016 12,552,608 $ 3.61 5.4 $ 66,137,378 Vested at December 31, 2016 11,680,455 $ 3.33 5.3 $ 64,733,964 Vested or expected to vest at December 31, 2016 (a) 12,539,865 $ 3.60 5.4 $ 66,119,285 (a) Includes forfeiture adjusted unvested shares. |
Summary of stock options outstanding and exercisable | Following is a summary of stock options outstanding and exercisable at December 31, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Number outstanding Weighted- Average Remaining Contractual Term (in years) Weighted- Average Exercise Price Number Exercisable Weighted- Average Exercise Price $0.50 - $0.76 441,429 2.4 $ 0.72 441,429 $ 0.72 $0.87 - $1.35 4,385,570 4.7 1.19 4,385,570 1.19 $1.40 - $2.45 1,362,424 4.1 1.92 1,362,424 1.92 $2.66 - $3.99 878,680 5.8 3.06 878,680 3.06 $4.19 - $6.38 3,056,069 6.2 5.36 2,937,038 5.34 $6.45- $9.78 2,324,103 7.0 7.30 1,610,485 7.25 $9.90 - $10.99 104,333 7.7 10.42 64,829 10.46 12,552,608 5.4 $ 3.61 11,680,455 $ 3.33 |
Unvested stock options roll forward | A summary of the status of the Company’s unvested stock options as of December 31, 2016 is presented below: Unvested Stock Options Number of Weighted- Unvested at January 1, 2016 3,067,935 $ 3.81 Granted — $ — Cancelled (154,200 ) $ 6.77 Vested (2,041,582 ) $ 3.61 Unvested at December 31, 2016 872,153 $ 4.28 |
Fair value of options valuation assumptions | The assumptions used in calculating the fair value of options granted using the Black-Scholes-Merton option-pricing model are set forth in the following table: Year ended December 31, 2016 2015 2014 Expected volatility — % 54.35 - 58.14% 58.14 - 64.50% Expected life (in years) 0 6 6 Expected dividend yield — — — Risk-free interest rate 0 1.51 - 1.68% 1.64 - 1.96% |
Restricted stock awards roll forward | Following is summary information for restricted stock awards for the year ended December 31, 2016 . Shares vest over a one to three year period. As of December 31, 2016 , there was approximately $21,905,000 of total unrecognized stock-based compensation related to time-based, non-vested restricted stock. That expense is expected to be recognized on a straight-line basis over a weighted-average period of 1.9 years . Additionally, during the twelve months ended December 31, 2016 , 43,344 shares of common stock valued at approximately $345,700 were issued under the 2006 Plan to a consultant in return for services performed, and is included in the table that follows. Number of Weighted-Average Grant Date Unvested at January 1, 2016 2,613,267 $ 9.14 Granted 2,755,426 $ 8.05 Vested (1,162,931 ) $ 8.68 Forfeited (377,317 ) $ 8.71 Unvested at December 31, 2016 3,828,445 $ 8.53 |
Allocation of share-based compensation | For the years ended December 31, 2016 , 2015 , and 2014 the Company recognized stock-based compensation as follows (in thousands): Years Ended December 31, 2016 2015 2014 Cost of sales $ 426 $ 352 $ 322 Research and development 647 790 660 Selling, general and administrative 16,745 15,754 10,471 $ 17,818 $ 16,896 $ 11,453 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): December 31, 2016 2015 Deferred tax assets and liabilities: Accruals and prepaids $ 4,992 $ 4,606 Intangible assets (5,130 ) 146 Property and equipment (1,338 ) (1,396 ) R&D and other tax credits 1,219 3,293 Stock Compensation 7,417 7,063 Net operating loss 2,395 1,763 Other 113 145 Net deferred tax assets $ 9,668 $ 15,620 Valuation allowance (554 ) (782 ) $ 9,114 $ 14,838 |
Reconciliation of the Federal statutory income tax | The reconciliation of the Federal statutory income tax rate of 35% to the effective rate is as follows: December 31, 2016 2015 Federal statutory rate 35.00 % 34.00 % State taxes, net of federal benefit 4.78 % 3.33 % Non deductible compensation 0.04 % 0.63 % Meals & entertainment 3.82 % 2.27 % Equity Compensation 5.51 % 6.39 % Domestic Production Activities Deduction (4.71 )% — % Tax Credits (8.79 )% (2.84 )% Prior Period Adjustments (3.79 )% — % Other 3.27 % (1.74 )% Valuation allowance (1.26 )% (63.33 )% 33.87 % (21.29 )% |
Schedule of current and deferred income tax expense (benefit) | Current and deferred income tax expense (benefit) is as follows (in thousands): December 31, 2016 December 31, 2015 Current: Federal $ 4,700 $ 8,452 State 1,423 1,218 Total current 6,123 9,670 Deferred: Federal 26 (13,070 ) State (16 ) (1,768 ) Total deferred 10 (14,838 ) Total expense $ 6,133 $ (5,168 ) |
Reconciliation of unrecognized tax benefits | The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands): December 31, 2016 December 31, 2015 Unrecognized tax benefits - January 1 $ 170 $ — Gross increases - tax positions in current period 111 170 Unrecognized tax benefits - December 31 $ 281 $ 170 |
Supplemental Disclosure of Ca35
Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental disclosure of cash flow and non-cash investing and financing activities | Selected cash payments, receipts, and noncash activities are as follows (in thousands) : Years Ended December 31, 2016 2015 2014 Cash paid for interest $ 162 $ 86 $ 48 Income taxes paid 642 2,293 384 Retirement of fixed assets — 319 — Deferred financing costs 10 504 — APIC related tax adjustments (424 ) 7,757 — Stock issuance of 441,009 shares in connection with acquisition of Stability 3,346 — — Stock issuance of 43,344, 16,493 and 15,958 shares in exchange for services performed in 2016, 2015 and 2014, respectively 346 164 117 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Estimated annual lease, royalty, and employment agreement expenses | The estimated annual lease payment and meeting space commitments are as follows (in thousands): Year ended December 31, 2017 $ 2,827 2018 3,079 2019 2,023 2020 490 2021 141 Thereafter 374 $ 8,934 |
Quarterly Financial Data (Una37
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | First Quarter Second Quarter Third Quarter Fourth Quarter NET SALES 2016 $ 53,367 $ 57,342 $ 64,429 $ 69,877 2015 40,767 45,679 49,015 51,835 GROSS MARGIN 2016 $ 45,421 $ 49,948 $ 56,432 $ 60,807 2015 35,619 40,590 44,036 46,849 NET INCOME 2016 $ 1,197 $ 1,975 $ 3,321 $ 5,481 2015 4,087 5,430 6,551 13,378 NET INCOME 2016 $ 0.01 $ 0.02 $ 0.03 $ 0.05 2015 0.04 0.05 0.06 0.13 NET INCOME 2016 $ 0.01 $ 0.02 $ 0.03 $ 0.05 2015 0.04 0.05 0.06 0.11 |
Product Revenue Data (Tables)
Product Revenue Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Net sales by categories | Net Sales by Categories (in thousands): Year Ended December 31, 2016 2015 2014 Wound Care $ 183,984 $ 141,096 $ 93,623 Surgical, Sports Medicine & Orthopedics (SSO) 61,031 46,200 24,600 Total $ 245,015 $ 187,296 $ 118,223 |
Nature of Business (Details)
Nature of Business (Details) - 12 months ended Dec. 31, 2016 | Business_Segment | segment |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of business segments | 1 | 1 |
Significant Accounting Polici40
Significant Accounting Policies (Details) | 12 Months Ended | ||||||
Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($)Business_Segment | Dec. 31, 2016USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jul. 31, 2010USD ($) | |
Market Concentrations and Credit Risk [Line Items] | |||||||
Number of business segments | 1 | 1 | |||||
FDIC insured amount | $ 250,000 | ||||||
Cash and cash equivalents uninsured amount | $ 33,200,000 | $ 33,200,000 | $ 33,200,000 | $ 33,200,000 | $ 27,700,000 | ||
Goodwill impairment | 0 | ||||||
impairment of indefinite useful lives intangible | 0 | 0 | |||||
Impairment of intangible assets with finite lives | 0 | 0 | |||||
Patents | |||||||
Market Concentrations and Credit Risk [Line Items] | |||||||
Intangible assets, net of accumulated amortization | $ 842,000 | $ 851,000 | $ 594,000 | ||||
Minimum | |||||||
Market Concentrations and Credit Risk [Line Items] | |||||||
Property and equipment estimated useful life | 3 years | ||||||
Maximum | |||||||
Market Concentrations and Credit Risk [Line Items] | |||||||
Property and equipment estimated useful life | 7 years |
Liquidity and Capital Resourc41
Liquidity and Capital Resources (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Liquidity and Capital Resources [Abstract] | ||||
Cash and cash equivalents | $ 34,391 | $ 28,486 | $ 46,582 | $ 44,078 |
Total current assets | 126,538 | 96,310 | ||
Total current liabilities | 50,732 | 26,777 | ||
Net working capital | 75,806 | |||
Net cash flows from operating activities | $ 25,828 | $ 18,807 | $ 16,802 |
Acquisition of Stability Inc. -
Acquisition of Stability Inc. - Narrative (Details) | Jan. 13, 2016USD ($)shares | Mar. 31, 2016USD ($) | Dec. 31, 2017 | Dec. 31, 2016USD ($)Business_Segment | Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | |||||||||
Gross profit margin multiplier | 1 | ||||||||
Net sales for earn-out period (less than) | $ 12,000,000 | ||||||||
Gross profit margin multiplier, low | 0.5 | ||||||||
Amortization of intangible assets | 2,127,000 | $ 933,000 | $ 928,000 | ||||||
Net income | 12,611,000 | 24,960,000 | |||||||
Number of business segments | 1 | 1 | |||||||
Fair Value Adjustment to Inventory | |||||||||
Business Acquisition [Line Items] | |||||||||
Net income | 1,485,000 | ||||||||
Forecast | |||||||||
Business Acquisition [Line Items] | |||||||||
Gross profit margin multiplier | 1 | ||||||||
Pro Forma | |||||||||
Business Acquisition [Line Items] | |||||||||
Amortization of intangible assets | $ 1,176,000 | ||||||||
Stability Biologics, LLC | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash paid at closing | $ 6,000,000 | $ 6,000,000 | 6,000,000 | ||||||
Fair Value of Equity Consideration Transferred | $ 3,345,935 | 3,346,000 | 3,346,000 | ||||||
Common stock issued (in shares) | shares | 441,009 | ||||||||
Assumed debt | $ 1,771,000 | 1,771,000 | 1,771,000 | ||||||
Acquisition related costs | 1,088,000 | ||||||||
Fair value of earn-out | 17,450,000 | $ 25,620,000 | $ 17,450,000 | $ 17,450,000 | $ 17,450,000 | $ 17,450,000 | |||
Stability Biologics, LLC | Selling, general and administrative | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition related costs | $ 1,088,000 |
Acquisition of Stability Inc.43
Acquisition of Stability Inc. - Fair Value of Stock Consideration (Details) - Stability Biologics, LLC - USD ($) | Jan. 13, 2016 | Mar. 31, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Common stock issued, price per share (in dollars per share) | $ 8.43 | ||
Common stock issued (in shares) | 441,009 | ||
Common stock issued in acquisition | $ 3,717,706 | ||
Less: Marketability Discount @ 10% | (371,771) | ||
Fair Value of Equity Consideration Transferred | $ 3,345,935 | $ 3,346,000 | $ 3,346,000 |
Marketability discount | 10.00% |
Acquisition of Stability Inc.44
Acquisition of Stability Inc. - Preliminarily Allocation of Purchase Price (Details) - USD ($) | Jan. 13, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Intangible assets: | ||||
Goodwill | $ 20,203,000 | $ 4,040,000 | ||
Stability Biologics, LLC | ||||
Business Combination, Consideration Transferred [Abstract] | ||||
Cash paid at closing | $ 6,000,000 | $ 6,000,000 | 6,000,000 | |
Working capital adjustment | (480,000) | (480,000) | (480,000) | |
Common stock issued (441,009 shares) | $ 3,345,935 | 3,346,000 | 3,346,000 | |
Common stock issued (in shares) | 441,009 | |||
Assumed debt | $ 1,771,000 | 1,771,000 | 1,771,000 | |
Fair value of earn-out | 17,450,000 | 25,620,000 | 17,450,000 | |
Total fair value of purchase price | 28,087,000 | 36,257,000 | 28,087,000 | |
Net assets acquired: | ||||
Debt-free working capital | 2,456,000 | 2,179,000 | 2,456,000 | |
Other long-term assets | 199,000 | 199,000 | 199,000 | |
Property, plant and equipment | 1,375,000 | 1,375,000 | 1,375,000 | |
Deferred tax liability | (5,896,000) | (8,268,000) | (5,896,000) | |
Subtotal | (1,866,000) | (4,515,000) | (1,866,000) | |
Intangible assets: | ||||
Subtotal | 13,790,000 | 17,860,000 | 13,790,000 | |
Goodwill | 16,163,000 | 22,912,000 | 16,163,000 | |
Total Assets Purchased | 28,087,000 | 36,257,000 | 28,087,000 | |
Cash | 140,000 | |||
Prepaid Expenses and other current assets | 100,000 | |||
Accounts receivable | 2,001,000 | |||
Federal and state taxes receivable | 28,000 | |||
Inventory | 9,002,000 | |||
Accounts payable and accrued expenses | (8,815,000) | |||
Debt-free working capital | 2,456,000 | 2,179,000 | 2,456,000 | |
Current portion of long term debt | (194,000) | |||
Assumed debt | 1,771,000 | |||
Net working capital | 685,000 | |||
Other long term assets | 199,000 | 199,000 | 199,000 | |
Stability Biologics, LLC | Long-term debt | ||||
Intangible assets: | ||||
Long-term debt | (560,000) | |||
Stability Biologics, LLC | Line of Credit | ||||
Intangible assets: | ||||
Long-term debt | (932,000) | |||
Stability Biologics, LLC | Shareholder loan | ||||
Intangible assets: | ||||
Long-term debt | (85,000) | |||
Stability Biologics, LLC | Tradenames & Trademarks | ||||
Intangible assets: | ||||
Indefinite-lived intangible assets | 450,000 | 830,000 | 450,000 | |
Stability Biologics, LLC | Customer relationships | ||||
Intangible assets: | ||||
Finite-Lived intangibles assets | 5,330,000 | 6,090,000 | 5,330,000 | |
Stability Biologics, LLC | Patents and know-how | ||||
Intangible assets: | ||||
Finite-Lived intangibles assets | 6,790,000 | 9,170,000 | 6,790,000 | |
Stability Biologics, LLC | Non-Compete Agreements | ||||
Intangible assets: | ||||
Finite-Lived intangibles assets | 830,000 | 1,080,000 | 830,000 | |
Stability Biologics, LLC | Licenses and permits | ||||
Intangible assets: | ||||
Finite-Lived intangibles assets | $ 390,000 | $ 690,000 | $ 390,000 |
Acquisition of Stability Inc.45
Acquisition of Stability Inc. - Intangible Assets Acquired as Part of Acquisition (Details) - Stability Biologics, LLC | Jan. 13, 2016 |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (in years) | 12 years |
Patents and know-how | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (in years) | 20 years |
Non-Compete Agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (in years) | 4 years |
Licenses and permits | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life (in years) | 2 years |
Acquisition of Stability Inc.46
Acquisition of Stability Inc. - Goodwill Reconciliation (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $ 4,040 | |
Goodwill, Ending Balance | $ 20,203 | 20,203 |
Stability Biologics, LLC | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 22,912 | |
Goodwill Adjustments | (6,749) | (6,749) |
Goodwill, Ending Balance | $ 16,163 | $ 16,163 |
Acquisition of Stability Inc.47
Acquisition of Stability Inc. - Measurement Period Adjustments (Details) - USD ($) | Jan. 13, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Intangible assets: | |||||
Goodwill | $ 20,203,000 | $ 20,203,000 | $ 4,040,000 | ||
Stability Biologics, LLC | |||||
Business Acquisition [Line Items] | |||||
Cash paid at closing | $ 6,000,000 | $ 6,000,000 | 6,000,000 | ||
Working capital adjustment | (480,000) | (480,000) | (480,000) | ||
Common stock issued (441,009 shares) | 3,345,935 | 3,346,000 | 3,346,000 | ||
Assumed debt | 1,771,000 | 1,771,000 | 1,771,000 | ||
Fair value of earn-out | 17,450,000 | 25,620,000 | 17,450,000 | 17,450,000 | |
Total fair value of purchase price | 28,087,000 | 36,257,000 | 28,087,000 | ||
Net assets acquired: | |||||
Debt-free working capital | 2,456,000 | 2,179,000 | 2,456,000 | 2,456,000 | |
Other long term assets | 199,000 | 199,000 | 199,000 | 199,000 | |
Property, plant and equipment | 1,375,000 | 1,375,000 | 1,375,000 | 1,375,000 | |
Deferred tax liability | (5,896,000) | (8,268,000) | (5,896,000) | (5,896,000) | |
Subtotal | (1,866,000) | (4,515,000) | (1,866,000) | (1,866,000) | |
Intangible assets: | |||||
Subtotal | 13,790,000 | 17,860,000 | 13,790,000 | 13,790,000 | |
Goodwill | 16,163,000 | 22,912,000 | 16,163,000 | 16,163,000 | |
Total Assets Purchased | 28,087,000 | 36,257,000 | 28,087,000 | 28,087,000 | |
Measurement Period | |||||
Fair value of earn-out | (8,170,000) | ||||
Total fair value of purchase price | (8,170,000) | ||||
Debt-free working capital | 277,000 | ||||
Deferred tax liability | 2,372,000 | ||||
Subtotal | 2,649,000 | ||||
Subtotal | (4,070,000) | ||||
Goodwill Adjustments | (6,749,000) | (6,749,000) | |||
Total Assets Purchased | (8,170,000) | ||||
Stability Biologics, LLC | Tradenames & Trademarks | |||||
Intangible assets: | |||||
Indefinite-lived intangible assets | 450,000 | 830,000 | 450,000 | 450,000 | |
Measurement Period | |||||
Trade names and trademarks | (380,000) | ||||
Stability Biologics, LLC | Customer relationships | |||||
Intangible assets: | |||||
Finite-Lived intangibles assets | 5,330,000 | 6,090,000 | 5,330,000 | 5,330,000 | |
Measurement Period | |||||
Intangible assets, finite lived | (760,000) | ||||
Stability Biologics, LLC | Patents and know-how | |||||
Intangible assets: | |||||
Finite-Lived intangibles assets | 6,790,000 | 9,170,000 | 6,790,000 | 6,790,000 | |
Measurement Period | |||||
Intangible assets, finite lived | (2,380,000) | ||||
Stability Biologics, LLC | Non-Compete Agreements | |||||
Intangible assets: | |||||
Finite-Lived intangibles assets | 830,000 | 1,080,000 | 830,000 | 830,000 | |
Measurement Period | |||||
Intangible assets, finite lived | (250,000) | ||||
Stability Biologics, LLC | Licenses and permits | |||||
Intangible assets: | |||||
Finite-Lived intangibles assets | $ 390,000 | $ 690,000 | 390,000 | $ 390,000 | |
Measurement Period | |||||
Intangible assets, finite lived | $ (300,000) |
Acquisition of Stability Inc.48
Acquisition of Stability Inc. - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
Revenue | $ 245,563 | $ 204,481 |
Net income | $ 12,611 | $ 24,960 |
Income per share, fully diluted (in dollars per share) | $ 0.11 | $ 0.22 |
Cash Equivalents and Short Te49
Cash Equivalents and Short Term Investments (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Line Items] | ||
Short term investments | $ 0 | $ 3,000,000 |
Certificates of Deposit | ||
Cash and Cash Equivalents [Line Items] | ||
Short term investments | $ 0 | $ 3,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,148 | $ 602 |
Work in process | 6,677 | 3,850 |
Finished goods | 10,817 | 3,405 |
Inventory, gross | 18,642 | 7,857 |
Reserve for obsolescence | (828) | (397) |
Inventory, net | $ 17,814 | $ 7,460 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and equipment [Line Items] | |||
Property and equipment, gross | $ 22,291 | $ 14,454 | |
Less accumulated depreciation | (8,505) | (4,979) | |
Property and equipment, net | 13,786 | 9,475 | |
Other liabilities | 821 | 1,148 | |
Depreciation expense | 3,333 | 1,799 | $ 1,197 |
Leasehold improvements | |||
Property and equipment [Line Items] | |||
Property and equipment, gross | 3,274 | 2,684 | |
Lab and clean room equipment | |||
Property and equipment [Line Items] | |||
Property and equipment, gross | 8,666 | 4,564 | |
Furniture and equipment | |||
Property and equipment [Line Items] | |||
Property and equipment, gross | 7,051 | 4,577 | |
Construction in Progress | |||
Property and equipment [Line Items] | |||
Property and equipment, gross | 3,300 | 2,629 | |
Capital leases | |||
Property and equipment [Line Items] | |||
Property and equipment, net | 427 | ||
Other liabilities | 31 | ||
Leasehold improvements paid for by landlord | |||
Property and equipment [Line Items] | |||
Property and equipment, net | 1,000 | ||
Other liabilities | $ 188 | $ 361 |
Intangible Assets and Royalty52
Intangible Assets and Royalty Agreement - Intangible Asssets Activity Summary (Details) - USD ($) | Jan. 29, 2007 | Dec. 31, 2016 | Mar. 31, 2016 | Jan. 13, 2016 | Dec. 31, 2015 | Jan. 05, 2011 |
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets, gross carrying value | $ 30,260,000 | $ 15,627,000 | ||||
Less Accumulated amortization and impairment charges | (6,992,000) | (4,864,000) | ||||
Intangible Assets, Net | 23,268,000 | 10,763,000 | ||||
Net book value of intangible assets | 21,810,000 | |||||
Stability Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Fair value of earn-out | 17,450,000 | $ 25,620,000 | $ 17,450,000 | |||
Tradenames & Trademarks | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value, indefinite lived | 1,458,000 | 1,008,000 | ||||
Tradenames & Trademarks | Stability Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value, indefinite lived | 450,000 | |||||
Tradenames & Trademarks | Surgical Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value, indefinite lived | $ 1,008,000 | |||||
In Process Research & Development | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value, indefinite lived | 25,000 | 25,000 | ||||
In Process Research & Development | Surgical Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value, indefinite lived | 25,000 | |||||
Patents in Process | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value, indefinite lived | $ 2,618,000 | 1,823,000 | ||||
Licenses | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Amortization Lives | 7 years | |||||
Gross carrying value | $ 1,399,000 | 1,009,000 | ||||
Licenses | Stability Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value | 390,000 | |||||
Licenses | Shriners Hospitals for Children and University of South Florida Research Foundation, Inc. | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Acquisition price | $ 996,000 | |||||
Maximum time of approval | 30 days | |||||
Fair value of earn-out | $ 200,000 | |||||
Contingent royalty to be paid to licensor | 3.00% | |||||
Annual royalty payment | $ 50,000 | |||||
Net book value of intangible assets | $ 10,000 | |||||
Licenses | Surgical Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value | 13,000 | |||||
Patents and know-how | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Amortization Lives | 19 years | |||||
Gross carrying value | $ 14,839,000 | 8,001,000 | ||||
Patents and know-how | Stability Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value | 6,790,000 | |||||
Patents and know-how | Surgical Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value | 7,690,000 | |||||
Finite-lived intangible assets, costs | $ 48,000 | |||||
Customer & Supplier Relationships | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Amortization Lives | 13 years | |||||
Gross carrying value | $ 9,091,000 | 3,761,000 | ||||
Customer & Supplier Relationships | Stability Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value | 5,330,000 | |||||
Customer & Supplier Relationships | Surgical Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value | $ 3,761,000 | |||||
Non-Compete Agreements | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Amortization Lives | 4 years | |||||
Gross carrying value | $ 830,000 | $ 0 | ||||
Non-Compete Agreements | Stability Biologics, LLC | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross carrying value | $ 830,000 |
Intangible Assets and Royalty53
Intangible Assets and Royalty Agreement - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 2,127 | $ 933 | $ 928 |
Intangible Assets and Royalty54
Intangible Assets and Royalty Agreement - Expected Future Amortization of Intangible Assets (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,017 | $ 2,034 |
2,018 | 1,829 |
2,019 | 1,829 |
2,020 | 1,622 |
2,021 | 1,622 |
Thereafter | 12,874 |
Net book value | $ 21,810 |
Long-Term Debt (Details)
Long-Term Debt (Details) - Credit Agreement - Revolving Credit Facility - USD ($) | Oct. 12, 2015 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 50,000,000 | |
Uncommitted incremental facility | 35,000,000 | |
Debt issuance costs | $ 500,000 | |
Debt term | 3 years | |
Outstanding line of credit | $ 0 | |
London Interbank Offered Rate (LIBOR) | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.50% | |
London Interbank Offered Rate (LIBOR) | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.25% |
Net Income Per Share - Computat
Net Income Per Share - Computation of Basic and Dilutive Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 5,481 | $ 3,321 | $ 1,975 | $ 1,197 | $ 13,378 | $ 6,551 | $ 5,430 | $ 4,087 | $ 11,974 | $ 29,446 | $ 6,220 |
Denominator for basic earnings per share - weighted average shares (in shares) | 105,928,348 | 105,929,205 | 105,793,008 | ||||||||
Effect of dilutive securities: Stock options, warrants, and restricted stock (in shares) | 6,513,361 | 7,699,277 | 7,502,496 | ||||||||
Denominator for diluted earnings per share - weighted average shares adjusted for dilutive securities (in shares) | 112,441,709 | 113,628,482 | 113,295,504 | ||||||||
Income per common share - basic (in dollars per share) | $ 0.05 | $ 0.03 | $ 0.02 | $ 0.01 | $ 0.13 | $ 0.06 | $ 0.05 | $ 0.04 | $ 0.11 | $ 0.28 | $ 0.06 |
Income per common share - diluted (in dollars per share) | $ 0.05 | $ 0.03 | $ 0.02 | $ 0.01 | $ 0.11 | $ 0.06 | $ 0.05 | $ 0.04 | $ 0.11 | $ 0.26 | $ 0.05 |
Net Income Per Share - Summary
Net Income Per Share - Summary of Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 6,513,361 | 7,699,277 | 7,502,496 |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,845,377 | 7,121,774 | 7,035,728 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 33,676 | 226,926 |
Restricted Stock Awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 667,984 | 543,827 | 239,842 |
Equity - Narrative (Details)
Equity - Narrative (Details) | Nov. 18, 2015$ / sharesshares | Dec. 31, 2016USD ($)plan$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | May 12, 2014USD ($) |
Class of Stock [Line Items] | |||||
Number of share-based compensation plans | plan | 4 | ||||
Intrinsic value of options exercised | $ 6,460,000 | $ 17,181,000 | $ 10,566,000 | ||
Intrinsic value of options vested | 7,378,000 | $ 10,044,000 | $ 6,615,000 | ||
Total unrecognized compensation expense | $ 1,064,000 | ||||
Weighted-average grant date fair value for options granted during the period (in dollars per share) | $ / shares | $ 0 | $ 5.15 | $ 4.18 | ||
Shares issued for services performed (in shares) | shares | 43,344 | 16,493 | 15,958 | ||
Shares issued for services performed | $ 346,000 | $ 164,000 | $ 117,000 | ||
Authorized share amount for repurchase | $ 66,000,000 | $ 60,000,000 | $ 20,000,000 | $ 10,000,000 | |
Stock repurchase (in shares) | shares | 1,338,616 | ||||
Shares repurchased, value | $ 10,338,000 | ||||
Commissions | 40,000 | ||||
Remaining authorizations under the repurchase program, amount | $ 9,936,000 | ||||
Warrants | |||||
Class of Stock [Line Items] | |||||
Warrants outstanding (in shares) | shares | 42,400 | ||||
Warrants outstanding (in dollars per share) | $ / shares | $ 1.09 | ||||
Warrants term | 5 years | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Shares issued for services performed (in shares) | shares | 11,321 | 15,958 | |||
Consultant | Common Stock | |||||
Class of Stock [Line Items] | |||||
Shares issued for services performed (in shares) | shares | 43,344 | ||||
Shares issued for services performed | $ 345,700 | ||||
Restricted Stock | |||||
Class of Stock [Line Items] | |||||
Total unrecognized stock-based compensation related to time-based, nonvested restricted stock | $ 21,905,000 | ||||
Expenses expected to be recognized over a weighted-average period | 1 year 10 months 24 days | ||||
Restricted Stock | Minimum | |||||
Class of Stock [Line Items] | |||||
Vesting period | 1 year | ||||
Restricted Stock | Maximum | |||||
Class of Stock [Line Items] | |||||
Vesting period | 3 years |
Equity - Activity of Stock Opti
Equity - Activity of Stock Options (Details) | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding, beginning of period (in shares) | shares | 14,019,629 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (1,164,138) |
Unvested options forfeited (in shares) | shares | (154,200) |
Vested options expired (in shares) | shares | (148,683) |
Outstanding, end of period (in shares) | shares | 12,552,608 |
Vested at end of period (in shares) | shares | 11,680,455 |
Vested and expected to vest (in shares) | shares | 12,539,865 |
Weighted- Average Exercise Price | |
Outstanding, weighted average exercise price, beginning of period (in dollars per share) | $ / shares | $ 3.62 |
Granted, weighted average exercise price (in dollars per share) | $ / shares | 0 |
Exercised, weighted average exercise price (in dollars per share) | $ / shares | 3.02 |
Unvested options forfeited, weighted-average exercise price (in dollars per share) | $ / shares | 6.77 |
Vested options expired, weighted-average exercise price (in dollars per share) | $ / shares | 6.16 |
Outstanding, weighted average exercise price, end of period (in dollars per share) | $ / shares | 3.61 |
Vested at end of period, weighted average exercise price (in dollars per share) | $ / shares | 3.33 |
Vested and expected to vest, weighted average exercise price (in dollars per share) | $ / shares | $ 3.60 |
Stock options, additional disclosures | |
Outstanding options, weighted average remaining contractual term | 5 years 4 months 24 days |
Vested at end of period weighted average remaining contractual term | 5 years 3 months 18 days |
Vested and expected to vest, weighted average remaining contractual term | 5 years 4 months 24 days |
Outstanding, aggregate intrinsic value | $ | $ 66,137,378 |
Vested at end of period, aggregate intrinsic value | $ | 64,733,964 |
Vested and expected to vest, aggregate intrinsic value | $ | $ 66,119,285 |
Equity - Exercise Price Ranges
Equity - Exercise Price Ranges (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 12,552,608 |
Outstanding options, weighted average remaining contractual term | 5 years 4 months 24 days |
Outstanding options, weighted average exercise price (in dollars per share) | $ 3.61 |
Number of exercisable options (in shares) | shares | 11,680,455 |
Exercisable options, weighted average exercise price (in dollars per share) | $ 3.33 |
$0.50 - $0.76 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | 0.50 |
Exercise price range, upper range limit (in dollars per share) | $ 0.76 |
Number of outstanding options (in shares) | shares | 441,429 |
Outstanding options, weighted average remaining contractual term | 2 years 4 months 24 days |
Outstanding options, weighted average exercise price (in dollars per share) | $ 0.72 |
Number of exercisable options (in shares) | shares | 441,429 |
Exercisable options, weighted average exercise price (in dollars per share) | $ 0.72 |
$0.87 - $1.35 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | 0.87 |
Exercise price range, upper range limit (in dollars per share) | $ 1.35 |
Number of outstanding options (in shares) | shares | 4,385,570 |
Outstanding options, weighted average remaining contractual term | 4 years 8 months 12 days |
Outstanding options, weighted average exercise price (in dollars per share) | $ 1.19 |
Number of exercisable options (in shares) | shares | 4,385,570 |
Exercisable options, weighted average exercise price (in dollars per share) | $ 1.19 |
$1.40 - $2.45 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | 1.40 |
Exercise price range, upper range limit (in dollars per share) | $ 2.45 |
Number of outstanding options (in shares) | shares | 1,362,424 |
Outstanding options, weighted average remaining contractual term | 4 years 1 month 6 days |
Outstanding options, weighted average exercise price (in dollars per share) | $ 1.92 |
Number of exercisable options (in shares) | shares | 1,362,424 |
Exercisable options, weighted average exercise price (in dollars per share) | $ 1.92 |
$2.66 - $3.99 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | 2.66 |
Exercise price range, upper range limit (in dollars per share) | $ 3.99 |
Number of outstanding options (in shares) | shares | 878,680 |
Outstanding options, weighted average remaining contractual term | 5 years 9 months 18 days |
Outstanding options, weighted average exercise price (in dollars per share) | $ 3.06 |
Number of exercisable options (in shares) | shares | 878,680 |
Exercisable options, weighted average exercise price (in dollars per share) | $ 3.06 |
$4.19 - $6.38 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | 4.19 |
Exercise price range, upper range limit (in dollars per share) | $ 6.38 |
Number of outstanding options (in shares) | shares | 3,056,069 |
Outstanding options, weighted average remaining contractual term | 6 years 2 months 12 days |
Outstanding options, weighted average exercise price (in dollars per share) | $ 5.36 |
Number of exercisable options (in shares) | shares | 2,937,038 |
Exercisable options, weighted average exercise price (in dollars per share) | $ 5.34 |
$6.45- $9.78 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | 6.45 |
Exercise price range, upper range limit (in dollars per share) | $ 9.78 |
Number of outstanding options (in shares) | shares | 2,324,103 |
Outstanding options, weighted average remaining contractual term | 7 years |
Outstanding options, weighted average exercise price (in dollars per share) | $ 7.30 |
Number of exercisable options (in shares) | shares | 1,610,485 |
Exercisable options, weighted average exercise price (in dollars per share) | $ 7.25 |
$9.90 - $10.99 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | 9.90 |
Exercise price range, upper range limit (in dollars per share) | $ 10.99 |
Number of outstanding options (in shares) | shares | 104,333 |
Outstanding options, weighted average remaining contractual term | 7 years 8 months 12 days |
Outstanding options, weighted average exercise price (in dollars per share) | $ 10.42 |
Number of exercisable options (in shares) | shares | 64,829 |
Exercisable options, weighted average exercise price (in dollars per share) | $ 10.46 |
Equity - Summary of Unvested St
Equity - Summary of Unvested Stock Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | |||
Unvested, beginning of period (in shares) | 3,067,935 | ||
Granted (in shares) | 0 | ||
Cancelled (in shares) | (154,200) | ||
Vested (in shares) | (2,041,582) | ||
Unvested, end of period (in shares) | 872,153 | 3,067,935 | |
Weighted- Average Grant Date Fair Value | |||
Unvested, beginning of period (in dollars per share) | $ 3.81 | ||
Granted (in dollars per share) | 0 | $ 5.15 | $ 4.18 |
Cancelled (in dollars per share) | 6.77 | ||
Vested (in dollars per share) | 3.61 | ||
Unvested, end of period (in dollars per share) | $ 4.28 | $ 3.81 |
Equity - Assumptions (Details)
Equity - Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair value options valuation assumptions [Abstract] | |||
Expected volatility | 0.00% | ||
Expected life (in years) | 0 years | 6 years | 6 years |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.00% | ||
Risk-free interest rate, minimum | 1.51% | 1.64% | |
Risk-free interest rate, maximum | 1.68% | 1.96% | |
Minimum | |||
Fair value options valuation assumptions [Abstract] | |||
Expected volatility | 54.35% | 58.14% | |
Maximum | |||
Fair value options valuation assumptions [Abstract] | |||
Expected volatility | 58.14% | 64.50% |
Equity - Summary of Restricted
Equity - Summary of Restricted Stock Awards (Details) - Restricted Stock | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Shares | |
Unvested, beginning of period (in shares) | shares | 2,613,267 |
Granted (in shares) | shares | 2,755,426 |
Vested (in shares) | shares | (1,162,931) |
Forfeited (in shares) | shares | (377,317) |
Unvested, end of period (in shares) | shares | 3,828,445 |
Weighted- Average Grant Date Fair Value | |
Unvested, beginning of period (in dollars per share) | $ / shares | $ 9.14 |
Granted (in dollars per share) | $ / shares | 8.05 |
Vested (in dollars per share) | $ / shares | 8.68 |
Forfeited (in dollars per share) | $ / shares | 8.71 |
Unvested, end of period (in dollars per share) | $ / shares | $ 8.53 |
Equity - Recognized Stock-Based
Equity - Recognized Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation [Abstract] | |||
Stock-based compensation expense | $ 17,818 | $ 16,896 | $ 11,453 |
Cost of sales | |||
Share-based Compensation [Abstract] | |||
Stock-based compensation expense | 426 | 352 | 322 |
Research and development | |||
Share-based Compensation [Abstract] | |||
Stock-based compensation expense | 647 | 790 | 660 |
Selling, general and administrative | |||
Share-based Compensation [Abstract] | |||
Stock-based compensation expense | $ 16,745 | $ 15,754 | $ 10,471 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets and liabilities: | ||
Accruals and prepaids | $ 4,992 | $ 4,606 |
Intangible assets | (5,130) | 146 |
Property and equipment | (1,338) | (1,396) |
R&D and other tax credits | 1,219 | 3,293 |
Stock Compensation | 7,417 | 7,063 |
Net operating loss | 2,395 | 1,763 |
Other | 113 | 145 |
Net deferred tax assets | 9,668 | 15,620 |
Valuation allowance | (554) | (782) |
Deferred tax assets and liabilities, net of valuation allowance | $ 9,114 | $ 14,838 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Federal Statutory Income Tax (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 35.00% | 34.00% |
State taxes, net of federal benefit | 4.78% | 3.33% |
Non deductible compensation | 0.04% | 0.63% |
Meals & entertainment | 3.82% | 2.27% |
Domestic Production Activities Deduction | 5.51% | 6.39% |
Domestic Production Activities Deduction | (4.71%) | (0.00%) |
Tax Credits | (8.79%) | (2.84%) |
Prior Period Adjustments | (3.79%) | 0.00% |
Other | 3.27% | (1.74%) |
Valuation allowance | (1.26%) | (63.33%) |
Effective income tax rate | 33.87% | (21.29%) |
Income Taxes - Schedule of curr
Income Taxes - Schedule of current and deferred income tax expense (benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 4,700 | $ 8,452 | |
State | 1,423 | 1,218 | |
Total current | 6,123 | 9,670 | |
Deferred: | |||
Federal | 26 | (13,070) | |
State | (16) | (1,768) | |
Total deferred | 10 | (14,838) | |
Total expense | $ 6,133 | $ (5,168) | $ 832 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | ||
Federal statutory rate | 35.00% | 34.00% |
Valuation allowance | $ 554,000 | $ 782,000 |
Deferred tax assets, operating loss carryforwards, domestic | 815,000 | 197,000 |
Deferred tax assets, operating loss carryforwards, state | 1,580,000 | 1,566,000 |
Realized deferred tax assets | 1,170,000 | |
Stock compensation | 0 | |
Unrecognized tax benefits that would affect effective tax rate | 281,000 | 170,000 |
Adjustments to tax accounts | 281,000 | 170,000 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Income tax net operating loss carryforwards | 2,327,000 | 579,000 |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Income tax net operating loss carryforwards | $ 27,912,000 | $ 27,552,000 |
Income Taxes - Reconciliation69
Income Taxes - Reconciliation of unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning of period | $ 170 | $ 0 |
Gross increases - tax positions in current period | 111 | 170 |
Unrecognized tax benefits, end of period | $ 281 | $ 170 |
Supplemental Disclosure of Ca70
Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | |||
Shares issued in conjunction with acquisition (in shares) | 441,009 | ||
Cash paid for interest | $ 162 | $ 86 | $ 48 |
Income taxes paid | 642 | 2,293 | 384 |
Retirement of fixed assets | 0 | 319 | 0 |
Deferred financing costs | 10 | 504 | 0 |
APIC related tax adjustments | (424) | 7,757 | 0 |
Stock issuance of 441,009 shares in connection with acquisition of Stability | 3,346 | 0 | 0 |
Stock issuance of 43,344, 16,493 and 15,958 shares in exchange for services performed in 2016, 2015 and 2014, respectively | $ 346 | $ 164 | $ 117 |
Shares issued for services performed (in shares) | 43,344 | 16,493 | 15,958 |
401k Plan (Details)
401k Plan (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Compensation and Retirement Disclosure [Abstract] | |
Minimum age require to qualify for pension plan | 21 years |
Minimum service period require to qualify for pension plan | 3 months |
Maximum wages deferred, percent | 100.00% |
Maximum eligible wages deferred by participants per year | $ 18,000 |
Minimum age for additional contribution beyond normal plan | 50 years |
Defined benefit plan, contributions by plan participants | $ 6,000 |
Employer matching contribution, percent | 6.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - Stability Biologics, LLC - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Jan. 13, 2016 | |
Related Party Transaction [Line Items] | ||
Assumed payable | $ 1,226,275 | $ 5,954,555 |
Proceeds from related party payable | 1,361,030 | |
Decrease in related party payable due to return or destruction of expired inventory | $ 3,367,250 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016USD ($)claim | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Aug. 18, 2015claim | Jul. 10, 2015claim | Jun. 29, 2015claim | |
Loss Contingencies [Line Items] | ||||||
Lessee expiration period | 8 years | |||||
Rent and operating leases expense | $ | $ 1,764 | $ 1,317 | $ 1,130 | |||
Pending Litigation | ||||||
Loss Contingencies [Line Items] | ||||||
Number of patent challenged grounds | 4 | |||||
Pending Litigation | Bone Bank Action | ||||||
Loss Contingencies [Line Items] | ||||||
Number of patent challenged grounds | 5 | 7 | ||||
Opinion allowing a review of patent | 2 | |||||
Pending Litigation | Liventa Action, 701 Patent | ||||||
Loss Contingencies [Line Items] | ||||||
Number of patent challenged grounds | 6 | |||||
Pending Litigation | Liventa Action, 437 Patent | ||||||
Loss Contingencies [Line Items] | ||||||
Number of patent challenged grounds | 7 | |||||
Opinion allowing a review of patent | 1 | |||||
Product Concentration Risk | Sales Revenue, Net | ||||||
Loss Contingencies [Line Items] | ||||||
Percentage of revenue | 10.00% | |||||
Letters of Credit | ||||||
Loss Contingencies [Line Items] | ||||||
Standby letters of credit | $ | $ 103 |
Commitments and Contingencies74
Commitments and Contingencies - Estimated Annual Lease, Royalty, and Employment Agreement Expenses (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 2,827 |
2,018 | 3,079 |
2,019 | 2,023 |
2,020 | 490 |
2,021 | 141 |
Thereafter | 374 |
Total Contractual commitments | $ 8,934 |
Quarterly Financial Data (Una75
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
NET SALES | $ 69,877 | $ 64,429 | $ 57,342 | $ 53,367 | $ 51,835 | $ 49,015 | $ 45,679 | $ 40,767 | $ 245,015 | $ 187,296 | $ 118,223 |
GROSS MARGIN | 60,807 | 56,432 | 49,948 | 45,421 | 46,849 | 44,036 | 40,590 | 35,619 | 212,608 | 167,094 | 105,558 |
NET INCOME | $ 5,481 | $ 3,321 | $ 1,975 | $ 1,197 | $ 13,378 | $ 6,551 | $ 5,430 | $ 4,087 | $ 11,974 | $ 29,446 | $ 6,220 |
Net income per common share - basic (in dollars per share) | $ 0.05 | $ 0.03 | $ 0.02 | $ 0.01 | $ 0.13 | $ 0.06 | $ 0.05 | $ 0.04 | $ 0.11 | $ 0.28 | $ 0.06 |
Net income per common share - diluted (in dollars per share) | $ 0.05 | $ 0.03 | $ 0.02 | $ 0.01 | $ 0.11 | $ 0.06 | $ 0.05 | $ 0.04 | $ 0.11 | $ 0.26 | $ 0.05 |
Product Revenue Data (Details)
Product Revenue Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Product Information [Line Items] | |||||||||||
Net sales | $ 69,877 | $ 64,429 | $ 57,342 | $ 53,367 | $ 51,835 | $ 49,015 | $ 45,679 | $ 40,767 | $ 245,015 | $ 187,296 | $ 118,223 |
Wound Care | |||||||||||
Product Information [Line Items] | |||||||||||
Net sales | 183,984 | 141,096 | 93,623 | ||||||||
Surgical, Sports Medicine & Orthopedics (SSO) | |||||||||||
Product Information [Line Items] | |||||||||||
Net sales | $ 61,031 | $ 46,200 | $ 24,600 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | ||||
Feb. 28, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 12, 2014 | |
Subsequent Event [Line Items] | |||||
Authorized share amount for repurchase | $ 66,000,000 | $ 60,000,000 | $ 20,000,000 | $ 10,000,000 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Increase in authorized share amount for repurchase | $ 20,000,000 | ||||
Authorized share amount for repurchase | $ 86,000,000 |
Schedule II - Valuation and Q78
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 3,270 | $ 1,750 | $ 407 |
Additions charged to Expense or Revenue | 2,127 | 1,698 | 1,357 |
Deductions and write-offs | (555) | (178) | (14) |
Balance at End of Year | 4,842 | 3,270 | 1,750 |
Allowance for product returns | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 1,262 | 841 | 215 |
Additions charged to Expense or Revenue | 8,319 | 3,257 | 2,215 |
Deductions and write-offs | (4,687) | (2,836) | (1,589) |
Balance at End of Year | 4,894 | 1,262 | 841 |
Allowance for obsolescence | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 397 | 527 | 322 |
Additions charged to Expense or Revenue | 2,280 | 540 | 405 |
Deductions and write-offs | (1,849) | (670) | (200) |
Balance at End of Year | $ 828 | $ 397 | $ 527 |