Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 25, 2015 | Jun. 30, 2014 |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | htwr | ||
Entity Registrant Name | HeartWare International, Inc. | ||
Entity Central Index Key | 1389072 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 17,238,508 | ||
Entity Public Float | $1.07 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $102,946 | $162,880 |
Short-term investments | 75,535 | 37,596 |
Accounts receivable, net | 38,041 | 28,052 |
Inventories | 54,046 | 40,876 |
Prepaid expenses and other current assets | 5,975 | 11,205 |
Total current assets | 276,543 | 280,609 |
Property, plant and equipment, net | 19,036 | 18,562 |
Goodwill | 61,390 | 61,596 |
In-process research and development | 32,850 | 35,500 |
Other intangible assets, net | 17,807 | 15,975 |
Deferred financing costs, net | 1,552 | 1,964 |
Long-term investments and other assets | 14,635 | 15,621 |
Total assets | 423,813 | 429,827 |
Current liabilities: | ||
Accounts payable | 13,322 | 17,914 |
Other accrued liabilities | 36,589 | 35,276 |
Total current liabilities | 49,911 | 53,190 |
Convertible senior notes, net | 114,803 | 107,125 |
Contingent liabilities (See Notes 4 and 6) | 43,740 | 67,000 |
Other long-term liabilities | 6,825 | 3,905 |
Commitments and contingencies-See Note 17 | ||
Stockholders' equity: | ||
Preferred stock-$.001 par value; 5,000 shares authorized; no shares issued and outstanding at December 31, 2014 and 2013, respectively | ||
Common stock-$.001 par value; 25,000 shares authorized; 17,156 and 16,878 shares issued and outstanding at December 31, 2014 and 2013, respectively | 17 | 17 |
Additional paid-in capital | 565,609 | 535,817 |
Accumulated deficit | -348,719 | -329,353 |
Accumulated other comprehensive loss: | ||
Cumulative translation adjustments | -8,112 | -7,859 |
Unrealized loss on investments | -261 | -15 |
Total accumulated other comprehensive loss | -8,373 | -7,874 |
Total stockholders' equity | 208,534 | 198,607 |
Total liabilities and stockholders' equity | $423,813 | $429,827 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 17,156,000 | 16,878,000 |
Common stock, shares outstanding | 17,155,833 | 16,878,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Revenue, net | $278,420 | $207,929 | $110,922 |
Cost of revenue | 92,195 | 76,468 | 51,023 |
Gross profit | 186,225 | 131,461 | 59,899 |
Operating expenses: | |||
Selling, general and administrative | 87,177 | 76,524 | 53,945 |
Research and development | 122,432 | 102,483 | 83,548 |
Change in fair value of contingent consideration | -23,260 | ||
Total operating expenses | 186,349 | 179,007 | 137,493 |
Loss from operations | -124 | -47,546 | -77,594 |
Other income (expense): | |||
Foreign exchange (loss) gain | -4,952 | -70 | 1,224 |
Interest expense | -13,133 | -12,224 | -11,404 |
Investment income, net | 666 | 370 | 243 |
Other, net | -1,263 | 626 | -187 |
Loss before taxes | -18,806 | -58,844 | -87,718 |
Income tax expense | 560 | 467 | |
Net loss | ($19,366) | ($59,311) | ($87,718) |
Net loss per common share-basic and diluted | ($1.14) | ($3.69) | ($6.15) |
Weighted average shares outstanding-basic and diluted | 16,992 | 16,066 | 14,252 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net loss | ($19,366) | ($59,311) | ($87,718) |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments | -253 | 180 | -408 |
Unrealized (loss) gain on investments | -246 | 9 | -1 |
Comprehensive loss | ($19,865) | ($59,122) | ($88,127) |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholders' Equity (USD $) | Total | World Heart Corporation [Member] | Common Shares [Member] | Common Shares [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] |
In Thousands | USD ($) | USD ($) | USD ($) | World Heart Corporation [Member] | USD ($) | World Heart Corporation [Member] | USD ($) | USD ($) |
USD ($) | ||||||||
Beginning balance at Dec. 31, 2011 | $126,784 | $14 | $316,748 | ($182,324) | ($7,654) | |||
Beginning balance, Shares at Dec. 31, 2011 | 14,114 | |||||||
Issuance of common stock in connection with acquisition | 6,942 | 6,942 | ||||||
Issuance of common stock in connection with acquisition, Shares | 83 | |||||||
Issuance of common stock in connection with license agreement and acquisition of intellectual property | 1,098 | 1,098 | ||||||
Issuance of common stock in connection with license agreement and acquisition of intellectual property, Shares | 13 | |||||||
Issuance of common stock pursuant to share-based awards | 2,709 | 1 | 2,708 | |||||
Issuance of common stock pursuant to share-based awards, Shares | 372 | |||||||
Share-based compensation | 18,805 | 18,805 | ||||||
Net loss | -87,718 | -87,718 | ||||||
Other comprehensive income | -409 | -409 | ||||||
Ending balance at Dec. 31, 2012 | 68,211 | 15 | 346,301 | -270,042 | -8,063 | |||
Ending balance, Shares at Dec. 31, 2012 | 14,582 | |||||||
Issuance of common stock pursuant to public offering, net of offering costs | 140,979 | 2 | 140,977 | |||||
Issuance of common stock pursuant to public offering, net of offering costs, shares | 1,725 | |||||||
Issuance of common stock in connection with acquisition of CircuLite | 21,794 | 21,794 | ||||||
Issuance of common stock in connection with acquisition of CircuLite, Shares | 226 | |||||||
Issuance of common stock pursuant to share-based awards | 4,871 | 4,871 | ||||||
Issuance of common stock pursuant to share-based awards, Shares | 345 | |||||||
Share-based compensation | 21,874 | 21,874 | ||||||
Net loss | -59,311 | -59,311 | ||||||
Other comprehensive income | 189 | 189 | ||||||
Ending balance at Dec. 31, 2013 | 198,607 | 17 | 535,817 | -329,353 | -7,874 | |||
Ending balance, Shares at Dec. 31, 2013 | 16,878 | |||||||
Issuance of common stock in connection with an intellectual property agreement | 5,000 | 5,000 | ||||||
Issuance of common stock in connection with an intellectual property agreement, Shares | 50 | |||||||
Issuance of common stock in connection with acquisition of CircuLite | 329 | 329 | ||||||
Issuance of common stock in connection with acquisition of CircuLite, Shares | 3 | |||||||
Issuance of common stock pursuant to share-based awards | 921 | 921 | ||||||
Issuance of common stock pursuant to share-based awards, Shares | 225 | |||||||
Share-based compensation | 23,542 | 23,542 | ||||||
Net loss | -19,366 | -19,366 | ||||||
Other comprehensive income | -499 | -499 | ||||||
Ending balance at Dec. 31, 2014 | $208,534 | $17 | $565,609 | ($348,719) | ($8,373) | |||
Ending balance, Shares at Dec. 31, 2014 | 17,156 |
Consolidated_Statement_of_Stoc1
Consolidated Statement of Stockholders' Equity (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Common Shares, par value | $0.00 | $0.00 | |
Common Shares [Member] | |||
Common Shares, par value | $0.00 | $0.00 | $0.00 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | ($19,366) | ($59,311) | ($87,718) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation of property, plant and equipment | 6,674 | 6,451 | 4,826 |
Amortization of intangible assets | 1,724 | 598 | 204 |
Impairment of fixed assets | 607 | 0 | 0 |
Impairment of goodwill and intangible assets | 2,650 | 3,726 | |
Share-based compensation expense | 23,542 | 21,874 | 18,805 |
Amortization of premium on investments | 810 | 635 | 555 |
Amortization of discount on convertible senior notes | 7,678 | 6,809 | 6,039 |
Amortization of deferred financing costs | 412 | 365 | 324 |
Change in fair value of contingent consideration | -23,260 | ||
Other | 1,498 | 467 | 1,028 |
Change in operating assets and liabilities: | |||
Accounts receivable | -11,786 | -2,372 | -10,390 |
Inventories | -16,284 | -4,331 | -7,909 |
Prepaid expenses and other current assets | 3,985 | -4,850 | -867 |
Accounts payable | -4,300 | 3,564 | 6,991 |
Other accrued liabilities | 7,324 | 3,975 | 7,589 |
Other long-term liabilities | 918 | 177 | 661 |
Net cash used in operating activities | -17,174 | -22,223 | -59,862 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of investments | -58,864 | -28,905 | -28,230 |
Maturities of investments | 19,870 | 6,346 | 103,548 |
Investment in unconsolidated affiliate | -10,000 | ||
Additions to property, plant and equipment, net | -6,721 | -2,692 | -4,406 |
Additions to patents | -1,555 | -814 | -1,024 |
Cash received from (paid for) security deposits | 714 | -271 | -750 |
Net cash (used in) provided by investing activities | -46,556 | -46,321 | 72,825 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from issuance of common stock | 149,126 | ||
Payment of common stock issuance costs | -8,148 | ||
Repayment of promissory note | -200 | -200 | -200 |
Proceeds from exercise of stock options | 921 | 4,871 | 2,709 |
Net cash provided by financing activities | 721 | 145,649 | 2,509 |
Effect of exchange rate changes on cash and cash equivalents | 3,075 | -146 | -808 |
CHANGE IN CASH AND CASH EQUIVALENTS | -59,934 | 76,959 | 14,664 |
CASH AND CASH EQUIVALENTS-BEGINNING OF PERIOD | 162,880 | 85,921 | 71,257 |
CASH AND CASH EQUIVALENTS-END OF PERIOD | 102,946 | 162,880 | 85,921 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 5,040 | 5,049 | 5,040 |
Cash paid for income taxes | 96 | ||
Supplemental disclosure of non-cash investing and financing activities: | |||
Contingent consideration related to acquisition of CircuLite | 43,740 | 67,000 | |
Shares issued to acquire intellectual property | 5,000 | 1,098 | |
Non-cash increase to patents and intellectual property | 2,000 | 5,000 | |
Transfers from inventory to property, plant and equipment | 1,153 | 2,072 | 1,766 |
World Heart Corporation [Member] | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Acquisition of CircuLite, net of cash acquired | 3,687 | ||
Supplemental disclosure of non-cash investing and financing activities: | |||
Shares issued to acquire CircuLite | 6,942 | ||
CircuLite [Member] | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Acquisition of CircuLite, net of cash acquired | -9,985 | ||
Supplemental disclosure of non-cash investing and financing activities: | |||
Shares issued to acquire CircuLite | 329 | 21,794 | |
Contingent consideration related to acquisition of CircuLite | $67,000 |
Description_of_Business
Description of Business | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Description of Business | Note 1. Description of Business |
HeartWare International, Inc., referred to in these notes collectively with its subsidiaries as “we,” “our,” “us,” “HeartWare,” “the HeartWare Group” or the “Company”, is a medical device company that develops, manufactures and markets miniaturized implantable heart pumps, or ventricular assist devices, to treat patients suffering from advanced heart failure. | |
The HeartWare Ventricular Assist System (the “HVAD System”), which includes a ventricular assist device (“VAD”) or blood pump, patient accessories and surgical tools, is designed to provide circulatory support for patients in the advanced stage of heart failure. The core of the HVAD System is a proprietary continuous flow blood pump, the HVAD pump, which is a full-output device capable of pumping up to 10 liters of blood per minute. The HVAD System is designed to be implanted adjacent to the heart, avoiding abdominal surgery, which is generally required to implant similar devices. | |
In November 2012, we received approval from the United States Food and Drug Administration (“FDA”) for the HVAD System as a bridge to heart transplantation in patients with end-stage heart failure. The HVAD System has been available in the European Union since receiving CE marking in 2009. In May 2012, we received an expanded European label for long-term use of the HVAD System in all patients at risk of death from refractory, end-stage heart failure. As of December 31, 2014, there have been over 7,000 implants of the HVAD System in patients at over 270 health care sites in 41 countries | |
On August 27, 2013, the FDA approved an Investigational Device Exemption (“IDE”) Supplement allowing HeartWare to commence enrollment in an additional patient cohort for the ENDURANCE clinical trial. In this supplemental cohort, HeartWare intends to enroll up to 310 patients receiving the HVAD System, as well as up to an additional 155 control patients using a randomization scheme consistent with the ENDURANCE protocol. Patients will be followed for 12 months after implant. In 2016, HeartWare intends to incorporate the data from both this supplemental cohort and ENDURANCE into an anticipated PMA Application seeking approval of the HVAD System for the destination therapy indication. | |
We continue to expand our pipeline through research and development into next generation products and peripherals and through ongoing and new clinical trials and to expand our presence in commercial markets outside of the United States. Among these activities, we are developing our next generation miniaturized device, the MVAD System. The MVAD System is based on the same technology platform as the HVAD System but adopts an axial flow, rather than a centrifugal flow, configuration and is being developed in multiple designs. The MVAD pump is less than one-half the size of the HVAD pump and can provide partial or full support. The MVAD platform is designed to allow for a variety of configurations and surgical placements with the goal towards further reduction of surgical invasiveness while producing superior clinical results. In December 2014, we initiated submissions to commence a CE Mark study at 9 international sites and are preparing regulatory submissions to commence an IDE study in the United States. | |
We are headquartered in Framingham, Massachusetts. We have operating facilities in Miami Lakes, Florida, Hannover, Germany, and Arden Hills, Minnesota. | |
HeartWare International, Inc. shares trade on the NASDAQ Stock Market under the symbol of “HTWR”. |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2014 | |
Text Block [Abstract] | |
Liquidity | Note 2. Liquidity |
We have funded our operations primarily through product revenue, the issuance of shares of our common stock and the issuance of convertible notes. At December 31, 2014, we had approximately $179.7 million of cash, cash equivalents and investments. Our cash, cash equivalents and investments are expected to be used primarily to fund our ongoing operations including expanding our sales and marketing capabilities on a global basis, research and development (including clinical trials) of new and existing products, components and accessories, regulatory and other compliance functions as well as for general working capital. We believe our cash, cash equivalents and investment balances are sufficient to support our planned operations for at least the next twelve months. | |
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of the Company as a going concern. We have incurred substantial losses from operations since our inception, and such losses have continued through December 31, 2014. At December 31, 2014, we had an accumulated deficit of approximately $348.7 million. |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Significant Accounting Policies | Note 3. Significant Accounting Policies | ||||||||||||
Principles of Consolidation | |||||||||||||
The accompanying consolidated financial statements include the accounts of the HeartWare Group. All inter-company balances and transactions have been eliminated in consolidation. We hold certain investments in small privately-held development-stage entities which are included in other assets on our consolidated balance sheets. In accordance with FASB ASC 810, we analyzed the investments to determine whether the investments are variable interests or interests that give us a controlling financial interest in a variable interest entity (“VIE”). As of December 31, 2014, we determined there were no VIEs required to be consolidated, because we are not the primary beneficiary, as we do not have the power to direct the most meaningful activities of the VIE. Investments where we do not exercise operating and financial control are accounted for under the equity method or cost method depending on our ownership interest. | |||||||||||||
Accounting Estimates | |||||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
Cash and cash equivalents, which primarily consist of money market funds, are recorded in the consolidated balance sheets at cost, which approximates fair value. All highly liquid investments with an original maturity of three months or less at the date of purchase are considered to be cash equivalents. | |||||||||||||
Investments | |||||||||||||
Our investments classified as available-for-sale are stated at fair value with unrealized gains and losses reported in accumulated other comprehensive loss within stockholders’ equity. We classify our available-for-sale investments as short-term if their remaining time to maturity at purchase is beyond three months, but less than twenty-four months. Investments with maturities at purchase beyond one year, but less than twenty-four months, may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Interest on investments classified as available-for-sale is included in investment income, net. Premiums paid on our short-term investments are amortized over the remaining term of the investment and such amortization is included in investment income, net. | |||||||||||||
Receivables | |||||||||||||
Accounts receivable consists of amounts due from the sale of our HVAD System to our customers, which include hospitals, health research institutions and medical device distributors. We grant credit to customers in the normal course of business, but do not require collateral or any other security to support credit sales. Our receivables are geographically dispersed, with a significant portion from customers located in Europe and other foreign countries. At December 31, 2014, no customer had an accounts receivable balance greater than 10% of our total accounts receivable. At December 31, 2013, one customer had an accounts receivable balance greater than 10% of total accounts receivable representing approximately 15% of our total accounts receivable. | |||||||||||||
We maintain allowances for doubtful accounts for estimated losses that may result from an inability to collect payments owed to us for product sales. We regularly review the allowance by considering factors such as historical experience, the age of the accounts receivable balances and local economic conditions that may affect a customer’s ability to pay. Account balances are charged off against the allowance after appropriate collection efforts are exhausted and we feel it is probable that the receivable will not be recovered. | |||||||||||||
The following table summarizes the change in our allowance for doubtful accounts for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance | $ | 495 | $ | 750 | $ | 500 | |||||||
Charges (reversals) to expense | 181 | (255 | ) | 250 | |||||||||
Charge-offs | (5 | ) | — | — | |||||||||
Ending balance | $ | 671 | $ | 495 | $ | 750 | |||||||
As of December 31, 2014 and 2013, we did not have an allowance for returns. | |||||||||||||
Inventories | |||||||||||||
Inventories are stated at the lower of cost or market. Cost is determined using a first-in, first-out, or FIFO, method. Work-in-process and finished goods manufactured or assembled by us include direct and indirect labor and manufacturing overhead. Finished goods include product which is ready-for-use and which is held by us or by our customers on a consignment basis. | |||||||||||||
We review our inventory for excess or obsolete inventory and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. Obsolescence may occur due to product expiring or product improvements rendering previous versions obsolete. | |||||||||||||
Property, Plant and Equipment | |||||||||||||
We record property, plant and equipment and leasehold improvements at historical cost. Expenditures for maintenance and repairs are recorded to expense; additions and improvements are capitalized. We generally provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the remaining term of the lease. | |||||||||||||
Property, plant and equipment, net consists of the following: | |||||||||||||
Estimated | December 31, | ||||||||||||
Useful Lives | 2014 | 2013 | |||||||||||
(in thousands) | |||||||||||||
Property, plant and equipment | |||||||||||||
Machinery and equipment | 1.5 to 7 years | $ | 21,279 | $ | 19,790 | ||||||||
Leasehold improvements | 3 to 10 years | 9,070 | 7,131 | ||||||||||
Office equipment, furniture and fixtures | 5 to 7 years | 2,206 | 1,294 | ||||||||||
Purchased software | 1 to 7 years | 6,474 | 5,057 | ||||||||||
39,029 | 33,272 | ||||||||||||
Less: accumulated depreciation | (19,993 | ) | (14,710 | ) | |||||||||
$ | 19,036 | $ | 18,562 | ||||||||||
Depreciation expense was $6.7 million, $6.5 million, and $4.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
During the year ended December 31, 2014, we ceased activities at the former headquarters of CircuLite in Teaneck, New Jersey and vacated the facility. We recorded an impairment charge of $0.6 million related to certain office equipment and software at the facility upon their discontinued use. This amount is included in selling, general and administrative expenses on our condensed consolidated statements of operations. | |||||||||||||
During the year ended December 31, 2013, we ceased certain development activities performed in our Australian facility, and relocated those activities to the United States. We sold a portion of the fixed assets at our Australian facility while others were written-off upon their discontinued use. The aggregate loss on disposal of fixed assets sold or written-off in 2013 in connection with this action was $0.5 million. This amount is included in research and development expenses on our consolidated statements of operations. | |||||||||||||
We enter into agreements with medical centers participating in our U.S. clinical trials under which we loan certain equipment, including patient monitors, to the center to be used throughout the trials. The equipment loaned to the centers is classified as a long-lived asset and included as a component of property, plant and equipment (machinery and equipment) on our consolidated balance sheets. Depreciation expense on equipment subject to these agreements is classified in cost of revenue and is computed using the straight-line method based on the estimated useful life of three years. | |||||||||||||
We also enter into short-term cancellable rental agreements with certain commercial customers for components of the HVAD System, including patient monitors and controllers. Under the terms of such agreements, we provide the equipment to the customers, but we retain title to the equipment. Equipment subject to rental agreements is classified as a long-lived asset and included as a component of property, plant and equipment (machinery and equipment). Depreciation expense on equipment subject to these agreements is classified in cost of revenue and is computed using the straight-line method based on the estimated useful life of fifteen months. | |||||||||||||
The net carrying value of equipment subject to the agreements discussed above was approximately $0.8 million and $1.3 million as of December 31, 2014 and 2013, respectively. | |||||||||||||
Deferred Financing Costs | |||||||||||||
Costs incurred in connection with the issuance of our convertible senior notes were allocated between the liability component and the equity component as further discussed in Note 10. The issuance costs allocated to convertible senior notes was capitalized within deferred financing costs, net on our consolidated balance sheets. These costs are being amortized using the effective interest method through December 15, 2017, the maturity date of the notes, and such amortization expense is reflected in interest expense on our consolidated statements of operations. The amount of amortization was approximately $0.4 million for each of the years ended December 31, 2014 and 2013. The amount of accumulated amortization at December 31, 2014 and 2013 was approximately $1.4 million and $1.0 million, respectively. | |||||||||||||
Revenue Recognition | |||||||||||||
We recognize revenue from product sales in accordance with FASB ASC 605—Revenue Recognition. Revenue from product sales is recognized when persuasive evidence of an arrangement exists, substantially all the risks and rewards of ownership have transferred to our customers, the selling price is fixed and collection is reasonably assured and there are no further obligations to customers. Sales from products are not subject to rights of return and, historically, actual sales returns have not been significant. We sell products through our direct sales force and through distributors. Sales through distributors are recognized as revenue upon sale to the distributor as these sales are considered to be final and no right of return or price protection exists. Sales to customers, when not made on consignment, are recognized upon shipment. A significant portion of our sales are made on a consignment basis. Revenue from products sold on a consignment basis is recognized on the date the consigned product is implanted or otherwise consumed. In limited circumstances, we rent peripheral equipment to patients. We recognize revenue from this arrangement when a contract is entered into with the patient’s insurer over the term the equipment is rented. | |||||||||||||
Shipping fees billed to customers are included in revenue and the related shipping costs are included in cost of revenue. Value added taxes and other similar types of taxes collected from customers in connection with the sale of our products are recorded on a net basis and are not included in revenue. | |||||||||||||
Product Warranty | |||||||||||||
Certain patient accessories sold with the HVAD System are covered by a limited warranty ranging from one to two years. Estimated contractual warranty obligations are recorded as an expense when the related revenue is recognized and are included in cost of revenue on our consolidated statements of operations. Factors that affect the estimated warranty liability include the number of units sold, historical and anticipated rates of warranty claims, cost per claim, and vendor supported warranty programs. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary. The amount of the liability recorded is equal to the estimated costs to repair or otherwise satisfy claims made by customers. Accrued warranty is included as a component of other accrued liabilities on our consolidated balance sheets. | |||||||||||||
Share-Based Compensation | |||||||||||||
We recognize share-based compensation expense in connection with our share-based awards based on the estimated fair value of the awards on the date of grant, net of estimated forfeitures, using an accelerated accrual method over the vesting period. Therefore, we only recognize compensation cost for those awards expected to vest over the service period of the award. We estimate the forfeiture rate based on our historical experience of forfeitures. If our actual forfeiture rate is materially different from our estimate, share-based compensation expense could be significantly different from what we have recorded in the current period. | |||||||||||||
Calculating share-based compensation expense requires the input of highly subjective judgment and assumptions, including forfeiture rates, estimates of expected life of the share-based award, stock price volatility and risk-free interest rates. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future. | |||||||||||||
We value restricted stock units (“RSUs”) at their intrinsic value on the date of grant. We estimate the fair value of our stock options using a Black-Scholes option pricing model. When appropriate, we estimate the expected life of a stock option by averaging the contractual term of the stock option (typically 10 years) with the associated vesting term (typically 4 years). We estimate the volatility of our shares on the date of grant considering several factors, including the historical volatility of our publicly-traded shares. We estimate the risk-free interest rate based on rates in effect for United States government bonds with terms similar to the expected lives of the stock options, at the time of grant. | |||||||||||||
We have issued share-based awards with performance-based vesting criteria. Achievement of the milestones must be “probable” before we begin recording share-based compensation expense. At each reporting date, we review the likelihood that these awards will vest and if the vesting is deemed probable, we begin to recognize compensation expense at that time. In the period that achievement of the performance based criteria is deemed probable, U.S. GAAP requires the immediate recognition of all previously unrecognized compensation since the original grant date. As a result, compensation expense recorded in the period that achievement is deemed probable could include a substantial amount of previously unrecorded compensation expense related to the prior periods. If ultimately performance goals are not met, for any share-based awards where vesting was previously deemed probable, previously recognized compensation cost will be reversed. | |||||||||||||
Valuation of Long-Lived Assets and Purchased Intangible Assets | |||||||||||||
We evaluate the carrying value of our long-lived assets, including purchased intangible assets, whenever events, changes in business circumstances or our planned use of long-lived assets indicate that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. If these facts and circumstances exist, we assess for recovery by comparing the carrying values of long-lived assets with their future undiscounted net cash flows. If the comparison indicates that impairment exists, impairment losses are recorded for the excess of the carrying value over the fair value of the long-lived assets based on discounted cash flows. Significant management judgment is required in the forecast of future operating results that are used in the preparation of expected undiscounted cash flows. In 2014, we ceased activities at CircuLite’s former headquarters in Teaneck, New Jersey and vacated the facility. We recorded an impairment charge of $0.6 million related to certain office equipment and software at the facility upon their discontinued use. This amount is included in selling, general and administrative expenses on our consolidated statements of operations. No impairments of similar long-lived assets were identified during the years ended December 31, 2013 or 2012. | |||||||||||||
We also evaluate the carrying value of intangible assets (not subject to amortization) related to in-process research and development (“IPR&D”) assets which are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. Accordingly, amortization of the IPR&D assets does not occur until the product reaches commercialization. During the period the assets are considered indefinite-lived, they are tested for impairment on an annual basis, as well as between annual tests if we become aware of any events occurring or changes in circumstances that indicate that the fair values of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs when regulatory approval to market the product is obtained, the associated IPR&D assets are deemed definite-lived and are then amortized based on their estimated useful lives at that point in time. If the related project is terminated or abandoned, we may have a full or partial impairment related to the IPR&D assets, calculated as the excess of their carrying value over fair value. | |||||||||||||
During the fourth quarter of 2014 we performed an impairment review of our in-process research and development and recorded an impairment charge of $2.6 million related to in-process research and development acquired in 2013. In the fourth quarter of 2013, we recorded an impairment charge of $2.5 million related to in-process research and development acquired in 2012. | |||||||||||||
Goodwill | |||||||||||||
We test goodwill for impairment on an annual basis in the fourth quarter of each fiscal year or more frequently if we believe indicators of impairment exist. The performance of the test involves a two-step process. The first step requires comparing the fair value of the reporting unit to its net book value, including goodwill. A potential impairment exists if the fair value of the reporting unit is lower than its net book value. The second step of the process is only performed if a potential impairment exists, and it involves comparing the aggregate fair value of the reporting unit’s net assets other than goodwill to the fair value of the reporting unit as a whole. Goodwill is considered impaired, and an impairment charge is recorded, if the excess of the fair value of the reporting unit over the fair value of the net assets is less than the carrying value of goodwill. | |||||||||||||
Based on the results of our annual impairment review in the fourth quarter of 2014, we concluded that goodwill was not impaired in 2014. In 2013, we recorded an impairment charge of $1.2 million to write-off goodwill that was recorded in 2012 in connection with our acquisition of World Heart. | |||||||||||||
Contingent Consideration | |||||||||||||
On December 1, 2013, we acquired CircuLite, Inc. In addition to initial consideration paid at closing, the former CircuLite securityholders may be entitled to receive additional shares of HeartWare common stock (or cash, in certain cases, at our discretion) upon the achievement of specified regulatory and commercial milestones, not to exceed $320 million in the aggregate over a ten-year period. The estimated fair value of the contingent payments is recorded as a liability and is remeasured at each reporting period. The estimated fair value is calculated using a discounted cash flow model utilizing significant unobservable inputs including future revenue projections, the probability of achieving each of the potential milestones and an estimated discount rate commensurate with the risks of the expected cash flows attributable to the various milestones. Material changes in any of these inputs could result in a significantly higher or lower fair value measurement and commensurate changes to this liability. Changes in the fair value of the contingent payments are recorded on a separate line item on our consolidated statements of operations. | |||||||||||||
Income Taxes | |||||||||||||
We account for income taxes in accordance with FASB ASC 740—Income Taxes. Under this method, deferred tax assets and liabilities are provided for differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the tax bases of assets and liabilities that will result in future taxable or deductible amounts. The deferred tax assets and liabilities are measured using the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Income tax expense is computed as the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred taxes will not be realized. | |||||||||||||
FASB ASC 740 requires that we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. | |||||||||||||
We recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes line on our consolidated statements of operations. | |||||||||||||
Translation of Foreign Currency | |||||||||||||
Assets and liabilities of our non-U.S. entities are translated at the period-end exchange rate and revenue and expenses are translated at the average exchange rates in effect during the respective periods. Equity transactions are translated at the spot rates on the dates of the original transactions. The net effect of these translation adjustments is shown in the accompanying consolidated financial statements as a component of stockholders’ equity, titled accumulated other comprehensive loss. Items in accumulated other comprehensive loss are not tax affected as we have incurred a net loss in each period since inception. | |||||||||||||
While most of the transactions of our domestic and international operations are denominated in the respective local currency, some transactions are denominated in other currencies. Transactions denominated in other currencies are accounted for in the respective local currency at the time of the transaction. Upon settlement of this type of transaction, any foreign currency gains or losses are included in our consolidated statements of operations. | |||||||||||||
Research and Development | |||||||||||||
Research and development costs, including new product development programs, regulatory compliance and clinical research, are expensed as incurred. | |||||||||||||
Marketing and Advertising Costs | |||||||||||||
Marketing, advertising and promotional costs are expensed when incurred. Advertising expenses were immaterial to our results of operations for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||
Leases | |||||||||||||
We lease all of our administrative and manufacturing facilities. We recognize rent expense on a straight-line basis over the terms of our leases. Any scheduled rent increases, rent holidays and other related incentives are recognized on a straight-line basis over the terms of the leases. The difference between the cash rental payments and the straight-line recognition of rent expense over the terms of the leases results in a deferred rent asset or liability. As of December 31, 2014, the long-term portion of our deferred rent liability of approximately $3.5 million is included in other long-term liabilities on our consolidated balance sheets. | |||||||||||||
Fair Value Measurements | |||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities approximate their fair value based on the short-term maturity of these instruments. See Note 6 (Fair Value Measurements) and Note 10 (Debt) for more information. | |||||||||||||
Vendor Concentration | |||||||||||||
For the years ended December 31, 2014, 2013 and 2012, we purchased approximately 72%, 70%, and 67%, respectively, of our inventory components and supplies from three vendors. In addition, one of the three vendors supplies consulting services and material used in research and development activities. As of December 31, 2014, 2013 and 2012, the amounts due to these vendors totaled approximately $5.4 million, $5.8 million and $5.4 million, respectively. | |||||||||||||
Concentration of Credit Risk and other Risks and Uncertainties | |||||||||||||
Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash and cash equivalents, investments and trade accounts receivable. Cash and cash equivalents are primarily on deposit with financial institutions in the United States and these deposits generally exceed the amount of insurance provided by the Federal Deposit Insurance Corporation (the “FDIC”). The Company has not experienced any historical losses on its deposits of cash and cash equivalents. Our investments consist of investment grade rated corporate and government agency debt and time deposits. | |||||||||||||
Concentration of credit risk with respect to our trade accounts receivable from our customers is primarily limited to hospitals, health research institutions and medical device distributors. Credit is extended to our customers based on an evaluation of a customer’s financial condition, and collateral is not required. | |||||||||||||
We are subject to certain risks and uncertainties including, but not limited to, our ability to achieve profitability, to generate cash flow sufficient to satisfy our indebtedness, to run clinical trials in order to receive and maintain FDA and foreign regulatory approvals for our products, our ability to adequately and timely address issues raised by FDA inspections, our ability to identify and correct quality issues in a timely manner and at a reasonable cost, the ability to achieve widespread acceptance of our products, our ability to manufacture our products in a sufficient volume and at a reasonable cost, the ability to protect our proprietary technologies and develop new products, the risks associated with operating in foreign countries, and general competitive and economic conditions. Changes in any of the preceding areas could have a material adverse effect on our business, results of operations or financial position. | |||||||||||||
New Accounting Standards | |||||||||||||
In September 2012, the FASB issued ASU No. 2012-02, Intangibles—Goodwill and Other (Topic 350), Testing Indefinite-Lived Intangible Assets for Impairment, which provides an entity the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. The qualitative assessment is optional, allowing companies to go directly to the quantitative assessment. ASU No. 2012-02 is effective for our annual and interim impairment tests performed subsequent to January 1, 2013. The adoption of ASU No. 2012-02 did not affect our consolidated financial position, results of operations or cash flows. | |||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). U.S. GAAP does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. This ASU applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date, although retrospective application is permitted. The adoption of ASU No. 2013-11 effective January 1, 2014 did not have a material effect on our consolidated financial position, results of operations or cash flows. | |||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The updated standard is a new comprehensive revenue recognition model that requires revenue to be recognized in a manner that depicts the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. The updated standard becomes effective for us in the first quarter of our fiscal year ending December 31, 2017. We have not yet selected a transition method, and we are currently evaluating the effect that the ASU 2014-09 will have on our consolidated financial statements and related disclosures. | |||||||||||||
In January 2015, the FASB issued ASU No. 2015-01, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. The FASB issued this ASU as part of its initiative to reduce complexity in accounting standards. This ASU eliminates from U.S. GAAP the concept of extraordinary items. Subtopic 225-20 required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of ASU No. 2015-01 is not expected to have a material effect on our consolidated financial position, results of operations or cash flows. |
Acquisitions
Acquisitions | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Business Combinations [Abstract] | |||||||||
Acquisitions | Note 4. Acquisitions | ||||||||
CircuLite, Inc. | |||||||||
On December 1, 2013, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which we acquired CircuLite. At the effective time of the merger, all of the issued and outstanding shares of CircuLite capital stock (other than any shares of capital stock held by CircuLite or its subsidiary immediately before the effective time of the Merger and any dissenting shares of CircuLite capital stock) automatically converted into the right to receive an upfront payment and certain contingent merger consideration, in accordance with the terms of the Merger Agreement, as described in our Current Report on Form 8-K filed with the Securities and Exchange Commission on December 2, 2013. | |||||||||
In connection with the acquisition of CircuLite, we agreed to pay $30 million consisting of approximately $18 million in shares of HeartWare common stock, par value $0.001 per share (the “Common Stock”), equal to approximately 230,000 shares of Common Stock (the “Closing Payment”), and approximately $12 million in cash to repay outstanding CircuLite indebtedness and pay certain transaction liabilities and expenses. We funded the cash payment at closing with our existing cash balances. In accordance with the terms of the Merger Agreement, a volume weighted average of the per share prices of Common Stock during the 60 consecutive trading days ending on (and including) November 27, 2013 was used to determine the number of shares of Common Stock issued in connection with the closing. For accounting purposes, these shares were valued as of closing at approximately $22 million based upon the closing price of our common stock on the trading day prior to closing. In addition to the Closing Payment, the former CircuLite securityholders may be entitled to receive additional shares of Common Stock (or cash, in certain cases, at our discretion) upon the achievement of specified performance milestones (the “Contingent Payments”). The Contingent Payments were recorded as a liability at the estimated acquisition-date fair value of approximately $67.0 million. Fair value was estimated using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate commensurate with the risks of the expected cash flows attributable to the various milestones. | |||||||||
The acquisition-date fair value of the consideration transferred is as follows: | |||||||||
Total Acquisition | |||||||||
Date Fair Value | |||||||||
(in thousands) | |||||||||
Cash transferred, including acquisition costs and repayment of debt | $ | 11,780 | |||||||
Shares of common stock issued | 22,328 | ||||||||
Contingent consideration | 67,000 | ||||||||
Total consideration transferred | $ | 101,108 | |||||||
We paid $5.7 million in transaction related liabilities and expenses and repaid $6.1 million in debt on behalf of CircuLite, which are included as cash transferred in the table above. | |||||||||
The transaction was accounted for as a business combination under the acquisition method of accounting in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations. Accordingly, the tangible assets and identifiable intangible assets acquired and liabilities assumed were recorded at fair value as of the date of acquisition, with the remaining purchase price recorded as goodwill. | |||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition on December 1, 2013 (in thousands): | |||||||||
Cash and cash equivalents | $ | 1,795 | |||||||
Identified intangible assets | 5,500 | ||||||||
In-process research and development | 35,500 | ||||||||
Goodwill | 61,576 | ||||||||
Other assets acquired | 2,724 | ||||||||
Total assets acquired | 107,095 | ||||||||
Other liabilities assumed | (5,987 | ) | |||||||
Total net assets acquired | $ | 101,108 | |||||||
The identified intangible assets consist of customer relationships and trade names. These assets are being amortized on a straight-line basis over their estimated economic useful lives ranging from 15-20 years. | |||||||||
In-process research and development (“IPR&D”) is principally the estimated fair value of the SYNERGY System, with assigned values to be allocated among the various IPR&D assets acquired. IPR&D is recorded as an indefinite-lived asset until put into commercial use, upon which each applicable IPR&D asset becomes classified as developed technology and is amortized over the estimated period of economic benefit. We recognized a partial IPR&D impairment charge of $2.6 million in the fourth quarter of 2014 as a result of our decision in January 2015 to discontinue development of the pump component of the Synergy, and to replace the pump with a version of our MVAD pump. | |||||||||
Goodwill, which largely represents the potential economic benefits of a technology that could expand our product portfolio and the patient population we can address, is calculated as the difference between the acquisition-date fair value of the consideration transferred and the fair values of the assets acquired and liabilities assumed. The goodwill is not expected to be deductible for income tax purposes. Goodwill is recorded as an indefinite-lived asset and is not amortized. Goodwill will be reviewed for impairment on an annual basis in the fourth quarter of our subsequent fiscal years or sooner if indications of impairment arise. | |||||||||
We incurred legal, consulting and other costs related to the acquisition aggregating approximately $2.8 million, which were expensed as incurred and are included in selling, general and administrative expenses in our consolidated statements of operations. The results of operations for CircuLite are included in our consolidated statements of operations subsequent to the December 1, 2013 date of acquisition. CircuLite’s results of operations for the period from December 1, 2013 to December 31, 2013 represented approximately $3.2 million of our consolidated net loss for the year ended December 31, 2013 and included approximately $0.6 million for restructuring costs. | |||||||||
The following unaudited pro forma information presents the combined results of operations for the years ended December 31, 2013 and 2012 as if we had completed the CircuLite acquisition at the beginning of 2012. The pro forma financial information is provided for comparative purposes only and is not necessarily indicative of what actual results would have been had the acquisition occurred on the date indicated, nor do they give effect to synergies, cost savings, fair market value adjustments, immaterial amortization expense and other changes expected to result from the acquisition. Accordingly, the pro forma financial results do not purport to be indicative of consolidated results of operations as of the date hereof, for any period ended on the date hereof, or for any other future date or period. | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Revenue | $ | 209,792 | $ | 112,214 | |||||
Income before taxes | (77,973 | ) | (106,636 | ) | |||||
Net loss | (78,599 | ) | (105,307 | ) | |||||
World Heart Corporation | |||||||||
On August 2, 2012, we completed the acquisition of 100% of the outstanding shares of World Heart Corporation (“World Heart”) for consideration of approximately 83,000 shares of HeartWare International common stock, valued at approximately $6.9 million. The fair value of the shares issued was determined on the basis of the closing market price of HeartWare International common stock on the acquisition date. The acquisition expands our intellectual property and technology portfolio. In accordance with accounting standards for business combinations, we accounted for the acquisition of World Heart under the acquisition method. Under the acquisition method, the assets and liabilities assumed at the date of acquisition were recorded in the consolidated financial statements at their respective fair values at the date of acquisition. The excess of the purchase price over the fair value of the acquired net assets has been recorded as goodwill. World Heart’s results of operations are included in our consolidated financial statements from the date of acquisition. | |||||||||
The determination of the estimated fair value of the acquired assets and liabilities required management to make significant estimates and assumptions. We determined the fair value by applying established valuation techniques, based on information that management believed to be relevant to this determination. We also hired an independent third party to assist in the valuation of purchased intangible assets and goodwill. The following table summarizes the purchase price allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands): | |||||||||
Assets | |||||||||
Short-term: | |||||||||
Cash and cash equivalents | $ | 3,689 | |||||||
Other current assets | 1,116 | ||||||||
Long-term: | |||||||||
Property, plant and equipment | 307 | ||||||||
In-process research and development | 2,536 | ||||||||
Patents | 1,327 | ||||||||
Goodwill | 1,190 | ||||||||
Total assets acquired | 10,165 | ||||||||
Liabilities | |||||||||
Current | 1,964 | ||||||||
Non-current | 1,258 | ||||||||
Net assets acquired | $ | 6,943 | |||||||
Patents are being amortized on a straight-line basis over the estimated useful life of 16 years. | |||||||||
As discussed in Note 8, during the fourth quarter of 2013 we recorded an impairment charge totaling $3.7 million to write-off goodwill of $1.2 million and in-process research and development of $2.5 million recorded in connection with our acquisition of World Heart. | |||||||||
All legal, consulting and other costs related to the acquisition aggregating approximately $1.1 million have been expensed as incurred and are included in selling, general and administrative expenses in our statements of operations. Pro forma results of operations have not been presented because the effect of this acquisition was not material our consolidated financial position, results of operations or cash flows. |
Investments
Investments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||
Investments | Note 5. Investments | ||||||||||||||||
We have cash investment policies that limit investments to investment grade rated securities. At December 31, 2014 and 2013, all of our investments were classified as available-for-sale and carried at fair value. At December 31, 2014 and 2013, our short-term investments had maturity dates of less than twenty-four months and our long-term investments had maturity dates within thirty-six months. | |||||||||||||||||
The amortized cost and fair value of our investments, with gross unrealized gains and losses, were as follows: | |||||||||||||||||
At December 31, 2014 | |||||||||||||||||
Amortized | Gross | Gross | Aggregate | ||||||||||||||
Cost Basis | Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
(in thousands) | |||||||||||||||||
Short-term investments: | |||||||||||||||||
Corporate debt | $ | 51,241 | $ | 8 | $ | (244 | ) | $ | 51,005 | ||||||||
U.S. government agency debt | 15,000 | — | (25 | ) | 14,975 | ||||||||||||
Certificates of deposit | 9,555 | — | — | 9,555 | |||||||||||||
Total short-term investments | $ | 75,796 | $ | 8 | $ | (269 | ) | $ | 75,535 | ||||||||
Long-term investments: | |||||||||||||||||
Certificates of deposit | $ | 1,225 | $ | — | $ | — | $ | 1,225 | |||||||||
Total long-term investments | $ | 1,225 | $ | — | $ | — | $ | 1,225 | |||||||||
At December 31, 2013 | |||||||||||||||||
Amortized | Gross | Gross | Aggregate | ||||||||||||||
Cost Basis | Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
(in thousands) | |||||||||||||||||
Short-term investments: | |||||||||||||||||
Corporate debt | $ | 32,221 | $ | 3 | $ | (18 | ) | $ | 32,206 | ||||||||
Certificates of deposit | 5,390 | — | — | 5,390 | |||||||||||||
Total short-term investments | $ | 37,611 | $ | 3 | $ | (18 | ) | $ | 37,596 | ||||||||
Long-term investments: | |||||||||||||||||
Certificates of deposit | $ | 1,225 | $ | — | $ | — | $ | 1,225 | |||||||||
Total long-term investments | $ | 1,225 | $ | — | $ | — | $ | 1,225 | |||||||||
In the years ended December 31, 2014 and 2013, we did not have any realized gains or losses on our investments. At December 31, 2014 and 2013, none of our available-for-sale investments had been in a continuous loss position for more than twelve months. As of December 31, 2014, a total of 22 individual securities had been in an unrealized loss position for twelve months or less and the losses were determined to be temporary. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
Fair Value Measurements | Note 6. Fair Value Measurements | ||||||||||||||||||||
FASB ASC 820—Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to us as of the reporting dates. Accordingly, the estimates presented in these consolidated financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. | |||||||||||||||||||||
FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). | |||||||||||||||||||||
The three levels of the fair value hierarchy are as follows: | |||||||||||||||||||||
Level 1—Quoted prices for identical instruments in active markets. | |||||||||||||||||||||
Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. | |||||||||||||||||||||
Level 3—Instruments with primarily unobservable value drivers. | |||||||||||||||||||||
We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy. There were no transfers between Level 1, Level 2 and Level 3 during the years ended December 31, 2014, 2013 or 2012. | |||||||||||||||||||||
The following tables represent the fair value of our financial assets and financial liabilities measured at fair value on a recurring basis and which level was used in the fair value hierarchy. | |||||||||||||||||||||
At December 31, 2014 | |||||||||||||||||||||
Carrying | Fair | Fair Value Measurements at the Reporting Date Using | |||||||||||||||||||
Value | Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
(in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Short-term investments | $ | 75,535 | $ | 75,535 | $ | — | $ | 75,535 | $ | — | |||||||||||
Long-term investments | 1,225 | 1,225 | — | 1,225 | — | ||||||||||||||||
Liabilities | |||||||||||||||||||||
Convertible senior notes | 114,803 | (1) | 153,978 | — | 153,978 | — | |||||||||||||||
Contingent consideration | 43,740 | 43,740 | — | — | 43,740 | ||||||||||||||||
Royalties | 962 | 962 | — | — | 962 | ||||||||||||||||
Lease exit costs | 1,207 | 1,207 | — | — | 1,207 | ||||||||||||||||
At December 31, 2013 | |||||||||||||||||||||
Carrying | Fair | Fair Value Measurements at the Reporting Date Using | |||||||||||||||||||
Value | Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
(in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Short-term investments | $ | 37,596 | $ | 37,596 | $ | — | $ | 37,596 | $ | — | |||||||||||
Long-term investments | 1,225 | 1,225 | — | 1,225 | — | ||||||||||||||||
Liabilities | |||||||||||||||||||||
Convertible senior notes | 107,125 | (1) | 174,117 | — | 174,117 | — | |||||||||||||||
Contingent consideration | 67,000 | 67,000 | — | — | 67,000 | ||||||||||||||||
Royalties | 999 | 999 | — | — | 999 | ||||||||||||||||
-1 | The carrying amount of our convertible senior notes is net of unamortized discount. See Note 10 (Debt) for more information. | ||||||||||||||||||||
Our Level 2 financial assets and liabilities include available-for-sale investments and our convertible senior notes. The fair value of our available-for-sale investments and our convertible senior notes was determined using quoted prices (including trade data) for the instruments in markets that are not active. The fair value of our convertible senior notes is presented for disclosure purposes only. | |||||||||||||||||||||
Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. Our Level 3 financial liabilities include the following: | |||||||||||||||||||||
• | Contingent consideration—Determining the fair value of the contingent consideration related to our acquisition of CircuLite in December 2013 requires significant management judgment or estimation. The estimated fair value is calculated using the income approach, with significant inputs that include various revenue assumptions, discount rates and applying a probability to each outcome. Material changes in any of these inputs could result in a significantly higher or lower fair value measurement. The fair value of the contingent consideration is remeasured at the estimated fair value at each reporting period. Actual amounts paid may differ from the obligations recorded. | ||||||||||||||||||||
• | Royalties—Royalties represent future royalty payments to be made over the next 15 years pursuant to agreements related to intellectual property licensed or acquired by World Heart Corporation, which we acquired in August 2012. Determination of fair value requires significant management judgment or estimation. The royalty payment obligations were valued using a discounted cash flow model, the future minimum royalty payment amounts and discount rates commensurate with our market risk and the terms of the obligations. | ||||||||||||||||||||
• | Lease exit costs—In the first quarter of 2014 we ceased the use of CircuLite’s former headquarters in Teaneck, New Jersey, which was subject to an operating lease that runs through the end of 2020, and we recorded a liability equal to the estimated fair value of the remaining lease payments as of the cease-use date. The fair value was estimated based upon the discounted present value of the remaining lease payments, considering future estimated sublease income, estimated broker fees and required tenant improvements. This estimated fair value requires management judgment. The fair value of this liability will be remeasured at estimated fair value at each reporting period. Actual amounts paid may differ from the obligation recorded. | ||||||||||||||||||||
The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the year ended December 31, 2014: | |||||||||||||||||||||
Contingent | |||||||||||||||||||||
Consideration | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Beginning balance | $ | 67,000 | |||||||||||||||||||
Payments | — | ||||||||||||||||||||
Change in fair value | (23,260 | ) | |||||||||||||||||||
Ending balance | $ | 43,740 | |||||||||||||||||||
The change in fair value of the contingent consideration for the year ended December 31, 2014 was due to several factors, including a $16.6 million reduction due to the likelihood of not achieving the performance milestone conditions related to the re-launch of the acquired form of the SYNERGY Surgical System following its loss of CE marking in the European Union in March 2014. In addition, we have discontinued development of the SYNERGY mircopump and have focused our efforts on a version of our MVAD pump for our partial-assist program. As a result of this shift in our development efforts, we updated our future projections for the SYNERGY System and reassessed the probabilities of attaining certain contingent milestone payments under the terms of the merger agreement. Our updated analysis resulted in an aggregate $17.5 million decrease in the fair value of the contingent consideration related to certain milestones and royalty payments. This overall decrease in fair value was partially offset by an increase of $10.8 million due to accretion of the liability due to the passage of time. Adjustments associated with the change in fair value of contingent consideration are presented on a separate line item on our consolidated statements of operations. Potential valuation adjustments will be made in future accounting periods as additional information becomes available, including, among other items, progress toward developing the SYNERGY System, as well as revenue and milestone targets as compared to our current projections, with the impact of these adjustments being recorded in our consolidated statements of operations. | |||||||||||||||||||||
The following table summarizes the change in fair value, as determined by Level 3 inputs, of the royalties in the year ended December 31, 2014: | |||||||||||||||||||||
Royalties | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Beginning balance | $ | 999 | |||||||||||||||||||
Payments | (116 | ) | |||||||||||||||||||
Change in fair value | 79 | ||||||||||||||||||||
Ending balance | $ | 962 | |||||||||||||||||||
The expense associated with the change in fair value of the royalty payment obligations is included in research and development expenses on our consolidated statements of operations. | |||||||||||||||||||||
The following table summarizes the change in fair value, as determined by Level 3 inputs, of the lease exit costs in the year ended December 31, 2014: | |||||||||||||||||||||
Lease Exit | |||||||||||||||||||||
Costs | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Beginning balance | $ | — | |||||||||||||||||||
Accruals | 1,676 | ||||||||||||||||||||
Payments | (518 | ) | |||||||||||||||||||
Change in fair value | 49 | ||||||||||||||||||||
Ending balance | $ | 1,207 | |||||||||||||||||||
The expense associated with the change in fair value of the lease exit costs is included in selling, general and administrative expenses on our consolidated statements of operations. | |||||||||||||||||||||
The following table presents quantitative information about the inputs and valuation methodologies used for our fair value measurements classified in Level 3 of the fair value hierarchy as of December 31, 2014: | |||||||||||||||||||||
Valuation Methodology | Significant | Weighted Average | |||||||||||||||||||
(range, if applicable) | |||||||||||||||||||||
Unobservable Input | |||||||||||||||||||||
Contingent consideration | Probability weighted income approach | Milestone dates | 2019 to 2022 | ||||||||||||||||||
Discount rate | 17.0% to 24.0% | ||||||||||||||||||||
Probability of occurrence | 0% to 100% | ||||||||||||||||||||
Royalties | Discounted cash flow | Discount rate | 4.8% to 7.8% | ||||||||||||||||||
Lease exit costs | Discounted cash flow | Sublease start date | November 2015 | ||||||||||||||||||
Sublease rate | $26.50/square foot | ||||||||||||||||||||
Discount rate | 3.50% | ||||||||||||||||||||
Assets That Are Measured at Fair Value on a Nonrecurring Basis | |||||||||||||||||||||
Non-financial assets such as intangible assets, goodwill and property, plant, and equipment are evaluated for impairment annually or when indicators of impairment exist. In the first quarter of 2014, we recorded an impairment charge of $0.6 million related to certain office equipment and software and in the fourth quarter of 2014, we recorded an impairment charge of $2.6 million related to in-process research and development (see Note 8). Impairment charges of $3.7 million were recorded in the fourth quarter of 2013 (see Note 8). No impairment charges were recorded in 2012. Non-financial assets such as identified intangibles acquired in connection with our acquisition of World Heart in August 2012 and CircuLite in December 2013 are measured at fair value using Level 3 inputs, which include discounted cash flow methodologies, or similar techniques, when there is limited market activity and the determination of fair value requires significant judgment or estimation. |
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | Note 7. Inventories | ||||||||
Components of inventories are as follows: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Raw material | $ | 28,688 | $ | 21,761 | |||||
Work-in-process | 10,240 | 8,206 | |||||||
Finished goods | 15,118 | 10,909 | |||||||
$ | 54,046 | $ | 40,876 | ||||||
Finished goods inventories includes inventory held on consignment at customer sites of $5.8 million and $4.6 million, at December 31, 2014 and 2013, respectively. |
Goodwill_InProcess_Research_an
Goodwill, In-Process Research and Development and Other Intangible Assets, Net | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Goodwill, In-Process Research and Development and Other Intangible Assets, Net | Note 8. Goodwill, In-Process Research and Development and Other Intangible Assets, Net | ||||||||
Goodwill | |||||||||
The carrying amount of goodwill and the change in the balance for the years ended December 31, 2014 and 2013 is as follows: | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Beginning balance | $ | 61,596 | $ | 1,190 | |||||
Additions | — | 61,576 | |||||||
Impairment | — | (1,190 | ) | ||||||
Foreign currency translation impact | (206 | ) | 20 | ||||||
Ending balance | $ | 61,390 | $ | 61,596 | |||||
In 2012, we acquired World Heart and recorded $1.2 million of goodwill. In 2013, we acquired CircuLite and recorded $61.6 million of goodwill. See Note 4 for additional information. Goodwill has been assigned to the Company’s single reporting unit, which is the single operating segment by which the chief decision maker manages the Company. See Note 16 for additional information. Goodwill is not deductible for U.S. tax purposes. | |||||||||
Based on our annual impairment review in the fourth quarter of 2014, we concluded that goodwill was not impaired in 2014. During the fourth quarter of 2013, we recorded an impairment charge totaling $3.7 million to write-off goodwill of $1.2 million and in-process research and development of $2.5 million that was recorded in 2012 in connection with our acquisition of World Heart. Subsequent to an evaluation of the ongoing research and development efforts surrounding the MiFlow technology, we determined we would discontinue further development efforts needed to commercialize the technology. As a result of this decision, an impairment charge was recorded. These amounts are included in research and development expenses on our consolidated statements of operations. | |||||||||
In-Process Research and Development | |||||||||
The carrying value of our in-process research and development assets, which relate to the development and potential commercialization of certain acquired technologies, consisted of the following at December 31, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
SYNERGY System technology | $ | 32,850 | $ | 35,500 | |||||
As discussed above, during the fourth quarter of 2013, we recorded an impairment charge of $2.5 million to write-off the value of the in-process research and development, which was recorded in connection with our acquisition of World Heart. This amount is included in research and development expenses on our consolidated statements of operations. | |||||||||
In December 2013, we acquired CircuLite and recorded $35.5 million of in-process research and development. See Note 4 for additional information. The in-process research and development has an indefinite life. At the time the economic life becomes determinable (upon project completion or abandonment) the amount will be amortized over its expected remaining life. During the fourth quarter of 2014 we performed an impairment review of this in-process research and development and recorded an impairment charge of $2.6 million. The fair value of the IPR&D asset was determined using the multi-period excess earnings method which is equal to the present value of the incremental after-tax cash flows attributable to that intangible asset. The impairment charge is included in research and development expenses on our consolidated statements of operations. | |||||||||
Other Intangible Assets | |||||||||
Other intangible assets, net consisted of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Patents | $ | 5,310 | $ | 3,754 | |||||
Purchased intangible assets | |||||||||
Trade names | 3,700 | 3,700 | |||||||
Customer relationships | 1,800 | 1,800 | |||||||
Acquired technology rights | 9,925 | 7,925 | |||||||
20,735 | 17,179 | ||||||||
Less: Accumulated amortization—Patents | (1,118 | ) | (800 | ) | |||||
Less: Accumulated amortization—Purchased intangible assets | (1,810 | ) | (404 | ) | |||||
$ | 17,807 | $ | 15,975 | ||||||
Our other intangible assets are amortized using the straight-line method over their estimated useful lives as follows: | |||||||||
Patents | 15 years | ||||||||
Purchased intangible assets | |||||||||
Trade names | 15 years | ||||||||
Customer relationships | 20 years | ||||||||
Acquired technology rights | 6 to 16 years | ||||||||
Following satisfaction of a pre-specified milestone in the fourth quarter of 2014, we were obligated to pay an additional $2.0 million under a certain patent assignment and license agreement. The $2.0 million, which is payable in cash or shares of our common stock, was recorded as additional acquired technology rights and accrued at December 31, 2014 in other long term liabilities on our consolidated balance sheets. We currently intend to settle this liability by issuing shares of our common stock in 2015. | |||||||||
Following satisfaction of a pre-specified milestone in December 2013, we were obligated to pay an additional $5.0 million under a certain patent assignment and license agreement. The $5.0 million, which was payable in cash or share of our common stock, was recorded as additional acquired technology rights and accrued at December 31, 2013 in other accrued liabilities on our consolidated balance sheets. We settled this liability through the issuance of 50,330 shares of our common stock in the first quarter of 2014. | |||||||||
Amortization expense for the years ended December 31, 2014, 2013 and 2012 was $1.7 million, $0.6 million and $0.2 million, respectively. | |||||||||
Estimated amortization expense for each of the five succeeding fiscal years based upon our intangible asset portfolio at December 31, 2014 is approximately $2.0 million. | |||||||||
Other_Balance_Sheet_Informatio
Other Balance Sheet Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Other Balance Sheet Information | Note 9. Other Balance Sheet Information | ||||||||||||||||
Long-Term Investment | |||||||||||||||||
In October 2013, we invested $10 million in an early stage privately-held company focused on the development of novel, minimally invasive heart therapies in the form of a convertible promissory note with an interest rate of 6% per annum (the “Note”). Pursuant to the terms of the Note, on October 7, 2014 (the maturity date), the privately held company elected to convert all unpaid principal and interest on the Note (less applicable taxes) into shares of its preferred stock. This investment is carried at cost and is included in long-term investments and other assets on our consolidated balance sheets. The carrying value of this investment was $10.5 million and $10.0 million at December 31, 2014 and 2013, respectively. | |||||||||||||||||
The fair value of this investment has not been estimated as of December 31, 2014 and 2013. As of December 31, 2014, the investee company had limited liquidity and is in the process of raising additional capital to continue its operations. However, there can be no assurance this effort will be successful. We considered determination of the fair value of this investment to be impracticable as it represents an equity interest in an early stage privately-held company, and we have limited access to information that would assist with determining fair value. We believe there have been no significant events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. Events may occur or information may become available, including the inability of the investee company to raise sufficient additional capital, that could require us to write-off all or a portion of this asset, which could have a material adverse effect on our consolidated results of operations. | |||||||||||||||||
Other Accrued Liabilities | |||||||||||||||||
Other accrued liabilities consist of the following: | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Accrued payroll and other employee costs | $ | 13,404 | $ | 10,840 | |||||||||||||
Accrued milestone payment | — | 5,000 | |||||||||||||||
Accrued material purchases | 4,284 | 4,325 | |||||||||||||||
Accrued warranty | 4,685 | 2,498 | |||||||||||||||
Accrued research and development costs | 2,663 | 2,307 | |||||||||||||||
Accrued product recall costs | 1,888 | — | |||||||||||||||
Accrued professional fees | 1,624 | 2,428 | |||||||||||||||
Accrued VAT | 1,637 | 1,329 | |||||||||||||||
Accrued restructuring costs | 1,266 | 245 | |||||||||||||||
Other accrued expenses | 5,138 | 6,304 | |||||||||||||||
$ | 36,589 | $ | 35,276 | ||||||||||||||
Accrued Payroll and Other Employee Costs | |||||||||||||||||
Accrued payroll and other employee costs included year-end employee bonuses of approximately $7.9 million and $6.6 million at December 31, 2014 and 2013, respectively. | |||||||||||||||||
Accrued Warranty | |||||||||||||||||
The following table summarizes changes in our warranty liability for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(in thousands) | |||||||||||||||||
Beginning balance | $ | 2,498 | $ | 543 | $ | 203 | |||||||||||
Accrual for warranty expense | 4,141 | 2,721 | 921 | ||||||||||||||
Warranty costs incurred during the period | (1,954 | ) | (766 | ) | (581 | ) | |||||||||||
Ending balance | $ | 4,685 | $ | 2,498 | $ | 543 | |||||||||||
During 2014 and 2013, increases in warranty reserves resulted from the substantial increase in commercial sales activity, taking into consideration our historical return and replacement experience. | |||||||||||||||||
Accrued Product Recall Costs | |||||||||||||||||
The costs to repair or replace products associated with product recalls and voluntary service campaigns are recorded when they are determined to be probable and reasonably estimable as a cost of revenue and are not included in our warranty liability. No such costs were incurred in 2013 or 2012. In April 2014, we implemented Field Corrective Action Notification following an observed increase in complaints related to earlier-than-expected battery depletion and routine battery handling. This notification provided information to assist patients and clinicians to monitor battery performance, recognize abnormal behaviors and reinforce proper power management of the HVAD System. We increased our warranty liability in the first quarter of 2014 to account for an anticipated higher level of battery returns likely to be associated with increased battery performance awareness following implementation of the field safety corrective action. On July 30, 2014, we extended the corrective action to include a voluntary recall of certain older batteries. The recall instructs sites to replace certain older batteries in the field upon patients’ routine visits in order to further mitigate the potential risks associated with premature battery depletion. | |||||||||||||||||
In February 2015, we expanded a 2013 voluntary Field Safety Corrective Action, by initiating a voluntary medical device recall of certain older controllers distributed in the U.S. during the ADVANCE and ENDURANCE clinical trial periods. The affected controllers exhibit a higher susceptibility to electrostatic discharge than newer, commercial controllers. This recall was ongoing as of December 31, 2014. | |||||||||||||||||
During 2014, we recorded charges aggregating $3.6 million for estimated costs associated with the battery and controller recalls discussed above. | |||||||||||||||||
Accrued Restructuring Costs | |||||||||||||||||
The following table summarizes changes in our accrued restructuring costs for the year ended December 31, 2014: | |||||||||||||||||
Facility Leases | Severance and | Contract | Total | ||||||||||||||
Related | Termination | ||||||||||||||||
(in thousands) | |||||||||||||||||
Beginning balance | $ | — | $ | 245 | $ | — | $ | 245 | |||||||||
Restructuring charges | 2,204 | 715 | 688 | 3,607 | |||||||||||||
Payments | (818 | ) | (833 | ) | (688 | ) | (2,339 | ) | |||||||||
Adjustments to estimated obligations | (168 | ) | (127 | ) | — | (295 | ) | ||||||||||
Change in fair value | 48 | — | — | 48 | |||||||||||||
Ending balance | $ | 1,266 | $ | — | $ | — | $ | 1,266 | |||||||||
The restructuring obligations reflected above resulted from the following actions: | |||||||||||||||||
Facility Closures | |||||||||||||||||
In the first quarter of 2014 we ceased the use of CircuLite’s former headquarters in Teaneck, New Jersey, which was subject to an operating lease that runs through the end of 2020 (see Note 11). In connection with this action, we recorded a $1.7 million liability equal to the estimated fair value of the remaining lease obligation as of the cease-use date (see Note 6). In the first quarter of 2014, we also relocated our corporate headquarters and ceased activities at our former headquarters in Framingham, Massachusetts. In connection with this action, we recorded a $0.5 million liability equal to the aggregate of the remaining payments on the lease for our former headquarters as of the cease-use date. Both of these items are included in selling, general and administrative expenses on our consolidated statements of operations. | |||||||||||||||||
Severance Agreements | |||||||||||||||||
In 2014, we incurred various costs related to the integration of CircuLite’s operations, including severance costs aggregating $0.6 million, the majority of which were recorded in the first quarter of 2014. We recorded $0.4 million in research and development expenses and the remaining $0.2 million in selling, general and administrative expenses on our consolidated statements of operations. | |||||||||||||||||
Contract Termination | |||||||||||||||||
As a result of anticipated design modifications to the SYNERGY System and our decision to move manufacturing of the SYNERGY System to our Miami Lakes facility, we terminated a supply agreement with a vendor in Germany for the purchase of components necessary to produce the prior-to-modification version of the SYNERGY System. In connection with the termination of this supply agreement, we recorded a charge of $0.7 million in the first quarter of 2014, which is included in research and development expenses on our consolidated statements of operations. |
Debt
Debt | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt | Note 10. Debt | ||||||||
Convertible Senior Notes | |||||||||
On December 15, 2010, we completed the sale of 3.5% convertible senior notes due 2017 (the “Convertible Notes”) for an aggregate principal amount of $143.75 million pursuant to the terms of an Indenture dated December 15, 2010 (the “Indenture”). The Convertible Notes are the senior unsecured obligations of the Company. The Convertible Notes bear interest at a rate of 3.5% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. The Convertible Notes will mature on December 15, 2017, unless earlier repurchased by us or converted. | |||||||||
The Convertible Notes offering was completed pursuant to a prospectus supplement, dated December 9, 2010, to a shelf registration statement on Form S-3 that was previously filed with the SEC and which was declared effective on December 9, 2010. | |||||||||
The Convertible Notes will be convertible at an initial conversion rate of 10 shares of our common stock per $1,000 principal amount of Convertible Notes, which corresponds to an initial conversion price of $100.00 per share of our common stock. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events. | |||||||||
Prior to June 15, 2017, holders may convert their Convertible Notes at their option only upon satisfaction of one or more of the conditions specified in the Indenture relating to the (i) sale price of our common stock, (ii) the trading price per $1,000 principal amount of Convertible Notes or (iii) specified corporate events. As of the date of this report on Form 10-K, none of the events that would allow holders to convert their Convertible Notes have occurred. On or after June 15, 2017 until the close of business of the business day immediately preceding the date the Convertible Notes mature, holders may convert their Convertible Notes at any time, regardless of whether any of the foregoing conditions have been met. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination thereof, at our election. | |||||||||
We may not redeem the Convertible Notes prior to maturity. Holders of the Convertible Notes may require us to purchase for cash all or a part of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, upon the occurrence of certain fundamental changes (as defined in the Indenture) involving the Company. The Indenture does not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us or any of our subsidiaries. | |||||||||
The Indenture contains customary terms and nonfinancial covenants and defines events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization) involving the Company occurs and is continuing, the Trustee (by notice to the Company) or the holders of at least 25% in principal amount of the outstanding Convertible Notes (by notice to the Company and the Trustee) may declare 100% of the principal of and accrued and unpaid interest, if any, on all the Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving the Company, 100% of the principal of and accrued and unpaid interest on the Convertible Notes will automatically become due and payable. Notwithstanding the foregoing, the Indenture provides that, to the extent we elect, the sole remedy for an event of default relating to certain failures by us to comply with certain reporting covenants in the Indenture consists exclusively of the right to receive additional interest on the Convertible Notes. | |||||||||
In accordance with ASC 470-20, Debt with Conversion and Other Options, which applies to certain convertible debt instruments that may be settled in cash or other assets, or partially in cash, upon conversion, we recorded the long-term debt and equity components on our Convertible Notes separately on the issuance date. The amount recorded for long-term debt was determined by measuring the fair value of a similar liability that does not have an associated equity component. The measurement of fair value required the Company to make estimates and assumptions to determine the present value of the cash flows of the Convertible Notes, absent the conversion feature. This treatment increased interest expense associated with our Convertible Notes by adding a non-cash component to interest expense in the form of amortization of a debt discount calculated based on the difference between the 3.5% cash coupon rate and the effective interest rate on debt borrowing of approximately 12.5%. The discount is being amortized to interest expense through the December 15, 2017 maturity date of the Convertible Notes using the effective interest method and is included in interest expense on our consolidated statements of operations. Additionally, we allocated the costs related to issuance of the Convertible Notes on the same percentage as the long-term debt and equity components, such that a portion of the costs is allocated to the long-term debt component and the equity component included in additional paid-in capital. The portion of the costs allocated to the long-term debt component is presented as deferred financing costs, net on our consolidated balance sheets. These deferred financing costs are also being amortized to interest expense through the December 15, 2017 maturity date of the Convertible Notes using the effective interest method and the amortization is included in interest expense on our consolidated statements of operations | |||||||||
The Convertible Notes and the equity component, which is recorded in additional paid-in-capital, consisted of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Principal amount | $ | 143,750 | $ | 143,750 | |||||
Unamortized discount | (28,947 | ) | (36,625 | ) | |||||
Net carrying amount | $ | 114,803 | $ | 107,125 | |||||
Equity component | $ | 55,038 | $ | 55,038 | |||||
Based on the initial conversion rate of 10 shares of our common stock per $1,000 principal amount of Convertible Notes, which corresponds to an initial conversion price of $100.00 per share of our common stock, the number of shares issuable upon conversion of the Convertible Notes is 1,437,500. The value of these shares, based on the closing price of our common stock on December 31, 2014 of $73.43 per share, was approximately $105.6 million. The fair value of our Convertible Notes as presented in Note 6 was approximately $154.0 million at December 31, 2014. | |||||||||
Interest expense related to the Convertible Notes consisted of interest due on the principal amount, amortization of the discount and amortization of the portion of the deferred financing costs allocated to the long-term debt component. For the years ended December 31, 2014 and 2013, interest expense related to the Convertible Notes was as follows: | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Stated amount at 3.5% coupon rate | $ | 5,031 | $ | 5,031 | |||||
Amortization of discount | 7,678 | 6,809 | |||||||
Amortization of deferred financing costs | 412 | 365 | |||||||
$ | 13,121 | $ | 12,205 | ||||||
Promissory Note | |||||||||
In connection with our acquisition of World Heart, we assumed a promissory note with an outstanding balance of $600,000, which matured on December 2, 2014. Interest on the promissory note was payable annually in arrears on December 2 of each year at a rate of 4.5% per annum. Principal payments of $200,000 were also due on December 2 of each year through maturity. At December 31, 2014, no further amounts are payable in connection with the promissory note. The amount of interest expense incurred in the years ended December 31, 2014, 2013 and 2012 was approximately $8,000, $17,000 and $11,000, respectively. |
Leases
Leases | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases [Abstract] | |||||
Leases | Note 11. Leases | ||||
Corporate Headquarters | |||||
On October 17, 2013, we entered into a lease for our corporate headquarters in Framingham, Massachusetts that commenced in January 2014. The facility is used primarily for office and ancillary laboratory purposes including development testing. Under the lease we rent approximately 58,000 square feet of company space and approximately 4,000 square feet of common space for an initial seven year period, with an option to renew for a period of fifty-seven months, but in no event beyond September 30, 2025. Annual base rent of approximately $1.3 million is payable monthly starting January 1, 2015. Annual base rent is subject to periodic increases beginning March 1, 2017 and will increase to approximately $1.5 million per year for the final four years of the lease. A security deposit of $0.3 million was paid in connection with the lease, which is included in other assets on our consolidated balance sheets. | |||||
Under the lease for our former headquarters in Framingham, Massachusetts, which was last amended on July 30, 2012, we rented approximately 21,300 square feet. Effective January 1, 2013, base rent obligations were approximately $0.4 million per year. The lease term for approximately 17,800 square feet ended on December 31, 2014, while the lease term for the remaining 3,500 square feet ends on June 30, 2015. In connection with the move to our corporate headquarters, we recorded a $0.5 million liability in the first quarter of 2014, which equaled the aggregate of the remaining payments on the lease for our former headquarters as of the cease-use date (see Note 9). | |||||
Florida Facility | |||||
On December 9, 2010, we entered into a lease for our facility in Miami Lakes, Florida. The facility is used primarily for manufacturing, research and development and administrative functions. Under the lease, which was amended in November 2012 and July 2013, we rent approximately 132,000 square feet for a period ending February 28, 2022, with an option to renew for two five-year terms. Effective with the July 2013 amendment, base rent payments are $10.00 per square foot and are subject to a 3% annual escalation on March 1 of each subsequent year. The lease is secured by a security deposit of $1.25 million in the form of an unconditional stand-by letter of credit. The letter of credit is supported by a certificate of deposit for the same amount, which is included in other assets on our consolidated balance sheets. | |||||
New Jersey Facility | |||||
In connection with the acquisition of CircuLite in December 2013, we assumed a noncancelable operating lease that CircuLite entered into for its headquarters in Teaneck, New Jersey in December 2012. Under the lease, we rent approximately 22,200 square feet mixed use office space for a period ending October 2020. The lease provides for a fixed monthly rent, plus utilities, with a six-month rent abatement during the first year. Base rent obligations are approximately $0.6 million per year and subject to a 2% annual escalation starting on September 1, 2014. Pursuant to the lease agreement, we are required to maintain cash on deposit of $0.8 million, which is included in other assets on our consolidated balance sheets. | |||||
In the first quarter of 2014, we initiated a plan to close this facility. The facility closure was accounted for in accordance with ASC 420 Exit or Disposal Cost Obligations, pursuant to which we recorded a liability equal to the fair value of the remaining lease payments as of the cease-use date. The fair value of this liability was estimated to be $1.7 million at the initial valuation date and was based upon the discounted present value of remaining lease rentals for the space no longer occupied, considering future estimated sublease income, estimated broker fees and required tenant improvements (see Note 6 and Note 9). | |||||
Other Facilities | |||||
In addition to the leases discussed above, we have entered into various operating lease agreements for miscellaneous office and research space and equipment. The duration of these agreements is typically twelve to thirty-six months from origination. The aggregate base annual rental payment on these leases is less than $0.3 million. | |||||
Rent expense was approximately $3.6 million, $2.9 million, and $2.7 million in 2014, 2013 and 2012, respectively. Future minimum rental commitments under non-cancelable operating lease agreements with remaining terms of at least one year as of December 31, 2014 are as follows: | |||||
Operating | |||||
Leases | |||||
(in thousands) | |||||
Year Ending December 31, | |||||
2015 | $ | 3,618 | |||
2016 | 3,559 | ||||
2017 | 3,662 | ||||
2018 | 3,664 | ||||
2019 | 3,751 | ||||
Thereafter | 5,870 | ||||
Total minimum lease payments | $ | 24,124 | |||
Aachen Germany Facility Closure | |||||
In January 2015, we initiated a plan to close our facilities located in Aachen, Germany. One facility is covered under an operating lease that ends on October 31, 2017. Base rent obligations are approximately $12,000 per month. The facility closure, which is targeted for completion on or by March 31, 2015, will be accounted for in accordance with ASC 420—Exit or Disposal Cost Obligations, pursuant to which we will record a liability equal to the fair value of the remaining lease payments as of the cease-use date. Fair value will be determined based upon the discounted present value of remaining lease rentals for the space no longer occupied, considering future estimated sublease income, estimated broker fees and required tenant improvements. We currently estimate that the total lease charge will be approximately $0.4 million. | |||||
Closure of this facility will result in a write-off of leasehold improvements, furnishings and other fixed assets that will not be transferred to our other facilities of approximately $0.6 million and a charge for non-cancellable purchase obligations of approximately $0.5 million. In January 2015, employees at this facility were notified of the closure and elimination of their positions. Certain of the employees have been asked to relocate. The estimated employee-related costs associated with severance obligations will be approximately $0.6 million. Each of these estimates is subject to further assessment and analysis. We anticipate recording these charges in the quarter ending March 31, 2015. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Equity [Abstract] | |||||
Stockholders' Equity | Note 12. Stockholders’ Equity | ||||
Preferred Stock | |||||
We are authorized to issue up to 5,000,000 shares of preferred stock, $.001 par value per share. Our board of directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of preferred stock in series, and by filing a certificate pursuant to the applicable law of the state of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. No shares of preferred stock have been issued or are outstanding. | |||||
Common Stock | |||||
We are authorized to issue up to 25,000,000 shares of common stock, $.001 par value per share. As of December 31, 2014, we had 17,155,833 shares outstanding. Holders are entitled to one vote for each share of common stock (or its equivalent). | |||||
Shares of our common stock reserved at December 31, 2014, for possible future issuance are as follows: | |||||
(in thousands) | |||||
Convertible senior notes | 1,768 | ||||
Equity award plans | 1,418 | ||||
3,186 | |||||
See the Consolidated Statement of Stockholders’ Equity for details related to our equity transactions. | |||||
2013 Public Offering | |||||
On March 12, 2013, we entered into an Underwriting Agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC, as representative of the several underwriters named in the Underwriting Agreement (the “Underwriters”), pursuant to which we agreed to sell and the Underwriters agreed to purchase, subject to and upon terms and conditions set forth therein, an aggregate of 1,500,000 shares of our common stock at a net sales price of $81.9114 per share (the public offering price of $86.45 per share minus the underwriting discount). We also granted the Underwriters an option to purchase 225,000 additional shares of our common stock at the public offering price less the underwriting discount, which the Underwriters exercised in full on March 13, 2013. The closing of the offering occurred on March 18, 2013. After fees and related expenses, net proceeds from the offering were approximately $141.0 million. | |||||
The offering was completed pursuant to a prospectus supplement, dated March 12, 2013, to a shelf registration statement on Form S-3 that was previously filed with the SEC and which was declared effective on December 9, 2010. This shelf registration statement expired on December 9, 2013. | |||||
On January 30, 2014, we filed a shelf registration statement with the SEC on Form S-3. This shelf registration statement allows us to offer and sell from time to time, in one or more series or issuances and on terms that we will determine at the time of the offering any combination and amount of the securities described in the prospectus contained in the registration statement or in the prospectus supplement filed with respect to a particular offering. An aggregate of 530,816 shares of our common stock were registered for issuance pursuant to various prospectus filings on January 30, 2014 in connection with the CircuLite acquisition. As of December 31, 2014, there remained 248,872 shares reserved for potential issuance in connection with future contingent milestone payments under the terms of the merger agreement (see Note 4). |
ShareBased_Compensation
Share-Based Compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Share-Based Compensation | Note 13. Share-Based Compensation | ||||||||||||||||
We allocate share-based compensation expense to cost of revenue, selling, general and administrative expense and research and development expense based on the award holder’s employment function. For the years ended December 31, 2014, 2013 and 2012, we recorded share-based compensation expenses as follows: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(in thousands) | |||||||||||||||||
Cost of revenue | $ | 2,032 | $ | 2,539 | $ | 3,152 | |||||||||||
Selling, general and administrative | 13,573 | 12,184 | 10,195 | ||||||||||||||
Research and development | 7,937 | 7,151 | 5,458 | ||||||||||||||
$ | 23,542 | $ | 21,874 | $ | 18,805 | ||||||||||||
Deferred tax benefits attributed to our share-based compensation expense are not recognized in the accompanying consolidated financial statements because we are in a net operating loss position and a full valuation allowance is maintained for all net deferred tax assets. We receive a tax deduction for certain stock option exercises during the period the options are exercised, and for the vesting of restricted stock units during the period the restricted stock units vest. For stock options, the amount of the tax deduction is generally for the excess of the fair market value of our shares of common stock over the exercise price of the stock options at the date of exercise. For restricted stock units, the amount of the tax deduction is generally for the fair market value of our shares of common stock at the vesting date. Excess tax benefits are not included in the accompanying consolidated financial statements because we are in a net operating loss position and a full valuation allowance is maintained for all net deferred tax assets. | |||||||||||||||||
Equity Plans | |||||||||||||||||
We have issued share-based awards to employees, non-executive directors and outside consultants through various approved plans and outside of any formal plan. New shares are issued upon the exercise of share-based awards. | |||||||||||||||||
Upon receipt of stockholder approval on May 31, 2012, we adopted the HeartWare International, Inc. 2012 Incentive Award Plan (“2012 Plan”). The 2012 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, performance awards, dividend equivalent rights, deferred stock, deferred stock units, stock payments and stock appreciation rights (collectively referred to as “Awards”), to our directors, employees and consultants. Under the terms of the 2012 Plan, the total number of shares of our common stock initially reserved for issuance under Awards is 1,375,000, provided that the total number of shares of our common stock that may be issued pursuant to “Full Value Awards” (Awards other than options, SARs or other awards for which the holder pays the intrinsic value existing as of the date of grant whether directly or by forgoing a right to receive a payment from the Company) is 1,275,000. As of December 31, 2014, 125,149 shares have been issued upon vesting of Awards issued under the 2012 Plan and Awards with respect to 528,332 shares were issued and outstanding under the 2012 Plan. Subsequent to adoption of the 2012 Plan, no new awards will be granted under our prior plans. Any outstanding awards under the prior will continue to be subject to the terms and conditions of the plan under which they were granted. | |||||||||||||||||
Stock Options | |||||||||||||||||
Each option allows the holder to subscribe for and be issued one share of our common stock at a specified price, which is generally the quoted market price of our common stock on the date the option is issued. Options generally vest on a pro-rata basis on each anniversary of the issuance date within four years of the date the option is issued. Options may be exercised after they have vested and prior to the specified expiry date provided applicable exercise conditions are met, if any. The expiry date can be for periods of up to ten years from the date the option is issued. | |||||||||||||||||
The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model using the assumptions established at that time. The following table includes the weighted average assumptions used for options issued in the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||||||
Expected volatility | 39 | % | 40 | % | 57 | % | |||||||||||
Risk-free interest rate | 1.65 | % | 1.15 | % | 1 | % | |||||||||||
Estimated holding period (years) | 5 | 6.25 | 6.25 | ||||||||||||||
Information related to options granted under all of our plans at December 31, 2014 and activity during the year then ended is as follows (certain amounts in U.S.$ were converted from AU$ at the then period-end spot rate): | |||||||||||||||||
Number of | Weighted | Weighted | Aggregate | ||||||||||||||
Options | Average | Average | Intrinsic | ||||||||||||||
(in thousands) | Exercise | Remaining | Value | ||||||||||||||
Price | Contractual Life | (in thousands) | |||||||||||||||
(Years) | |||||||||||||||||
Outstanding at December 31, 2013 | 133 | $ | 42.82 | ||||||||||||||
Granted | 7 | 88.84 | |||||||||||||||
Exercised | (32 | ) | 29.25 | ||||||||||||||
Forfeited | — | — | |||||||||||||||
Expired | (1 | ) | 86.58 | ||||||||||||||
Outstanding at December 31, 2014 | 107 | $ | 48.32 | 4.39 | $ | 3,063 | |||||||||||
Exercisable at December 31, 2014 | 87 | $ | 39.75 | 3.52 | $ | 3,051 | |||||||||||
The aggregate intrinsic values at December 31, 2014 noted in the table above represent the number of in-the-money options outstanding or exercisable multiplied by the closing price of our common stock traded on NASDAQ less the respective weighted average exercise price at period end. | |||||||||||||||||
The weighted average grant date fair value per share of options granted in the years ended December 31, 2014, 2013 and 2012 was $32.41, $38.51, and $43.83, respectively. | |||||||||||||||||
The total intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012 was approximately $1.9 million, $10.3 million, and $3.7 million, respectively. Cash received from options exercised in the years ended December 31, 2014, 2013 and 2012 was approximately $0.9 million, $4.9 million and $2.7 million. | |||||||||||||||||
At December 31, 2014, there was approximately $0.2 million of unrecognized compensation expense, net of estimated forfeitures, related to non-vested option awards. The expense is expected to be recognized over a weighted average period of 0.7 years. | |||||||||||||||||
Restricted Stock Units | |||||||||||||||||
Each restricted stock unit (“RSU”) represents a contingent right to receive one share of our common stock. RSUs generally vest on a pro-rata basis on each anniversary of the issuance date over three or four years or vest in accordance with performance-based criteria. The RSUs with performance-based vesting criteria vest in one or more tranches contingent upon the achievement of pre-determined milestones related to the development of our products, the achievement of certain prescribed clinical and regulatory objectives, the achievement of specific financial performance measures or similar metrics. There is no consideration payable on the vesting or exercise of RSUs issued under the plans. Upon vesting, the RSUs are exercised automatically and settled in shares of our common stock. | |||||||||||||||||
Information related to RSUs at December 31, 2014 and activity during the year then ended is as follows: | |||||||||||||||||
Number of | Weighted | Aggregate | |||||||||||||||
Units | Average | Intrinsic Value | |||||||||||||||
(in thousands) | Remaining | (in thousands) | |||||||||||||||
Contractual | |||||||||||||||||
Life | |||||||||||||||||
(Years) | |||||||||||||||||
Outstanding at December 31, 2013 | 476 | ||||||||||||||||
Granted | 363 | ||||||||||||||||
Vested/Exercised | (193 | ) | |||||||||||||||
Forfeited | (57 | ) | |||||||||||||||
Outstanding at December 31, 2014 | 589 | 1.51 | $ | 43,232 | |||||||||||||
Exercisable at December 31, 2014 | — | — | $ | — | |||||||||||||
The aggregate intrinsic value at December 31, 2014 noted in the table above represents the closing price of our common stock traded on NASDAQ multiplied by the number of RSUs outstanding. | |||||||||||||||||
At December 31, 2014, 26,705 of the RSUs outstanding are subject to performance-based vesting criteria as described above. | |||||||||||||||||
The total intrinsic value of RSUs vested during the years ended December 31, 2014, 2013 and 2012 was approximately $15.4 million, $16.4 million, and $25.6 million, respectively. | |||||||||||||||||
The fair value of each RSU award equals the closing price of our common stock on the date of grant. The weighted average grant date fair value per share of RSUs granted during the years ended December 31, 2014, 2013 and 2012 was $97.50, $91.21, and $83.13, respectively. | |||||||||||||||||
At December 31, 2014, we had approximately $24.9 million of unrecognized compensation expense, net of estimated forfeitures, related to non-vested RSU awards. The expense is expected to be recognized over a weighted average period of 1.5 years. | |||||||||||||||||
On February 23, 2015, our board of directors approved the grant of an aggregate of 280,000 RSUs to a group of employees, including officers of the Company. Approximately 230,000 of the RSUs granted in February 2015 will vest on a pro-rata basis on each anniversary of the issuance date over four years, while the remainder is subject to performance-based vesting criteria. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | Note 14. Income Taxes | ||||||||||||
During 2014, we were subject to income taxes on foreign taxable income in certain jurisdictions. The 2014 income tax provision of $0.5 million related primarily to foreign income taxes. | |||||||||||||
Income (loss) before taxes on a geographic basis during 2014 was as follows: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
United States | $ | (20,684 | ) | $ | (58,063 | ) | $ | (82,463 | ) | ||||
Non-U.S. | 1,878 | (781 | ) | (5,255 | ) | ||||||||
$ | (18,806 | ) | $ | (58,844 | ) | $ | (87,718 | ) | |||||
Our effective tax rate of less than 1% differs from the statutory United States federal income tax rate of 34% for all periods presented due primarily to the valuation allowance on deferred tax assets, and differences in foreign tax rates. | |||||||||||||
The primary components of net deferred tax assets and liabilities at December 31, 2014 and 2013 were as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
Deferred tax assets: | |||||||||||||
U.S. losses carried forward | $ | 128,216 | $ | 179,503 | |||||||||
Non-U.S. losses carried forward | 4,227 | 5,039 | |||||||||||
Total net operating losses carried forward | 132,443 | 184,542 | |||||||||||
Research and development credit | — | 2,114 | |||||||||||
Equity awards | 9,902 | 7,152 | |||||||||||
Other deferred tax assets | 11,935 | 4,812 | |||||||||||
Gross deferred tax assets | 154,280 | 198,620 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Convertible debt | (10,632 | ) | (13,171 | ) | |||||||||
Purchased intangible assets | (13,549 | ) | (14,143 | ) | |||||||||
Net deferred tax assets | 130,099 | 171,306 | |||||||||||
Less: valuation allowance | (130,099 | ) | (171,306 | ) | |||||||||
Net deferred tax asset/(liability) | $ | — | $ | — | |||||||||
FASB ASC 740—Income Taxes requires that a valuation allowance be established to reduce a deferred tax asset to its realizable value when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence needs to be considered, including the utilization of past tax credits and length of carry-back and carry-forward periods, reversal of temporary differences, tax planning strategies, our current and past performance, the market environment in which we operate, and the evaluation of tax planning strategies to generate future taxable income. | |||||||||||||
At December 31, 2014 and 2013, we had gross deferred tax assets in excess of deferred tax liabilities of $130.1 million and $171.3 million, respectively. We determined that it is not “more likely than not” that substantially all of our deferred tax assets will not be realized and therefore we should apply a valuation allowance to reduce our net deferred tax assets to their estimated realizable value. The valuation allowance primarily relates to the deferred tax assets arising from operating loss carry-forwards. The valuation allowance on our net deferred tax assets decreased by approximately $41.2 million for the year ended December 31, 2014 and increased by approximately $97.3 million and $31.4 million for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||
We completed an evaluation of our net operating loss and credit carry-forwards as outlined under section 382, which resulted in a deferred tax asset reduction of approximately $56.4 million due to limitations on our U.S. net operating loss carry-forwards. Such deferred tax asset had been fully reserved. We have adjusted our net operating loss and credit carry-forwards according to the results of this evaluation. | |||||||||||||
Net operating losses representing excess tax benefits attributable to share based compensation are not included in the table of deferred tax assets and liabilities shown above because they have not been realized for financial statement purposes. Pursuant to ASC 718, excess tax benefits attributable to share based compensation will only be recorded to additional paid-in capital when they are realized through a reduction of taxes payable. As of December 31, 2014, the portion of the federal and state net operating loss related to share based compensation is approximately $34.4 million and $24.1 million, respectively. | |||||||||||||
At December 31, 2014, we had unexpired net operating loss carry-forwards of approximately $386.1 million and $206.3 million for U.S. federal and state income tax purposes, respectively, which are available to offset future taxable income and begin to expire starting in 2024 through 2034. We also have foreign tax loss carry-forwards of approximately $20.0 million that do not expire. | |||||||||||||
We operate within multiple taxing jurisdictions and are subject to audit in those jurisdictions. Because of the complex issues involved, any claims can require an extended period to resolve. | |||||||||||||
Uncertain tax positions | |||||||||||||
The amount of gross unrecognized tax benefits as of December 31, 2014 and December 31, 2013 was $3.2 million and $3.6 million, respectively. The fiscal years 2011 through 2013 are considered open tax years (however, any year with net operating loss carryforwards remain open to adjustment) in U.S. federal and state and Australian tax jurisdictions. The fiscal years 2010 through 2013 are considered open tax years for German and United Kingdom tax jurisdictions. The fiscal years 2011 through 2013 are considered open tax years for tax jurisdictions in France. | |||||||||||||
We evaluate tax positions for recognition using a more-likely-than-not recognition threshold, and those tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant information. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: | |||||||||||||
Uncertain tax position | Year ended | ||||||||||||
December 31, | |||||||||||||
2014 | |||||||||||||
(in thousands) | |||||||||||||
Unrecognized tax benefits—beginning of the year | $ | 3,567 | |||||||||||
Gross increases/(decrease)—prior year | 17 | ||||||||||||
Gross increases/(decrease)—current year | (356 | ) | |||||||||||
Unrecognized tax benefits—end of the year | $ | 3,228 | |||||||||||
Included in the balance of unrecognized tax benefits at December 31, 2014, are $1.8 million of tax benefits that, if recognized, would impact the effective tax rate. The remainder of the unrecognized tax benefits would increase our net operating loss carry-forwards and would not impact the effective tax rate, so long as we continue to maintain a full valuation allowance. We anticipate that no material amounts of unrecognized tax benefits will either expire or be settled in the next 12 months of the reporting date. Additionally, no uncertain tax positions had been identified prior to 2014. |
Net_Loss_Per_Share
Net Loss Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Net Loss Per Share | Note 15. Net Loss Per Share | ||||||||||||
Basic net loss per common share was computed by dividing net loss for the period by the weighted-average number of common shares outstanding for each respective period. Diluted net loss per common share adjusts basic net loss per common share for the dilutive effects of share-based awards as determined under the treasury stock method, our convertible senior notes as determined under the if-converted method, and other potentially dilutive instruments only in the periods in which the effect is dilutive. Due to our net loss for all periods presented, all potentially dilutive instruments were excluded because their inclusion would have been anti-dilutive. The following instruments were excluded from the calculation of diluted weighted average shares outstanding, as their effect would be anti-dilutive. | |||||||||||||
Common shares issuable upon: | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Conversion of convertible senior notes | 1,438 | 1,438 | 1,438 | ||||||||||
Exercise or vesting of share-based awards | 696 | 608 | 838 |
Business_Segment_Geographic_Ar
Business Segment, Geographic Areas and Major Customers | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Business Segment, Geographic Areas and Major Customers | Note 16. Business Segment, Geographic Areas and Major Customers | ||||||||||||
For financial reporting purposes, we have one reportable segment which designs, manufactures and markets medical devices for the treatment of advanced heart failure. Products are distributed to customers located in the United States through our clinical trials and as commercial products, as commercial products to customers in Europe and under special access in other countries. Product sales attributed to a country or region are based on the location of the customer to whom the products are sold. Long-lived assets are primarily held in the United States. | |||||||||||||
Product sales by geographic location for the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
United States | $ | 151,335 | $ | 105,345 | $ | 27,650 | |||||||
Germany | 63,629 | 54,793 | 40,001 | ||||||||||
International, excluding Germany | 63,456 | 47,791 | 43,271 | ||||||||||
$ | 278,420 | $ | 207,929 | $ | 110,922 | ||||||||
The percentage of our revenue generated in the U.S. increased in 2014 and 2013 as compared to 2012 due to receipt in November 2012 of FDA approval to sell the HVAD System commercially in the U.S. | |||||||||||||
As a significant portion of our revenue is generated outside of the U.S., we are dependent on favorable economic and regulatory environments for our products in Europe and other countries outside of the U.S. For the years ended December 31, 2014, 2013 and 2012, no customers individually accounted for more than 10% of product sales. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 17. Commitments and Contingencies |
We received a warning letter from the FDA, dated June 2, 2014, following an inspection of our Miami Lakes, Florida facility conducted in January 2014. The FDA letter cited four categories for us to address: (1) procedures for validating device design, including device labeling; (2) procedures for implementing corrective and preventive action (“CAPA”); (3) maintaining records related to investigations; and (4) validation of computer software used as part of production or quality systems. The warning letter did not require any action by physicians or patients and did not restrict use of our devices. | |
We sent the FDA our initial response to the warning letter within the required fifteen business days of receipt, and committed to undertaking certain quality system improvements and providing the FDA with periodic updates. During 2014, we commenced implementing systemic changes and organizational enhancements to address the four warning letter items and related quality systems. We have established teams to review and address the items cited by the FDA and have engaged external subject matter experts to assist in assessment and remediation efforts. | |
At December 31, 2014, we had purchase order commitments of approximately $36.1 million related to product costs, supplies, services and property, plant and equipment purchases. Many of our materials and supplies require long lead times. Our purchase order commitments reflect materials that may be received up to one year from the date of order. | |
In addition to the above, we have entered into employment agreements with all of our executive officers. These contracts do not have a fixed term and are constructed on an at-will basis. Some of these contracts provide executives with the right to receive certain additional payments and benefits if their employment is terminated after a change of control, as defined in such agreements. | |
From time to time we invest in certain development stage entities in connection with research activities. Certain contingent milestone payments in connection with these arrangements have not been accrued in the accompanying consolidated financial statements as the amounts are indeterminate at this time. | |
The taxation and customs requirements, together with other applicable laws and regulations of certain foreign jurisdictions, can be inherently complex and subject to differing interpretation by local authorities. We are subject to the risk that either we have misinterpreted applicable laws and regulations, or that foreign authorities may take inconsistent, unclear or changing positions on local law, customs practices or rules. In the event that we have misinterpreted any of the above, or that foreign authorities take positions contrary to ours, we may incur liabilities that may differ materially from the amounts accrued in the accompanying consolidated financial statements. | |
Litigation | |
From time to time we may be involved in litigation or other contingencies arising in the ordinary course of business. Except as set forth below, and based on the information presently available, management believes there are no contingencies, claims or actions, pending or threatened, the ultimate resolution of which will have a material adverse effect on our financial position, liquidity or result of operations. | |
In accordance with FASB ASC 450, Contingencies, we accrue loss contingencies including costs of settlement, damages and defense related to litigation to the extent they are probable and reasonably estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. | |
On February 24, 2010, we received a letter from two holders of Series A Preferred Stock in HeartWare, Inc., an indirect subsidiary of HeartWare International, Inc. These holders requested various financial and other information regarding HeartWare, Inc. for the purpose of determining the Company’s compliance with their rights as holders of Series A Preferred Stock, including whether a liquidation event has occurred since inception in 2003. HeartWare, Inc. issued Series A-1 and Series A-2 Preferred Stock to certain equity holders of Kriton Medical, Inc. when HeartWare, Inc. purchased out of bankruptcy substantially all of the assets of Kriton in July 2003. The Series A-1 and Series A-2 Preferred Stock do not have voting or dividend rights but, prior to the settlement described below, entitled the holders thereof to receive, upon certain liquidation events of HeartWare, Inc. (but not the liquidation of or change of control of HeartWare International, Inc.), an amount equal to $10 per share of Series A-1 and $21 per share of Series A-2. The aggregate liquidation preference payment obligation totaled approximately $15 million. | |
On June 27, 2011, HeartWare International, Inc. and HeartWare, Inc., along with HeartWare’s directors, certain officers and a significant stockholder, were named as defendants in a putative class action lawsuit filed in Massachusetts state court by two other Series A Preferred Stockholders on behalf of all holders of Series A Preferred Stock. The complaint alleged that the defendants breached their fiduciary and contractual obligations to Series A Preferred Stockholders by preventing them from receiving a payment of the liquidation preference in connection with certain corporate transactions, including a transaction in 2005 in which HeartWare, Inc. was acquired by HeartWare Limited, a subsidiary of HeartWare International, Inc. The plaintiffs sought monetary damages, interest, costs and limited equitable relief. We do not believe HeartWare International, Inc., HeartWare, Inc. or any of our directors, officers or stockholders have abrogated the rights, or in any way failed to satisfy obligations owed to, any of our stockholders, including holders of Series A Preferred Stock. On February 3, 2012, counsel for plaintiffs and defendants entered into a Memorandum of Understanding to settle the matter. Defendants agreed to pay up to $1.1 million to participating putative class members in exchange for a full and unconditional release of all claims asserted in the litigation, including any and all claims arising from any right to receive a payment upon any liquidation or deemed liquidation event that has arisen or may arise in the future. On March 22, 2012, the parties filed with the court a stipulation of settlement formalizing the settlement agreement. Shortly thereafter, plaintiffs caused notice of the settlement to be made to putative class members. Following a hearing on July 25, 2012, the court entered judgment granting plaintiffs’ motion to finally approve the settlement, including the full and unconditional release of all present and future claims to receive the liquidation preference, and dismissed the case with prejudice. | |
At December 31, 2011, we determined that settlement of the litigation discussed above was probable and that the reasonably estimable settlement amount was $1.1 million. Accordingly, we recorded a liability for the $1.1 million and a $0.2 million receivable from one of the co-defendants, who was a related party. On September 4, 2012, the settlement was funded after receiving $0.8 million from our insurance carrier in connection with the settlement of this litigation. We recorded the insurance recovery as a reduction to selling, general and administrative expenses in our statement of operations in 2012. | |
Contingent Consideration and Milestone Payments | |
In December 2013, we acquired CircuLite using a combination of cash, stock and post-acquisition milestone and royalty payments. The post-acquisition payments are payable based upon the achievement of five specified performance milestones and revenue over periods ranging from 8-10 years subsequent to the acquisition date. The maximum amount of the aggregate post-acquisition payments could be $320 million. As of December 31, 2014, the fair value of this contingent consideration was estimated to be $43.7 million (see Note 6). | |
License and Development Agreements | |
From time to time, we license rights to technology or intellectual property from third parties. These licenses may require us to pay upfront payments as well as development or other payments upon successful completion of preclinical, clinical, regulatory or revenue milestones. In addition, these agreements may require us to pay royalties on sales of products arising from the licensed technology or intellectual property. Because the achievement of these milestones is not reasonably estimable, we have not recorded a liability in the accompanying consolidated financial statements for any of these contingencies. |
Guarantees
Guarantees | 12 Months Ended |
Dec. 31, 2014 | |
Guarantees [Abstract] | |
Guarantees | Note 18. Guarantees |
On December 16, 2008, we entered into a Deed of Cross Guarantee (the “Deed”) by and among the Group’s then-existing entities; HeartWare International, Inc., HeartWare Pty. Limited (formerly HeartWare Limited) and HeartWare Inc., whereby the companies have agreed to cross-guarantee each other’s liabilities. The Deed was established as a condition to obtaining financial reporting relief under ASIC Class Order 98/1418 which provided relief for us from the requirement to prepare and lodge audited accounts for HeartWare Pty. Limited in Australia. HeartWare International, Inc. is the holding entity, HeartWare, Inc. is the alternative Trustee and HeartWare Pty. Limited is a member of the Closed Group for purposes of the Class Order. |
Retirement_Savings_Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Savings Plan | Note 19. Retirement Savings Plan |
We have established a 401(k) plan in which substantially all of our U.S. employees are eligible to participate. Contributions made by employees are limited to the maximum allowable for U.S. federal income tax purposes. Beginning in April 2010, we commenced a matching program whereby we match employee contributions at a rate of 100% of applicable contributions up to 3% of included compensation plus 50% of applicable contributions up to the next 2% of included compensation. Our contributions to the 401(k) plan were approximately $1.4 million, $1.1 million and $0.8 million for the years ended December 31, 2014, 2013 and 2012. |
Quarterly_Financial_Informatio
Quarterly Financial Information (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Quarterly Financial Information (Unaudited) | Note 20. Quarterly Financial Information (Unaudited) | ||||||||||||||||
The following table presents selected quarterly financial information for the periods indicated. This information has been derived from our unaudited quarterly consolidated financial statements, which in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of such information. The quarterly per share data presented below was calculated separately and may not sum to the annual figures presented in the consolidated financial statements. These operating results are also not necessarily indicative of results for any future period. | |||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
2014 | |||||||||||||||||
Revenue, net | $ | 66,472 | $ | 70,131 | $ | 68,608 | $ | 73,209 | |||||||||
Gross profit | 43,557 | 47,176 | 45,631 | 49,860 | |||||||||||||
Net income (loss) | (19,444 | ) | 8,364 | (7,370 | ) | (916 | ) | ||||||||||
Net income (loss) per common share—basic (1) | $ | (1.15 | ) | $ | 0.49 | $ | (0.43 | ) | $ | (0.05 | ) | ||||||
Net income (loss) per common share—diluted (1) | $ | (1.15 | ) | $ | 0.48 | $ | (0.43 | ) | $ | (0.05 | ) | ||||||
Weighted average shares outstanding—basic | 16,934 | 16,989 | 17,007 | 17,037 | |||||||||||||
Weighted average shares outstanding—diluted | 16,934 | 17,305 | 17,007 | 17,037 | |||||||||||||
2013 | |||||||||||||||||
Revenue, net | $ | 49,239 | $ | 50,836 | $ | 54,800 | $ | 53,054 | |||||||||
Gross profit | 30,459 | 31,970 | 35,271 | 33,761 | |||||||||||||
Net loss | (12,959 | ) | (12,934 | ) | (11,371 | ) | (22,048 | ) | |||||||||
Net loss per common share—basic and diluted (1) | $ | (0.87 | ) | $ | (0.79 | ) | $ | (0.69 | ) | $ | (1.33 | ) | |||||
Weighted average shares outstanding—basic and diluted | 14,860 | 16,370 | 16,439 | 16,574 | |||||||||||||
-1 | Net income (loss) per common share for each quarter is computed using the weighted-average number of shares outstanding during that quarter while net loss per common share for the full year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the four quarters’ net income (loss) per common share may not equal the full-year loss per share. | ||||||||||||||||
Significant amounts in per quarter information listed above include: | |||||||||||||||||
• | Net loss for the quarter ended December 31, 2014 included $2.6 million for the impairment of certain purchased intangible assets and a $9.1 million decrease in the fair value of contingent consideration associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net loss for the quarter ended September 30, 2014 included a $3.6 million decrease in the fair value of contingent consideration associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net income for the quarter ended June 30, 2014 included a $13.7 million decrease in the fair value of contingent consideration associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net loss for the quarter ended March 31, 2014 included $4.1 million in restructuring costs and a $3.1 million increase in the fair value of contingent consideration associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net loss for the quarter ended December 31, 2013 included the impairment of certain purchased intangible assets aggregating $3.7 million, $3.1 million of CircuLite operating expenses, which includes $0.6 million of severance costs, and $2.3 million of transaction costs associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net loss for the quarter ended March 31, 2014 included foreign exchange gains of $0.2 million. | ||||||||||||||||
• | Net loss for the quarters ended September 30 and December 31, 2014 included foreign exchange losses of $3.3 million and $1.8 million, respectively. | ||||||||||||||||
• | Net loss for the quarters ended March 31 and June 30, 2013 included foreign exchange losses of $1.9 million and $0.6 million, respectively. | ||||||||||||||||
• | Net loss for the quarters ended September 30 and December 31, 2013 included foreign exchange gains of $2.1 million and $0.3 million, respectively. | ||||||||||||||||
• | Net income (loss) for the quarters ended March 31, June 30, September 30 and December 31, 2014 included share-based compensation expense of approximately $4.4 million, $6.5 million, $6.4 million and $6.2 million, respectively. | ||||||||||||||||
• | Net loss for the quarters ended March 31, June 30, September 30 and December 31, 2013 included share-based compensation expense of approximately $4.4 million, $4.9 million, $7.1 million and $5.3 million, respectively. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 21. Subsequent Events |
We have evaluated events and transactions that occurred subsequent to December 31, 2014 through the date the financial statements were issued, for potential recognition or disclosure in the accompanying consolidated financial statements. As disclosed in Note 11, in January 2015, we initiated a plan to close our facilities located in Aachen, Germany. We currently estimate that the aggregate amount of charges related to this action will be approximately $2.1 million, which we anticipate recording in the quarter ending March 31, 2015. Except for this event, we did not identify any events or transactions that should be recognized or disclosed in the accompanying consolidated financial statements. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||||||
The accompanying consolidated financial statements include the accounts of the HeartWare Group. All inter-company balances and transactions have been eliminated in consolidation. We hold certain investments in small privately-held development-stage entities which are included in other assets on our consolidated balance sheets. In accordance with FASB ASC 810, we analyzed the investments to determine whether the investments are variable interests or interests that give us a controlling financial interest in a variable interest entity (“VIE”). As of December 31, 2014, we determined there were no VIEs required to be consolidated, because we are not the primary beneficiary, as we do not have the power to direct the most meaningful activities of the VIE. Investments where we do not exercise operating and financial control are accounted for under the equity method or cost method depending on our ownership interest. | |||||||||||||
Accounting Estimates | Accounting Estimates | ||||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. | |||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||
Cash and cash equivalents, which primarily consist of money market funds, are recorded in the consolidated balance sheets at cost, which approximates fair value. All highly liquid investments with an original maturity of three months or less at the date of purchase are considered to be cash equivalents. | |||||||||||||
Investments | Investments | ||||||||||||
Our investments classified as available-for-sale are stated at fair value with unrealized gains and losses reported in accumulated other comprehensive loss within stockholders’ equity. We classify our available-for-sale investments as short-term if their remaining time to maturity at purchase is beyond three months, but less than twenty-four months. Investments with maturities at purchase beyond one year, but less than twenty-four months, may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Interest on investments classified as available-for-sale is included in investment income, net. Premiums paid on our short-term investments are amortized over the remaining term of the investment and such amortization is included in investment income, net. | |||||||||||||
Receivables | Receivables | ||||||||||||
Accounts receivable consists of amounts due from the sale of our HVAD System to our customers, which include hospitals, health research institutions and medical device distributors. We grant credit to customers in the normal course of business, but do not require collateral or any other security to support credit sales. Our receivables are geographically dispersed, with a significant portion from customers located in Europe and other foreign countries. At December 31, 2014, no customer had an accounts receivable balance greater than 10% of our total accounts receivable. At December 31, 2013, one customer had an accounts receivable balance greater than 10% of total accounts receivable representing approximately 15% of our total accounts receivable. | |||||||||||||
We maintain allowances for doubtful accounts for estimated losses that may result from an inability to collect payments owed to us for product sales. We regularly review the allowance by considering factors such as historical experience, the age of the accounts receivable balances and local economic conditions that may affect a customer’s ability to pay. Account balances are charged off against the allowance after appropriate collection efforts are exhausted and we feel it is probable that the receivable will not be recovered. | |||||||||||||
The following table summarizes the change in our allowance for doubtful accounts for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance | $ | 495 | $ | 750 | $ | 500 | |||||||
Charges (reversals) to expense | 181 | (255 | ) | 250 | |||||||||
Charge-offs | (5 | ) | — | — | |||||||||
Ending balance | $ | 671 | $ | 495 | $ | 750 | |||||||
As of December 31, 2014 and 2013, we did not have an allowance for returns. | |||||||||||||
Inventories | Inventories | ||||||||||||
Inventories are stated at the lower of cost or market. Cost is determined using a first-in, first-out, or FIFO, method. Work-in-process and finished goods manufactured or assembled by us include direct and indirect labor and manufacturing overhead. Finished goods include product which is ready-for-use and which is held by us or by our customers on a consignment basis. | |||||||||||||
We review our inventory for excess or obsolete inventory and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. Obsolescence may occur due to product expiring or product improvements rendering previous versions obsolete. | |||||||||||||
Property, Plant and Equipment, Net | Property, Plant and Equipment | ||||||||||||
We record property, plant and equipment and leasehold improvements at historical cost. Expenditures for maintenance and repairs are recorded to expense; additions and improvements are capitalized. We generally provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the remaining term of the lease. | |||||||||||||
Property, plant and equipment, net consists of the following: | |||||||||||||
Estimated | December 31, | ||||||||||||
Useful Lives | 2014 | 2013 | |||||||||||
(in thousands) | |||||||||||||
Property, plant and equipment | |||||||||||||
Machinery and equipment | 1.5 to 7 years | $ | 21,279 | $ | 19,790 | ||||||||
Leasehold improvements | 3 to 10 years | 9,070 | 7,131 | ||||||||||
Office equipment, furniture and fixtures | 5 to 7 years | 2,206 | 1,294 | ||||||||||
Purchased software | 1 to 7 years | 6,474 | 5,057 | ||||||||||
39,029 | 33,272 | ||||||||||||
Less: accumulated depreciation | (19,993 | ) | (14,710 | ) | |||||||||
$ | 19,036 | $ | 18,562 | ||||||||||
Depreciation expense was $6.7 million, $6.5 million, and $4.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
During the year ended December 31, 2014, we ceased activities at the former headquarters of CircuLite in Teaneck, New Jersey and vacated the facility. We recorded an impairment charge of $0.6 million related to certain office equipment and software at the facility upon their discontinued use. This amount is included in selling, general and administrative expenses on our condensed consolidated statements of operations. | |||||||||||||
During the year ended December 31, 2013, we ceased certain development activities performed in our Australian facility, and relocated those activities to the United States. We sold a portion of the fixed assets at our Australian facility while others were written-off upon their discontinued use. The aggregate loss on disposal of fixed assets sold or written-off in 2013 in connection with this action was $0.5 million. This amount is included in research and development expenses on our consolidated statements of operations. | |||||||||||||
We enter into agreements with medical centers participating in our U.S. clinical trials under which we loan certain equipment, including patient monitors, to the center to be used throughout the trials. The equipment loaned to the centers is classified as a long-lived asset and included as a component of property, plant and equipment (machinery and equipment) on our consolidated balance sheets. Depreciation expense on equipment subject to these agreements is classified in cost of revenue and is computed using the straight-line method based on the estimated useful life of three years. | |||||||||||||
We also enter into short-term cancellable rental agreements with certain commercial customers for components of the HVAD System, including patient monitors and controllers. Under the terms of such agreements, we provide the equipment to the customers, but we retain title to the equipment. Equipment subject to rental agreements is classified as a long-lived asset and included as a component of property, plant and equipment (machinery and equipment). Depreciation expense on equipment subject to these agreements is classified in cost of revenue and is computed using the straight-line method based on the estimated useful life of fifteen months. | |||||||||||||
The net carrying value of equipment subject to the agreements discussed above was approximately $0.8 million and $1.3 million as of December 31, 2014 and 2013, respectively. | |||||||||||||
Deferred Financing Costs | Deferred Financing Costs | ||||||||||||
Costs incurred in connection with the issuance of our convertible senior notes were allocated between the liability component and the equity component as further discussed in Note 10. The issuance costs allocated to convertible senior notes was capitalized within deferred financing costs, net on our consolidated balance sheets. These costs are being amortized using the effective interest method through December 15, 2017, the maturity date of the notes, and such amortization expense is reflected in interest expense on our consolidated statements of operations. The amount of amortization was approximately $0.4 million for each of the years ended December 31, 2014 and 2013. The amount of accumulated amortization at December 31, 2014 and 2013 was approximately $1.4 million and $1.0 million, respectively. | |||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||
We recognize revenue from product sales in accordance with FASB ASC 605—Revenue Recognition. Revenue from product sales is recognized when persuasive evidence of an arrangement exists, substantially all the risks and rewards of ownership have transferred to our customers, the selling price is fixed and collection is reasonably assured and there are no further obligations to customers. Sales from products are not subject to rights of return and, historically, actual sales returns have not been significant. We sell products through our direct sales force and through distributors. Sales through distributors are recognized as revenue upon sale to the distributor as these sales are considered to be final and no right of return or price protection exists. Sales to customers, when not made on consignment, are recognized upon shipment. A significant portion of our sales are made on a consignment basis. Revenue from products sold on a consignment basis is recognized on the date the consigned product is implanted or otherwise consumed. In limited circumstances, we rent peripheral equipment to patients. We recognize revenue from this arrangement when a contract is entered into with the patient’s insurer over the term the equipment is rented. | |||||||||||||
Shipping fees billed to customers are included in revenue and the related shipping costs are included in cost of revenue. Value added taxes and other similar types of taxes collected from customers in connection with the sale of our products are recorded on a net basis and are not included in revenue. | |||||||||||||
Product Warranty | Product Warranty | ||||||||||||
Certain patient accessories sold with the HVAD System are covered by a limited warranty ranging from one to two years. Estimated contractual warranty obligations are recorded as an expense when the related revenue is recognized and are included in cost of revenue on our consolidated statements of operations. Factors that affect the estimated warranty liability include the number of units sold, historical and anticipated rates of warranty claims, cost per claim, and vendor supported warranty programs. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary. The amount of the liability recorded is equal to the estimated costs to repair or otherwise satisfy claims made by customers. Accrued warranty is included as a component of other accrued liabilities on our consolidated balance sheets. | |||||||||||||
Share-Based Compensation | Share-Based Compensation | ||||||||||||
We recognize share-based compensation expense in connection with our share-based awards based on the estimated fair value of the awards on the date of grant, net of estimated forfeitures, using an accelerated accrual method over the vesting period. Therefore, we only recognize compensation cost for those awards expected to vest over the service period of the award. We estimate the forfeiture rate based on our historical experience of forfeitures. If our actual forfeiture rate is materially different from our estimate, share-based compensation expense could be significantly different from what we have recorded in the current period. | |||||||||||||
Calculating share-based compensation expense requires the input of highly subjective judgment and assumptions, including forfeiture rates, estimates of expected life of the share-based award, stock price volatility and risk-free interest rates. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future. | |||||||||||||
We value restricted stock units (“RSUs”) at their intrinsic value on the date of grant. We estimate the fair value of our stock options using a Black-Scholes option pricing model. When appropriate, we estimate the expected life of a stock option by averaging the contractual term of the stock option (typically 10 years) with the associated vesting term (typically 4 years). We estimate the volatility of our shares on the date of grant considering several factors, including the historical volatility of our publicly-traded shares. We estimate the risk-free interest rate based on rates in effect for United States government bonds with terms similar to the expected lives of the stock options, at the time of grant. | |||||||||||||
We have issued share-based awards with performance-based vesting criteria. Achievement of the milestones must be “probable” before we begin recording share-based compensation expense. At each reporting date, we review the likelihood that these awards will vest and if the vesting is deemed probable, we begin to recognize compensation expense at that time. In the period that achievement of the performance based criteria is deemed probable, U.S. GAAP requires the immediate recognition of all previously unrecognized compensation since the original grant date. As a result, compensation expense recorded in the period that achievement is deemed probable could include a substantial amount of previously unrecorded compensation expense related to the prior periods. If ultimately performance goals are not met, for any share-based awards where vesting was previously deemed probable, previously recognized compensation cost will be reversed. | |||||||||||||
Valuation of Long-Lived Assets and Purchased Intangible Assets | Valuation of Long-Lived Assets and Purchased Intangible Assets | ||||||||||||
We evaluate the carrying value of our long-lived assets, including purchased intangible assets, whenever events, changes in business circumstances or our planned use of long-lived assets indicate that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. If these facts and circumstances exist, we assess for recovery by comparing the carrying values of long-lived assets with their future undiscounted net cash flows. If the comparison indicates that impairment exists, impairment losses are recorded for the excess of the carrying value over the fair value of the long-lived assets based on discounted cash flows. Significant management judgment is required in the forecast of future operating results that are used in the preparation of expected undiscounted cash flows. In 2014, we ceased activities at CircuLite’s former headquarters in Teaneck, New Jersey and vacated the facility. We recorded an impairment charge of $0.6 million related to certain office equipment and software at the facility upon their discontinued use. This amount is included in selling, general and administrative expenses on our consolidated statements of operations. No impairments of similar long-lived assets were identified during the years ended December 31, 2013 or 2012. | |||||||||||||
We also evaluate the carrying value of intangible assets (not subject to amortization) related to in-process research and development (“IPR&D”) assets which are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. Accordingly, amortization of the IPR&D assets does not occur until the product reaches commercialization. During the period the assets are considered indefinite-lived, they are tested for impairment on an annual basis, as well as between annual tests if we become aware of any events occurring or changes in circumstances that indicate that the fair values of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs when regulatory approval to market the product is obtained, the associated IPR&D assets are deemed definite-lived and are then amortized based on their estimated useful lives at that point in time. If the related project is terminated or abandoned, we may have a full or partial impairment related to the IPR&D assets, calculated as the excess of their carrying value over fair value. | |||||||||||||
During the fourth quarter of 2014 we performed an impairment review of our in-process research and development and recorded an impairment charge of $2.6 million related to in-process research and development acquired in 2013. In the fourth quarter of 2013, we recorded an impairment charge of $2.5 million related to in-process research and development acquired in 2012. | |||||||||||||
Goodwill | Goodwill | ||||||||||||
We test goodwill for impairment on an annual basis in the fourth quarter of each fiscal year or more frequently if we believe indicators of impairment exist. The performance of the test involves a two-step process. The first step requires comparing the fair value of the reporting unit to its net book value, including goodwill. A potential impairment exists if the fair value of the reporting unit is lower than its net book value. The second step of the process is only performed if a potential impairment exists, and it involves comparing the aggregate fair value of the reporting unit’s net assets other than goodwill to the fair value of the reporting unit as a whole. Goodwill is considered impaired, and an impairment charge is recorded, if the excess of the fair value of the reporting unit over the fair value of the net assets is less than the carrying value of goodwill. | |||||||||||||
Based on the results of our annual impairment review in the fourth quarter of 2014, we concluded that goodwill was not impaired in 2014. In 2013, we recorded an impairment charge of $1.2 million to write-off goodwill that was recorded in 2012 in connection with our acquisition of World Heart. | |||||||||||||
Contingent Consideration | Contingent Consideration | ||||||||||||
On December 1, 2013, we acquired CircuLite, Inc. In addition to initial consideration paid at closing, the former CircuLite securityholders may be entitled to receive additional shares of HeartWare common stock (or cash, in certain cases, at our discretion) upon the achievement of specified regulatory and commercial milestones, not to exceed $320 million in the aggregate over a ten-year period. The estimated fair value of the contingent payments is recorded as a liability and is remeasured at each reporting period. The estimated fair value is calculated using a discounted cash flow model utilizing significant unobservable inputs including future revenue projections, the probability of achieving each of the potential milestones and an estimated discount rate commensurate with the risks of the expected cash flows attributable to the various milestones. Material changes in any of these inputs could result in a significantly higher or lower fair value measurement and commensurate changes to this liability. Changes in the fair value of the contingent payments are recorded on a separate line item on our consolidated statements of operations. | |||||||||||||
Income Taxes | Income Taxes | ||||||||||||
We account for income taxes in accordance with FASB ASC 740—Income Taxes. Under this method, deferred tax assets and liabilities are provided for differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the tax bases of assets and liabilities that will result in future taxable or deductible amounts. The deferred tax assets and liabilities are measured using the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Income tax expense is computed as the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred taxes will not be realized. | |||||||||||||
FASB ASC 740 requires that we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. | |||||||||||||
We recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes line on our consolidated statements of operations. | |||||||||||||
Translation of Foreign Currency | Translation of Foreign Currency | ||||||||||||
Assets and liabilities of our non-U.S. entities are translated at the period-end exchange rate and revenue and expenses are translated at the average exchange rates in effect during the respective periods. Equity transactions are translated at the spot rates on the dates of the original transactions. The net effect of these translation adjustments is shown in the accompanying consolidated financial statements as a component of stockholders’ equity, titled accumulated other comprehensive loss. Items in accumulated other comprehensive loss are not tax affected as we have incurred a net loss in each period since inception. | |||||||||||||
While most of the transactions of our domestic and international operations are denominated in the respective local currency, some transactions are denominated in other currencies. Transactions denominated in other currencies are accounted for in the respective local currency at the time of the transaction. Upon settlement of this type of transaction, any foreign currency gains or losses are included in our consolidated statements of operations. | |||||||||||||
Research and Development | Research and Development | ||||||||||||
Research and development costs, including new product development programs, regulatory compliance and clinical research, are expensed as incurred. | |||||||||||||
Marketing and Advertising Costs | Marketing and Advertising Costs | ||||||||||||
Marketing, advertising and promotional costs are expensed when incurred. Advertising expenses were immaterial to our results of operations for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||
Leases | Leases | ||||||||||||
We lease all of our administrative and manufacturing facilities. We recognize rent expense on a straight-line basis over the terms of our leases. Any scheduled rent increases, rent holidays and other related incentives are recognized on a straight-line basis over the terms of the leases. The difference between the cash rental payments and the straight-line recognition of rent expense over the terms of the leases results in a deferred rent asset or liability. As of December 31, 2014, the long-term portion of our deferred rent liability of approximately $3.5 million is included in other long-term liabilities on our consolidated balance sheets. | |||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities approximate their fair value based on the short-term maturity of these instruments. See Note 6 (Fair Value Measurements) and Note 10 (Debt) for more information. | |||||||||||||
Vendor Concentration | Vendor Concentration | ||||||||||||
For the years ended December 31, 2014, 2013 and 2012, we purchased approximately 72%, 70%, and 67%, respectively, of our inventory components and supplies from three vendors. In addition, one of the three vendors supplies consulting services and material used in research and development activities. As of December 31, 2014, 2013 and 2012, the amounts due to these vendors totaled approximately $5.4 million, $5.8 million and $5.4 million, respectively. | |||||||||||||
Concentration of Credit Risk and other Risks and Uncertainties | Concentration of Credit Risk and other Risks and Uncertainties | ||||||||||||
Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash and cash equivalents, investments and trade accounts receivable. Cash and cash equivalents are primarily on deposit with financial institutions in the United States and these deposits generally exceed the amount of insurance provided by the Federal Deposit Insurance Corporation (the “FDIC”). The Company has not experienced any historical losses on its deposits of cash and cash equivalents. Our investments consist of investment grade rated corporate and government agency debt and time deposits. | |||||||||||||
Concentration of credit risk with respect to our trade accounts receivable from our customers is primarily limited to hospitals, health research institutions and medical device distributors. Credit is extended to our customers based on an evaluation of a customer’s financial condition, and collateral is not required. | |||||||||||||
We are subject to certain risks and uncertainties including, but not limited to, our ability to achieve profitability, to generate cash flow sufficient to satisfy our indebtedness, to run clinical trials in order to receive and maintain FDA and foreign regulatory approvals for our products, our ability to adequately and timely address issues raised by FDA inspections, our ability to identify and correct quality issues in a timely manner and at a reasonable cost, the ability to achieve widespread acceptance of our products, our ability to manufacture our products in a sufficient volume and at a reasonable cost, the ability to protect our proprietary technologies and develop new products, the risks associated with operating in foreign countries, and general competitive and economic conditions. Changes in any of the preceding areas could have a material adverse effect on our business, results of operations or financial position. | |||||||||||||
New Accounting Standards | New Accounting Standards | ||||||||||||
In September 2012, the FASB issued ASU No. 2012-02, Intangibles—Goodwill and Other (Topic 350), Testing Indefinite-Lived Intangible Assets for Impairment, which provides an entity the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. The qualitative assessment is optional, allowing companies to go directly to the quantitative assessment. ASU No. 2012-02 is effective for our annual and interim impairment tests performed subsequent to January 1, 2013. The adoption of ASU No. 2012-02 did not affect our consolidated financial position, results of operations or cash flows. | |||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). U.S. GAAP does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. This ASU applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, with early adoption permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date, although retrospective application is permitted. The adoption of ASU No. 2013-11 effective January 1, 2014 did not have a material effect on our consolidated financial position, results of operations or cash flows. | |||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The updated standard is a new comprehensive revenue recognition model that requires revenue to be recognized in a manner that depicts the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. The updated standard becomes effective for us in the first quarter of our fiscal year ending December 31, 2017. We have not yet selected a transition method, and we are currently evaluating the effect that the ASU 2014-09 will have on our consolidated financial statements and related disclosures. | |||||||||||||
In January 2015, the FASB issued ASU No. 2015-01, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. The FASB issued this ASU as part of its initiative to reduce complexity in accounting standards. This ASU eliminates from U.S. GAAP the concept of extraordinary items. Subtopic 225-20 required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of ASU No. 2015-01 is not expected to have a material effect on our consolidated financial position, results of operations or cash flows. | |||||||||||||
Debt | In accordance with ASC 470-20, Debt with Conversion and Other Options, which applies to certain convertible debt instruments that may be settled in cash or other assets, or partially in cash, upon conversion, we recorded the long-term debt and equity components on our Convertible Notes separately on the issuance date. The amount recorded for long-term debt was determined by measuring the fair value of a similar liability that does not have an associated equity component. The measurement of fair value required the Company to make estimates and assumptions to determine the present value of the cash flows of the Convertible Notes, absent the conversion feature. This treatment increased interest expense associated with our Convertible Notes by adding a non-cash component to interest expense in the form of amortization of a debt discount calculated based on the difference between the 3.5% cash coupon rate and the effective interest rate on debt borrowing of approximately 12.5%. The discount is being amortized to interest expense through the December 15, 2017 maturity date of the Convertible Notes using the effective interest method and is included in interest expense on our consolidated statements of operations. Additionally, we allocated the costs related to issuance of the Convertible Notes on the same percentage as the long-term debt and equity components, such that a portion of the costs is allocated to the long-term debt component and the equity component included in additional paid-in capital. The portion of the costs allocated to the long-term debt component is presented as deferred financing costs, net on our consolidated balance sheets. These deferred financing costs are also being amortized to interest expense through the December 15, 2017 maturity date of the Convertible Notes using the effective interest method and the amortization is included in interest expense on our consolidated statements of operations | ||||||||||||
Contingencies | In accordance with FASB ASC 450, Contingencies, we accrue loss contingencies including costs of settlement, damages and defense related to litigation to the extent they are probable and reasonably estimable. Otherwise, we expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Summary of Change in Allowance for Doubtful Accounts | The following table summarizes the change in our allowance for doubtful accounts for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance | $ | 495 | $ | 750 | $ | 500 | |||||||
Charges (reversals) to expense | 181 | (255 | ) | 250 | |||||||||
Charge-offs | (5 | ) | — | — | |||||||||
Ending balance | $ | 671 | $ | 495 | $ | 750 | |||||||
Summary of Property, Plant and Equipment, Net | Property, plant and equipment, net consists of the following: | ||||||||||||
Estimated | December 31, | ||||||||||||
Useful Lives | 2014 | 2013 | |||||||||||
(in thousands) | |||||||||||||
Property, plant and equipment | |||||||||||||
Machinery and equipment | 1.5 to 7 years | $ | 21,279 | $ | 19,790 | ||||||||
Leasehold improvements | 3 to 10 years | 9,070 | 7,131 | ||||||||||
Office equipment, furniture and fixtures | 5 to 7 years | 2,206 | 1,294 | ||||||||||
Purchased software | 1 to 7 years | 6,474 | 5,057 | ||||||||||
39,029 | 33,272 | ||||||||||||
Less: accumulated depreciation | (19,993 | ) | (14,710 | ) | |||||||||
$ | 19,036 | $ | 18,562 | ||||||||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Business Combinations [Abstract] | |||||||||
Summary of Acquisition Date Fair Value | The acquisition-date fair value of the consideration transferred is as follows: | ||||||||
Total Acquisition | |||||||||
Date Fair Value | |||||||||
(in thousands) | |||||||||
Cash transferred, including acquisition costs and repayment of debt | $ | 11,780 | |||||||
Shares of common stock issued | 22,328 | ||||||||
Contingent consideration | 67,000 | ||||||||
Total consideration transferred | $ | 101,108 | |||||||
Summary of Estimated Fair Value of the Assets Acquired and Liabilities Assumed at the Date of Acquisition | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition on December 1, 2013 (in thousands): | ||||||||
Cash and cash equivalents | $ | 1,795 | |||||||
Identified intangible assets | 5,500 | ||||||||
In-process research and development | 35,500 | ||||||||
Goodwill | 61,576 | ||||||||
Other assets acquired | 2,724 | ||||||||
Total assets acquired | 107,095 | ||||||||
Other liabilities assumed | (5,987 | ) | |||||||
Total net assets acquired | $ | 101,108 | |||||||
Pro Forma of Result of Operation Effect for Business acquisition | The following unaudited pro forma information presents the combined results of operations for the years ended December 31, 2013 and 2012 as if we had completed the CircuLite acquisition at the beginning of 2012. The pro forma financial information is provided for comparative purposes only and is not necessarily indicative of what actual results would have been had the acquisition occurred on the date indicated, nor do they give effect to synergies, cost savings, fair market value adjustments, immaterial amortization expense and other changes expected to result from the acquisition. Accordingly, the pro forma financial results do not purport to be indicative of consolidated results of operations as of the date hereof, for any period ended on the date hereof, or for any other future date or period. | ||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Revenue | $ | 209,792 | $ | 112,214 | |||||
Income before taxes | (77,973 | ) | (106,636 | ) | |||||
Net loss | (78,599 | ) | (105,307 | ) | |||||
Summary of the Purchase Price Allocation of the Fair Value of the Assets Acquired and Liabilities Assumed at the Date of Acquisition | The following table summarizes the purchase price allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands): | ||||||||
Assets | |||||||||
Short-term: | |||||||||
Cash and cash equivalents | $ | 3,689 | |||||||
Other current assets | 1,116 | ||||||||
Long-term: | |||||||||
Property, plant and equipment | 307 | ||||||||
In-process research and development | 2,536 | ||||||||
Patents | 1,327 | ||||||||
Goodwill | 1,190 | ||||||||
Total assets acquired | 10,165 | ||||||||
Liabilities | |||||||||
Current | 1,964 | ||||||||
Non-current | 1,258 | ||||||||
Net assets acquired | $ | 6,943 | |||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||
Summary of Amortized Cost and Fair Value of Investments | The amortized cost and fair value of our investments, with gross unrealized gains and losses, were as follows: | ||||||||||||||||
At December 31, 2014 | |||||||||||||||||
Amortized | Gross | Gross | Aggregate | ||||||||||||||
Cost Basis | Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
(in thousands) | |||||||||||||||||
Short-term investments: | |||||||||||||||||
Corporate debt | $ | 51,241 | $ | 8 | $ | (244 | ) | $ | 51,005 | ||||||||
U.S. government agency debt | 15,000 | — | (25 | ) | 14,975 | ||||||||||||
Certificates of deposit | 9,555 | — | — | 9,555 | |||||||||||||
Total short-term investments | $ | 75,796 | $ | 8 | $ | (269 | ) | $ | 75,535 | ||||||||
Long-term investments: | |||||||||||||||||
Certificates of deposit | $ | 1,225 | $ | — | $ | — | $ | 1,225 | |||||||||
Total long-term investments | $ | 1,225 | $ | — | $ | — | $ | 1,225 | |||||||||
At December 31, 2013 | |||||||||||||||||
Amortized | Gross | Gross | Aggregate | ||||||||||||||
Cost Basis | Unrealized | Unrealized | Fair Value | ||||||||||||||
Gains | Losses | ||||||||||||||||
(in thousands) | |||||||||||||||||
Short-term investments: | |||||||||||||||||
Corporate debt | $ | 32,221 | $ | 3 | $ | (18 | ) | $ | 32,206 | ||||||||
Certificates of deposit | 5,390 | — | — | 5,390 | |||||||||||||
Total short-term investments | $ | 37,611 | $ | 3 | $ | (18 | ) | $ | 37,596 | ||||||||
Long-term investments: | |||||||||||||||||
Certificates of deposit | $ | 1,225 | $ | — | $ | — | $ | 1,225 | |||||||||
Total long-term investments | $ | 1,225 | $ | — | $ | — | $ | 1,225 | |||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
Fair Value of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis | The following tables represent the fair value of our financial assets and financial liabilities measured at fair value on a recurring basis and which level was used in the fair value hierarchy. | ||||||||||||||||||||
At December 31, 2014 | |||||||||||||||||||||
Carrying | Fair | Fair Value Measurements at the Reporting Date Using | |||||||||||||||||||
Value | Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
(in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Short-term investments | $ | 75,535 | $ | 75,535 | $ | — | $ | 75,535 | $ | — | |||||||||||
Long-term investments | 1,225 | 1,225 | — | 1,225 | — | ||||||||||||||||
Liabilities | |||||||||||||||||||||
Convertible senior notes | 114,803 | (1) | 153,978 | — | 153,978 | — | |||||||||||||||
Contingent consideration | 43,740 | 43,740 | — | — | 43,740 | ||||||||||||||||
Royalties | 962 | 962 | — | — | 962 | ||||||||||||||||
Lease exit costs | 1,207 | 1,207 | — | — | 1,207 | ||||||||||||||||
At December 31, 2013 | |||||||||||||||||||||
Carrying | Fair | Fair Value Measurements at the Reporting Date Using | |||||||||||||||||||
Value | Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
(in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Short-term investments | $ | 37,596 | $ | 37,596 | $ | — | $ | 37,596 | $ | — | |||||||||||
Long-term investments | 1,225 | 1,225 | — | 1,225 | — | ||||||||||||||||
Liabilities | |||||||||||||||||||||
Convertible senior notes | 107,125 | (1) | 174,117 | — | 174,117 | — | |||||||||||||||
Contingent consideration | 67,000 | 67,000 | — | — | 67,000 | ||||||||||||||||
Royalties | 999 | 999 | — | — | 999 | ||||||||||||||||
-1 | The carrying amount of our convertible senior notes is net of unamortized discount. See Note 10 (Debt) for more information. | ||||||||||||||||||||
Summary of Change in Fair Value of Contingent Consideration as Determined by Level 3 Inputs | The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the year ended December 31, 2014: | ||||||||||||||||||||
Contingent | |||||||||||||||||||||
Consideration | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Beginning balance | $ | 67,000 | |||||||||||||||||||
Payments | — | ||||||||||||||||||||
Change in fair value | (23,260 | ) | |||||||||||||||||||
Ending balance | $ | 43,740 | |||||||||||||||||||
Summary of Change in Fair Value of Royalties as Determined by Level 3 Inputs | The following table summarizes the change in fair value, as determined by Level 3 inputs, of the royalties in the year ended December 31, 2014: | ||||||||||||||||||||
Royalties | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Beginning balance | $ | 999 | |||||||||||||||||||
Payments | (116 | ) | |||||||||||||||||||
Change in fair value | 79 | ||||||||||||||||||||
Ending balance | $ | 962 | |||||||||||||||||||
Summary of Change in Fair Value of Lease Exit Costs as Determined by Level 3 Inputs | The following table summarizes the change in fair value, as determined by Level 3 inputs, of the lease exit costs in the year ended December 31, 2014: | ||||||||||||||||||||
Lease Exit | |||||||||||||||||||||
Costs | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Beginning balance | $ | — | |||||||||||||||||||
Accruals | 1,676 | ||||||||||||||||||||
Payments | (518 | ) | |||||||||||||||||||
Change in fair value | 49 | ||||||||||||||||||||
Ending balance | $ | 1,207 | |||||||||||||||||||
Schedule of Quantitative Information for Level 3 Fair Value Measurements | The following table presents quantitative information about the inputs and valuation methodologies used for our fair value measurements classified in Level 3 of the fair value hierarchy as of December 31, 2014: | ||||||||||||||||||||
Valuation Methodology | Significant | Weighted Average | |||||||||||||||||||
(range, if applicable) | |||||||||||||||||||||
Unobservable Input | |||||||||||||||||||||
Contingent consideration | Probability weighted income approach | Milestone dates | 2019 to 2022 | ||||||||||||||||||
Discount rate | 17.0% to 24.0% | ||||||||||||||||||||
Probability of occurrence | 0% to 100% | ||||||||||||||||||||
Royalties | Discounted cash flow | Discount rate | 4.8% to 7.8% | ||||||||||||||||||
Lease exit costs | Discounted cash flow | Sublease start date | November 2015 | ||||||||||||||||||
Sublease rate | $26.50/square foot | ||||||||||||||||||||
Discount rate | 3.50% |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Components of Inventories | Components of inventories are as follows: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Raw material | $ | 28,688 | $ | 21,761 | |||||
Work-in-process | 10,240 | 8,206 | |||||||
Finished goods | 15,118 | 10,909 | |||||||
$ | 54,046 | $ | 40,876 | ||||||
Goodwill_InProcess_Research_an1
Goodwill, In-Process Research and Development and Other Intangible Assets, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Summary of Carrying Amount of Goodwill and Change in Balance | The carrying amount of goodwill and the change in the balance for the years ended December 31, 2014 and 2013 is as follows: | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Beginning balance | $ | 61,596 | $ | 1,190 | |||||
Additions | — | 61,576 | |||||||
Impairment | — | (1,190 | ) | ||||||
Foreign currency translation impact | (206 | ) | 20 | ||||||
Ending balance | $ | 61,390 | $ | 61,596 | |||||
Summary of Carrying Value of In-Process Research and Development Assets | The carrying value of our in-process research and development assets, which relate to the development and potential commercialization of certain acquired technologies, consisted of the following at December 31, 2014 and 2013: | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
SYNERGY System technology | $ | 32,850 | $ | 35,500 | |||||
Summary of Other Intangible Assets | Other intangible assets, net consisted of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Patents | $ | 5,310 | $ | 3,754 | |||||
Purchased intangible assets | |||||||||
Trade names | 3,700 | 3,700 | |||||||
Customer relationships | 1,800 | 1,800 | |||||||
Acquired technology rights | 9,925 | 7,925 | |||||||
20,735 | 17,179 | ||||||||
Less: Accumulated amortization—Patents | (1,118 | ) | (800 | ) | |||||
Less: Accumulated amortization—Purchased intangible assets | (1,810 | ) | (404 | ) | |||||
$ | 17,807 | $ | 15,975 | ||||||
Estimated Useful Lives of Intangible Assets | Our other intangible assets are amortized using the straight-line method over their estimated useful lives as follows: | ||||||||
Patents | 15 years | ||||||||
Purchased intangible assets | |||||||||
Trade names | 15 years | ||||||||
Customer relationships | 20 years | ||||||||
Acquired technology rights | 6 to 16 years |
Other_Balance_Sheet_Informatio1
Other Balance Sheet Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Summary of Other Accrued Liabilities | Other accrued liabilities consist of the following: | ||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Accrued payroll and other employee costs | $ | 13,404 | $ | 10,840 | |||||||||||||
Accrued milestone payment | — | 5,000 | |||||||||||||||
Accrued material purchases | 4,284 | 4,325 | |||||||||||||||
Accrued warranty | 4,685 | 2,498 | |||||||||||||||
Accrued research and development costs | 2,663 | 2,307 | |||||||||||||||
Accrued product recall costs | 1,888 | — | |||||||||||||||
Accrued professional fees | 1,624 | 2,428 | |||||||||||||||
Accrued VAT | 1,637 | 1,329 | |||||||||||||||
Accrued restructuring costs | 1,266 | 245 | |||||||||||||||
Other accrued expenses | 5,138 | 6,304 | |||||||||||||||
$ | 36,589 | $ | 35,276 | ||||||||||||||
Summary of Changes in Warranty Liability | The following table summarizes changes in our warranty liability for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(in thousands) | |||||||||||||||||
Beginning balance | $ | 2,498 | $ | 543 | $ | 203 | |||||||||||
Accrual for warranty expense | 4,141 | 2,721 | 921 | ||||||||||||||
Warranty costs incurred during the period | (1,954 | ) | (766 | ) | (581 | ) | |||||||||||
Ending balance | $ | 4,685 | $ | 2,498 | $ | 543 | |||||||||||
Summary of Changes in Accrued Restructuring Costs | The following table summarizes changes in our accrued restructuring costs for the year ended December 31, 2014: | ||||||||||||||||
Facility Leases | Severance and | Contract | Total | ||||||||||||||
Related | Termination | ||||||||||||||||
(in thousands) | |||||||||||||||||
Beginning balance | $ | — | $ | 245 | $ | — | $ | 245 | |||||||||
Restructuring charges | 2,204 | 715 | 688 | 3,607 | |||||||||||||
Payments | (818 | ) | (833 | ) | (688 | ) | (2,339 | ) | |||||||||
Adjustments to estimated obligations | (168 | ) | (127 | ) | — | (295 | ) | ||||||||||
Change in fair value | 48 | — | — | 48 | |||||||||||||
Ending balance | $ | 1,266 | $ | — | $ | — | $ | 1,266 | |||||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Summary of Convertible Notes and Equity Component | The Convertible Notes and the equity component, which is recorded in additional paid-in-capital, consisted of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Principal amount | $ | 143,750 | $ | 143,750 | |||||
Unamortized discount | (28,947 | ) | (36,625 | ) | |||||
Net carrying amount | $ | 114,803 | $ | 107,125 | |||||
Equity component | $ | 55,038 | $ | 55,038 | |||||
Summary of Interest Expense Related to Convertible Notes | For the years ended December 31, 2014 and 2013, interest expense related to the Convertible Notes was as follows: | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Stated amount at 3.5% coupon rate | $ | 5,031 | $ | 5,031 | |||||
Amortization of discount | 7,678 | 6,809 | |||||||
Amortization of deferred financing costs | 412 | 365 | |||||||
$ | 13,121 | $ | 12,205 | ||||||
Leases_Tables
Leases (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases [Abstract] | |||||
Future Minimum Rental Commitments Under Non-cancelable Operating Lease Agreements | Future minimum rental commitments under non-cancelable operating lease agreements with remaining terms of at least one year as of December 31, 2014 are as follows: | ||||
Operating | |||||
Leases | |||||
(in thousands) | |||||
Year Ending December 31, | |||||
2015 | $ | 3,618 | |||
2016 | 3,559 | ||||
2017 | 3,662 | ||||
2018 | 3,664 | ||||
2019 | 3,751 | ||||
Thereafter | 5,870 | ||||
Total minimum lease payments | $ | 24,124 | |||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Equity [Abstract] | |||||
Shares of Common Stock Reserved for Possible Future Issuance | Shares of our common stock reserved at December 31, 2014, for possible future issuance are as follows: | ||||
(in thousands) | |||||
Convertible senior notes | 1,768 | ||||
Equity award plans | 1,418 | ||||
3,186 | |||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Allocation of Share-Based Compensation Expense | For the years ended December 31, 2014, 2013 and 2012, we recorded share-based compensation expenses as follows: | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(in thousands) | |||||||||||||||||
Cost of revenue | $ | 2,032 | $ | 2,539 | $ | 3,152 | |||||||||||
Selling, general and administrative | 13,573 | 12,184 | 10,195 | ||||||||||||||
Research and development | 7,937 | 7,151 | 5,458 | ||||||||||||||
$ | 23,542 | $ | 21,874 | $ | 18,805 | ||||||||||||
Weighted Average Assumptions Used for Options Issued | The following table includes the weighted average assumptions used for options issued in the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||||||||||
Expected volatility | 39 | % | 40 | % | 57 | % | |||||||||||
Risk-free interest rate | 1.65 | % | 1.15 | % | 1 | % | |||||||||||
Estimated holding period (years) | 5 | 6.25 | 6.25 | ||||||||||||||
Summary of Options Granted under All Plans | Information related to options granted under all of our plans at December 31, 2014 and activity during the year then ended is as follows (certain amounts in U.S.$ were converted from AU$ at the then period-end spot rate): | ||||||||||||||||
Number of | Weighted | Weighted | Aggregate | ||||||||||||||
Options | Average | Average | Intrinsic | ||||||||||||||
(in thousands) | Exercise | Remaining | Value | ||||||||||||||
Price | Contractual Life | (in thousands) | |||||||||||||||
(Years) | |||||||||||||||||
Outstanding at December 31, 2013 | 133 | $ | 42.82 | ||||||||||||||
Granted | 7 | 88.84 | |||||||||||||||
Exercised | (32 | ) | 29.25 | ||||||||||||||
Forfeited | — | — | |||||||||||||||
Expired | (1 | ) | 86.58 | ||||||||||||||
Outstanding at December 31, 2014 | 107 | $ | 48.32 | 4.39 | $ | 3,063 | |||||||||||
Exercisable at December 31, 2014 | 87 | $ | 39.75 | 3.52 | $ | 3,051 | |||||||||||
Summary of RSU's | Information related to RSUs at December 31, 2014 and activity during the year then ended is as follows: | ||||||||||||||||
Number of | Weighted | Aggregate | |||||||||||||||
Units | Average | Intrinsic Value | |||||||||||||||
(in thousands) | Remaining | (in thousands) | |||||||||||||||
Contractual | |||||||||||||||||
Life | |||||||||||||||||
(Years) | |||||||||||||||||
Outstanding at December 31, 2013 | 476 | ||||||||||||||||
Granted | 363 | ||||||||||||||||
Vested/Exercised | (193 | ) | |||||||||||||||
Forfeited | (57 | ) | |||||||||||||||
Outstanding at December 31, 2014 | 589 | 1.51 | $ | 43,232 | |||||||||||||
Exercisable at December 31, 2014 | — | — | $ | — | |||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income (Loss) before Taxes on Geographic Basis | Income (loss) before taxes on a geographic basis during 2014 was as follows: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
United States | $ | (20,684 | ) | $ | (58,063 | ) | $ | (82,463 | ) | ||||
Non-U.S. | 1,878 | (781 | ) | (5,255 | ) | ||||||||
$ | (18,806 | ) | $ | (58,844 | ) | $ | (87,718 | ) | |||||
Primary Components of Net Deferred Tax Assets and Liabilities | The primary components of net deferred tax assets and liabilities at December 31, 2014 and 2013 were as follows: | ||||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
Deferred tax assets: | |||||||||||||
U.S. losses carried forward | $ | 128,216 | $ | 179,503 | |||||||||
Non-U.S. losses carried forward | 4,227 | 5,039 | |||||||||||
Total net operating losses carried forward | 132,443 | 184,542 | |||||||||||
Research and development credit | — | 2,114 | |||||||||||
Equity awards | 9,902 | 7,152 | |||||||||||
Other deferred tax assets | 11,935 | 4,812 | |||||||||||
Gross deferred tax assets | 154,280 | 198,620 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Convertible debt | (10,632 | ) | (13,171 | ) | |||||||||
Purchased intangible assets | (13,549 | ) | (14,143 | ) | |||||||||
Net deferred tax assets | 130,099 | 171,306 | |||||||||||
Less: valuation allowance | (130,099 | ) | (171,306 | ) | |||||||||
Net deferred tax asset/(liability) | $ | — | $ | — | |||||||||
Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits from Continuing Operations | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: | ||||||||||||
Uncertain tax position | Year ended | ||||||||||||
December 31, | |||||||||||||
2014 | |||||||||||||
(in thousands) | |||||||||||||
Unrecognized tax benefits—beginning of the year | $ | 3,567 | |||||||||||
Gross increases/(decrease)—prior year | 17 | ||||||||||||
Gross increases/(decrease)—current year | (356 | ) | |||||||||||
Unrecognized tax benefits—end of the year | $ | 3,228 | |||||||||||
Net_Loss_Per_Share_Tables
Net Loss Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Anti-Dilutive Securities Excluded from Computation of Earnings Per Share | The following instruments were excluded from the calculation of diluted weighted average shares outstanding, as their effect would be anti-dilutive. | ||||||||||||
Common shares issuable upon: | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Conversion of convertible senior notes | 1,438 | 1,438 | 1,438 | ||||||||||
Exercise or vesting of share-based awards | 696 | 608 | 838 |
Business_Segment_Geographic_Ar1
Business Segment, Geographic Areas and Major Customers (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Product Sales by Geographic Location | Product sales by geographic location for the years ended December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
United States | $ | 151,335 | $ | 105,345 | $ | 27,650 | |||||||
Germany | 63,629 | 54,793 | 40,001 | ||||||||||
International, excluding Germany | 63,456 | 47,791 | 43,271 | ||||||||||
$ | 278,420 | $ | 207,929 | $ | 110,922 | ||||||||
Quarterly_Financial_Informatio1
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Summary of selected quarterly financial information | The following table presents selected quarterly financial information for the periods indicated. | ||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
2014 | |||||||||||||||||
Revenue, net | $ | 66,472 | $ | 70,131 | $ | 68,608 | $ | 73,209 | |||||||||
Gross profit | 43,557 | 47,176 | 45,631 | 49,860 | |||||||||||||
Net income (loss) | (19,444 | ) | 8,364 | (7,370 | ) | (916 | ) | ||||||||||
Net income (loss) per common share—basic (1) | $ | (1.15 | ) | $ | 0.49 | $ | (0.43 | ) | $ | (0.05 | ) | ||||||
Net income (loss) per common share—diluted (1) | $ | (1.15 | ) | $ | 0.48 | $ | (0.43 | ) | $ | (0.05 | ) | ||||||
Weighted average shares outstanding—basic | 16,934 | 16,989 | 17,007 | 17,037 | |||||||||||||
Weighted average shares outstanding—diluted | 16,934 | 17,305 | 17,007 | 17,037 | |||||||||||||
2013 | |||||||||||||||||
Revenue, net | $ | 49,239 | $ | 50,836 | $ | 54,800 | $ | 53,054 | |||||||||
Gross profit | 30,459 | 31,970 | 35,271 | 33,761 | |||||||||||||
Net loss | (12,959 | ) | (12,934 | ) | (11,371 | ) | (22,048 | ) | |||||||||
Net loss per common share—basic and diluted (1) | $ | (0.87 | ) | $ | (0.79 | ) | $ | (0.69 | ) | $ | (1.33 | ) | |||||
Weighted average shares outstanding—basic and diluted | 14,860 | 16,370 | 16,439 | 16,574 | |||||||||||||
-1 | Net income (loss) per common share for each quarter is computed using the weighted-average number of shares outstanding during that quarter while net loss per common share for the full year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the four quarters’ net income (loss) per common share may not equal the full-year loss per share. | ||||||||||||||||
Significant amounts in per quarter information listed above include: | |||||||||||||||||
• | Net loss for the quarter ended December 31, 2014 included $2.6 million for the impairment of certain purchased intangible assets and a $9.1 million decrease in the fair value of contingent consideration associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net loss for the quarter ended September 30, 2014 included a $3.6 million decrease in the fair value of contingent consideration associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net income for the quarter ended June 30, 2014 included a $13.7 million decrease in the fair value of contingent consideration associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net loss for the quarter ended March 31, 2014 included $4.1 million in restructuring costs and a $3.1 million increase in the fair value of contingent consideration associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net loss for the quarter ended December 31, 2013 included the impairment of certain purchased intangible assets aggregating $3.7 million, $3.1 million of CircuLite operating expenses, which includes $0.6 million of severance costs, and $2.3 million of transaction costs associated with the acquisition of CircuLite. | ||||||||||||||||
• | Net loss for the quarter ended March 31, 2014 included foreign exchange gains of $0.2 million. | ||||||||||||||||
• | Net loss for the quarters ended September 30 and December 31, 2014 included foreign exchange losses of $3.3 million and $1.8 million, respectively. | ||||||||||||||||
• | Net loss for the quarters ended March 31 and June 30, 2013 included foreign exchange losses of $1.9 million and $0.6 million, respectively. | ||||||||||||||||
• | Net loss for the quarters ended September 30 and December 31, 2013 included foreign exchange gains of $2.1 million and $0.3 million, respectively. | ||||||||||||||||
• | Net income (loss) for the quarters ended March 31, June 30, September 30 and December 31, 2014 included share-based compensation expense of approximately $4.4 million, $6.5 million, $6.4 million and $6.2 million, respectively. | ||||||||||||||||
• | Net loss for the quarters ended March 31, June 30, September 30 and December 31, 2013 included share-based compensation expense of approximately $4.4 million, $4.9 million, $7.1 million and $5.3 million, respectively. |
Description_of_Business_Additi
Description of Business - Additional Information (Detail) | 0 Months Ended | 12 Months Ended | |
Aug. 27, 2013 | Dec. 31, 2014 | Aug. 27, 2013 | |
Patient | l | Patient | |
Country | |||
Implants | |||
Facilities | |||
Collaboration Arrangement Disclosure [Abstract] | |||
Capacity of blood pumping device | 10 | ||
Number of health care sites where HVAD is implanted in Patients | 270 | ||
Number of countries where HVAD is implanted in Patients | 41 | ||
Number of implants of HVAD System in patients | 7,000 | ||
Number of patients Expected to Enroll | 310 | ||
Number of Additional control patients | 155 |
Liquidity_Additional_Informati
Liquidity - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Liquidity [Abstract] | ||
Cash, cash equivalents and investments | $179,700,000 | |
Accumulated deficit | ($348,719,000) | ($329,353,000) |
Significant_Accounting_Policie3
Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 01, 2013 | Dec. 30, 2013 | |
Entity | Vendor | |||||||
Entity | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
VIE's required to be consolidated | 0 | 0 | ||||||
Cash and cash equivalent maximum maturity period | 3 months | |||||||
Percentage of account receivables by customers | 10.00% | 10.00% | 10.00% | 10.00% | ||||
Depreciation expense | $6,674,000 | $6,451,000 | $4,826,000 | |||||
Impairment charge | 607,000 | 607,000 | 0 | 0 | ||||
Aggregate loss on disposal of fixed assets sold | 500,000 | |||||||
Net carrying value of equipment | 19,036,000 | 18,562,000 | 19,036,000 | 18,562,000 | ||||
Deferred cost amortization expense | 412,000 | 365,000 | 324,000 | |||||
Accumulated amortization of deferred costs | 1,400,000 | 1,000,000 | 1,400,000 | 1,000,000 | ||||
Maturity date of notes | 15-Dec-17 | |||||||
Expected Stock Option contractual term | 10 years | |||||||
Typical Vesting term | 4 years | |||||||
Research and development charged to expense | 2,600,000 | 2,500,000 | ||||||
Goodwill impairment charge | 1,190,000 | |||||||
Maximum percentage of benefit to be realized upon settlement with tax authority | 50.00% | |||||||
Deferred rent liability | 3,500,000 | 3,500,000 | ||||||
Percentage of inventory component purchased | 72.00% | 70.00% | 67.00% | |||||
Number of vendors supplying material consulting services | 1 | |||||||
Number of vendors for inventory supply | 3 | |||||||
Amount due to vendors | 5,400,000 | 5,800,000 | 5,400,000 | 5,800,000 | 5,400,000 | |||
Convertible Senior Notes [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Maturity date of notes | 15-Dec-17 | |||||||
World Heart Corporation [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Goodwill impairment charge | 1,200,000 | 0 | 1,200,000 | |||||
Equipment Subject to Agreements One [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Estimated life of equipment | 3 years | |||||||
Equipment Subject To Agreements Two [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Estimated life of equipment | 15 months | |||||||
Equipment Subject to Agreements [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Net carrying value of equipment | 800,000 | 1,300,000 | 800,000 | 1,300,000 | ||||
Allowance for Sales Returns [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Allowance for returns | 0 | 0 | 0 | |||||
Accounts Receivable [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Number of customers having account receivable balance | 0 | 1 | ||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Percentage of accounts receivable from major customer | 15.00% | |||||||
Minimum [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Maturity period of available-for-sale investments classified as short-term investment | 3 months | |||||||
Maturity of investment classified as short-term | 1 year | |||||||
Maturity of limited warranty | 1 year | |||||||
Maximum [Member] | ||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||||||
Maturity period of available-for-sale investments classified as short-term investment | 24 months | |||||||
Maturity of investment classified as short-term | 24 months | |||||||
Maturity of limited warranty | 2 years | |||||||
Regulatory and commercial milestones | $320,000,000 | $320,000,000 |
Significant_Accounting_Policie4
Significant Accounting Policies - Summary of Change in Allowance for Doubtful Accounts (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Beginning balance | $495 | $750 | $500 |
Charges (reversals) to expense | 181 | -255 | 250 |
Charge-offs | -5 | ||
Ending balance | $671 | $495 | $750 |
Significant_Accounting_Policie5
Significant Accounting Policies - Summary of Property, Plant and Equipment, Net (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 39,029 | 33,272 |
Less: accumulated depreciation | -19,993 | -14,710 |
Property, plant and equipment, net | 19,036 | 18,562 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 21,279 | 19,790 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 1 year 6 months | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 7 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 9,070 | 7,131 |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 3 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 10 years | |
Office Equipment, Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,206 | 1,294 |
Office Equipment, Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 5 years | |
Office Equipment, Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 7 years | |
Software and Software Development Costs [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 6,474 | 5,057 |
Software and Software Development Costs [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 1 year | |
Software and Software Development Costs [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 7 years |
Acquisition_Additional_Informa
Acquisition - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 01, 2013 | Aug. 02, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2012 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Gross Business acquisition purchase price | $30,000,000 | ||||||||
Value of shares assigned for Business acquisition | 18,000,000 | ||||||||
Par value of shares | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | |||
Acquisition of share | 230,000 | 83,000 | |||||||
Cash transferred, including acquisition costs and repayment of debt | 12,000,000 | ||||||||
Shares of common stock Valued at closing | 22,000,000 | ||||||||
Estimated acquisition-date fair value of the Contingent Payments | 67,000,000 | ||||||||
Consulting and other costs related to the acquisition | 1,100,000 | ||||||||
Acquisition of share in percent | 100.00% | ||||||||
Common stock, value | 6,900,000 | ||||||||
Impairment charges | 2,650,000 | 3,726,000 | 2,650,000 | 3,726,000 | |||||
Goodwill impairment charge | 1,190,000 | ||||||||
CircuLite [Member] | |||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Cash transferred, including acquisition costs and repayment of debt | 11,780,000 | ||||||||
Shares of common stock Valued at closing | 22,328,000 | ||||||||
Estimated acquisition-date fair value of the Contingent Payments | 67,000,000 | ||||||||
Business Acquisition transaction related liabilities and expenses | 5,700,000 | ||||||||
Repayment of debt on behalf of CircuLite | 6,100,000 | ||||||||
Impairment of in-process research and development | 2,600,000 | ||||||||
Consulting and other costs related to the acquisition | 2,300,000 | 2,800,000 | |||||||
Net loss of Acquisition | -78,599,000 | 3,200,000 | -105,307,000 | ||||||
Restructuring costs | 600,000 | 4,100,000 | |||||||
Common stock, value | 101,108,000 | ||||||||
Impairment charges | 2,600,000 | 3,700,000 | |||||||
World Heart Corporation [Member] | |||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Impairment of in-process research and development | 2,500,000 | ||||||||
Impairment charges | 3,700,000 | ||||||||
Goodwill impairment charge | $1,200,000 | $0 | $1,200,000 | ||||||
Acquired Patents [Member] | |||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Customer relationships and trade names estimated economic useful lives | 16 years | ||||||||
Minimum [Member] | Customer Relationships and Trade Names [Member] | |||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Customer relationships and trade names estimated economic useful lives | 15 years | ||||||||
Maximum [Member] | Customer Relationships and Trade Names [Member] | |||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Customer relationships and trade names estimated economic useful lives | 20 years |
Acquisition_Summary_of_Acquisi
Acquisition - Summary of Acquisition Date Fair Value (Detail) (USD $) | 0 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 01, 2013 | Aug. 02, 2012 | Dec. 01, 2013 |
Loans At Acquisition Date [Line Items] | |||
Cash transferred, including acquisition costs and repayment of debt | $12,000 | ||
Shares of common stock issued | 22,000 | ||
Contingent consideration | 67,000 | 67,000 | |
Total consideration transferred | 6,900 | ||
CircuLite [Member] | |||
Loans At Acquisition Date [Line Items] | |||
Cash transferred, including acquisition costs and repayment of debt | 11,780 | ||
Shares of common stock issued | 22,328 | ||
Contingent consideration | 67,000 | 67,000 | |
Total consideration transferred | $101,108 |
Acquisition_Summary_of_Estimat
Acquisition - Summary of Estimated Fair Value of the Assets Acquired and Liabilities Assumed at the Date of Acquisition (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 01, 2013 |
In Thousands, unless otherwise specified | ||||
Loans At Acquisition Date [Line Items] | ||||
Goodwill | $61,390 | $61,596 | $1,190 | |
CircuLite [Member] | ||||
Loans At Acquisition Date [Line Items] | ||||
Cash and cash equivalents | 1,795 | |||
Identified intangible assets | 5,500 | |||
In-process research and development | 35,500 | |||
Goodwill | 61,576 | |||
Other assets acquired | 2,724 | |||
Total assets acquired | 107,095 | |||
Other liabilities assumed | -5,987 | |||
Total net assets acquired | $101,108 |
Acquisition_Pro_Forma_of_Resul
Acquisition - Pro Forma of Result of Operation Effect for Business acquisition (Detail) (CircuLite [Member], USD $) | 1 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
CircuLite [Member] | |||
Business Acquisition Pro Forma Information [Line Items] | |||
Revenue | $209,792 | $112,214 | |
Income before taxes | -77,973 | -106,636 | |
Net loss | $3,200 | ($78,599) | ($105,307) |
Acquisition_Summary_of_the_Pur
Acquisition - Summary of the Purchase Price Allocation of the Fair Value of the Assets Acquired and Liabilities Assumed at the Date of Acquisition (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Long-term: | |||
Goodwill | $61,390 | $61,596 | $1,190 |
World Heart Corporation [Member] | |||
Short-term: | |||
Cash and cash equivalents | 3,689 | ||
Other current assets | 1,116 | ||
Long-term: | |||
Property, plant and equipment | 307 | ||
In-process research and development | 2,536 | ||
Goodwill | 1,190 | ||
Total assets acquired | 10,165 | ||
Liabilities | |||
Current | 1,964 | ||
Non-current | 1,258 | ||
Net assets acquired | 6,943 | ||
World Heart Corporation [Member] | Patents [Member] | |||
Long-term: | |||
Patents | $1,327 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Realized gains (losses) on investments | $0 | $0 | ||
Available-for-sale investments in a continuous loss position for more than twelve months | $0 | $0 | ||
Available-for-sale investments in a continuous loss position for twelve months or less, Number of securities | 22 | 22 | ||
Short-term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investment maturity date description | Less than twenty-four months | Less than twenty-four months | ||
Long-term Investments [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investment maturity date description | Within thirty-six months | Within thirty-six months |
Investments_Summary_of_Amortiz
Investments - Summary of Amortized Cost and Fair Value of Investments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | $75,796 | $37,611 |
Gross Unrealized Gains | 8 | 3 |
Gross Unrealized Losses | -269 | -18 |
Aggregate Fair Value | 75,535 | 37,596 |
Short-term Investments [Member] | Corporate Debt [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 51,241 | 32,221 |
Gross Unrealized Gains | 8 | 3 |
Gross Unrealized Losses | -244 | -18 |
Aggregate Fair Value | 51,005 | 32,206 |
Short-term Investments [Member] | U.S. Government Agency Debt [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 15,000 | |
Gross Unrealized Losses | -25 | |
Aggregate Fair Value | 14,975 | |
Short-term Investments [Member] | Certificates of Deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 9,555 | 5,390 |
Aggregate Fair Value | 9,555 | 5,390 |
Long-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 1,225 | 1,225 |
Aggregate Fair Value | 1,225 | 1,225 |
Long-term Investments [Member] | Certificates of Deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 1,225 | 1,225 |
Aggregate Fair Value | $1,225 | $1,225 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Transfer between level 1, Level 2, Level3 | $0 | $0 | $0 | |||
Change in fair value of contingent consideration | 10,800,000 | 10,800,000 | ||||
Impairment charges | 607,000 | 607,000 | 0 | 0 | ||
Impairment charges | 2,650,000 | 3,726,000 | 2,650,000 | 3,726,000 | ||
Performance Milestone Goal [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Change in fair value of contingent consideration | -16,600,000 | -16,600,000 | ||||
Synergy Surgical System [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Change in fair value of contingent consideration | -17,500,000 | -17,500,000 | ||||
World Heart Corporation [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Period for royalty payment obligations | 15 years | |||||
Impairment charges | $3,700,000 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | $75,535 | $37,596 |
Convertible senior notes | 114,803 | 107,125 |
Contingent consideration | 43,740 | 67,000 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 75,535 | 37,596 |
Long-term investments | 1,225 | 1,225 |
Convertible senior notes | 153,978 | 174,117 |
Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Contingent consideration | 43,740 | 67,000 |
Royalties | 962 | 999 |
Lease exit costs | 1,207 | |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 75,535 | 37,596 |
Long-term investments | 1,225 | 1,225 |
Convertible senior notes | 114,803 | 107,125 |
Contingent consideration | 43,740 | 67,000 |
Royalties | 962 | 999 |
Lease exit costs | 1,207 | |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 75,535 | 37,596 |
Long-term investments | 1,225 | 1,225 |
Convertible senior notes | 153,978 | 174,117 |
Contingent consideration | 43,740 | 67,000 |
Royalties | 962 | 999 |
Lease exit costs | $1,207 |
Fair_Value_Measurements_Summar
Fair Value Measurements - Summary of Change in Fair Value of Contingent Consideration as Determined by Level 3 Inputs (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $67,000 |
Change in fair value | -23,260 |
Ending balance | 43,740 |
Level 3 [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | 67,000 |
Payments | 0 |
Change in fair value | -23,260 |
Ending balance | $43,740 |
Fair_Value_Measurements_Summar1
Fair Value Measurements - Summary of Change in Fair Value of Royalties as Determined by Level 3 Inputs (Detail) (Level 3 [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Level 3 [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $999 |
Payments | -116 |
Change in fair value | 79 |
Ending balance | $962 |
Fair_Value_Measurements_Summar2
Fair Value Measurements - Summary of Change in Fair Value of Lease Exit Costs as Determined by Level 3 Inputs (Detail) (Level 3 [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Level 3 [Member] | |
Fair Value Assets Measured On Recurring and Nonrecurring Basis [Line Items] | |
Accruals | $1,676 |
Payments | -518 |
Change in fair value | 49 |
Ending balance | $1,207 |
Fair_Value_Measurements_Schedu
Fair Value Measurements - Schedule of Quantitative Information for Level 3 Fair Value Measurements (Detail) (Level 3 [Member]) | 12 Months Ended |
Dec. 31, 2014 | |
Contingent Consideration [Member] | Minimum [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Discount rate | 17.00% |
Probability of occurrence | 0.00% |
Contingent Consideration [Member] | Minimum [Member] | Probability Weighted Income Approach [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Milestone dates | 2019 |
Contingent Consideration [Member] | Maximum [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Discount rate | 24.00% |
Probability of occurrence | 100.00% |
Contingent Consideration [Member] | Maximum [Member] | Probability Weighted Income Approach [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Milestone dates | 2022 |
Royalties [Member] | Minimum [Member] | Discounted Cash Flow [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Discount rate | 4.80% |
Royalties [Member] | Maximum [Member] | Discounted Cash Flow [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Discount rate | 7.80% |
Lease Exit Costs [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Sublease rate | 26.5 |
Discount rate | 3.50% |
Lease Exit Costs [Member] | Discounted Cash Flow [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Sublease start date | Nov-15 |
Inventories_Components_of_Inve
Inventories - Components of Inventories (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw material | $28,688 | $21,761 |
Work-in-process | 10,240 | 8,206 |
Finished goods | 15,118 | 10,909 |
Inventory, total | $54,046 | $40,876 |
Inventories_Additional_Informa
Inventories - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Inventory held on consignment | $5.80 | $4.60 |
Goodwill_InProcess_Research_an2
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Summary of Carrying Amount of Goodwill and Change in Balance (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Intangible Liability Disclosure [Abstract] | ||
Beginning balance | $61,596 | $1,190 |
Additions | 61,576 | |
Impairment | -1,190 | |
Foreign currency translation impact | -206 | 20 |
Ending balance | $61,390 | $61,596 |
Goodwill_InProcess_Research_an3
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Acquired goodwill | $61,576,000 | |||||
Goodwill impairment charge | 2,650,000 | 3,726,000 | 2,650,000 | 3,726,000 | ||
Amortization expense | 1,724,000 | 598,000 | 204,000 | |||
Estimated amortization expense for 2015 | 2,000,000 | 2,000,000 | ||||
Estimated amortization expense for 2016 | 2,000,000 | 2,000,000 | ||||
Estimated amortization expense for 2017 | 2,000,000 | 2,000,000 | ||||
Estimated amortization expense for 2018 | 2,000,000 | 2,000,000 | ||||
Estimated amortization expense for 2019 | 2,000,000 | 2,000,000 | ||||
Acquired Technology Rights [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Additional acquired technology rights | 2,000,000 | 5,000,000 | ||||
Issuance of stock to settle liability | 50,330 | |||||
In-Process Research and Development [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill impairment charge | 2,600,000 | |||||
World Heart Corporation [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Acquired goodwill | 1,200,000 | 1,200,000 | ||||
Goodwill impairment charge | 3,700,000 | |||||
Impairment of in-process research and development | 2,500,000 | |||||
World Heart Corporation [Member] | In-Process Research and Development [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Impairment of in-process research and development | 2,500,000 | |||||
CircuLite [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Acquired goodwill | 61,600,000 | |||||
Goodwill impairment charge | 2,600,000 | 3,700,000 | ||||
Impairment of in-process research and development | 2,600,000 | |||||
CircuLite [Member] | In-Process Research and Development [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Business combination indefinite lived intangible assets work in progress | $35,500,000 |
Goodwill_InProcess_Research_an4
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Summary of Carrying Value of In-Process Research and Development Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Intangible Liability Disclosure [Abstract] | ||
Carrying value of in-process research and development assets | $32,850 | $35,500 |
Goodwill_InProcess_Research_an5
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Summary of Other Intangible Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | $20,735 | $17,179 |
Purchased intangible assets | ||
Other intangible assets | 20,735 | 17,179 |
Other intangible assets, net | 17,807 | 15,975 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 5,310 | 3,754 |
Purchased intangible assets | ||
Other intangible assets | 5,310 | 3,754 |
Less: Accumulated amortization | -1,118 | -800 |
Trade names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 3,700 | 3,700 |
Purchased intangible assets | ||
Other intangible assets | 3,700 | 3,700 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 1,800 | 1,800 |
Purchased intangible assets | ||
Other intangible assets | 1,800 | 1,800 |
Acquired Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 9,925 | 7,925 |
Purchased intangible assets | ||
Other intangible assets | 9,925 | 7,925 |
Purchased Intangible Assets [Member] | ||
Purchased intangible assets | ||
Less: Accumulated amortization | ($1,810) | ($404) |
Goodwill_InProcess_Research_an6
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Estimated Useful Lives of Intangible Assets (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | 15 years |
Trade names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | 15 years |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | 20 years |
Minimum [Member] | Acquired Technology Rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | 6 years |
Maximum [Member] | Acquired Technology Rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | 16 years |
Other_Balance_Sheet_Informatio2
Other Balance Sheet Information - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | 1 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Oct. 31, 2013 | |
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Convertible promissory note, amount | $14,635,000 | $15,621,000 | |||
Carrying value of investment | 10,500,000 | 10,000,000 | |||
Accrued payroll and other employee costs | 7,900,000 | 6,600,000 | |||
Cost of revenue | 92,195,000 | 76,468,000 | 51,023,000 | ||
Remaining lease payments | 24,124,000 | ||||
Contract termination fee | 122,432,000 | 102,483,000 | 83,548,000 | ||
Product Recall Expense [Member] | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Cost of revenue | 3,600,000 | ||||
CircuLite [Member] | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Aggregate severance costs | 600,000 | ||||
Research and Development [Member] | CircuLite [Member] | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Aggregate severance costs | 400,000 | ||||
Selling, General and Administrative [Member] | CircuLite [Member] | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Aggregate severance costs | 200,000 | ||||
Facility Closing [Member] | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Lease liability | 1,700,000 | ||||
Remaining lease payments | 500,000 | ||||
Lease expiration year | 2020 | ||||
Contract Termination [Member] | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Contract termination fee | 700,000 | ||||
Convertible Promissory Notes [Member] | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Convertible promissory note, amount | $10,000,000 | ||||
Convertible promissory note, interest rate | 6.00% | ||||
Convertible promissory note, maturity date | 7-Oct-14 |
Other_Balance_Sheet_Informatio3
Other Balance Sheet Information - Summary of Other Accrued Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Payables and Accruals [Abstract] | ||||
Accrued payroll and other employee costs | $13,404 | $10,840 | ||
Accrued milestone payment | 5,000 | |||
Accrued material purchases | 4,284 | 4,325 | ||
Accrued warranty | 4,685 | 2,498 | 543 | 203 |
Accrued research and development costs | 2,663 | 2,307 | ||
Accrued product recall costs | 1,888 | |||
Accrued professional fees | 1,624 | 2,428 | ||
Accrued VAT | 1,637 | 1,329 | ||
Accrued restructuring costs | 1,266 | 245 | ||
Other accrued expenses | 5,138 | 6,304 | ||
Total other accrued liabilities | $36,589 | $35,276 |
Other_Balance_Sheet_Informatio4
Other Balance Sheet Information - Summary of Changes in Warranty Liability (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Beginning balance | $2,498 | $543 | $203 |
Accrual for warranty expense | 4,141 | 2,721 | 921 |
Warranty costs incurred during the period | -1,954 | -766 | -581 |
Ending balance | $4,685 | $2,498 | $543 |
Other_Balance_Sheet_Informatio5
Other Balance Sheet Information - Summary of Changes in Accrued Restructuring Costs (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | $245 |
Restructuring charges | 3,607 |
Payments | -2,339 |
Adjustments to estimated obligations | -295 |
Change in fair value | 48 |
Ending balance | 1,266 |
Facility Leases [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 2,204 |
Payments | -818 |
Adjustments to estimated obligations | -168 |
Change in fair value | 48 |
Ending balance | 1,266 |
Employee Severance [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | 245 |
Restructuring charges | 715 |
Payments | -833 |
Adjustments to estimated obligations | -127 |
Contract Termination [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 688 |
Payments | ($688) |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 15, 2010 | |
Debt Instrument [Line Items] | ||||
Maturity of convertible and promissory notes | 15-Dec-17 | |||
Coupon rate | 3.50% | 3.50% | ||
Aggregate principal amount of convertible senior notes | $143,750,000 | $143,750,000 | $143,750,000 | |
Payable semi-annually in arrear | June 15 and December 15 | |||
Conversion of shares | 10 | |||
Principal amount of Convertible Notes | 1,000 | |||
Initial conversion price | $100 | |||
Principal amount of the Convertible Notes part of repurchase price | 100.00% | |||
Principal amount of Convertible Notes part of owners | 25.00% | |||
Effective interest rate on debt borrowing | 12.50% | |||
Number of shares issuable upon conversion of the Convertible Notes | 1,437,500 | |||
Convertible value of instrument for convertible debt | 105,600,000 | |||
Fair value of Convertible Notes | 154,000,000 | |||
Interest expense | 13,133,000 | 12,224,000 | 11,404,000 | |
World Heart Corporation [Member] | Promissory Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Coupon rate | 4.50% | |||
Outstanding promissory note | 600,000 | |||
Principal payments | 200,000 | |||
Outstanding balance on the promissory note | 0 | |||
Interest expense | $8,000 | $17,000 | $11,000 | |
Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Coupon rate | 3.50% | 3.50% | ||
Common Shares [Member] | ||||
Debt Instrument [Line Items] | ||||
Closing price | $73.43 |
Debt_Summary_of_Convertible_No
Debt - Summary of Convertible Notes and Equity Component (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 15, 2010 |
In Thousands, unless otherwise specified | |||
Debt Disclosure [Abstract] | |||
Principal amount | $143,750 | $143,750 | $143,750 |
Unamortized discount | -28,947 | -36,625 | |
Net carrying amount | 114,803 | 107,125 | |
Equity component | $55,038 | $55,038 |
Debt_Summary_of_Interest_Expen
Debt - Summary of Interest Expense Related to Convertible Notes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Debt Disclosure [Abstract] | |||
Stated amount at 3.5% coupon rate | $5,031 | $5,031 | |
Amortization of discount | 7,678 | 6,809 | 6,039 |
Amortization of deferred financing costs | 412 | 365 | 324 |
Convertible Notes interest expense, Net | $13,121 | $12,205 |
Debt_Summary_of_Interest_Expen1
Debt - Summary of Interest Expense Related to Convertible Notes (Parenthetical) (Detail) | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ||
Coupon rate | 3.50% | 3.50% |
Leases_Additional_Information_
Leases - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | 1 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jul. 31, 2013 | Nov. 30, 2012 | Jul. 30, 2012 | Dec. 09, 2010 | Oct. 17, 2013 | |
sqft | sqft | sqft | |||||||
Operating Leased Assets [Line Items] | |||||||||
Amount of base rate obligation | $12,000 | ||||||||
Required cash on deposit under lease agreement | 1,250,000 | ||||||||
Remaining area under lease | 3,500 | ||||||||
Lease term of remaining area under lease | 30-Jun-15 | ||||||||
Lease charges | 1,700,000 | ||||||||
Rent expense | 3,600,000 | 2,900,000 | 2,700,000 | ||||||
CircuLite [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Annual base rent | 600,000 | ||||||||
Lease rent area | 22,200 | ||||||||
Percentage of annual escalation in addition to base rent | 200.00% | ||||||||
Operating lease expiration Period | 2020-10 | ||||||||
Employee related severance cost | 600,000 | ||||||||
Minimum [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Lease expiration period | 12 months | ||||||||
Maximum [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Lease expiration period | 36 months | ||||||||
Aggregate base annual rental payment | 300,000 | ||||||||
Other Assets [Member] | CircuLite [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Required cash on deposit under lease agreement | 800,000 | ||||||||
Massachusetts [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Initial lease period | 7 years | ||||||||
Renewal lease period | 57 months | ||||||||
Annual base rent | 1,300,000 | ||||||||
Amount of base rate obligation | 1,500,000 | 400,000 | |||||||
Required cash on deposit under lease agreement | 300,000 | ||||||||
Additional space increasing area | 21,300 | ||||||||
Lease rent area | 17,800 | ||||||||
Lease expiration date | 31-Dec-14 | ||||||||
Lease charges | 500,000 | ||||||||
Massachusetts [Member] | Company Space [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Rented area in square feet | 58,000 | ||||||||
Massachusetts [Member] | Common Space [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Rented area in square feet | 4,000 | ||||||||
Florida [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Lease rent area | 132,000 | 132,000 | |||||||
Lease expiration date | 28-Feb-22 | ||||||||
Payment of base rent per square | 10 | ||||||||
Percentage of annual escalation in addition to base rent | 3.00% | ||||||||
Number of renewal times of operation lease | 2 | ||||||||
Renewal period of operating lease | 5 years | 5 years | |||||||
New Jersey [Member] | CircuLite [Member] | Forecast [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Lease charges | 400,000 | ||||||||
Germany [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Fixed assets write off | 600,000 | ||||||||
Employee related severance cost | 600,000 | ||||||||
Non-cancellable purchase obligation | $500,000 |
Leases_Future_Minimum_Rental_C
Leases - Future Minimum Rental Commitments Under Non-cancelable Operating Lease Agreements (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Leases [Abstract] | |
2015 | $3,618 |
2016 | 3,559 |
2017 | 3,662 |
2018 | 3,664 |
2019 | 3,751 |
Thereafter | 5,870 |
Total minimum lease payments | $24,124 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Mar. 18, 2013 | Mar. 13, 2013 | Mar. 12, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 01, 2013 | Jan. 30, 2014 |
Vote | |||||||
Schedule Of Stockholders Equity [Line Items] | |||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||||
Preferred stock, par value | $0.00 | $0.00 | |||||
Preferred stock, shares issued | 0 | 0 | |||||
Preferred stock, shares outstanding | 0 | 0 | |||||
Common stock, shares authorized | 25,000,000 | 25,000,000 | |||||
Common stock, par value | $0.00 | $0.00 | $0.00 | ||||
Common stock, shares outstanding | 17,155,833 | 16,878,000 | |||||
Number of votes per share | 1 | ||||||
Shares offered under Underwriting Agreement | 1,500,000 | ||||||
Net sales price, per share | $81.91 | ||||||
Offering price, per share | $86.45 | ||||||
Additional shares offered under Underwriting Agreement | 225,000 | ||||||
Issuance of common stock pursuant to public offering, net of offering costs | $141 | ||||||
Shelf registration statement expiration date | 9-Dec-13 | ||||||
Shares reserved in connection with future contingent milestone payments | 3,186,000 | ||||||
CircuLite [Member] | |||||||
Schedule Of Stockholders Equity [Line Items] | |||||||
Shares registered for issuance for acquisition | 530,816 | ||||||
Shares reserved in connection with future contingent milestone payments | 248,872 |
Stockholders_Equity_Shares_of_
Stockholders' Equity - Shares of Common Stock Reserved for Possible Future Issuance (Detail) | Dec. 31, 2014 |
Changes In Equity And Comprehensive Income Line Items [Line Items] | |
Common stock, capital shares reserved for future issuance, Total | 3,186,000 |
Equity Award Plans [Member] | |
Changes In Equity And Comprehensive Income Line Items [Line Items] | |
Common stock, capital shares reserved for future issuance, Total | 1,418,000 |
Convertible Senior Notes [Member] | |
Changes In Equity And Comprehensive Income Line Items [Line Items] | |
Common stock, capital shares reserved for future issuance, Total | 1,768,000 |
ShareBased_Compensation_Alloca
Share-Based Compensation - Allocation of Share-Based Compensation Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Recorded share-based compensation expense | $23,542 | $21,874 | $18,805 |
Cost of Revenues [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Recorded share-based compensation expense | 2,032 | 2,539 | 3,152 |
Selling, General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Recorded share-based compensation expense | 13,573 | 12,184 | 10,195 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Recorded share-based compensation expense | $7,937 | $7,151 | $5,458 |
ShareBased_Compensation_Additi
Share-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 23, 2015 | Feb. 28, 2015 | 31-May-12 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share issued upon vesting of Awards | 32,000 | |||||
Stock options issued | 7,000 | |||||
Stock options outstanding | 107,000 | 133,000 | ||||
Performance based option vesting period | 4 years | |||||
Option expiry period | 10 years | |||||
Weighted average grant date fair value per share option | $32.41 | $38.51 | $43.83 | |||
Cash received from options exercised | $921,000 | $4,871,000 | $2,709,000 | |||
Exercise or Vesting of Share-Based Awards [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance based option vesting period | 4 years | |||||
Aggregate Intrinsic value options | 1,900,000 | 10,300,000 | 3,700,000 | |||
Cash received from options exercised | 900,000 | 4,900,000 | 2,700,000 | |||
Unrecognized compensation expense related to non-vested option awards | 200,000 | |||||
Expected weighted average period of recognition for Unrecognized Share-based compensation | 8 months 12 days | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense related to non-vested option awards | 24,900,000 | |||||
Expected weighted average period of recognition for Unrecognized Share-based compensation | 1 year 6 months | |||||
Contingent right to receive share of common stock | 1 | |||||
RSU's outstanding | 26,705 | |||||
Restricted stock units vested intrinsic value | $15,400,000 | $16,400,000 | $25,600,000 | |||
Weighted average grant date fair value per share other than option | $97.50 | $91.21 | $83.13 | |||
Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | Chief Executive Officer [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected weighted average period of recognition for Unrecognized Share-based compensation | 4 years | |||||
Restricted Stock Units grant to group of employees | 280,000 | 230,000 | ||||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance based option vesting period | 3 years | |||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance based option vesting period | 4 years | |||||
2012 Plan Award [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved for issuance under 2012 incentive award plan | 1,375,000 | |||||
Share issued upon vesting of Awards | 125,149 | |||||
Stock options issued | 528,332 | |||||
Stock options outstanding | 528,332 | |||||
Full Value Awards [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved for issuance under 2012 incentive award plan | 1,275,000 |
ShareBased_Compensation_Weight
Share-Based Compensation - Weighted Average Assumptions Used for Options Issued (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 39.00% | 40.00% | 57.00% |
Risk-free interest rate | 1.65% | 1.15% | 1.00% |
Estimated holding period (years) | 5 years | 6 years 3 months | 6 years 3 months |
ShareBased_Compensation_Summar
Share-Based Compensation - Summary of Options Granted under All Plans (Detail) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Number of Options | |
Outstanding, Beginning Balance | 133 |
Granted | 7 |
Exercised | -32 |
Forfeited | 0 |
Expired | -1 |
Outstanding, Ending Balance | 107 |
Exercisable, Ending Balance | 87 |
Weighted Average Exercise Price | |
Outstanding, Beginning Balance | $42.82 |
Granted | $88.84 |
Exercised | $29.25 |
Forfeited | $0 |
Expired | $86.58 |
Outstanding, Ending Balance | $48.32 |
Exercisable, Ending Balance | $39.75 |
Weighted Average Remaining Contractual Life | |
Outstanding, Ending Balance | 4 years 4 months 21 days |
Exercisable, Ending Balance | 3 years 6 months 7 days |
Aggregate Intrinsic Value | |
Outstanding, Ending Balance | $3,063 |
Exercisable, Ending Balance | $3,051 |
ShareBased_Compensation_Summar1
Share-Based Compensation - Summary of RSU's (Detail) (Restricted Stock Units (RSUs) [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Restricted Stock Units (RSUs) [Member] | |
Number of Restricted Stock Units | |
Outstanding, Beginning Balance | 476 |
Granted | 363 |
Released | -193 |
Forfeited | -57 |
Outstanding, Ending Balance | 589 |
Exercisable, Ending Balance | 0 |
Weighted Average Remaining Contractual Life | |
Outstanding, Ending Balance | 1 year 6 months 4 days |
Exercisable, Ending Balance | 0 years |
Aggregate Intrinsic Value | |
Outstanding, Ending Balance | $43,232 |
Exercisable, Ending Balance | $0 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax [Line Items] | |||
Foreign income taxes, income tax provision | $500,000 | ||
Effective tax rate | Less than 1% | ||
United States federal income tax rate | 34.00% | ||
Deferred tax asset net of liabilities before valuation allowance | 130,099,000 | 171,306,000 | |
Increase (decrease) in valuation allowance | -41,200,000 | 97,300,000 | 31,400,000 |
Unrecognized tax benefits | 3,228,000 | 3,567,000 | |
Component of unrecognized tax benefits that would impact the effective tax rate | 1,800,000 | ||
Foreign [Member] | |||
Income Tax [Line Items] | |||
Portion of federal and state net operating loss related to share based compensation | 34,400,000 | ||
Operating loss carry-forwards | 20,000,000 | ||
State [Member] | |||
Income Tax [Line Items] | |||
Portion of federal and state net operating loss related to share based compensation | 24,100,000 | ||
Operating loss carry-forwards | 206,300,000 | ||
U.S. [Member] | |||
Income Tax [Line Items] | |||
Deferred tax asset operating loss and credit carry-forwards | 56,400,000 | ||
Operating loss carry-forwards | $386,100,000 | ||
U.S. [Member] | Minimum [Member] | |||
Income Tax [Line Items] | |||
Year of expiration | 2024 | ||
U.S. [Member] | Maximum [Member] | |||
Income Tax [Line Items] | |||
Year of expiration | 2034 |
Income_Taxes_Income_Loss_befor
Income Taxes - Income (Loss) before Taxes on Geographic Basis (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
United States | ($20,684) | ($58,063) | ($82,463) |
Non-U.S. | 1,878 | -781 | -5,255 |
Loss before taxes | ($18,806) | ($58,844) | ($87,718) |
Income_Taxes_Primary_Component
Income Taxes - Primary Components of Net Deferred Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
U.S. losses carried forward | $128,216 | $179,503 |
Non-U.S. losses carried forward | 4,227 | 5,039 |
Total net operating losses carried forward | 132,443 | 184,542 |
Research and development credit | 2,114 | |
Equity awards | 9,902 | 7,152 |
Other deferred tax assets | 11,935 | 4,812 |
Gross deferred tax assets | 154,280 | 198,620 |
Deferred tax liabilities: | ||
Convertible debt | -10,632 | -13,171 |
Purchased intangible assets | -13,549 | -14,143 |
Net deferred tax assets | 130,099 | 171,306 |
Less: valuation allowance | -130,099 | -171,306 |
Net deferred tax asset/(liability) | $0 | $0 |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits from Continuing Operations (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits-beginning of the year | $3,567 |
Gross increases/(decrease)-prior year | 17 |
Gross increases/(decrease)-current year | -356 |
Unrecognized tax benefits-end of the year | $3,228 |
Net_Loss_Per_Share_AntiDilutiv
Net Loss Per Share - Anti-Dilutive Securities Excluded from Computation of Weighted Average Shares Outstanding (Detail) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Convertible Promissory Notes [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded | 1,438 | 1,438 | 1,438 |
Stock Compensation Plan [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded | 696 | 608 | 838 |
Business_Segment_Geographic_Ar2
Business Segment, Geographic Areas and Major Customers - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Customer | Customer | Customer | |
Segment | |||
Segment Reporting [Abstract] | |||
Number of reportable segments | 1 | ||
Number of customers exceeding ten percent of sales | 0 | 0 | 0 |
Percentage of minimum product sales | 10.00% | 10.00% | 10.00% |
Business_Segment_Geographic_Ar3
Business Segment, Geographic Areas and Major Customers - Product Sales by Geographic Location (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue, net | $73,209 | $68,608 | $70,131 | $66,472 | $53,054 | $54,800 | $50,836 | $49,239 | $278,420 | $207,929 | $110,922 |
United States [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue, net | 151,335 | 105,345 | 27,650 | ||||||||
Germany [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue, net | 63,629 | 54,793 | 40,001 | ||||||||
International, Excluding Germany [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue, net | $63,456 | $47,791 | $43,271 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||||
Feb. 03, 2012 | Dec. 31, 2014 | Dec. 01, 2013 | Feb. 24, 2014 | Dec. 31, 2013 | Sep. 04, 2012 | Dec. 31, 2011 | Feb. 24, 2010 | |
Shareholder | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Purchase order commitments | Approximately $36.1 million | |||||||
Purchase order commitments | $36,100,000 | |||||||
Maximum period for purchase order commitments | 1 year | |||||||
Number of Series - A preferred stock holders | 2 | |||||||
Aggregate liquidation preference payment | 15,000,000 | |||||||
Unconditional release of all claims asserted in litigation by defendants | 1,100,000 | |||||||
Received from co-defendants | 200,000 | |||||||
Amount receivable from insurance carrier | 800,000 | |||||||
Litigation settlement recorded | 1,100,000 | |||||||
Contingent consideration | 43,740,000 | 67,000,000 | ||||||
Minimum [Member] | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Performance milestone payment term | 8 years | |||||||
Maximum [Member] | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Performance milestone payment term | 10 years | |||||||
Aggregate milestone payments | $320,000,000 | $320,000,000 | ||||||
A-1 Preferred Stock [Member] | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Amount receives on certain liquidation events | $10 | |||||||
A-2 Preferred Stock [Member] | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Amount receives on certain liquidation events | $21 |
Retirement_Savings_Plan_Additi
Retirement Savings Plan - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Apr. 30, 2010 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule Of Sale Of Subsidiary [Abstract] | ||||
Employer matching contributions for first three percentage | 100.00% | |||
Employer contribution | 3.00% | |||
Employer matching contributions for additional two percentage | 50.00% | |||
Additional employer contribution | 2.00% | |||
Contributions towards 401(k) plan | $1.40 | $1.10 | $0.80 |
Recovered_Sheet1
Quarterly Financial information (Unaudited) - Summary of Selected Quarterly Financial information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue, net | $73,209 | $68,608 | $70,131 | $66,472 | $53,054 | $54,800 | $50,836 | $49,239 | $278,420 | $207,929 | $110,922 |
Gross profit | 49,860 | 45,631 | 47,176 | 43,557 | 33,761 | 35,271 | 31,970 | 30,459 | 186,225 | 131,461 | 59,899 |
Net income (loss) | -916 | -7,370 | 8,364 | -19,444 | -22,048 | -11,371 | -12,934 | -12,959 | -19,366 | -59,311 | -87,718 |
Net income (loss) per common share-basic | ($0.05) | ($0.43) | $0.49 | ($1.15) | |||||||
Net loss per common share-basic and diluted | ($1.33) | ($0.69) | ($0.79) | ($0.87) | ($1.14) | ($3.69) | ($6.15) | ||||
Net income (loss) per common share-diluted | ($0.05) | ($0.43) | $0.48 | ($1.15) | |||||||
Weighted average shares outstanding-basic and diluted | 16,574 | 16,439 | 16,370 | 14,860 | 16,992 | 16,066 | 14,252 | ||||
Weighted average shares outstanding-basic | 17,037 | 17,007 | 16,989 | 16,934 | |||||||
Weighted average shares outstanding-diluted | 17,037 | 17,007 | 17,305 | 16,934 | |||||||
Foreign exchange gains (losses) | 1,800 | 3,300 | 200 | 300 | 2,100 | 600 | 1,900 | -4,952 | -70 | 1,224 | |
Share-based compensation expense | $6,200 | $6,400 | $6,500 | $4,400 | $5,300 | $7,100 | $4,900 | $4,400 | $23,542 | $21,874 | $18,805 |
Recovered_Sheet2
Quarterly Financial information (Unaudited) - Summary of Selected Quarterly Financial information (Parenthetical) (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||||
Aug. 02, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | |
Interim Reporting [Line Items] | |||||||||
Net loss on impairment of certain purchased intangible assets | $2,650,000 | $3,726,000 | $2,650,000 | $3,726,000 | |||||
Increase decrease in the fair value of contingent consideration of acquisition | -23,260,000 | ||||||||
Operating expenses | 186,349,000 | 179,007,000 | 137,493,000 | ||||||
Transaction costs associated with the acquisition | 1,100,000 | ||||||||
CircuLite [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Net loss on impairment of certain purchased intangible assets | 2,600,000 | 3,700,000 | |||||||
Increase decrease in the fair value of contingent consideration of acquisition | 9,100,000 | 3,600,000 | 13,700,000 | 3,100,000 | |||||
Restructuring costs | 600,000 | 4,100,000 | |||||||
Operating expenses | 3,100,000 | ||||||||
Severance costs | 600,000 | ||||||||
Transaction costs associated with the acquisition | $2,300,000 | $2,800,000 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (Scenario, Forecast [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Scenario, Forecast [Member] | |
Subsequent Event [Line Items] | |
Aggregate amount of business closure charges | $2.10 |