Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 25, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | htwr | ||
Entity Registrant Name | HeartWare International, Inc. | ||
Entity Central Index Key | 1,389,072 | ||
Current Fiscal Year End Date | --12-31 | ||
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 | 17,533,606 | ||
Entity Public Float | $ 1,250 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 175,047 | $ 102,946 |
Short-term investments | 68,531 | 75,535 |
Accounts receivable, net | 35,570 | 38,041 |
Inventories | 47,686 | 54,046 |
Prepaid expenses and other current assets | 2,868 | 5,975 |
Total current assets | 329,702 | 276,543 |
Property, plant and equipment, net | 15,098 | 19,036 |
Goodwill | 61,233 | 61,390 |
In-process research and development | 10,800 | 32,850 |
Other intangible assets, net | 13,045 | 17,807 |
Deferred financing costs, net | 3,973 | 1,552 |
Long-term investments and other assets | 23,725 | 14,635 |
Total assets | 457,576 | 423,813 |
Current liabilities: | ||
Accounts payable | 15,249 | 13,322 |
Other accrued liabilities | 45,889 | 36,589 |
Total current liabilities | 61,138 | 49,911 |
Convertible senior notes, net | 191,062 | 114,803 |
Contingent liabilities (See Notes 4 and 6) | 12,330 | 43,740 |
Other long-term liabilities | $ 4,554 | $ 6,825 |
Commitments and contingencies-See Note 17 | ||
Stockholders' equity: | ||
Preferred stock-$.001 par value; 5,000 shares authorized; no shares issued and outstanding at December 31, 2015 and 2014, respectively | ||
Common stock-$.001 par value; 50,000 and 25,000 shares authorized at December 31, 2015 and 2014, respectively; 17,405 and 17,156 shares issued and outstanding at December 31, 2015 and 2014, respectively | $ 17 | $ 17 |
Additional paid-in capital | 618,219 | 565,609 |
Accumulated deficit | (421,499) | (348,719) |
Accumulated other comprehensive loss: | ||
Cumulative translation adjustments | (8,085) | (8,112) |
Unrealized loss on investments | (160) | (261) |
Total accumulated other comprehensive loss | (8,245) | (8,373) |
Total stockholders' equity | 188,492 | 208,534 |
Total liabilities and stockholders' equity | $ 457,576 | $ 423,813 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
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 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 25,000,000 |
Common stock, shares issued | 17,405,000 | 17,156,000 |
Common stock, shares outstanding | 17,405,000 | 17,156,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Revenue, net | $ 276,843 | $ 278,420 | $ 207,929 |
Cost of revenue | 103,287 | 92,195 | 76,468 |
Gross profit | 173,556 | 186,225 | 131,461 |
Operating expenses: | |||
Selling, general and administrative | 94,594 | 87,177 | 76,524 |
Research and development | 120,769 | 119,782 | 98,757 |
Impairment of intangible assets | 26,849 | 2,650 | 3,726 |
Change in fair value of contingent consideration | (31,410) | (23,260) | |
Total operating expenses | 210,802 | 186,349 | 179,007 |
Loss from operations | (37,246) | (124) | (47,546) |
Other income (expense): | |||
Foreign exchange loss | (4,417) | (4,952) | (70) |
Interest expense | (14,305) | (13,133) | (12,224) |
Investment income, net | 790 | 666 | 370 |
Other, net | (16,588) | (1,263) | 626 |
Loss before taxes | (71,766) | (18,806) | (58,844) |
Income tax expense | 1,014 | 560 | 467 |
Net loss | $ (72,780) | $ (19,366) | $ (59,311) |
Net loss per common share-basic and diluted | $ (4.21) | $ (1.14) | $ (3.69) |
Weighted average shares outstanding-basic and diluted | 17,274 | 16,992 | 16,066 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (72,780) | $ (19,366) | $ (59,311) |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments | 27 | (253) | 180 |
Unrealized (loss) gain on investments | 101 | (246) | 9 |
Comprehensive loss | $ (72,652) | $ (19,865) | $ (59,122) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Shares [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] |
Beginning balance at Dec. 31, 2012 | $ 68,211 | $ 15 | $ 346,301 | $ (270,042) | $ (8,063) |
Beginning 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 (loss) | 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 (loss) | (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 | ||||
Issuance of common stock in connection with an intellectual property agreement | 2,000 | 2,000 | |||
Issuance of common stock in connection with an intellectual property agreement, Shares | 26 | ||||
Issuance of common stock pursuant to share-based awards | 81 | 81 | |||
Issuance of common stock pursuant to share-based awards, Shares | 223 | ||||
Settlement of conversion feature on 3.5% Notes exchanged | (19,467) | (19,467) | |||
Allocation of fair value of equity component of 1.75% Notes | $ 47,400 | $ 47,400 | |||
Allocation of fair value of equity component of 1.75% Notes, Share | 0 | 0 | 0 | 0 | 0 |
Allocation of pro-rata portion of offering costs to equity component of 1.75% Notes | $ (1,209) | $ (1,209) | |||
Share-based compensation | 23,805 | 23,805 | |||
Net loss | (72,780) | $ (72,780) | |||
Other comprehensive income (loss) | 128 | $ 128 | |||
Ending balance at Dec. 31, 2015 | $ 188,492 | $ 17 | $ 618,219 | $ (421,499) | $ (8,245) |
Ending balance, Shares at Dec. 31, 2015 | 17,405 |
Consolidated Statement of Stoc7
Consolidated Statement of Stockholders' Equity (Parenthetical) | Dec. 31, 2015$ / shares |
Common Shares, par value | $ 0.001 |
Common Shares [Member] | |
Common Shares, par value | $ 0.001 |
3.5% Convertible Senior Notes, Due 2017 [Member] | |
Coupon rate | 3.50% |
3.5% Convertible Senior Notes, Due 2017 [Member] | Additional Paid-In Capital [Member] | |
Coupon rate | 3.50% |
1.75% Convertible Senior Notes, Due 2021 [Member] | Additional Paid-In Capital [Member] | |
Coupon rate | 1.75% |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (72,780,000) | $ (19,366,000) | $ (59,311,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation of property, plant and equipment | 6,667,000 | 6,674,000 | 6,451,000 |
Amortization of intangible assets | 2,078,000 | 1,724,000 | 598,000 |
Impairment of fixed assets | 1,118,000 | 607,000 | 0 |
Impairment of goodwill and intangible assets | 26,849,000 | 2,650,000 | 3,726,000 |
Share-based compensation expense | 23,805,000 | 23,542,000 | 21,874,000 |
Amortization of premium on investments | 1,074,000 | 810,000 | 635,000 |
Amortization of discount on convertible senior notes | 8,691,000 | 7,678,000 | 6,809,000 |
Amortization of deferred financing costs | 556,000 | 412,000 | 365,000 |
Change in fair value of contingent consideration | (31,410,000) | (23,260,000) | |
Other | 16,654,000 | 1,498,000 | 467,000 |
Change in operating assets and liabilities: | |||
Accounts receivable | 894,000 | (11,786,000) | (2,372,000) |
Inventories | 3,546,000 | (16,284,000) | (4,331,000) |
Prepaid expenses and other current assets | 2,953,000 | 3,985,000 | (4,850,000) |
Other non-current assets | (2,539,000) | ||
Accounts payable | 1,950,000 | (4,300,000) | 3,564,000 |
Other accrued liabilities | 9,663,000 | 7,324,000 | 3,975,000 |
Other long-term liabilities | (267,000) | 918,000 | 177,000 |
Net cash used in operating activities | (498,000) | (17,174,000) | (22,223,000) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of investments | (28,105,000) | (58,864,000) | (28,905,000) |
Maturities of investments | 34,415,000 | 19,870,000 | 6,346,000 |
Investment in unconsolidated investee | (7,000,000) | (10,000,000) | |
Additions to property, plant and equipment, net | (3,035,000) | (6,721,000) | (2,692,000) |
Additions to patents | (2,115,000) | (1,555,000) | (814,000) |
Cash received from (paid for) security deposits | 294,000 | 714,000 | (271,000) |
Net cash used in investing activities | (5,546,000) | (46,556,000) | (46,321,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Borrowings on convertible senior notes | 79,889,000 | ||
Payment of convertible notes issuance costs | (5,161,000) | ||
Proceeds from issuance of common stock | 149,126,000 | ||
Payment of common stock issuance costs | (8,148,000) | ||
Repayment of promissory note | (200,000) | (200,000) | |
Proceeds from exercise of stock options | 80,000 | 921,000 | 4,871,000 |
Net cash provided by financing activities | 74,808,000 | 721,000 | 145,649,000 |
Effect of exchange rate changes on cash and cash equivalents | 3,337,000 | 3,075,000 | (146,000) |
CHANGE IN CASH AND CASH EQUIVALENTS | 72,101,000 | (59,934,000) | 76,959,000 |
CASH AND CASH EQUIVALENTS-BEGINNING OF PERIOD | 102,946,000 | 162,880,000 | 85,921,000 |
CASH AND CASH EQUIVALENTS-END OF PERIOD | 175,047,000 | 102,946,000 | 162,880,000 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 5,056,000 | 5,040,000 | 5,049,000 |
Cash paid for income taxes | 755,000 | 96,000 | |
Supplemental disclosure of non-cash investing and financing activities: | |||
Contingent consideration related to acquisition of CircuLite | 12,330,000 | 43,740,000 | |
Exchange of convertible notes | 101,300,000 | ||
Shares issued to acquire intellectual property | 2,000,000 | 5,000,000 | |
Non-cash increase to patents and intellectual property | 2,000,000 | 5,000,000 | |
Transfers from inventory to property, plant and equipment | $ 1,037,000 | 1,153,000 | 2,072,000 |
CircuLite [Member] | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Impairment of goodwill and intangible assets | 3,700,000 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Acquisition of CircuLite, net of cash acquired | (9,985,000) | ||
Supplemental disclosure of non-cash investing and financing activities: | |||
Shares issued to acquire CircuLite | $ 329,000 | 21,794,000 | |
Contingent consideration related to acquisition of CircuLite | $ 67,000,000 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [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, 2015, there have been over 10,000 implants of the HVAD System in patients at over 320 health care sites in 47 countries. In August 2015, we completed enrollment of an Investigational Device Exemption (“IDE”) Supplement which allowed HeartWare an additional patient cohort for the ENDURANCE clinical trial. In this supplemental cohort, HeartWare enrolled 308 patients who received the HVAD System, as well as 157 control patients using a randomization scheme consistent with the original ENDURANCE protocol. Assessment of primary endpoint is at 1 year post implant. In 2016, HeartWare intends to incorporate the data from both this supplemental cohort and ENDURANCE into an anticipated PMA Supplement Application seeking approval of the HVAD System for a destination therapy indication. Beyond the HVAD System, we are developing our next generation miniaturized device, known as 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 System is designed to allow for a variety of configurations and surgical placements with the goal of further reducing surgical invasiveness while producing superior clinical results. In July 2015, we initiated a multicenter, prospective, non-randomized, single-arm CE Mark trial that evaluates the clinical safety and performance of the MVAD System for the treatment of advanced heart failure. In September 2015, we voluntarily paused the MVAD CE Mark clinical trial to address an MVAD controller manufacturing issue. Subsequent to that action, during the fourth quarter of 2015 and in consultation with study investigators, we began evaluating MVAD System performance and reported adverse events in certain clinical trial patients, including events that showed evidence of pump thrombosis. We are currently evaluating various aspects of the MVAD System design to determine whether changes should be made. Should design changes be implemented, initiation of a new trial would likely be required. The timetable for updating affected regulatory filings and restarting clinical implants cannot be reliably projected at this time. 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, 2015 | |
Accounting Policies [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, 2015, we had approximately $244.6 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, 2015. At December 31, 2015, we had an accumulated deficit of approximately $421.5 million. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015, 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, 2015, one customer had an accounts receivable balance greater than 10% of total accounts receivable representing approximately 17% of our total accounts receivable. At December 31, 2014, no customer had an accounts receivable balance greater than 10% of our total accounts receivable. In 2015, we entered into an agreement with one customer with extended payment terms in which sales are recorded as a long-term receivable and a portion of sales are deferred. The deferred portion of sales are treated as a financing charge in which interest income is imputed and recorded as investment income over the financing period on our consolidated statement of operations. At December 31, 2015 we had approximately $2.5 million of long-term receivables and they are recorded on consolidated balance sheet under long-term investments and other assets. 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, 2015, 2014 and 2013: 2015 2014 2013 (in thousands) Beginning balance $ 671 $ 495 $ 750 Charges (reversals) to expense 5 181 (255 ) Charge-offs (0 ) (5 ) — Ending balance $ 676 $ 671 $ 495 As of December 31, 2015 and 2014, 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 Useful Lives December 31, 2015 2014 (in thousands) Property, plant and equipment Machinery and equipment 1.5 to 7 years $ 21,785 $ 21,279 Leasehold improvements 3 to 10 years 8,891 9,070 Office equipment, furniture and fixtures 5 to 7 years 2,105 2,206 Purchased software 1 to 7 years 7,575 6,474 40,356 39,029 Less: accumulated depreciation (25,258 ) (19,993 ) $ 15,098 $ 19,036 Depreciation expense was $6.7 million, $6.7 million, and $6.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. During the year ended December 31, 2015, we ceased activities at our facility in Aachen, Germany. We recorded an impairment charge of approximately $1.1 million related to certain office equipment and software at the facility upon their discontinued use. This amount is included in research and development expenses on our consolidated statement of operations. 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 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 $0.6 million and $0.7 million as of December 31, 2015 and 2014, 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 for notes issued in December 2010 and through December 15, 2021 for notes issued in May 2015, the respective maturity dates of the notes, and such amortization expense is reflected in interest expense on our consolidated statements of operations. The amount of amortization was approximately $0.6 and $0.4 million for each of the years ended December 31, 2015 and 2014, respectively. The amount of accumulated amortization at December 31, 2015 and 2014 was approximately $0.9 million and $1.4 million, respectively. Revenue Recognition We recognize revenue from product sales in accordance with FASB ASC 605— Revenue Recognition 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 lease impairment charges totaling $1.7 million related to closure of the facility and an additional impairment charge of $0.6 million related to certain office equipment and software at the facility upon their discontinued use. In 2015, due primarily to weakness in the northern New Jersey real estate market we recorded additional lease impairment charges totaling $1.5 million. These amounts are included in selling, general and administrative expenses on our consolidated statements of operations. No impairments of similar long-lived assets were identified during the year ended December 31, 2013. 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, abandoned or significantly changed, 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 2015, we performed an impairment review of IPR&D acquired from CircuLite and recorded an impairment charge of $22.1 million. This change was a result of longer than anticipated timelines to develop and receive approval for a CircuLite System. We had a similar IPR&D charge of $2.6 million in 2014 when we discontinued the use of the CircuLite micro pump acquired from CircuLite in favor of using our MVAD pump for the CircuLite System. During the fourth quarter of 2015, we also recorded an impairment charge of $4.8 million related to tradenames and customer lists associated with our acquisition of CicruLite. The impairment was primarily associated with program delays which impact the certainty of development and eventual regulatory approval of a CircuLite System. 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 each year, we concluded that goodwill was not impaired in either 2015 or 2014. Contingent Consideration On December 1, 2013, we acquired CircuLite, Inc. In addition to initial consideration paid at closing, the former CircuLite security holders 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 $300 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 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, 2015, 2014 and 2013. 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, 2015, the long-term portion of our deferred rent liability of approximately $3.2 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 Vendor Concentration For the years ended December 31, 2015, 2014 and 2013, we purchased approximately 68%, 72%, and 70%, 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, 2015, 2014 and 2013, the amounts due to these vendors totaled approximately $6.1 million, $5.4 million and $5.8 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 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) In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) 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 In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | Note 4. Acquisitions Valtech Cardio, Ltd. On September 1, 2015, we entered into a Business Combination Agreement (the “BCA”) by and among the Company, Valtech Cardio, Ltd. (“Valtech”), HW Global, Inc. (“Holdco”), HW Merger Sub, Inc., Valor Merger Sub Ltd. and Valor Shareholder Representative, LLC, pursuant to which we and Valtech proposed to effect a strategic combination of our respective businesses under Holdco subject to certain closing conditions. Valtech is a privately held company that specializes in the development of innovative surgical and transcatheter valve repair and replacement devices for the treatment of mitral valve regurgitation and tricuspid valve regurgitation. Effective January 28, 2016, we terminated the BCA pursuant to the terms of the BCA by delivering written notice to the other parties. As of December 31, 2015, we had invested approximately $17 million in Valtech in the original form of convertible loans, of which $10 million together with $0.5 million of accrued interest was converted into Valtech preferred shares amounting to approximately 3.0% ownership on a fully diluted basis. Pursuant to the BCA we loaned Valtech $1 million on January 7, 2016 and $30 million following termination of the BCA per provisions of the BCA, in the form of convertible loans. We have no current contractual obligations to further fund Valtech. This investment, including both our equity investment and outstanding convertible notes receivable were deemed to be realizable, are carried at cost and are included in long-term investments and other assets on our consolidated balance sheets. The fair value of this investment has not been estimated as of December 31, 2015 as there have been no impairment indicators identified. 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 security holders 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 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 were being amortized on a straight-line basis over their estimated economic useful lives ranging from 15-20 years. We recognized a full impairment charge of $4.8 million for the remaining book value of these identified intangible assets in the fourth quarter of 2015. The impairment was associated with program delays which impact the certainty of development and eventual regulatory approval of a CircuLite System. In-process research and development (“IPR&D”) is principally the estimated fair value of the CircuLite 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 partial impairment charges of $22.1 million and $2.6 million in 2015 and 2014, respectively, as a result of factors which impacted the realizability of the CircuLite IPR&D. The 2015 charge was primarily associated with program delays which impact the certainty of development and eventual regulatory approval of a CircuLite System, while the 2014 charge resulted from a decision to discontinue development of the acquired CircuLite micro pump in favor of replacing it 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. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and 2014, all of our investments were classified as available-for-sale and carried at fair value. At December 31, 2015 and 2014, 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, 2015 Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value (in thousands) Short-term investments: Corporate debt $ 32,666 $ — $ (100 ) $ 32,566 U.S. government agency debt 25,000 — (60 ) 24,940 Certificates of deposit 11,025 — — 11,025 Total short-term investments $ 68,691 $ — $ (160 ) $ 68,531 Long-term investments: Certificates of deposit $ 980 $ — $ — $ 980 Total long-term investments $ 980 $ — $ — $ 980 At December 31, 2014 Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value (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 For the twelve months ended December 31, 2015 and 2014, we did not have any realized gains or losses on our investments. At December 31, 2015, 13 of our available-for-sale investments with an aggregate fair value of $34.5 million had been in a continuous loss position for more than twelve months. At December 31, 2015, the gross unrealized loss on these 13 available-for-sale investments was $99,000 and was deemed to be temporary. At December 31, 2015, 5 individual securities had been in an unrealized loss position for twelve months or less. At December 31, 2014, none of our available-for-sale investments had been in a continuous loss position for more than twelve months, while 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, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 6. Fair Value Measurements FASB ASC 820— Fair Value Measurements and Disclosures, 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, 2015, 2014 or 2013. 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, 2015 Carrying Value Fair Value Fair Value Measurements at the Reporting Date Using Level 1 Level 2 Level 3 (in thousands) Assets Short-term investments $ 68,531 $ 68,531 $ — $ 68,531 $ — Long-term investments 980 980 — 980 — Liabilities Convertible senior notes 191,062 (1) 200,351 — 200,351 — Contingent consideration 12,330 12,330 — — 12,330 Royalties 918 918 — — 918 Lease exit costs 1,955 1,955 — — 1,955 At December 31, 2014 Carrying Value Fair Value Fair Value Measurements at the Reporting Date Using 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 • The carrying amount of our convertible senior notes is net of unamortized discount. See 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 • Royalties • Lease exit costs 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, 2015: Contingent (in thousands) Beginning balance $ 43,740 Payments — Change in fair value (31,410 ) Ending balance $ 12,330 In 2015, we reassessed the timing and likelihood of achieving each remaining CircuLite milestone payment and future royalties. As a result of this review we recognized a charge of $38.1 million, which was partially offset by accretion expense of $6.7 million during the year. 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 CircuLite 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, 2015: Royalties (in thousands) Beginning balance $ 962 Payments (110 ) Change in fair value 66 Ending balance $ 918 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, 2015: Lease Exit (in thousands) Beginning balance $ 1,266 Payments (887 ) Change in fair value 1,576 Ending balance $ 1,955 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, 2015: Valuation Methodology Significant Unobservable Input Weighted Average (range, if applicable) Contingent consideration Probability weighted income approach Milestone dates Discount rate Probability of occurrence 2020 to 2023 17.0% to 24.0% 50% Royalties Discounted cash flow Discount rate 4.8% to 7.8% Lease exit costs Discounted cash flow Sublease start date Sublease rate Discount rate March 2017 $22.00/square foot 3.5% 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 2015 we recorded an impairment charge of $1.1 million related to certain office equipment and software associated with the closure of our facility in Aachen, Germany and in the fourth quarter of 2015, we recorded impairment charges totaling $26.8 million related to IPR&D, Tradenames, and Customer Relationships due to program delays which impact the certainty of development and eventual regulatory approval of a CircuLite System, ( see see |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 7. Inventories Components of inventories are as follows: December 31, 2015 2014 (in thousands) Raw material $ 25,679 $ 28,688 Work-in-process 8,858 10,240 Finished goods 13,149 15,118 $ 47,686 $ 54,046 Finished goods inventories includes inventory held on consignment at customer sites of $6.1 million and $5.8 million, at December 31, 2015 and 2014, respectively. |
Goodwill, In-Process Research a
Goodwill, In-Process Research and Development and Other Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and 2014 is as follows: 2015 2014 (in thousands) Beginning balance $ 61,390 $ 61,596 Additions — — Impairment — — Foreign currency translation impact (157 ) (206 ) Ending balance $ 61,233 $ 61,390 In 2013, we acquired CircuLite and recorded $61.6 million of goodwill. See In-Process Research and Development (“IPR&D”) The carrying value of our IPR&D assets, which relate to the development and potential commercialization of certain acquired technologies, consisted of the following at December 31, 2015 and 2014: 2015 2014 (in thousands) CircuLite System technology $ 10,800 $ 32,850 In December 2013, we acquired CircuLite and recorded $35.5 million of IPR&D. See During the fourth quarter of 2015 and 2014, we performed an impairment review of this IPR&D and recorded impairment charges of $22.1 and $2.6 million, respectively. The 2015 change was primarily associated with program delays which impact the certainty of development and eventual regulatory approval of a CircuLite System, in which the change in certainty of development resulted in the introduction of a 50% probability of success in our fair value analysis. The charge was recorded in the fourth quarter of 2015. See further discussion below. In 2014, the IPR&D charge resulted from discontinuance of the CircuLite micro pump development program. 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 charges are 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, 2015 2014 (in thousands) Patents $ 7,424 $ 5,310 Purchased intangible assets Trade names — 3,700 Customer relationships — 1,800 Acquired technology rights 9,925 9,925 17,349 20,735 Less: Accumulated amortization—Patents (1,551 ) (1,118 ) Less: Accumulated amortization—Purchased intangible assets (2,753 ) (1,810 ) $ 13,045 $ 17,807 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 During the fourth quarter of 2015 and 2014, we performed an impairment review of these intangible assets and recorded an impairment charge of $4.8 million in 2015 with no charge recorded in 2014. The 2015 charge resulted from impairment of value which was ascribed to tradenames and customer relationships related to the 2013 acquisition of CircuLite and was associated with an evaluation of the CircuLite development program that occurred in the fourth quarter, which was necessitated by events that continued to evolve throughout the fourth quarter. These events included our progress with the MVAD System and review of clinical data from the MVAD CE Mark trial, as well as longer than anticipated project timelines impacting the certainty of development and eventual regulatory approval for a CircuLite System. The impairment charges are included in impairment of intangible asset expenses on our consolidated statements of operations. 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 settled this liability by issuing 26,042 shares of our common stock in May 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, 2015, 2014 and 2013 was $2.1 million, $1.7 million and $0.6 million, respectively. Estimated amortization expense for each of the five succeeding fiscal years based upon our intangible asset portfolio at December 31, 2015 is approximately $2.1 million. |
Other Balance Sheet Information
Other Balance Sheet Information | 12 Months Ended |
Dec. 31, 2015 | |
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 Valtech Cardio, Ltd. 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 “2013 Note”). Pursuant to the terms of the Note, on October 7, 2014 (the maturity date), Valtech elected to convert all unpaid principal and interest on the Note (less applicable taxes) which amounted to $10.5 million, into shares of its preferred stock. As our December 31, 2015, our equity ownership in Valtech was approximately 3.0% on a fully diluted basis. During the third and fourth quarters of 2015 we invested a total of $7.0 million in the form of convertible promissory notes with terms similar to the 2013 note, which have maturity dates of July 10, 2017. This investment, including both our equity investment and outstanding convertible notes receivable were deemed to be realizable, are carried at cost and are included in long-term investments and other assets on our consolidated balance sheets. The carrying value of this investment was $17.6 million and $10.5 million at December 31, 2015 and 2014, respectively. The fair value of this investment has not been estimated as of December 31, 2015 and 2014 as no impairment indicators were identified. Other Accrued Liabilities Other accrued liabilities consist of the following: December 31, 2015 2014 (in thousands) Accrued payroll and other employee costs $ 14,068 $ 13,404 Accrued product recall costs 8,503 1,888 Accrued warranty 6,116 4,685 Accrued material purchases 4,107 4,284 Accrued professions fees 2,685 1,624 Accrued research and development costs 2,191 2,663 Accrued restructuring costs 1,955 1,266 Accrued VAT 1,238 1,637 Other accrued expenses 5,026 5,138 $ 45,889 $ 36,589 Accrued Payroll and Other Employee Costs Accrued payroll and other employee costs included year-end employee bonuses of approximately $8.0 million and $7.9 million at December 31, 2015 and 2014, respectively. Accrued Warranty The following table summarizes changes in our warranty liability for the years ended December 31, 2015, 2014 and 2013: 2015 2014 2013 (in thousands) Beginning balance $ 4,685 $ 2,498 $ 543 Accrual for warranty expense 2,040 4,141 2,721 Warranty costs incurred during the period (609 ) (1,954 ) (766 ) Ending balance $ 6,116 $ 4,685 $ 2,498 During 2015 and 2014, increases in warranty reserves resulted from the substantial increase in commercial sales activity, taking into consideration our historical return and replacement experience. Accrued Field Action 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 already incorporated in our accrued product warranty liability. In September 2015, we recorded charges for estimated costs associated with planned field actions related to certain older batteries and international AC adapters. The AC Adapter field action was implemented to mitigate potential risks for international AC Adapters which have a higher risk of failure in event of a power surge and the battery replacement action is to remove certain older batteries for newer batteries containing improved cells from a new supplier. These actions ensued in January 2016. 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 completed as of December 31, 2015. On April 30, 2014, we implemented a corrective action to notify clinicians and patients of 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 with monitoring battery performance, recognizing abnormal behaviors and reinforcing proper power management of the HVAD System. On July 30, 2014, we extended this field action to include a voluntary recall of certain older batteries. The recall instructed 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. We recorded charges of $8.6 million, $5.0 million, and $0 for the years ended December 31, 2015, 2014 and 2013, respectively, for the field actions described above. Accrued Restructuring Costs The following table summarizes changes in our accrued restructuring costs for the year ended December 31, 2015: Facility Leases Severance and Contract Total (in thousands) Beginning balance $ 1,266 $ — $ — $ 1,266 Restructuring charges 139 598 338 1,075 Payments (887 ) (598 ) (338 ) (1,823 ) Adjustments to estimated obligations 1,386 — — 1,386 Change in fair value 51 — — 51 Ending balance $ 1,955 $ — $ — $ 1,955 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 see In the first quarter of 2015, we ceased activities at our facility in Aachen, Germany, which was subject to an operating lease that runs through October 2017. In connection with this action, we recorded a $0.1 million liability equal to the lease termination payment that was negotiated with the landlord. This amount is included in research and development expenses on our consolidated statement of operations. Severance Agreements In 2015, we incurred various costs related to the closure of our facility in Aachen, Germany due to discontinuance of the CircuLite micro pump development program, including severance costs totaling $0.6 million. These costs recorded in the first quarter of 2015 as research and development expenses on our consolidated statement of operations. 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 In 2015, we incurred various costs related to closure of our facility in Aachen, Germany due to discontinuance of the CircuLite micro pump development program, including contract termination costs totaling $0.3 million. These costs were primarily recorded in the first quarter of 2015 as research and development expenses on our consolidated statement of operations. As a result of anticipated design modifications to the CircuLite System and our decision to move manufacturing of the CircuLite 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 CircuLite 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, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Note 10. Debt 3.5% Convertible Senior Notes On December 15, 2010, we completed the sale of 3.5% convertible senior notes due December 15, 2017, unless earlier repurchased by us or converted (the “2017 Notes”) for an aggregate principal amount of $143.75 million pursuant to the terms of an Indenture dated December 15, 2010 (the “Indenture”). The 2017 Notes are the senior unsecured obligations of the Company. The 2017 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. In May 2015, we entered into separate, privately negotiated, exchange agreements (the “Exchange”) with certain holders of our outstanding 2017 Notes. Pursuant to these agreements, we exchanged $101.3 million aggregate principal amount of the 2017 Notes for $118.2 million principal amount of 1.75% convertible senior notes due 2021. We did not receive any proceeds related to the Exchange. As of December 31, 2015, the aggregate principal value of the 2017 Notes outstanding was $42.5 million following the Exchange Transaction completed in May 2015. (see further discussion below). The 2017 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 2017 Notes will be convertible at an initial conversion rate of 10 shares of our common stock per $1,000 principal amount of 2017 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 2017 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 2017 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 2017 Notes have occurred. On or after June 15, 2017, until the close of business of the business day immediately preceding the date the 2017 Notes mature, holders may convert their 2017 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 2017 Notes prior to maturity. Holders of the 2017 Notes may require us to purchase for cash all or a part of their 2017 Notes at a repurchase price equal to 100% of the principal amount of the 2017 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 payment 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 2017 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 2017 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 2017 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 2017 Notes. In accordance with FASB ASC 470-20, Debt with Conversion and Other Options Based on the initial conversion rate of 10 shares of our common stock per $1,000 principal amount of 2017 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 remaining outstanding 2017 Notes is 424,710. The value of these shares, based on the closing price of our common stock on December 31, 2015 of $50.40 per share, was approximately $21.4 million. The fair value of our 2017 Notes as presented in Note 6 was $38.2 million at December 31, 2015. 1.75% Convertible Senior Notes In May 2015, we issued $84.2 million principal amount of 1.75% convertible senior notes due December 15, 2021 (the “2021 Notes”), unless earlier repurchased, redeemed or converted. Combined with the 2021 Notes issued in connection with the Exchange described above, the aggregate principal amount issued under the 2021 Notes was $202.4 million. The Exchange resulted in the retirement of outstanding 2017 Notes with a carrying value of $83.1 million, the write-off of unamortized debt issuance costs of $1.0 million and settlement of $10.7 million related to the conversion feature embedded in the 2017 Notes. The 2021 Notes offered in the Exchange had a fair value of $88.0 million, which resulted in a loss on extinguishment of debt of $16.6 million in the three months ended June 30, 2015. The net proceeds from the issuance of the 2021 Notes amounted to $74.7 million, net of deferred issuance costs paid as of December 31, 2015. In connection with the issuance of the 2021 Notes, we incurred costs of approximately $5.2 million. Interest on the 2021 Notes is payable semiannually in arrears on June 15 and December 15, at a rate of 1.75% per annum, beginning on December 15, 2015. The 2021 Notes will mature on December 15, 2021 unless earlier repurchased, redeemed or converted. Prior to the close of business on the business day immediately preceding June 15, 2021, holders may convert their 2021 Notes at their option only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2015 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on such trading day; (3) upon the occurrence of specified corporate events, or (4) if we call the 2021 Notes for redemption, until the close of business on the business day immediately preceding the redemption date. As of the date of this report on Form 10-Q, none of the events that would allow holders to convert their 2021 Notes have occurred. On or after June 15, 2021 until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert their 2021 Notes at any time, regardless of whether any of the foregoing conditions has been met. Upon conversion, we will satisfy our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. Both the 2017 and 2021 Notes offer noteholders the right to convert during the period beginning 35 trading days prior to the anticipated closing date of certain merger transactions and ending 35 trading days following the actual closing date. We may not redeem the 2021 Notes prior to June 19, 2019. On or after June 19, 2019, we may redeem for cash all or part of the 2021 Notes if the last reported sale price per share of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the trading day immediately preceding the date on which we provide the notice of redemption exceeds 130% of the applicable conversion price for the 2021 Notes on each applicable trading day. The redemption price will equal 100% of the principal amount of the 2021 Notes being redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2021 Notes. If we undergo a fundamental change, as defined in the Indenture among the Company and Wilmington Trust, N.A., holders may require us to repurchase for cash all or part of their 2021 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2021 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The fundamental change is primarily triggered by a change of control, liquidation, dissolution or delisting from NASDAQ. The 2021 Notes are senior unsecured obligations and rank senior in right of payment to our future indebtedness that is expressly subordinated in right of payment to the 2021 Notes; equal in right of payment to our existing and future unsecured indebtedness that is not subordinated; effectively subordinated in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries. The 2021 Notes will be convertible at an initial conversion rate of 10 shares of our common stock per $1,000 principal amount of 2021 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. In accordance with FASB ASC 470-20, Debt with Conversion and Other Options Based on the initial conversion rate of 10 shares of our common stock per $1,000 principal amount of 2021 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 2021 Notes is 2,023,660. The value of these shares, based on the closing price of our common stock on December 31, 2015 of $50.40 per share, was approximately $102.0 million. The fair value of our 2021 Notes as presented in Note 6 was $162.1 million at December 31, 2015. The Convertible Notes and the equity component, which is recorded in additional paid-in-capital, consisted of the following: December 31, December 31, (in thousands) Principal amount of the 3.5% convertible senior notes, due 2017 $ 42,471 $ 143,750 Unamortized discount (5,994 ) (28,947 ) $ 36,477 $ 114,803 Equity component $ 7,629 $ 55,038 Principal amount of the 1.75% convertible senior notes, due 2021 $ 202,366 $ — Unamortized discount (47,781 ) — $ 154,585 $ — Equity component $ 47,400 $ — 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, 2015 and 2014, interest expense related to the Convertible Notes was as follows: 2015 2014 (in thousands) Coupon rate $ 5,055 $ 5,031 Amortization of discount 8,691 7,678 Amortization of deferred financing costs 556 412 $ 14,302 $ 13,121 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2015 | |
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 and was amended in May 2015. The facility is used primarily for office and ancillary laboratory purposes including development testing. Under the lease we rent approximately 74,000 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, as amended, of approximately $1.6 million is payable monthly as of January 1, 2016. Annual base rent is subject to periodic increases beginning March 1, 2017 and will increase to approximately $1.8 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 ended 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 (s ee 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 non-cancelable 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 $0.7 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 ee 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 $3.3 million, $3.6 million, and $2.9 million in 2015, 2014 and 2013, respectively. Future minimum rental commitments under non-cancelable operating lease agreements with remaining terms of at least one year as of December 31, 2015 are as follows: Operating Leases (in thousands) Year Ending December 31, 2016 $ 3,853 2017 4,029 2018 4,075 2019 4,056 2020 3,882 Thereafter 2,370 Total minimum lease payments $ 22,265 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. During the first quarter of 2015, we reached a lease termination agreement with the landlord and recorded a $0.1 million charge. Closure of this facility resulted in a write-off of leasehold improvements, furnishings and other fixed assets that will not be transferred to our other facilities of approximately $1.1 million and a charge for non-cancellable purchase obligations of approximately $0.3 million. In January 2015, employees at this facility were notified of the closure and elimination of their positions. The employee-related costs associated with severance payments were approximately $0.6 million. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
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 50,000,000 shares of common stock, $.001 par value per share. As of December 31, 2015, we had 17,405,451 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, 2015, for possible future issuance are as follows: (in thousands) Convertible senior notes 3,164 Equity award plans 2,291 5,455 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 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015, 2014 and 2013, we recorded share-based compensation expenses as follows: 2015 2014 2013 (in thousands) Cost of revenue $ 1,975 $ 2,032 $ 2,539 Selling, general and administrative 13,544 13,573 12,184 Research and development 8,286 7,937 7,151 $ 23,805 $ 23,542 $ 21,874 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, and amended as of June 29, 2015, 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 2,475,000, 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 2,375,000. As of December 31, 2015, 277,375 shares have been issued upon vesting of Awards issued under the 2012 Plan and Awards with respect to 640,896 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, 2015, 2014 and 2013. 2015 2014 2013 Dividend yield 0.00 % 0.00 % 0.00 % Expected volatility 37.50 % 39.00 % 40.00 % Risk-free interest rate 1.69 % 1.65 % 1.15 % Estimated holding period (years) 5.00 5.00 6.25 Information related to options granted under all of our plans at December 31, 2015 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 Outstanding at December 31, 2014 107 $ 48.32 Granted 7 76.60 Exercised (3 ) 27.95 Forfeited — — Expired — — Outstanding at December 31, 2015 111 $ 49.20 3.78 $ 1,550 Exercisable at December 31, 2015 99 $ 45.08 3.20 $ 1,550 The aggregate intrinsic values at December 31, 2015 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, 2015, 2014 and 2013 was $27.10, $32.41, and $38.51, respectively. The total intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013 was approximately $0.2 million, $1.9 million, and $10.3 million, respectively. Cash received from options exercised in the years ended December 31, 2015, 2014 and 2013 was approximately $0.1 million, $0.9 million and $4.9 million. At December 31, 2015, there was approximately $0.1 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 0.5 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, 2015 and activity during the year then ended is as follows: Number of Weighted (Years) Aggregate Outstanding at December 31, 2014 589 Granted 312 Vested/Exercised (221 ) Forfeited (57 ) Outstanding at December 31, 2015 623 1.50 $ 31,384 Exercisable at December 31, 2015 — — $ — The aggregate intrinsic value at December 31, 2015 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, 2015, 64,772 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, 2015, 2014 and 2013 was approximately $15.2 million, $15.4 million, and $16.4 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, 2015, 2014 and 2013 was $87.72, $97.50, and $91.21, respectively. At December 31, 2015, we had approximately $22.9 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 19, 2016, our board of directors approved the grant of an aggregate of 293,100 RSUs to a group of employees, including officers of the Company. Approximately 245,350 of the RSUs granted in February 2016 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. Also on February 19, 2016, our board of directors approved the grant of an aggregate of 149,938 stock options to a group of employees, including officers of the Company. Approximately 149,938 of the stock options granted in February 2016 will vest on a pro-rata basis on each anniversary of the issuance date over three years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14. Income Taxes During 2015, we were subject to income taxes on foreign taxable income in certain jurisdictions. The 2015 income tax provision of $1.0 million, of which $0.2 million is currently payable, related primarily to foreign income taxes. Income (loss) before taxes on a geographic basis during 2015 was as follows: 2015 2014 2013 (in thousands) United States $ (75,861 ) $ (20,684 ) $ (58,063 ) Non-U.S. 4,095 1,878 (781 ) $ (71,766 ) $ (18,806 ) $ (58,844 ) 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, 2015 and 2014 were as follows: 2015 2014 (in thousands) Deferred tax assets: U.S. losses carried forward $ 137,825 $ 128,216 Non-U.S. losses carried forward 3,709 4,227 Total net operating losses carried forward 141,534 132,443 Equity awards 12,017 9,902 Other deferred tax assets 19,506 11,935 Gross deferred tax assets 173,057 154,280 Deferred tax liabilities: Convertible debt (18,119 ) (10,632 ) Purchased intangible assets (4,423 ) (13,549 ) Net deferred tax assets 150,515 130,099 Less: valuation allowance (150,395 ) (130,099 ) Net deferred tax asset/(liability) $ 120 $ — FASB ASC 740 —Income Taxes At December 31, 2015 and 2014, we had gross deferred tax assets in excess of deferred tax liabilities of $150.5 million and $130.1 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 increased by approximately $20.3 million for the year ended December 31, 2015 decreased by approximately $41.2 million for the year ended December 31, 2014 and increased by approximately $97.3 million for the year ended December 31, 2013. In 2014 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, 2015, the portion of the federal and state net operating loss related to share based compensation is approximately $34.7 million and $29.4 million, respectively. At December 31, 2015, we had unexpired net operating loss carry-forwards of approximately $425.7 million and $149.3 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 2035. We also have foreign tax loss carry-forwards of approximately $15.8 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. During the fourth quarter of 2015, the German Tax authority began an audit at HeartWare GmbH for Corporate, Trade and VAT (Value Added Tax) taxes. The audit was initiated as part of routine inspection by the German Authorities. As of December 31, 2015 field work was in its initial stages and no estimates or assessments, and as such no charges, have been made. Uncertain tax positions The amount of gross unrecognized tax benefits as of December 31, 2015 and December 31, 2014 was $2.1 million and $3.2 million, respectively. The fiscal years 2012 through 2014 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 2011 through 2014 are considered open tax years for German and United Kingdom tax jurisdictions. The fiscal years 2012 through 2014 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, (in thousands) Unrecognized tax benefits—beginning of the year $ 3,228 Gross increases/(decrease)—prior year 17 Gross increases/(decrease)—current year (1,159 ) Unrecognized tax benefits—end of the year $ 2,086 Included in the balance of unrecognized tax benefits at December 31, 2015, are $1.4 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 2015. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2015 | |
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: 2015 2014 2013 (in thousands) Conversion of convertible senior notes 2,448 1,438 1,438 Exercise or vesting of share-based awards 734 696 608 3,182 2,134 2,046 |
Business Segment, Geographic Ar
Business Segment, Geographic Areas and Major Customers | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015, 2014 and 2013 are as follows: 2015 2014 2013 (in thousands) United States $ 161,848 $ 151,335 $ 105,345 Germany 52,907 63,629 54,793 International, excluding Germany 62,088 63,456 47,791 $ 276,843 $ 278,420 $ 207,929 The percentage of our revenue generated in the U.S. increased in 2015 and 2014 as compared to 2013 due to receipt in November 2012 of FDA approval to sell the HVAD System commercially in the U.S as well as foreign currency effects related to strengthening of the United States Dollar. 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, 2015, 2014 and 2013, no customers individually accounted for more than 10% of product sales. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
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 the use of our devices. We provided 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 and continuing in 2015, we implemented 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. As we continue to evaluate our quality systems, it is possible that we may need to take additional actions including the possibility of voluntary product recalls when necessary to ensure patient safety and effective performance of the HVAD System. We anticipate a follow-up inspection by the FDA of our Miami Lakes, Florida facility in 2016. At December 31, 2015, we had purchase order commitments of approximately $42.9 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 ( see In accordance with FASB ASC 450 , Contingencies 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 $300 million. As of December 31, 2015, the fair value of this contingent consideration was estimated to be $12.3 million ( see 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, 2015 | |
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, 2015 | |
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 $1.8 million, $1.4 million and $1.1 million for the years ended December 31, 2015, 2014 and 2013. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
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) 2015 Revenue, net $ 70,021 $ 73,569 $ 65,166 $ 68,087 Gross profit 47,981 48,341 32,176 45,057 Net loss (14,535 ) (27,393 ) (29,927 ) (926 ) Net loss per common share—basic and diluted (1) $ (0.85 ) $ (1.59 ) $ (1.73 ) $ (0.05 ) Weighted average shares outstanding—basic and diluted 17,193 17,269 17,303 17,327 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 (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 quarters ended March 31, June 30, September 30 and December 31, 2015 included share-based compensation expense of approximately $6.0 million, $6.7 million, $6.1 million and $5.0 million, respectively. • Net loss for the quarter ended December 31, 2015 included $1.0 million in restructuring costs, foreign exchange losses of $1.1 million, $26.8 million for the impairment of certain purchased intangible assets and a $38.1 million decrease in the fair value of contingent consideration associated with the acquisition of CircuLite. • Net loss for the quarter ended September 30, 2015 included foreign exchange losses of $0.4 million and a $2.4 million increase in the fair value of contingent consideration associated with the acquisition of CircuLite. • Net loss for the quarter ended June 30, 2015 included loss on extinguishment of debt of $16.6 million, foreign exchange gains of $0.8 million and a $2.2 million increase in the fair value of contingent consideration associated with the acquisition of CircuLite. • Net loss for the quarter ended March 31, 2015 included $2.6 million in restructuring costs, foreign exchange losses of $3.7 million and a $2.1 million increase in the fair value of contingent consideration associated with the acquisition of CircuLite. • 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 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 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 21. Subsequent Events We have evaluated events and transactions that occurred subsequent to December 31, 2015 through the date the financial statements were issued, for potential recognition or disclosure in the accompanying consolidated financial statements. Except for the events discussed below, we did not identify any events or transactions that should be recognized or disclosed in the accompanying consolidated financial statements. On January 22, 2016, the St. Paul Teachers’ Retirement Fund Association filed a putative class action complaint (the “Complaint”) in the United States District Court for the Southern District of New York on behalf of all persons and entities who purchased or otherwise acquired shares of the company from June 10, 2014 through January 11, 2016 (the “Class Period”). The Complaint claims that the company and two of our executives violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making false and misleading statements about, among other things, the company’s response to the June 2014 FDA Warning Letter, the development of the MVAD System and the acquisition of Valtech. The Complaint claims that the disclosure of the purportedly false and misleading statements caused the price of the company’s stock to drop, and seeks to recover damages on behalf of all purchasers or acquirers of the company’s stock during the Class Period. The company intends to vigorously defend itself against these claims. Because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. As a result we cannot reasonably estimate a range of loss for this action and accordingly have not accrued any liability associated with this action. On January 28, 2016, we entered into a Cooperation Agreement with Engaged Capital, LLC and certain affiliates (collectively, “Engaged Capital”) pursuant to which, subject to the terms of the Cooperation Agreement, the we agreed, among other things, to jointly select an additional independent director to be appointed to the company’s board of directors and form a business strategy committee of the company’s board of directors. In addition, Engaged Capital agreed to withdraw its previously nominated slate of directors for election at the company’s 2016 annual meeting of stockholders and to certain customary standstill provisions. A copy of the Cooperation Agreement is attached as Exhibit 10.1 On September 1, 2015, we entered into a Business Combination Agreement (the “BCA”) by and among the Company, Valtech Cardio, Ltd. (“Valtech”), HW Global, Inc. (“Holdco”), HW Merger Sub, Inc., Valor Merger Sub Ltd. and Valor Shareholder Representative, LLC, pursuant to which we and Valtech proposed to effect a strategic combination of our respective businesses under Holdco subject to certain closing conditions. Valtech is a privately held company that specializes in the development of innovative surgical and transcatheter valve repair and replacement devices for the treatment of mitral valve regurgitation and tricuspid valve regurgitation. Effective January 28, 2016, we terminated the BCA pursuant to the terms of the BCA by delivering written notice to the other parties. As of December 31, 2015, we had invested approximately $17 million in Valtech in the original form of convertible loans, of which $10 million together with $0.5 million of accrued interest was converted into Valtech preferred shares amounting to approximately 3.0% ownership on a fully diluted basis. Pursuant to the BCA we loaned Valtech $1 million on January 7, 2016 and $30 million following termination of the BCA per provisions of the BCA, in the form of convertible loans. |
Significant Accounting Polici30
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015, 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, 2015, one customer had an accounts receivable balance greater than 10% of total accounts receivable representing approximately 17% of our total accounts receivable. At December 31, 2014, no customer had an accounts receivable balance greater than 10% of our total accounts receivable. In 2015, we entered into an agreement with one customer with extended payment terms in which sales are recorded as a long-term receivable and a portion of sales are deferred. The deferred portion of sales are treated as a financing charge in which interest income is imputed and recorded as investment income over the financing period on our consolidated statement of operations. At December 31, 2015 we had approximately $2.5 million of long-term receivables and they are recorded on consolidated balance sheet under long-term investments and other assets. 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, 2015, 2014 and 2013: 2015 2014 2013 (in thousands) Beginning balance $ 671 $ 495 $ 750 Charges (reversals) to expense 5 181 (255 ) Charge-offs (0 ) (5 ) — Ending balance $ 676 $ 671 $ 495 As of December 31, 2015 and 2014, 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 | 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 Useful Lives December 31, 2015 2014 (in thousands) Property, plant and equipment Machinery and equipment 1.5 to 7 years $ 21,785 $ 21,279 Leasehold improvements 3 to 10 years 8,891 9,070 Office equipment, furniture and fixtures 5 to 7 years 2,105 2,206 Purchased software 1 to 7 years 7,575 6,474 40,356 39,029 Less: accumulated depreciation (25,258 ) (19,993 ) $ 15,098 $ 19,036 Depreciation expense was $6.7 million, $6.7 million, and $6.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. During the year ended December 31, 2015, we ceased activities at our facility in Aachen, Germany. We recorded an impairment charge of approximately $1.1 million related to certain office equipment and software at the facility upon their discontinued use. This amount is included in research and development expenses on our consolidated statement of operations. 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 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 $0.6 million and $0.7 million as of December 31, 2015 and 2014, 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 for notes issued in December 2010 and through December 15, 2021 for notes issued in May 2015, the respective maturity dates of the notes, and such amortization expense is reflected in interest expense on our consolidated statements of operations. The amount of amortization was approximately $0.6 and $0.4 million for each of the years ended December 31, 2015 and 2014, respectively. The amount of accumulated amortization at December 31, 2015 and 2014 was approximately $0.9 million and $1.4 million, respectively. |
Revenue Recognition | Revenue Recognition We recognize revenue from product sales in accordance with FASB ASC 605— Revenue Recognition 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 lease impairment charges totaling $1.7 million related to closure of the facility and an additional impairment charge of $0.6 million related to certain office equipment and software at the facility upon their discontinued use. In 2015, due primarily to weakness in the northern New Jersey real estate market we recorded additional lease impairment charges totaling $1.5 million. These amounts are included in selling, general and administrative expenses on our consolidated statements of operations. No impairments of similar long-lived assets were identified during the year ended December 31, 2013. 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, abandoned or significantly changed, 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 2015, we performed an impairment review of IPR&D acquired from CircuLite and recorded an impairment charge of $22.1 million. This change was a result of longer than anticipated timelines to develop and receive approval for a CircuLite System. We had a similar IPR&D charge of $2.6 million in 2014 when we discontinued the use of the CircuLite micro pump acquired from CircuLite in favor of using our MVAD pump for the CircuLite System. During the fourth quarter of 2015, we also recorded an impairment charge of $4.8 million related to tradenames and customer lists associated with our acquisition of CicruLite. The impairment was primarily associated with program delays which impact the certainty of development and eventual regulatory approval of a CircuLite System. |
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 each year, we concluded that goodwill was not impaired in either 2015 or 2014. |
Contingent Consideration | Contingent Consideration On December 1, 2013, we acquired CircuLite, Inc. In addition to initial consideration paid at closing, the former CircuLite security holders 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 $300 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 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, 2015, 2014 and 2013. |
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, 2015, the long-term portion of our deferred rent liability of approximately $3.2 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 |
Vendor Concentration | Vendor Concentration For the years ended December 31, 2015, 2014 and 2013, we purchased approximately 68%, 72%, and 70%, 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, 2015, 2014 and 2013, the amounts due to these vendors totaled approximately $6.1 million, $5.4 million and $5.8 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 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) In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) 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 In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs |
Contingencies | In accordance with FASB ASC 450 , Contingencies |
Significant Accounting Polici31
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015, 2014 and 2013: 2015 2014 2013 (in thousands) Beginning balance $ 671 $ 495 $ 750 Charges (reversals) to expense 5 181 (255 ) Charge-offs (0 ) (5 ) — Ending balance $ 676 $ 671 $ 495 |
Summary of Property, Plant and Equipment, Net | Property, plant and equipment, net consists of the following: Estimated Useful Lives December 31, 2015 2014 (in thousands) Property, plant and equipment Machinery and equipment 1.5 to 7 years $ 21,785 $ 21,279 Leasehold improvements 3 to 10 years 8,891 9,070 Office equipment, furniture and fixtures 5 to 7 years 2,105 2,206 Purchased software 1 to 7 years 7,575 6,474 40,356 39,029 Less: accumulated depreciation (25,258 ) (19,993 ) $ 15,098 $ 19,036 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value (in thousands) Short-term investments: Corporate debt $ 32,666 $ — $ (100 ) $ 32,566 U.S. government agency debt 25,000 — (60 ) 24,940 Certificates of deposit 11,025 — — 11,025 Total short-term investments $ 68,691 $ — $ (160 ) $ 68,531 Long-term investments: Certificates of deposit $ 980 $ — $ — $ 980 Total long-term investments $ 980 $ — $ — $ 980 At December 31, 2014 Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value (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 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 Carrying Value Fair Value Fair Value Measurements at the Reporting Date Using Level 1 Level 2 Level 3 (in thousands) Assets Short-term investments $ 68,531 $ 68,531 $ — $ 68,531 $ — Long-term investments 980 980 — 980 — Liabilities Convertible senior notes 191,062 (1) 200,351 — 200,351 — Contingent consideration 12,330 12,330 — — 12,330 Royalties 918 918 — — 918 Lease exit costs 1,955 1,955 — — 1,955 At December 31, 2014 Carrying Value Fair Value Fair Value Measurements at the Reporting Date Using 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 • The carrying amount of our convertible senior notes is net of unamortized discount. See |
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, 2015: Contingent (in thousands) Beginning balance $ 43,740 Payments — Change in fair value (31,410 ) Ending balance $ 12,330 |
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, 2015: Royalties (in thousands) Beginning balance $ 962 Payments (110 ) Change in fair value 66 Ending balance $ 918 |
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, 2015: Lease Exit (in thousands) Beginning balance $ 1,266 Payments (887 ) Change in fair value 1,576 Ending balance $ 1,955 |
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, 2015: Valuation Methodology Significant Unobservable Input Weighted Average (range, if applicable) Contingent consideration Probability weighted income approach Milestone dates Discount rate Probability of occurrence 2020 to 2023 17.0% to 24.0% 50% Royalties Discounted cash flow Discount rate 4.8% to 7.8% Lease exit costs Discounted cash flow Sublease start date Sublease rate Discount rate March 2017 $22.00/square foot 3.5% |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Components of inventories are as follows: December 31, 2015 2014 (in thousands) Raw material $ 25,679 $ 28,688 Work-in-process 8,858 10,240 Finished goods 13,149 15,118 $ 47,686 $ 54,046 |
Goodwill, In-Process Research36
Goodwill, In-Process Research and Development and Other Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and 2014 is as follows: 2015 2014 (in thousands) Beginning balance $ 61,390 $ 61,596 Additions — — Impairment — — Foreign currency translation impact (157 ) (206 ) Ending balance $ 61,233 $ 61,390 |
Summary of Carrying Value of In-Process Research and Development Assets | The carrying value of our IPR&D assets, which relate to the development and potential commercialization of certain acquired technologies, consisted of the following at December 31, 2015 and 2014: 2015 2014 (in thousands) CircuLite System technology $ 10,800 $ 32,850 |
Summary of Other Intangible Assets | Other intangible assets, net consisted of the following: December 31, 2015 2014 (in thousands) Patents $ 7,424 $ 5,310 Purchased intangible assets Trade names — 3,700 Customer relationships — 1,800 Acquired technology rights 9,925 9,925 17,349 20,735 Less: Accumulated amortization—Patents (1,551 ) (1,118 ) Less: Accumulated amortization—Purchased intangible assets (2,753 ) (1,810 ) $ 13,045 $ 17,807 |
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 Informati37
Other Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Other Accrued Liabilities | Other accrued liabilities consist of the following: December 31, 2015 2014 (in thousands) Accrued payroll and other employee costs $ 14,068 $ 13,404 Accrued product recall costs 8,503 1,888 Accrued warranty 6,116 4,685 Accrued material purchases 4,107 4,284 Accrued professions fees 2,685 1,624 Accrued research and development costs 2,191 2,663 Accrued restructuring costs 1,955 1,266 Accrued VAT 1,238 1,637 Other accrued expenses 5,026 5,138 $ 45,889 $ 36,589 |
Summary of Changes in Warranty Liability | The following table summarizes changes in our warranty liability for the years ended December 31, 2015, 2014 and 2013: 2015 2014 2013 (in thousands) Beginning balance $ 4,685 $ 2,498 $ 543 Accrual for warranty expense 2,040 4,141 2,721 Warranty costs incurred during the period (609 ) (1,954 ) (766 ) Ending balance $ 6,116 $ 4,685 $ 2,498 |
Summary of Changes in Accrued Restructuring Costs | The following table summarizes changes in our accrued restructuring costs for the year ended December 31, 2015: Facility Leases Severance and Contract Total (in thousands) Beginning balance $ 1,266 $ — $ — $ 1,266 Restructuring charges 139 598 338 1,075 Payments (887 ) (598 ) (338 ) (1,823 ) Adjustments to estimated obligations 1,386 — — 1,386 Change in fair value 51 — — 51 Ending balance $ 1,955 $ — $ — $ 1,955 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, December 31, (in thousands) Principal amount of the 3.5% convertible senior notes, due 2017 $ 42,471 $ 143,750 Unamortized discount (5,994 ) (28,947 ) $ 36,477 $ 114,803 Equity component $ 7,629 $ 55,038 Principal amount of the 1.75% convertible senior notes, due 2021 $ 202,366 $ — Unamortized discount (47,781 ) — $ 154,585 $ — Equity component $ 47,400 $ — |
Summary of Interest Expense Related to Convertible Debt | For the years ended December 31, 2015 and 2014, interest expense related to the Convertible Notes was as follows: 2015 2014 (in thousands) Coupon rate $ 5,055 $ 5,031 Amortization of discount 8,691 7,678 Amortization of deferred financing costs 556 412 $ 14,302 $ 13,121 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 are as follows: Operating Leases (in thousands) Year Ending December 31, 2016 $ 3,853 2017 4,029 2018 4,075 2019 4,056 2020 3,882 Thereafter 2,370 Total minimum lease payments $ 22,265 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Shares of Common Stock Reserved for Possible Future Issuance | Shares of our common stock reserved at December 31, 2015, for possible future issuance are as follows: (in thousands) Convertible senior notes 3,164 Equity award plans 2,291 5,455 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Allocation of Share-Based Compensation Expense | For the years ended December 31, 2015, 2014 and 2013, we recorded share-based compensation expenses as follows: 2015 2014 2013 (in thousands) Cost of revenue $ 1,975 $ 2,032 $ 2,539 Selling, general and administrative 13,544 13,573 12,184 Research and development 8,286 7,937 7,151 $ 23,805 $ 23,542 $ 21,874 |
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, 2015, 2014 and 2013. 2015 2014 2013 Dividend yield 0.00 % 0.00 % 0.00 % Expected volatility 37.50 % 39.00 % 40.00 % Risk-free interest rate 1.69 % 1.65 % 1.15 % Estimated holding period (years) 5.00 5.00 6.25 |
Summary of Options Granted under All Plans | Information related to options granted under all of our plans at December 31, 2015 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 Outstanding at December 31, 2014 107 $ 48.32 Granted 7 76.60 Exercised (3 ) 27.95 Forfeited — — Expired — — Outstanding at December 31, 2015 111 $ 49.20 3.78 $ 1,550 Exercisable at December 31, 2015 99 $ 45.08 3.20 $ 1,550 |
Summary of RSU's | Information related to RSUs at December 31, 2015 and activity during the year then ended is as follows: Number of Weighted (Years) Aggregate Outstanding at December 31, 2014 589 Granted 312 Vested/Exercised (221 ) Forfeited (57 ) Outstanding at December 31, 2015 623 1.50 $ 31,384 Exercisable at December 31, 2015 — — $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income (Loss) before Taxes on Geographic Basis | Income (loss) before taxes on a geographic basis during 2015 was as follows: 2015 2014 2013 (in thousands) United States $ (75,861 ) $ (20,684 ) $ (58,063 ) Non-U.S. 4,095 1,878 (781 ) $ (71,766 ) $ (18,806 ) $ (58,844 ) |
Primary Components of Net Deferred Tax Assets and Liabilities | The primary components of net deferred tax assets and liabilities at December 31, 2015 and 2014 were as follows: 2015 2014 (in thousands) Deferred tax assets: U.S. losses carried forward $ 137,825 $ 128,216 Non-U.S. losses carried forward 3,709 4,227 Total net operating losses carried forward 141,534 132,443 Equity awards 12,017 9,902 Other deferred tax assets 19,506 11,935 Gross deferred tax assets 173,057 154,280 Deferred tax liabilities: Convertible debt (18,119 ) (10,632 ) Purchased intangible assets (4,423 ) (13,549 ) Net deferred tax assets 150,515 130,099 Less: valuation allowance (150,395 ) (130,099 ) Net deferred tax asset/(liability) $ 120 $ — |
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, (in thousands) Unrecognized tax benefits—beginning of the year $ 3,228 Gross increases/(decrease)—prior year 17 Gross increases/(decrease)—current year (1,159 ) Unrecognized tax benefits—end of the year $ 2,086 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Anti-Dilutive Securities Excluded from Computation of Weighted Average Shares Outstanding | 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: 2015 2014 2013 (in thousands) Conversion of convertible senior notes 2,448 1,438 1,438 Exercise or vesting of share-based awards 734 696 608 3,182 2,134 2,046 |
Business Segment, Geographic 44
Business Segment, Geographic Areas and Major Customers (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Product Sales by Geographic Location | Product sales by geographic location for the years ended December 31, 2015, 2014 and 2013 are as follows: 2015 2014 2013 (in thousands) United States $ 161,848 $ 151,335 $ 105,345 Germany 52,907 63,629 54,793 International, excluding Germany 62,088 63,456 47,791 $ 276,843 $ 278,420 $ 207,929 |
Quarterly Financial Informati45
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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) 2015 Revenue, net $ 70,021 $ 73,569 $ 65,166 $ 68,087 Gross profit 47,981 48,341 32,176 45,057 Net loss (14,535 ) (27,393 ) (29,927 ) (926 ) Net loss per common share—basic and diluted (1) $ (0.85 ) $ (1.59 ) $ (1.73 ) $ (0.05 ) Weighted average shares outstanding—basic and diluted 17,193 17,269 17,303 17,327 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 • 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 quarters ended March 31, June 30, September 30 and December 31, 2015 included share-based compensation expense of approximately $6.0 million, $6.7 million, $6.1 million and $5.0 million, respectively. • Net loss for the quarter ended December 31, 2015 included $1.0 million in restructuring costs, foreign exchange losses of $1.1 million, $26.8 million for the impairment of certain purchased intangible assets and a $38.1 million decrease in the fair value of contingent consideration associated with the acquisition of CircuLite. • Net loss for the quarter ended September 30, 2015 included foreign exchange losses of $0.4 million and a $2.4 million increase in the fair value of contingent consideration associated with the acquisition of CircuLite. • Net loss for the quarter ended June 30, 2015 included loss on extinguishment of debt of $16.6 million, foreign exchange gains of $0.8 million and a $2.2 million increase in the fair value of contingent consideration associated with the acquisition of CircuLite. • Net loss for the quarter ended March 31, 2015 included $2.6 million in restructuring costs, foreign exchange losses of $3.7 million and a $2.1 million increase in the fair value of contingent consideration associated with the acquisition of CircuLite. • 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 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 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 $6.2 million, respectively. |
Description of Business - Addit
Description of Business - Additional Information (Detail) | 1 Months Ended | 12 Months Ended |
Aug. 31, 2015Patient | Dec. 31, 2015CountryFacilitiesImplantsl | |
Collaboration Arrangement Disclosure [Abstract] | ||
Capacity of blood pumping device | l | 10 | |
Number of health care sites where HVAD is implanted in Patients | Facilities | 320 | |
Number of countries where HVAD is implanted in Patients | Country | 47 | |
Number of implants of HVAD System in patients | Implants | 10,000 | |
Number of patients Expected to Enroll | 308 | |
Number of control patients | 157 |
Liquidity - Additional Informat
Liquidity - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Liquidity [Abstract] | ||
Cash, cash equivalents and investments | $ 244,600 | |
Accumulated deficit | $ (421,499) | $ (348,719) |
Significant Accounting Polici48
Significant Accounting Policies - Additional Information (Detail) | May. 31, 2015 | Dec. 01, 2013USD ($) | Dec. 31, 2015USD ($)Entity | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)EntityCustomerVendor | Dec. 31, 2014USD ($)Customer | Dec. 31, 2013USD ($) |
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||||
VIE's required to be consolidated | Entity | 0 | 0 | |||||||
Cash and cash equivalent maximum maturity period | 3 months | ||||||||
Percentage of account receivables by customers | 17.00% | 17.00% | |||||||
Long-term receivables | $ 2,500,000 | $ 2,500,000 | |||||||
Sales allowances | 0 | $ 0 | |||||||
Depreciation expense | 6,667,000 | 6,674,000 | $ 6,451,000 | ||||||
Impairment charge | 1,118,000 | 607,000 | 0 | ||||||
Net carrying value of equipment | 15,098,000 | $ 19,036,000 | 15,098,000 | 19,036,000 | |||||
Deferred cost amortization expense | 556,000 | 412,000 | $ 365,000 | ||||||
Accumulated amortization of deferred costs | 900,000 | 1,400,000 | $ 900,000 | 1,400,000 | |||||
Expected Stock Option contractual term | 10 years | ||||||||
Typical Vesting term | 4 years | ||||||||
Research and development charged to expense | 22,100,000 | 2,600,000 | |||||||
Goodwill impairment charge | $ 0 | $ 0 | |||||||
Maximum percentage of benefit to be realized upon settlement with tax authority | 50.00% | ||||||||
Deferred rent liability | 3,200,000 | $ 3,200,000 | |||||||
Percentage of inventory component purchased | 68.00% | 72.00% | 70.00% | ||||||
Number of vendors supplying material consulting services | Vendor | 1 | ||||||||
Number of vendors for inventory supply | Vendor | 3 | ||||||||
Amount due to vendors | 6,100,000 | 5,400,000 | $ 6,100,000 | $ 5,400,000 | $ 5,800,000 | ||||
Convertible Senior Notes [Member] | |||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||||
Maturity date of notes | Dec. 15, 2021 | Dec. 15, 2017 | |||||||
Office Equipment and Software [Member] | |||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||||
Impairment charge | $ 1,100,000 | $ 600,000 | $ 1,100,000 | 600,000 | |||||
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 years | ||||||||
Equipment Subject to Agreements [Member] | |||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||||
Net carrying value of equipment | 600,000 | $ 700,000 | $ 600,000 | 700,000 | |||||
Selling, General and Administrative [Member] | |||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||||
Impairment charge | $ 1,500,000 | ||||||||
Selling, General and Administrative [Member] | Facility Closing [Member] | |||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||||
Impairment charge | $ 1,700,000 | ||||||||
Trade names [Member] | |||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||||
Impairment charged to intangible asset | $ 4,800,000 | ||||||||
Accounts Receivable [Member] | |||||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||||
Number of customers having account receivable balance | Customer | 1 | 0 | |||||||
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 | ||||||||
Percentage of account receivables by customers | 10.00% | 10.00% | 10.00% | 10.00% | |||||
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 | $ 300,000,000 | $ 300,000,000 |
Significant Accounting Polici49
Significant Accounting Policies - Summary of Change in Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Beginning balance | $ 671 | $ 495 | $ 750 |
Charges (reversals) to expense | 5 | 181 | (255) |
Charge-offs | 0 | (5) | |
Ending balance | $ 676 | $ 671 | $ 495 |
Significant Accounting Polici50
Significant Accounting Policies - Summary of Property, Plant and Equipment, Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 40,356 | $ 39,029 |
Less: accumulated depreciation | (25,258) | (19,993) |
Property, plant and equipment, net | 15,098 | 19,036 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 21,785 | 21,279 |
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 | $ 8,891 | 9,070 |
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 | $ 2,105 | 2,206 |
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 | |
Purchased Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 7,575 | $ 6,474 |
Purchased Software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 1 year | |
Purchased Software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, estimated useful lives | 7 years |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) - USD ($) | Dec. 01, 2013 | Dec. 31, 2013 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 26, 2016 | Jan. 07, 2016 |
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 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Acquisition of share | 230,000 | ||||||||||
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 | ||||||||||
Impairment charges of identified intangible assets | $ 4,800,000 | $ 0 | |||||||||
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 charges of identified intangible assets | 4,800,000 | ||||||||||
Impairment of in-process research and development | $ 22,100,000 | $ 2,600,000 | |||||||||
Legal, consulting and other costs related to the acquisition | $ 2,800,000 | ||||||||||
Net loss of Acquisition | $ 3,200,000 | ||||||||||
Restructuring costs | 1,000,000 | $ 2,600,000 | $ 4,100,000 | $ 600,000 | |||||||
Valtech Cardio, Ltd [Member] | |||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||
Convertible loans issued | 17,000,000 | 17,000,000 | |||||||||
Conversion of loans into preferred shares | 10,000,000 | 10,000,000 | |||||||||
Accrued interest | 500,000 | $ 500,000 | |||||||||
Acquisition ownership percentage | 3.00% | ||||||||||
Contractual obligations, current | $ 0 | $ 0 | |||||||||
Valtech Cardio, Ltd [Member] | Subsequent Event [Member] | |||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||||
Convertible loans issued | $ 30,000,000 | $ 1,000,000 | |||||||||
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 Acquis
Acquisition - Summary of Acquisition Date Fair Value (Detail) $ in Thousands | Dec. 01, 2013USD ($) |
Business Acquisition [Line Items] | |
Cash transferred, including acquisition costs and repayment of debt | $ 12,000 |
Shares of common stock issued | 22,000 |
Contingent consideration | 67,000 |
CircuLite [Member] | |
Business Acquisition [Line Items] | |
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 |
Acquisition - Summary of Estima
Acquisition - Summary of Estimated Fair Value of the Assets Acquired and Liabilities Assumed at the Date of Acquisition (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 01, 2013 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 61,233 | $ 61,390 | $ 61,596 | |
CircuLite [Member] | ||||
Business Acquisition [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 |
Investments - Additional Inform
Investments - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2015USD ($)InvestmentSecurities | Dec. 31, 2014USD ($)InvestmentSecurities | |
Schedule of Available-for-sale Securities [Line Items] | ||
Realized gains (losses) on investments | $ 0 | $ 0 |
Number of individual investment securities in unrealized loss position | Securities | 5 | 22 |
Number of available-for-sale investments in a continuous loss position for more than twelve months | Investment | 13 | 0 |
Available-for-sale investments with aggregate fair value in continuous loss position for more than twelve months | $ 34,500,000 | |
Gross unrealized loss on available-for-sale investments | $ 99,000 | |
Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investment maturity date description at Dec. 31, 2014 and current period | Less than twenty-four months | |
Long-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investment maturity date description at Dec. 31, 2014 and current period | Within thirty-six months |
Investments - Summary of Amorti
Investments - Summary of Amortized Cost and Fair Value of Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | $ 68,691 | $ 75,796 |
Gross Unrealized Gains | 8 | |
Gross Unrealized Losses | (160) | (269) |
Aggregate Fair Value | 68,531 | 75,535 |
Short-term Investments [Member] | Corporate Debt [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 32,666 | 51,241 |
Gross Unrealized Gains | 8 | |
Gross Unrealized Losses | (100) | (244) |
Aggregate Fair Value | 32,566 | 51,005 |
Short-term Investments [Member] | U.S. Government Agency Debt [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 25,000 | 15,000 |
Gross Unrealized Losses | (60) | (25) |
Aggregate Fair Value | 24,940 | 14,975 |
Short-term Investments [Member] | Certificates of Deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 11,025 | 9,555 |
Aggregate Fair Value | 11,025 | 9,555 |
Long-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 980 | 1,225 |
Aggregate Fair Value | 980 | 1,225 |
Long-term Investments [Member] | Certificates of Deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost Basis | 980 | 1,225 |
Aggregate Fair Value | $ 980 | $ 1,225 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Transfer between level 1, Level 2, Level 3 | $ 0 | $ 0 | $ 0 | ||||
Change in fair value of contingent consideration | $ 38,100,000 | 38,100,000 | |||||
Accretion expense | 6,700,000 | ||||||
Impairment charges | 1,118,000 | 607,000 | 0 | ||||
Impairment charges of intangible assets | 26,800,000 | 26,849,000 | 2,650,000 | 3,726,000 | |||
Impairment charges | 26,849,000 | 2,650,000 | $ 3,726,000 | ||||
Office Equipment and Software [Member] | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Impairment charges | $ 1,100,000 | $ 600,000 | $ 1,100,000 | $ 600,000 | |||
In-Process Research and Development [Member] | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Impairment charges | $ 22,100,000 | $ 2,600,000 | |||||
World Heart Corporation [Member] | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Period for royalty payment obligations | 15 years |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | $ 68,531 | $ 75,535 |
Convertible senior notes | 191,062 | 114,803 |
Contingent consideration | 12,330 | 43,740 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 68,531 | 75,535 |
Long-term investments | 980 | 1,225 |
Convertible senior notes | 200,351 | 153,978 |
Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Contingent consideration | 12,330 | 43,740 |
Royalties | 918 | 962 |
Lease exit costs | 1,955 | 1,207 |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 68,531 | 75,535 |
Long-term investments | 980 | 1,225 |
Convertible senior notes | 191,062 | 114,803 |
Contingent consideration | 12,330 | 43,740 |
Royalties | 918 | 962 |
Lease exit costs | 1,955 | 1,207 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 68,531 | 75,535 |
Long-term investments | 980 | 1,225 |
Convertible senior notes | 200,351 | 153,978 |
Contingent consideration | 12,330 | 43,740 |
Royalties | 918 | 962 |
Lease exit costs | $ 1,955 | $ 1,207 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Change in Fair Value of Contingent Consideration as Determined by Level 3 Inputs (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 43,740 | |
Change in fair value | (31,410) | $ (23,260) |
Ending balance | 12,330 | 43,740 |
Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 43,740 | |
Payments | 0 | |
Change in fair value | (31,410) | |
Ending balance | $ 12,330 | $ 43,740 |
Fair Value Measurements - Sum59
Fair Value Measurements - Summary of Change in Fair Value of Royalties as Determined by Level 3 Inputs (Detail) - Level 3 [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 962 |
Payments | (110) |
Change in fair value | 66 |
Ending balance | $ 918 |
Fair Value Measurements - Sum60
Fair Value Measurements - Summary of Change in Fair Value of Lease Exit Costs as Determined by Level 3 Inputs (Detail) - Level 3 [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 1,266 |
Payments | (887) |
Change in fair value | 1,576 |
Ending balance | $ 1,955 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Quantitative Information for Level 3 Fair Value Measurements (Detail) - Level 3 [Member] | 12 Months Ended |
Dec. 31, 2015$ / ft² | |
Contingent Consideration [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Probability of occurrence | 50.00% |
Contingent Consideration [Member] | Minimum [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Discount rate | 17.00% |
Contingent Consideration [Member] | Minimum [Member] | Probability Weighted Income Approach [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Milestone dates | 2,020 |
Contingent Consideration [Member] | Maximum [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Discount rate | 24.00% |
Contingent Consideration [Member] | Maximum [Member] | Probability Weighted Income Approach [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Milestone dates | 2,023 |
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 | 22 |
Discount rate | 3.50% |
Lease Exit Costs [Member] | Discounted Cash Flow [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Sublease start date | Mar. 31, 2017 |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 25,679 | $ 28,688 |
Work-in-process | 8,858 | 10,240 |
Finished goods | 13,149 | 15,118 |
Inventory, total | $ 47,686 | $ 54,046 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Inventory held on consignment | $ 6.1 | $ 5.8 |
Goodwill, In-Process Research64
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Summary of Carrying Amount of Goodwill and Change in Balance (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible Liability Disclosure [Abstract] | ||
Beginning balance | $ 61,390 | $ 61,596 |
Additions | 0 | 0 |
Impairment | 0 | 0 |
Foreign currency translation impact | (157) | (206) |
Ending balance | $ 61,233 | $ 61,390 |
Goodwill, In-Process Research65
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
May. 31, 2015 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 01, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired goodwill | $ 0 | $ 0 | |||||||
Goodwill impairment charge | 26,849 | 2,650 | $ 3,726 | ||||||
Probability of success in fair value analysis | 50.00% | ||||||||
Impairment charges of other intangible assets | $ 4,800 | $ 0 | |||||||
Common stock issued to settle liability | 26,042 | ||||||||
Amortization of intangible assets | 2,078 | $ 1,724 | 598 | ||||||
Estimated amortization expense for 2016 | 2,100 | 2,100 | |||||||
Estimated amortization expense for 2017 | 2,100 | 2,100 | |||||||
Estimated amortization expense for 2018 | 2,100 | 2,100 | |||||||
Estimated amortization expense for 2019 | 2,100 | 2,100 | |||||||
Estimated amortization expense for 2020 | 2,100 | $ 2,100 | |||||||
Acquired Technology Rights [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Additional acquired technology rights | $ 5,000 | 2,000 | |||||||
Issuance of stock to settle other liability | 50,330 | ||||||||
In-Process Research and Development [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Goodwill impairment charge | 22,100 | 2,600 | |||||||
CircuLite [Member] | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Acquired goodwill | 61,600 | ||||||||
Goodwill impairment charge | 26,800 | $ 2,600 | 3,700 | ||||||
Business combination indefinite lived intangible assets work in progress | $ 35,500 | ||||||||
Impairment charges of other intangible assets | $ 4,800 | ||||||||
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 | $ 35,500 |
Goodwill, In-Process Research66
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Summary of Carrying Value of In-Process Research and Development Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Intangible Liability Disclosure [Abstract] | ||
Carrying value of in-process research and development assets | $ 10,800 | $ 32,850 |
Goodwill, In-Process Research67
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Summary of Other Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | $ 17,349 | $ 20,735 |
Purchased intangible assets | ||
Other intangible assets | 17,349 | 20,735 |
Other intangible assets, net | 13,045 | 17,807 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 7,424 | 5,310 |
Purchased intangible assets | ||
Other intangible assets | 7,424 | 5,310 |
Less: Accumulated amortization | (1,551) | (1,118) |
Trade names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 3,700 | |
Purchased intangible assets | ||
Other intangible assets | 3,700 | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 1,800 | |
Purchased intangible assets | ||
Other intangible assets | 1,800 | |
Acquired Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 9,925 | 9,925 |
Purchased intangible assets | ||
Other intangible assets | 9,925 | 9,925 |
Purchased Intangible Assets [Member] | ||
Purchased intangible assets | ||
Less: Accumulated amortization | $ (2,753) | $ (1,810) |
Goodwill, In-Process Research68
Goodwill, In-Process Research and Development and Other Intangible Assets, Net - Estimated Useful Lives of Intangible Assets (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
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 Informati69
Other Balance Sheet Information - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Oct. 31, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | |
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Long-term investment, amount | $ 23,725 | $ 14,635 | |||||
Bonuses included in accrued payroll and other employee costs | 8,000 | 7,900 | |||||
Cost of revenue | 103,287 | 92,195 | $ 76,468 | ||||
Remaining lease payments | 22,265 | ||||||
Lease impairment charges | 1,500 | ||||||
Aggregate severance costs | $ 600 | ||||||
Contract termination fee | 300 | $ 700 | |||||
Product Recall Expense [Member] | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Cost of revenue | $ 8,600 | 5,000 | $ 0 | ||||
CircuLite [Member] | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Aggregate severance costs | 600 | ||||||
Valtech Cardio, Ltd [Member] | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Percentage of equity ownership | 3.00% | ||||||
Research and Development [Member] | CircuLite [Member] | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Aggregate severance costs | 400 | ||||||
Selling, General and Administrative [Member] | CircuLite [Member] | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Aggregate severance costs | 200 | ||||||
Convertible Promissory Notes [Member] | Valtech Cardio, Ltd [Member] | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Long-term investment, amount | $ 10,000 | $ 7,000 | $ 7,000 | ||||
Long-term investment, interest rate | 6.00% | ||||||
Long-term investment, maturity date | Oct. 7, 2014 | Jul. 10, 2017 | |||||
Percentage of equity ownership | 3.00% | ||||||
Preferred Stock Investment [Member] | Valtech Cardio, Ltd [Member] | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Long-term investment, amount | $ 17,600 | $ 10,500 | |||||
Facility Closing [Member] | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Remaining lease payments | $ 100 | $ 500 | |||||
Lease expiration year | 2,020 | ||||||
Lease liability | $ 1,700 | ||||||
Lease impairment charges | $ 1,500 |
Other Balance Sheet Informati70
Other Balance Sheet Information - Summary of Other Accrued Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Payables and Accruals [Abstract] | ||||
Accrued payroll and other employee costs | $ 14,068 | $ 13,404 | ||
Accrued product recall costs | 8,503 | 1,888 | ||
Accrued warranty | 6,116 | 4,685 | $ 2,498 | $ 543 |
Accrued material purchases | 4,107 | 4,284 | ||
Accrued professions fees | 2,685 | 1,624 | ||
Accrued research and development costs | 2,191 | 2,663 | ||
Accrued restructuring costs | 1,955 | 1,266 | ||
Accrued VAT | 1,238 | 1,637 | ||
Other accrued expenses | 5,026 | 5,138 | ||
Total other accrued liabilities | $ 45,889 | $ 36,589 |
Other Balance Sheet Informati71
Other Balance Sheet Information - Summary of Changes in Warranty Liability (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Beginning balance | $ 4,685 | $ 2,498 | $ 543 |
Accrual for warranty expense | 2,040 | 4,141 | 2,721 |
Warranty costs incurred during the period | (609) | (1,954) | (766) |
Ending balance | $ 6,116 | $ 4,685 | $ 2,498 |
Other Balance Sheet Informati72
Other Balance Sheet Information - Summary of Changes in Accrued Restructuring Costs (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | $ 1,266 |
Restructuring charges | 1,075 |
Payments | (1,823) |
Adjustments to estimated obligations | 1,386 |
Change in fair value | 51 |
Ending balance | 1,955 |
Facility Leases [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | 1,266 |
Restructuring charges | 139 |
Payments | (887) |
Adjustments to estimated obligations | 1,386 |
Change in fair value | 51 |
Ending balance | 1,955 |
Severance and Related [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 598 |
Payments | (598) |
Contract Termination [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges | 338 |
Payments | $ (338) |
Debt - Additional Information (
Debt - Additional Information (Detail) | May. 31, 2015USD ($) | May. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)Days$ / sharesshares | Dec. 31, 2014USD ($) | Dec. 15, 2010USD ($) |
Debt Instrument [Line Items] | |||||||
Debt instrument aggregate principal amount | $ 101,300,000 | ||||||
Equity component of convertible debt | 47,400,000 | ||||||
Proceeds from issuance of convertible debt | $ 79,889,000 | ||||||
Convertible Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maturity of convertible senior notes | Dec. 15, 2021 | Dec. 15, 2017 | |||||
3.5% Convertible Senior Notes, Due 2017 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Coupon rate | 3.50% | 3.50% | |||||
Aggregate principal amount of convertible senior notes | $ 42,500,000 | $ 143,750,000 | |||||
Payable semi-annually in arrear | June 15 and December 15 | ||||||
Debt instrument aggregate principal amount | $ 101,300,000 | ||||||
Convertible value of instrument for convertible debt | $ 21,400,000 | ||||||
Conversion rate of shares | shares | 10 | ||||||
Principal amount of Convertible Notes | $ 1,000 | ||||||
Initial conversion price | $ / shares | $ 100 | ||||||
Principal amount of the Convertible Notes part of repurchase price | 100.00% | ||||||
Principal amount of Convertible Notes part of owners | 25.00% | ||||||
Equity component of convertible debt | $ 7,600,000 | ||||||
Number of shares issuable upon conversion of the Convertible Notes | shares | 424,710 | ||||||
Fair value of Convertible Notes | $ 38,200,000 | ||||||
Debt instrument, beginning trading days prior to anticipated closing date | 35 days | ||||||
Debt instrument, ending trading days following actual closing date | 35 days | ||||||
3.5% Convertible Senior Notes, Due 2017 [Member] | Common Shares [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Closing price | $ / shares | $ 50.40 | ||||||
3.5% Convertible Senior Notes, Due 2017 [Member] | Convertible Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Coupon rate | 3.50% | 3.50% | |||||
Aggregate principal amount of convertible senior notes | $ 42,471,000 | $ 143,750,000 | |||||
Effective interest rate on debt borrowing | 12.50% | ||||||
1.75% Convertible Senior Notes, Due 2021 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Coupon rate | 1.75% | 1.75% | |||||
Aggregate principal amount of convertible senior notes | $ 84,200,000 | $ 84,200,000 | $ 202,400,000 | ||||
Payable semi-annually in arrear | June 15 and December 15 | ||||||
Convertible value of instrument for convertible debt | $ 118,200,000 | $ 102,000,000 | |||||
Conversion rate of shares | shares | 10 | ||||||
Principal amount of Convertible Notes | $ 1,000 | ||||||
Initial conversion price | $ / shares | $ 100 | ||||||
Principal amount of the Convertible Notes part of repurchase price | 100.00% | ||||||
Equity component of convertible debt | $ 47,400,000 | ||||||
Number of shares issuable upon conversion of the Convertible Notes | shares | 2,023,660 | ||||||
Fair value of Convertible Notes | $ 162,100,000 | ||||||
Maturity of convertible senior notes | Dec. 15, 2021 | ||||||
Debt instrument carrying amount | $ 83,100,000 | $ 83,100,000 | |||||
Write off of debt issuance costs | 1,000,000 | ||||||
Debt instrument settlement amount related to conversion feature | $ 10,700,000 | ||||||
Debt instrument, exchange agreement fair value | $ 88,000,000 | ||||||
Loss on extinguishment of long-term debt | $ 16,600,000 | ||||||
Proceeds from issuance of convertible debt | 74,700,000 | ||||||
Debt issuance costs | $ 5,200,000 | ||||||
Debt instrument convertible debt, latest date | Jun. 15, 2021 | ||||||
Debt instrument, trading days | Days | 20 | ||||||
Debt instrument, consecutive trading days | 30 days | ||||||
Debt instrument, conversion price percentage | 130.00% | ||||||
Debt instrument, business day period | 5 days | ||||||
Debt instrument convertible conversion rate | 98.00% | ||||||
Debt instrument, beginning trading days prior to anticipated closing date | 35 days | ||||||
Debt instrument, ending trading days following actual closing date | 35 days | ||||||
Redemption price percentage | 100.00% | ||||||
Amount paid to sinking fund | $ 0 | ||||||
1.75% Convertible Senior Notes, Due 2021 [Member] | Common Shares [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Closing price | $ / shares | $ 50.40 | ||||||
1.75% Convertible Senior Notes, Due 2021 [Member] | Convertible Senior Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Coupon rate | 1.75% | 1.75% | |||||
Aggregate principal amount of convertible senior notes | $ 202,366,000 | ||||||
Effective interest rate on debt borrowing | 7.20% |
Debt - Summary of Convertible N
Debt - Summary of Convertible Notes and Equity Component (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | May. 31, 2015 | Dec. 31, 2014 | Dec. 15, 2010 |
Debt Instrument [Line Items] | ||||
Net carrying amount | $ 191,062 | $ 114,803 | ||
3.5% Convertible Senior Notes, Due 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 42,500 | $ 143,750 | ||
1.75% Convertible Senior Notes, Due 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 202,400 | $ 84,200 | ||
Convertible Senior Notes [Member] | 3.5% Convertible Senior Notes, Due 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 42,471 | 143,750 | ||
Unamortized discount | (5,994) | (28,947) | ||
Net carrying amount | 36,477 | 114,803 | ||
Equity component | 7,629 | $ 55,038 | ||
Convertible Senior Notes [Member] | 1.75% Convertible Senior Notes, Due 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 202,366 | |||
Unamortized discount | (47,781) | |||
Net carrying amount | 154,585 | |||
Equity component | $ 47,400 |
Debt - Summary of Convertible75
Debt - Summary of Convertible Notes and Equity Component (Parenthetical) (Detail) | Dec. 31, 2015 | May. 31, 2015 | Dec. 31, 2014 | Dec. 15, 2010 |
3.5% Convertible Senior Notes, Due 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Coupon rate | 3.50% | 3.50% | ||
3.5% Convertible Senior Notes, Due 2017 [Member] | Convertible Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Coupon rate | 3.50% | 3.50% | ||
1.75% Convertible Senior Notes, Due 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Coupon rate | 1.75% | |||
1.75% Convertible Senior Notes, Due 2021 [Member] | Convertible Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Coupon rate | 1.75% | 1.75% |
Debt - Summary of Interest Expe
Debt - Summary of Interest Expense Related to Convertible Debt (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Disclosure [Abstract] | |||
Coupon rate | $ 5,055 | $ 5,031 | |
Amortization of discount | 8,691 | 7,678 | $ 6,809 |
Amortization of deferred financing costs | 556 | 412 | $ 365 |
Convertible Notes interest expense, Net | $ 14,302 | $ 13,121 |
Leases - Additional Information
Leases - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 31, 2013$ / ft² | Jul. 13, 2013ft² | Nov. 30, 2012ft² | Mar. 31, 2015USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)ft² | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Oct. 17, 2013USD ($)ft² | Dec. 31, 2012USD ($) | Jul. 30, 2012ft² | Dec. 09, 2010USD ($)Lease | |
Operating Leased Assets [Line Items] | ||||||||||||
Required cash on deposit under lease agreement | $ 1,250,000 | |||||||||||
Remaining area under lease | ft² | 3,500 | |||||||||||
Lease term of remaining area under lease | Jun. 30, 2015 | |||||||||||
Lease charges | $ 1,700,000 | $ 2,000,000 | ||||||||||
Lease impairment charges | 1,500,000 | |||||||||||
Rent expense | 3,300,000 | $ 3,600,000 | $ 2,900,000 | |||||||||
Lease termination charge | $ 22,265,000 | |||||||||||
Employee related severance cost | $ 600,000 | |||||||||||
Facility Closing [Member] | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Lease expiration date | Oct. 31, 2017 | |||||||||||
Lease impairment charges | $ 1,500,000 | |||||||||||
Lease termination charge | $ 100,000 | $ 500,000 | ||||||||||
CircuLite [Member] | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Annual base rent | $ 700,000 | |||||||||||
Lease rent area | ft² | 22,200 | |||||||||||
Percentage of annual escalation in addition to base rent | 2.00% | |||||||||||
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 | $ 1,600,000 | |||||||||||
Amount of base rate obligation | $ 1,800,000 | $ 400,000 | ||||||||||
Required cash on deposit under lease agreement | $ 300,000 | |||||||||||
Additional space increasing area | ft² | 21,300 | |||||||||||
Lease rent area | ft² | 17,800 | |||||||||||
Lease expiration date | Dec. 31, 2014 | |||||||||||
Lease charges | $ 500,000 | |||||||||||
Massachusetts [Member] | Company Space [Member] | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Rented area in square feet | ft² | 74,000 | |||||||||||
Massachusetts [Member] | Common Space [Member] | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Rented area in square feet | ft² | 4,000 | |||||||||||
Florida [Member] | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Lease rent area | ft² | 132,000 | 132,000 | ||||||||||
Lease expiration date | Feb. 28, 2022 | |||||||||||
Payment of base rent per square | $ / ft² | 10 | |||||||||||
Percentage of annual escalation in addition to base rent | 3.00% | |||||||||||
Number of renewal times of operation lease | Lease | 2 | |||||||||||
Renewal period of operating lease | 5 years | 5 years | ||||||||||
Germany [Member] | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Fixed assets write off | $ 1,100,000 | |||||||||||
Employee related severance cost | 600,000 | |||||||||||
Non-cancellable purchase obligation | $ 300,000 |
Leases - Future Minimum Rental
Leases - Future Minimum Rental Commitments Under Non-cancelable Operating Lease Agreements (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Leases [Abstract] | |
2,016 | $ 3,853 |
2,017 | 4,029 |
2,018 | 4,075 |
2,019 | 4,056 |
2,020 | 3,882 |
Thereafter | 2,370 |
Total minimum lease payments | $ 22,265 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) $ / shares in Units, $ in Millions | Mar. 18, 2013USD ($) | Mar. 13, 2013shares | Mar. 12, 2013$ / sharesshares | Dec. 31, 2015Vote$ / sharesshares | Dec. 31, 2014$ / sharesshares | Jan. 30, 2014shares | Dec. 01, 2013$ / shares |
Schedule Of Stockholders Equity [Line Items] | |||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares issued | 0 | 0 | |||||
Preferred stock, shares outstanding | 0 | 0 | |||||
Common stock, shares authorized | 50,000,000 | 25,000,000 | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common stock, shares outstanding | 17,405,000 | 17,156,000 | |||||
Number of votes per share | Vote | 1 | ||||||
Shares offered under Underwriting Agreement | 1,500,000 | ||||||
Net sales price, per share | $ / shares | $ 81.9114 | ||||||
Offering price, per share | $ / shares | $ 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 | Dec. 9, 2013 | ||||||
Shares reserved in connection with future contingent milestone payments | 5,455,000 | ||||||
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 o
Stockholders' Equity - Shares of Common Stock Reserved for Possible Future Issuance (Detail) shares in Thousands | Dec. 31, 2015shares |
Changes In Equity And Comprehensive Income [Line Items] | |
Common stock, capital shares reserved for future issuance, Total | 5,455 |
Equity Award Plans [Member] | |
Changes In Equity And Comprehensive Income [Line Items] | |
Common stock, capital shares reserved for future issuance, Total | 2,291 |
Convertible Senior Notes [Member] | |
Changes In Equity And Comprehensive Income [Line Items] | |
Common stock, capital shares reserved for future issuance, Total | 3,164 |
Share-Based Compensation - Allo
Share-Based Compensation - Allocation of Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Recorded share-based compensation expense | $ 23,805 | $ 23,542 | $ 21,874 |
Cost of Revenue [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Recorded share-based compensation expense | 1,975 | 2,032 | 2,539 |
Selling, General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Recorded share-based compensation expense | 13,544 | 13,573 | 12,184 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Recorded share-based compensation expense | $ 8,286 | $ 7,937 | $ 7,151 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Feb. 19, 2016 | May. 31, 2012 | Feb. 29, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance based option vesting period | 4 years | |||||
Option expiry period | 10 years | |||||
Weighted average grant date fair value per share option | $ 27.10 | $ 32.41 | $ 38.51 | |||
Proceeds from exercise of stock options | $ 80 | $ 921 | $ 4,871 | |||
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 | 2,475,000 | |||||
Share issued upon vesting of Awards | 277,375 | |||||
Stock options issued | 640,896 | |||||
Stock options outstanding | 640,896 | |||||
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 | 2,375,000 | |||||
Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share issued upon vesting of Awards | 3 | |||||
Stock options issued | 7,000 | |||||
Stock options outstanding | 111,000 | 107,000 | ||||
Performance based option vesting period | 4 years | |||||
Aggregate Intrinsic value options | $ 200 | $ 1,900 | 10,300 | |||
Unrecognized compensation expense related to non-vested option awards | $ 100 | |||||
Expected weighted average period of recognition for Unrecognized Share-based compensation | 6 months | |||||
Stock Option [Member] | Chief Executive Officer [Member] | Subsequent Event [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options grant to group of employees | 149,938 | 149,938 | ||||
Stock options, weighted average period for recognition | 3 years | |||||
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 | $ 22,900 | |||||
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 | 64,772 | |||||
Restricted stock units vested intrinsic value | $ 15,200 | $ 15,400 | $ 16,400 | |||
Weighted average grant date fair value per share other than option | $ 87.72 | $ 97.50 | $ 91.21 | |||
Restricted Stock Units (RSUs) [Member] | Chief Executive Officer [Member] | Subsequent Event [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 | 293,100 | 245,350 | ||||
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 |
Share-Based Compensation - Weig
Share-Based Compensation - Weighted Average Assumptions Used for Options Issued (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 37.50% | 39.00% | 40.00% |
Risk-free interest rate | 1.69% | 1.65% | 1.15% |
Estimated holding period (years) | 5 years | 5 years | 6 years 3 months |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Options Granted under All Plans (Detail) - Stock Option [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Number of Options | |
Outstanding, Beginning Balance | shares | 107,000 |
Granted | shares | 7,000 |
Exercised | shares | (3) |
Forfeited | shares | 0 |
Expired | shares | 0 |
Outstanding, Ending Balance | shares | 111,000 |
Exercisable at December 31, 2015 | shares | 99,000 |
Weighted Average Exercise Price | |
Outstanding, Beginning Balance | $ / shares | $ 48.32 |
Granted | $ / shares | 76.60 |
Exercised | $ / shares | 27.95 |
Forfeited | $ / shares | 0 |
Expired | $ / shares | 0 |
Outstanding, Ending Balance | $ / shares | 49.20 |
Exercisable, Ending Balance | $ / shares | $ 45.08 |
Weighted Average Remaining Contractual Life | |
Weighted average remaining contractual life, outstanding | 3 years 9 months 11 days |
Weighted average remaining contractual life, exercisable | 3 years 2 months 12 days |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, outstanding | $ | $ 1,550 |
Aggregate intrinsic value, exercisable | $ | $ 1,550 |
Share-Based Compensation - Su85
Share-Based Compensation - Summary of RSU's (Detail) - Restricted Stock Units (RSUs) [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)shares | |
Number of Restricted Stock Units | |
Outstanding, Beginning Balance | 589,000 |
Granted | 312,000 |
Vested/Exercised | (221) |
Forfeited | (57,000) |
Outstanding, Ending Balance | 623,000 |
Exercisable, Ending Balance | 0 |
Weighted Average Remaining Contractual Life | |
Outstanding, Ending Balance | 1 year 6 months |
Exercisable, Ending Balance | 0 years |
Aggregate Intrinsic Value | |
Outstanding, Ending Balance | $ | $ 31,384 |
Exercisable, Ending Balance | $ | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax [Line Items] | |||
Foreign income taxes, income tax provision | $ 1,000 | ||
Income taxes payable, current | $ 200 | ||
Effective tax rate | Less than 1% | ||
United States federal income tax rate | 34.00% | ||
Deferred tax asset net of liabilities before valuation allowance | $ 150,515 | $ 130,099 | |
Increase (decrease) in valuation allowance | 20,300 | (41,200) | $ 97,300 |
Unrecognized tax benefits | 2,086 | $ 3,228 | |
Component of unrecognized tax benefits that would impact the effective tax rate | 1,400 | ||
Foreign [Member] | |||
Income Tax [Line Items] | |||
Portion of federal and state net operating loss related to share based compensation | 34,700 | ||
Operating loss carry-forwards | 15,800 | ||
State [Member] | |||
Income Tax [Line Items] | |||
Portion of federal and state net operating loss related to share based compensation | 29,400 | ||
Operating loss carry-forwards | 149,300 | ||
U.S. [Member] | |||
Income Tax [Line Items] | |||
Deferred tax asset operating loss and credit carry-forwards | 56,400 | ||
Operating loss carry-forwards | $ 425,700 | ||
U.S. [Member] | Minimum [Member] | |||
Income Tax [Line Items] | |||
Year of expiration | 2,024 | ||
U.S. [Member] | Maximum [Member] | |||
Income Tax [Line Items] | |||
Year of expiration | 2,035 |
Income Taxes - Income (Loss) be
Income Taxes - Income (Loss) before Taxes on Geographic Basis (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (75,861) | $ (20,684) | $ (58,063) |
Non-U.S. | 4,095 | 1,878 | (781) |
Loss before taxes | $ (71,766) | $ (18,806) | $ (58,844) |
Income Taxes - Primary Componen
Income Taxes - Primary Components of Net Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
U.S. losses carried forward | $ 137,825 | $ 128,216 |
Non-U.S. losses carried forward | 3,709 | 4,227 |
Total net operating losses carried forward | 141,534 | 132,443 |
Equity awards | 12,017 | 9,902 |
Other deferred tax assets | 19,506 | 11,935 |
Gross deferred tax assets | 173,057 | 154,280 |
Deferred tax liabilities: | ||
Convertible debt | (18,119) | (10,632) |
Purchased intangible assets | (4,423) | (13,549) |
Net deferred tax assets | 150,515 | 130,099 |
Less: valuation allowance | (150,395) | $ (130,099) |
Net deferred tax asset/(liability) | $ 120 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits from Continuing Operations (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits-beginning of the year | $ 3,228 |
Gross increases/(decrease)-prior year | 17 |
Gross increases/(decrease)-current year | (1,159) |
Unrecognized tax benefits-end of the year | $ 2,086 |
Net Loss Per Share - Anti-Dilut
Net Loss Per Share - Anti-Dilutive Securities Excluded from Computation of Weighted Average Shares Outstanding (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded | 3,182 | 2,134 | 2,046 |
Convertible Promissory Notes [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded | 2,448 | 1,438 | 1,438 |
Stock Compensation Plan [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded | 734 | 696 | 608 |
Business Segment, Geographic 91
Business Segment, Geographic Areas and Major Customers - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2015CustomerSegment | Dec. 31, 2014Customer | Dec. 31, 2013Customer | |
Segment Reporting [Abstract] | |||
Number of reportable segments | Segment | 1 | ||
Number of customers exceeding ten percent of sales | Customer | 0 | 0 | 0 |
Percentage of minimum product sales | 10.00% | 10.00% | 10.00% |
Business Segment, Geographic 92
Business Segment, Geographic Areas and Major Customers - Product Sales by Geographic Location (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue, net | $ 68,087 | $ 65,166 | $ 73,569 | $ 70,021 | $ 73,209 | $ 68,608 | $ 70,131 | $ 66,472 | $ 276,843 | $ 278,420 | $ 207,929 |
United States [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue, net | 161,848 | 151,335 | 105,345 | ||||||||
Germany [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue, net | 52,907 | 63,629 | 54,793 | ||||||||
International, Excluding Germany [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue, net | $ 62,088 | $ 63,456 | $ 47,791 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Dec. 01, 2013 | Dec. 31, 2015 | Dec. 31, 2014 |
Commitments And Contingencies [Line Items] | |||
Purchase order commitments | Approximately $42.9 million | ||
Purchase order commitments | $ 42,900,000 | ||
Maximum period for purchase order commitments | 1 year | ||
Contingent consideration | $ 12,330,000 | $ 43,740,000 | |
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 payment | $ 300,000,000 | $ 300,000,000 |
Retirement Savings Plan - Addit
Retirement Savings Plan - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2010 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
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 | $ 1.7 | $ 1.4 | $ 1.1 |
Quarterly Financial informati95
Quarterly Financial information (Unaudited) - Summary of Selected Quarterly Financial information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue, net | $ 68,087 | $ 65,166 | $ 73,569 | $ 70,021 | $ 73,209 | $ 68,608 | $ 70,131 | $ 66,472 | $ 276,843 | $ 278,420 | $ 207,929 |
Gross profit | 45,057 | 32,176 | 48,341 | 47,981 | 49,860 | 45,631 | 47,176 | 43,557 | 173,556 | 186,225 | 131,461 |
Net income (loss) | $ (926) | $ (29,927) | $ (27,393) | $ (14,535) | $ (916) | $ (7,370) | $ 8,364 | $ (19,444) | $ (72,780) | $ (19,366) | $ (59,311) |
Net income (loss) per common share-basic | $ (0.05) | $ (0.43) | $ 0.49 | $ (1.15) | |||||||
Net loss per common share-basic and diluted | $ (0.05) | $ (1.73) | $ (1.59) | $ (0.85) | $ (4.21) | $ (1.14) | $ (3.69) | ||||
Net income (loss) per common share-diluted | $ (0.05) | $ (0.43) | $ 0.48 | $ (1.15) | |||||||
Weighted average shares outstanding-basic and diluted | 17,327 | 17,303 | 17,269 | 17,193 | 17,274 | 16,992 | 16,066 | ||||
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 | $ (4,417) | $ (4,952) | $ (70) |
Quarterly Financial informati96
Quarterly Financial information (Unaudited) - Summary of Selected Quarterly Financial information (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interim Reporting [Line Items] | |||||||||||
Share-based compensation expense | $ 5,000 | $ 6,100 | $ 6,700 | $ 6,000 | $ 6,200 | $ 6,400 | $ 6,500 | $ 4,400 | $ 23,805 | $ 23,542 | $ 21,874 |
Foreign exchange gains (losses) | (1,800) | (3,300) | 200 | (4,417) | (4,952) | (70) | |||||
Net loss on impairment of certain purchased intangible assets | 26,849 | 2,650 | 3,726 | ||||||||
Increase (decrease) in the fair value of contingent consideration of acquisition | $ (31,410) | $ (23,260) | |||||||||
CircuLite [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Loss on extinguishment of debt | 16,600 | ||||||||||
Restructuring costs | 1,000 | 2,600 | 4,100 | 600 | |||||||
Foreign exchange gains (losses) | (1,100) | (400) | 800 | (3,700) | |||||||
Net loss on impairment of certain purchased intangible assets | 26,800 | 2,600 | $ 3,700 | ||||||||
Increase (decrease) in the fair value of contingent consideration of acquisition | $ 38,100 | $ 2,400 | $ 2,200 | $ 2,100 | $ 9,100 | $ 3,600 | $ 13,700 | $ 3,100 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Valtech Cardio, Ltd [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 26, 2016 | Jan. 07, 2016 | |
Subsequent Event [Line Items] | |||
Convertible loans issued | $ 17 | ||
Conversion of loans into preferred shares | 10 | ||
Accrued interest | $ 0.5 | ||
Acquisition ownership percentage | 3.00% | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Convertible loans issued | $ 30 | $ 1 |