Document_and_Entity_Informatio
Document and Entity Information (USD $) | 1 Months Ended | 12 Months Ended |
Feb. 25, 2014 | Dec. 31, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | ' | '10-K |
Amendment Flag | ' | 'false |
Document Period End Date | ' | 31-Dec-13 |
Document Fiscal Year Focus | ' | '2013 |
Document Fiscal Period Focus | ' | 'FY |
Entity Registrant Name | ' | 'DJO FINANCE LLC |
Entity Central Index Key | ' | '0001395317 |
Current Fiscal Year End Date | ' | '--12-31 |
Entity Well-known Seasoned Issuer | ' | 'No |
Entity Current Reporting Status | ' | 'No |
Entity Voluntary Filers | ' | 'Yes |
Entity Filer Category | ' | 'Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 0 | ' |
Entity Public Float | $0 | ' |
Membership Interests Percentage | 100.00% | ' |
Membership Interests Description | '100% of the issuer’s membership interests were owned by DJO Holdings LLC. | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $43,578 | $31,223 |
Accounts receivable, net | 185,088 | 166,742 |
Inventories, net | 154,983 | 156,315 |
Deferred tax assets, net | 27,527 | 33,283 |
Prepaid expenses and other current assets | 27,951 | 18,073 |
Total current assets | 439,127 | 405,636 |
Property and equipment, net | 107,829 | 107,035 |
Goodwill | 1,149,331 | 1,249,305 |
Intangible assets, net | 958,993 | 1,055,531 |
Other assets | 39,499 | 45,216 |
Total assets | 2,694,779 | 2,862,723 |
Current liabilities: | ' | ' |
Accounts payable | 56,374 | 54,294 |
Accrued interest | 29,682 | 31,653 |
Current portion of debt obligations | 8,620 | 8,858 |
Other current liabilities | 109,472 | 93,640 |
Total current liabilities | 204,148 | 188,445 |
Long-term debt obligations | 2,251,167 | 2,223,816 |
Deferred tax liabilities, net | 242,028 | 241,202 |
Other long-term liabilities | 16,718 | 24,850 |
Total liabilities | 2,714,061 | 2,678,313 |
Commitments and contingencies | ' | ' |
DJO Finance LLC membership (deficit) equity: | ' | ' |
Member capital | 838,769 | 839,234 |
Accumulated deficit | -861,878 | -658,426 |
Accumulated other comprehensive income | 1,183 | 1,284 |
Total membership (deficit) equity | -21,926 | 182,092 |
Noncontrolling interests | 2,644 | 2,318 |
Total (deficit) equity | -19,282 | 184,410 |
Total liabilities and (deficit) equity | $2,694,779 | $2,862,723 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 31, 2012 | Sep. 29, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net sales | $313,586 | $288,049 | $294,745 | $279,077 | $290,510 | $273,986 | $285,977 | $278,947 | $1,175,457 | $1,129,420 | $1,074,770 |
Cost of sales (exclusive of amortization of intangible assets of $35,125, $38,355 and $38,668 for the year ended December 31, 2013, 2012 and 2011, respectively) | ' | ' | ' | ' | ' | ' | ' | ' | 472,417 | 443,920 | 418,138 |
Gross profit | 187,930 | 169,889 | 175,783 | 169,438 | 174,924 | 165,689 | 174,175 | 170,712 | 703,040 | 685,500 | 656,632 |
Operating expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 477,238 | 460,065 | 487,084 |
Research and development | ' | ' | ' | ' | ' | ' | ' | ' | 33,221 | 27,877 | 26,850 |
Amortization of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 95,539 | 97,243 | 93,957 |
Impairment of goodwill and intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 106,600 | 7,397 | 141,006 |
Operating Expenses, Total | ' | ' | ' | ' | ' | ' | ' | ' | 712,598 | 592,582 | 748,897 |
Operating (loss) income | -81,149 | 25,375 | 26,423 | 19,793 | 20,159 | 22,529 | 28,361 | 21,869 | -9,558 | 92,918 | -92,265 |
Other (expense) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -177,733 | -183,055 | -169,332 |
Interest income | ' | ' | ' | ' | ' | ' | ' | ' | 191 | 201 | 345 |
Loss on modification and extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | -1,059 | -36,889 | -2,065 |
Other (expense) income, net | ' | ' | ' | ' | ' | ' | ' | ' | -1,287 | 3,553 | -2,814 |
Nonoperating Income (Expense), Total | ' | ' | ' | ' | ' | ' | ' | ' | -179,888 | -216,190 | -173,866 |
Loss before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -189,446 | -123,272 | -266,131 |
Income tax (provision) benefit | ' | ' | ' | ' | ' | ' | ' | ' | -13,116 | 4,904 | 52,544 |
Net loss | -131,419 | -18,375 | -20,642 | -32,126 | -46,868 | -22,535 | -19,922 | -29,043 | -202,562 | -118,368 | -213,587 |
Net income attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | -890 | -782 | -882 |
Net loss attributable to DJO Finance LLC | ($131,786) | ($18,488) | ($20,814) | ($32,364) | ($47,036) | ($22,562) | ($20,198) | ($29,354) | ($203,452) | ($119,150) | ($214,469) |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Amortization of intangible assets | $35,125 | $38,355 | $38,668 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 31, 2012 | Sep. 29, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net loss | ($131,419) | ($18,375) | ($20,642) | ($32,126) | ($46,868) | ($22,535) | ($19,922) | ($29,043) | ($202,562) | ($118,368) | ($213,587) |
Other comprehensive (loss) income, net of taxes: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments, net of tax (provision) benefit of $(1,212), $(1,386) and $1,681 for the year ended December 31, 2013, 2012, and 2011, respectively | ' | ' | ' | ' | ' | ' | ' | ' | 19 | 1,108 | -1,896 |
Unrealized loss on cash flow hedges, net of tax benefit of $175 for the year ended December 31, 2011 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -272 |
Reclassification adjustment for losses on cash flow hedges included in net loss, net of tax provision of $2,773 for the year ended December 31, 2011 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,381 |
Other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | 19 | 1,108 | 2,213 |
Comprehensive loss | ' | ' | ' | ' | ' | ' | ' | ' | -202,543 | -117,260 | -211,374 |
Comprehensive income attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | -1,010 | -824 | -829 |
Comprehensive loss attributable to DJO Finance LLC | ' | ' | ' | ' | ' | ' | ' | ' | ($203,553) | ($118,084) | ($212,203) |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Loss (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Foreign currency translation adjustment, tax benefit (provision) | ($1,212) | ($1,386) | $1,681 |
Unrealized loss on cash flow hedges, net of tax benefit | ' | ' | 175 |
Reclassification adjustment for losses on cash flow hedges included in net loss, net of tax provision | ' | ' | $2,773 |
Consolidated_Statements_of_Def
Consolidated Statements of (Deficit) Equity (USD $) | Total | Member capital | Retained Earnings | Accumulated other comprehensive (loss) income | Total membership equity | Noncontrolling interests |
In Thousands | ||||||
Balance at Dec. 31, 2010 | $506,819 | $830,994 | ($324,807) | ($2,048) | $504,139 | $2,680 |
Net (loss) income | -213,587 | ' | -214,469 | ' | -214,469 | 882 |
Other comprehensive (loss) income, net of taxes | 2,213 | ' | ' | 2,266 | 2,266 | -53 |
Investment by parent | 3,176 | 3,176 | ' | ' | 3,176 | ' |
Stock-based compensation | 2,701 | 2,701 | ' | ' | 2,701 | ' |
Cancellation of vested options | -2,000 | -2,000 | ' | ' | -2,000 | ' |
Dividend paid by subsidiary to owners of noncontrolling interests | -1,366 | ' | ' | ' | ' | -1,366 |
Balance at Dec. 31, 2011 | 297,956 | 834,871 | -539,276 | 218 | 295,813 | 2,143 |
Net (loss) income | -118,368 | ' | -119,150 | ' | -119,150 | 782 |
Other comprehensive (loss) income, net of taxes | 1,108 | ' | ' | 1,066 | 1,066 | 42 |
Investment by parent | 2,000 | 2,000 | ' | ' | 2,000 | ' |
Stock-based compensation | 2,339 | 2,339 | ' | ' | 2,339 | ' |
Exercise of stock options | 24 | 24 | ' | ' | 24 | ' |
Dividend paid by subsidiary to owners of noncontrolling interests | -649 | ' | ' | ' | ' | -649 |
Balance at Dec. 31, 2012 | 184,410 | 839,234 | -658,426 | 1,284 | 182,092 | 2,318 |
Net (loss) income | -202,562 | ' | -203,452 | ' | -203,452 | 890 |
Other comprehensive (loss) income, net of taxes | 19 | ' | ' | -101 | -101 | 120 |
Stock-based compensation | 2,155 | 2,155 | ' | ' | 2,155 | ' |
Cancellation of vested options | -2,001 | -2,001 | ' | ' | -2,001 | ' |
Exercise of stock options | -619 | -619 | ' | ' | -619 | ' |
Dividend paid by subsidiary to owners of noncontrolling interests | -684 | ' | ' | ' | ' | -684 |
Balance at Dec. 31, 2013 | ($19,282) | $838,769 | ($861,878) | $1,183 | ($21,926) | $2,644 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash Flows From Operating Activities: | ' | ' | ' |
Net loss | ($202,562) | ($118,368) | ($213,587) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' | ' |
Depreciation | 33,127 | 30,216 | 27,294 |
Amortization of intangible assets | 95,539 | 97,243 | 93,957 |
Amortization of debt issuance costs and non-cash interest expense | 8,012 | 9,732 | 8,476 |
Stock-based compensation expense | 2,155 | 2,339 | 2,701 |
Impairment of goodwill and intangible assets | 106,600 | 7,397 | 141,006 |
Loss on disposal of assets | 1,108 | 1,686 | 4,385 |
Deferred income tax provision (benefit) | 4,738 | -11,581 | -60,620 |
Provisions for doubtful accounts and sales returns | 33,085 | 22,226 | 31,673 |
Inventory reserves | 10,121 | 6,350 | 7,706 |
Loss on modification and extinguishment of debt | 1,059 | 36,889 | 2,065 |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | ' | ' | ' |
Accounts receivable | -50,950 | -29,490 | -32,231 |
Inventories | -5,648 | -28,287 | -13,190 |
Prepaid expenses and other assets | -8,755 | 1,313 | 8,435 |
Accrued interest | -1,969 | 10,723 | 5,351 |
Accounts payable and other current liabilities | 4,120 | 6,231 | 12,249 |
Net cash (used in) provided by operating activities | 29,780 | 44,619 | 23,605 |
Cash Flows From Investing Activities: | ' | ' | ' |
Purchases of property and equipment | -37,484 | -32,950 | -39,397 |
Cash paid in connection with acquisitions, net of cash acquired | -1,953 | -29,909 | -317,669 |
Other investing activities, net | -1,626 | -1,106 | -1,596 |
Net cash used in investing activities | -41,063 | -63,965 | -358,662 |
Cash Flows From Financing Activities: | ' | ' | ' |
Proceeds from issuance of debt | 549,417 | 1,342,450 | 439,000 |
Repayments of debt and capital lease obligations | -523,037 | -1,276,045 | -96,826 |
Payment of debt issuance, modification and extinguishment costs | -2,387 | -55,827 | -7,694 |
Investment by parent | ' | 2,000 | 3,176 |
Cash paid in connection with the cancellation of vested options | ' | ' | -2,000 |
Dividend paid by subsidiary to owners of noncontrolling interests | -684 | -649 | -1,366 |
Exercise of stock options | ' | 24 | ' |
Net cash provided by (used in) financing activities | 23,309 | 11,953 | 334,290 |
Effect of exchange rate changes on cash and cash equivalents | 329 | 447 | 804 |
Net increase (decrease) in cash and cash equivalents | 12,355 | -6,946 | 37 |
Cash and cash equivalents at beginning of period | 31,223 | 38,169 | 38,132 |
Cash and cash equivalents at end of period | 43,578 | 31,223 | 38,169 |
Supplemental disclosures of cash flow information: | ' | ' | ' |
Cash paid for interest | 171,361 | 162,579 | 151,207 |
Cash paid (refunded) for taxes, net | $7,834 | $4,704 | ($956) |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 12 Months Ended | |
Dec. 31, 2013 | ||
Organization and Basis of Presentation | ' | |
1 | ORGANIZATION AND BASIS OF PRESENTATION | |
Organization and Business | ||
We are a global developer, manufacturer and distributor of medical devices that provide solutions for musculoskeletal health, vascular health and pain management. Our products address the continuum of patient care from injury prevention to rehabilitation after surgery, injury or from degenerative disease, enabling people to regain or maintain their natural motion. Our products are used by orthopedic specialists, spine surgeons, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers and other healthcare professionals. Our product lines include rigid and soft orthopedic bracing, hot and cold therapy, bone growth stimulators, vascular therapy systems and compression garments, therapeutic shoes and inserts, electrical stimulators used for pain management and physical therapy products. Our surgical implant business offers a comprehensive suite of reconstructive joint products for the hip, knee and shoulder. | ||
DJO Finance LLC (DJOFL) is a wholly owned indirect subsidiary of DJO Global, Inc. (DJO). Substantially all business activities of DJO are conducted by DJOFL and its wholly owned subsidiaries. Except as otherwise indicated, references to “us,” “we,” “DJOFL,” “our,” or “the Company,” refers to DJOFL and its consolidated subsidiaries. | ||
Infrequent Events | ||
In September 2013, a fire occurred at our factory in Tunisia. As a result of the fire, certain inventory and fixed assets were destroyed and the leased facility became inoperable. Estimated losses of $5.0 million related to destroyed inventory and fixed assets, excess expenses incurred and building reconstruction costs have been recorded for the year ended December 31, 2013. Additionally, we have recorded $1.3 million in revenue from business interruption insurance proceeds. As the amounts are recoverable against our property and business interruption insurance policies and recovery is considered probable, we have recorded a corresponding insurance receivable of $6.3 million as of December 31, 2013. | ||
Segment Reporting | ||
In the first quarter of 2013, we reassigned certain product lines between our Bracing and Vascular segment and Recovery Sciences segment and revised the way we allocate costs among all of our segments. Segment information for all periods presented herein has been restated to reflect these changes. | ||
We market and distribute our products through four operating segments, Bracing and Vascular, Recovery Sciences, Surgical Implant, and International. Our Bracing and Vascular, Recovery Sciences, and Surgical Implant segments generate their revenues within the United States. Our Bracing and Vascular segment offers rigid knee braces, orthopedic soft goods cold therapy products, vascular systems, compression therapy products and therapeutic footwear for the diabetes care market. Our Recovery Sciences segment offers home electrotherapy, iontophoresis, home traction products, bone growth stimulation products and clinical physical therapy equipment. Our Surgical Implant segment offers a comprehensive suite of reconstructive joint products for the knee, hip and shoulder. Our International segment offers all of our products to customers outside the United States. See Note 18 for additional information about our reportable segments. | ||
Use of Estimates | ||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are used in accounting for, among other things, contractual allowances, rebates, product returns, warranty obligations, allowances for doubtful accounts, valuation of inventories, self-insurance reserves, income taxes, loss contingencies, fair values of derivative instruments, fair values of long-lived assets and any related impairments, capitalization of costs associated with internally developed software and stock-based compensation. Actual results could differ from those estimates. | ||
Basis of Presentation | ||
We consolidate the results of operations of our 50% owned subsidiary Medireha GmbH (Medireha) and reflect the 50% share of results not owned by us as noncontrolling interests in our Consolidated Statements of Operations. We maintain control of Medireha through certain rights that enable us to prohibit certain business activities that are not consistent with our plans for the business and provide us with exclusive distribution rights for products manufactured by Medireha. | ||
The accompanying Consolidated Financial Statements include our accounts and all voting interest entities where we exercise a controlling financial interest through the ownership of a direct or indirect majority voting interest. All significant intercompany accounts and transactions have been eliminated in consolidation. | ||
Reclassifications | ||
Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The reclassifications were not material to the Consolidated Financial Statements. |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Significant Accounting Policies | ' | ||||||||||||
2 | SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Cash and Cash Equivalents. Cash consists of deposits with financial institutions. We consider all short-term, highly liquid investments and investments in money market funds and commercial paper with remaining maturities of less than three months at the time of purchase to be cash equivalents. While our cash and cash equivalents are on deposit with high-quality institutions, such deposits exceed Federal Deposit Insurance Corporation insured limits. | |||||||||||||
Allowance for Doubtful Accounts. We make estimates of the collectibility of accounts receivable. Management analyzes accounts receivable historical collection rates and bad debts write-offs, customer concentrations, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. | |||||||||||||
Sales Returns and Allowances. We make estimates of the amount of sales returns and allowances that will eventually be incurred. Management analyzes sales programs that are in effect, contractual arrangements, market acceptance and historical trends when evaluating the adequacy of sales returns and allowance accounts. We estimate contractual discounts and allowances for reimbursement amounts from our third party payor customers based on negotiated contracts and historical experience. | |||||||||||||
Inventories. We state our inventories at the lower of cost or market. We use standard cost methodology to determine cost basis for our inventories. This methodology approximates actual cost on a first-in, first-out basis. We establish reserves for slow moving and excess inventory, product obsolescence, shrinkage and other valuation impairments based on future demand and historical experience. | |||||||||||||
Property and Equipment. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets that range from three to 25 years. Leasehold improvements and equipment under capital leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. We capitalize surgical implant instruments that we provide to surgeons, free of charge, for use while implanting our products and the related depreciation expense is recorded as a component of Selling, general and administrative expense. We also capitalize electrotherapy devices that we rent to patients and record the related depreciation expense in cost of sales. | |||||||||||||
Software Developed For Internal Use. Software is stated at cost less accumulated amortization and is amortized on a straight-line basis over estimated useful lives ranging from three to ten years. We capitalize costs of internally developed software during the development stage, including external consulting costs, cost of software licenses, and internal payroll and payroll-related costs for employees who are directly associated with a software project. Software assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable. Upgrades and enhancements are capitalized if they result in added functionality. Amortization expense related to internally developed software was $1.9 million, $1.9 million and $2.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
In 2008, we began implementing a new ERP system to replace six legacy accounting and finance systems and numerous other software systems with a single-entry ERP system that will be used by most of our businesses. During the year ended December 31, 2011, we determined that certain capitalized ERP assets would not be used and we recorded an impairment charge of $7.1 million which is included in Selling and general administrative expense in our Consolidated Statement of Operations. As of December 31, 2013 and 2012, we had $10.5 million and $12.4 million respectively, of unamortized internally developed software costs included within property and equipment in our Consolidated Balance Sheets. | |||||||||||||
Intangible Assets. Our primary intangible assets are goodwill, customer relationships, patents and technology and trademarks and trade names. Goodwill represents the excess purchase price over the fair value of the identifiable net assets acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized, but instead are tested for impairment at least annually. Intangible assets with definite lives are amortized over their respective estimated useful lives and reviewed for impairment when circumstances warrant. | |||||||||||||
We evaluate the carrying value of goodwill and indefinite life intangible assets annually on the first day of the fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. We evaluate the carrying value of finite life intangible assets whenever events or circumstances indicate the carrying value may not be recoverable. Significant assumptions are required to estimate the fair value of goodwill and intangible assets, most notably estimated future cash flows generated by these assets. As such, these fair valuation measurements use significant unobservable inputs, which are inputs that are classified as Level 3 in the fair value hierarchy. Changes to these assumptions could require us to record impairment charges on these assets. | |||||||||||||
Warranty Costs. We provide expressed warranties on certain products for periods typically ranging from one to three years. We estimate our warranty obligations at the time of sale based upon historical experience and known product issues, if any. | |||||||||||||
A summary of the activity in our warranty reserves is as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 1,488 | $ | 1,756 | $ | 2,222 | |||||||
Amount charged to expense for estimated warranty costs | 1,138 | 338 | 105 | ||||||||||
Deductions for actual costs incurred | (779 | ) | (606 | ) | (571 | ) | |||||||
Balance, end of year | $ | 1,847 | $ | 1,488 | $ | 1,756 | |||||||
Self Insurance. We are partially self insured for certain employee health benefits and product liability claims. Accruals for losses are provided based upon claims experience and actuarial assumptions, including provisions for incurred but not reported losses. | |||||||||||||
Revenue Recognition. We recognize revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) shipment of goods and passage of title occurs; (iii) the selling price is fixed or determinable; and (iv) collectibility is reasonably assured. | |||||||||||||
We sell our products through a variety of distribution channels. We generally recognize revenue when we ship our products to our customers. We recognize revenue, both rental and purchase, for products sold directly to patients or their third party insurance payors, when our product has been dispensed or shipped to the patient and the patient’s insurance has been verified. | |||||||||||||
We record revenues from sales or our surgical implant products when the products are used in a surgical procedure (implanted in a patient). We include amounts billed to customers for freight in revenue. | |||||||||||||
We reduce revenue by estimates of potential future product returns and other allowances. Revenues are also reduced by rebates related to sales transacted through distribution agreements that provide the distributors with a right to return inventory or take certain pricing adjustments based on sales mix or volume. Provisions for product returns and other allowances are recorded as a reduction to revenue in the period sales are recognized. | |||||||||||||
Advertising Costs. We expense advertising costs as they are incurred. For the years ended December 31, 2013, 2012 and 2011, advertising costs were $6.4 million, $6.5 million and $7.0 million, respectively. In 2013 we revised our definition of advertising costs to exclude certain other marketing and promotion costs. The amounts for the years ended December 31, 2012 and 2011 have been revised to conform to the 2013 definition. | |||||||||||||
Shipping and Handling Expenses. Shipping and handling expenses are included within cost of sales in our Consolidated Statements of Operations. | |||||||||||||
Stock Based Compensation. We maintain a stock option plan under which stock options of our indirect parent, DJO, have been granted to both employees and non-employees. All share based payments to employees are recognized in the financial statements based on their grant date fair values and our estimates of forfeitures. We amortize stock-based compensation for service-based awards granted on a straight-line basis over the requisite service (vesting) period for the entire award. Other awards vest upon the achievement of certain pre-determined performance targets, and compensation expense is recognized to the extent the achievement of the performance targets is deemed probable. | |||||||||||||
Income Taxes. Income taxes are accounted for under the asset and liability method, whereby deferred tax assets and liabilities are recognized and measured using enacted tax rates in effect for each taxing jurisdiction in which we operate for the year in which those temporary differences are expected to be recognized. Net deferred tax assets are then reduced by a valuation allowance if we believe it more-likely-than-not such net deferred tax assets will not be realized. | |||||||||||||
Foreign Currency Translation and Transactions. The reporting currency of DJOFL is the U.S. Dollar. Assets and liabilities of foreign subsidiaries (including intercompany balances for which settlement is not anticipated in the foreseeable future) are translated at the spot rate in effect at the applicable reporting date, and our Consolidated Statement of Operations is translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is recorded as a component of accumulated other comprehensive income (loss) in our Consolidated Statement of Comprehensive Loss. Cash flows from our operations in foreign countries are translated at the average rate for the applicable period. The effect of exchange rates on cash balances held in foreign currencies are separately reported in our Consolidated Statements of Cash Flows. | |||||||||||||
Transactions denominated in currencies other than our or our subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in our Consolidated Balance Sheets related to such transactions result in transaction gains and losses that are reflected in our Consolidated Statements of Operations as either unrealized (based on the applicable period end translation) or realized (upon settlement of the transactions). For the years ended December 31, 2013, 2012 and 2011, foreign transaction (losses) gains were $(1.5) million, $3.6 million and $(2.8) million, respectively. | |||||||||||||
Derivative Financial Instruments. All derivative instruments are recognized in the financial statements and measured at fair value regardless of the purpose or intent for holding them. | |||||||||||||
We use foreign exchange forward contracts to hedge expense commitments that are denominated in currencies other than the U.S. dollar. The purpose of our foreign currency hedging activities is to fix the dollar value of specific commitments and payments to foreign vendors. Before acquiring a derivative instrument to hedge a specific risk, potential natural hedges are evaluated. While our foreign exchange contracts act as economic hedges, we have not designated such instruments as hedges for accounting purposes. Therefore, gains and losses resulting from changes in the fair values of these derivative instruments are recorded in other income (expense), net, in our Consolidated Statements of Operations. | |||||||||||||
The fair value of our derivative instruments has been determined through the use of models that consider various assumptions, including time value and other relevant economic measures, which are inputs that are classified as Level 2 in the fair value hierarchy (see Notes 10 and 11). | |||||||||||||
Comprehensive Income (Loss). Comprehensive income (loss) includes net income (loss) as per our Consolidated Statement of Operations and other comprehensive income (loss). Other comprehensive income (loss), which is comprised of unrealized gains and losses on foreign currency translation adjustments and cash flow hedges, net of tax, is included in our Consolidated Statement of Comprehensive Loss. | |||||||||||||
Concentration of Credit Risk. We sell the majority of our products in the United States to orthopedic professionals, hospitals, distributors, specialty dealers, insurance companies, managed care companies and certain governmental payors such as Medicare. International sales comprised 25.5%, 24.8% and 26.0% of our net sales for the years ended December 31, 2013, 2012, and 2011, respectively. International sales are generated from a diverse group of customers through our wholly owned subsidiaries and certain independent distributors. Credit is extended based on an evaluation of the customer’s financial condition and generally collateral is not required. We provide a reserve for estimated bad debts. Management reviews and revises its estimates for credit losses from time to time and such credit losses have generally been within management’s estimates. In each of the years ended December 31, 2013, 2012 and 2011, we had no individual customer or distributor that accounted for 10% or more of our total annual net sales. | |||||||||||||
Fair Value of Financial Instruments. The carrying amounts of our short-term financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate fair values due to their short-term nature. See Note 12 for information concerning the fair value of our variable and fixed rate debt. | |||||||||||||
Recent Accounting Standards. In July 2012, the FASB issued an accounting standard update regarding testing of intangible assets for impairment. This standard update allows companies the option to perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not the asset is impaired. We adopted this standard update during the first quarter of 2013. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements. | |||||||||||||
In February 2013, the FASB issued an accounting standard update regarding reporting amounts reclassified out of accumulated other comprehensive income. This update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional details about those amounts. The amended guidance was effective for interim and annual periods beginning after December 15, 2012. The Company adopted this standard update during the first quarter of 2013. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements. | |||||||||||||
In July 2013, the FASB issued an accounting standard update regarding the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. This update is consistent with our current financial statement presentation and therefore we do not believe the adoption of this standard will have an impact on the Company’s consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Acquisitions | ' | ||||||||||||||||||||||||||||
3 | ACQUISITIONS | ||||||||||||||||||||||||||||
On July 1, 2013 we acquired certain assets of Blue Leaf Medical CC, (“Blue Leaf”) for a total purchase price of $0.6 million. The assets acquired relate to certain vascular product lines in South Africa, Namibia, Botswana, Mozambique and Zambia. The purchase price consisted of a cash payment at closing of $0.4 million, $0.1 million for the purchase of inventory on hand at closing and $0.1 million which was held back to provide security for potential indemnification claims and, if not used for such indemnification claims, will be paid to the sellers in July 2014. | |||||||||||||||||||||||||||||
On March 7, 2013 we acquired certain assets of Vasyli Medical Asia/Pacific Pty Ltd, (“Vasyli”) for a total purchase price of $2.2 million. The assets acquired relate to the distribution of certain vascular product lines in Australia and New Zealand. The purchase price consisted of a cash payment at closing of $1.3 million, $0.5 million for the purchase of inventory on hand at closing and $0.4 million which was held back to provide security for potential indemnification claims and, if not used for such indemnification claims, will be paid to the sellers in March 2014. Additionally, there was $0.3 million of contingent consideration payable one year from the acquisition date if certain revenue targets were met by December 31, 2013; however, these targets were not achieved and therefore no payment is required. | |||||||||||||||||||||||||||||
Our primary reason for the acquisitions was to move from an indirect sales model (i.e., sales to distributors at a discount) to a direct sales model, resulting in increased gross profit and operating income. All goodwill associated with these acquisitions is allocated to our International reporting segment. | |||||||||||||||||||||||||||||
On December 28, 2012, we acquired all of the outstanding shares of capital stock of Exos Corporation (Exos) for a total purchase price of $40.6 million. The purchase price consisted of a cash payment of $31.2 million, settlement of the existing distributor agreement with Exos at a fair value of $1.2 million and $8.2 million for the fair value of contingent consideration. Of the initial cash payment, $3.0 million was withheld from the closing date payment and was paid to a third party escrow agent to secure the indemnity obligations of the seller. The $10.0 million contingent consideration was initially measured at a fair value of $8.2 million based on the probability weighted estimate of approximately 95% for the achievement of certain specified milestones and the budgeted 2013 Exos product line revenues. During the year ended December 31, 2013, we remeasured the fair value based on the probability of achieving the budgeted Exos revenue and certain specified milestones and the discounted present value of the current estimate of the future contingent payment which resulted in a reduction of $2.5 million to the net fair value of the contingent consideration. This fair value measurement is categorized within Level 3 of the fair value hierarchy. The contingent consideration of $5.7 million is to be paid in April 2014. | |||||||||||||||||||||||||||||
Exos is a medical device company focused on thermoformable external musculoskeletal stabilization systems for the treatment of fractures and other injuries requiring stabilization. All goodwill arising from the Exos acquisition was allocated to our Bracing and Vascular reporting segment. In connection with the acquisition of Exos, we incurred $1.3 million of direct acquisition costs comprised of $0.5 million of legal and other professional fees and $0.8 million of transaction and advisory fees to Blackstone Advisory Partners L.P., and Blackstone Management Partners LLC, affiliates of our major shareholder (see Note 17). These costs are included in Selling, general and administrative expense in our Consolidated Statement of Operations. The acquisition was partially funded using proceeds from $25.0 million of new term loans issued on December 28, 2012 (see Note 12). | |||||||||||||||||||||||||||||
During 2011, we made the following acquisitions, all of which are included in our Bracing and Vascular segment (with the exception of the international activities of Dr. Comfort and ETI, which are included in our International segment): | |||||||||||||||||||||||||||||
On April 7, 2011, we acquired all of the LLC membership interests of Rikco International, LLC, d/b/a Dr. Comfort (Dr. Comfort), for a total purchase price of $257.5 million. Dr. Comfort is a provider of therapeutic footwear, which serves the diabetes care market in podiatry practices, orthotic and prosthetic centers, home medical equipment providers and independent pharmacies. In connection with the acquisition of Dr. Comfort, we incurred $11.3 million of direct acquisition costs comprised of $2.2 million in legal and other professional fees, $4.1 million of bridge financing fees and $5.0 million in transaction and advisory fees to Blackstone Advisory Partners L.P., an affiliate of our major shareholder (see Note 17). These costs are included in Selling, general and administrative expense in our Consolidated Statement of Operations. The acquisition was funded using proceeds from $300.0 million of new 7.75% senior notes (7.75% Notes) issued in April 2011 (see Note 12). | |||||||||||||||||||||||||||||
On March 10, 2011, we acquired substantially all of the assets of Circle City Medical, Inc. (Circle City or Bell-Horn). Circle City markets orthopedic soft goods and medical compression therapy products to independent pharmacies and home healthcare dealers. The purchase price was $11.7 million, of which $1.3 million was withheld from the closing date payment and was paid to a third party escrow agent to secure the indemnity obligations of the seller. No claims were made and the holdback was paid in March 2012. An additional $1.3 million was deposited into escrow for the retention of a key employee and is being recognized as compensation expense over the retention period of 24 months. Direct acquisition costs associated with the Circle City acquisition of $0.1 million are included in Selling, general and administrative expense in our Consolidated Statement of Operations. We financed the acquisition with cash on hand and a draw of $7.0 million on our revolving line of credit. Up to an additional $2.0 million may be earned by the sole shareholder of Circle City as a royalty payment based on future sales of a specific product line over the next six years. This potential royalty payment was evaluated separately from the acquisition of the assets and liabilities of Circle City, and the royalty payments will be expensed as they are earned. For the year ended December 31, 2013, royalty payments made to the seller for sales of this product line were not significant to the Company. | |||||||||||||||||||||||||||||
On February 4, 2011, we purchased certain assets of an e-commerce business (BetterBraces.com), which offers various bracing, cold therapy and electrotherapy products, for total consideration of $3.0 million. Of the total purchase price, $1.8 million was paid in cash at closing, $0.4 million was offset against accounts receivable due from the seller, $0.5 million was retained to fully repay outstanding principal and accrued interest due from the seller under a revolving convertible promissory note, and $0.3 million was paid to the seller in February 2012 following expiration of an indemnification hold back period. The acquisition was financed using cash on hand. | |||||||||||||||||||||||||||||
On January 4, 2011, we acquired all of the outstanding shares of capital stock of Elastic Therapy, Inc. (ETI), a designer and manufacturer of private label medical compression therapy products used to treat and prevent a wide range of venous disorders. The purchase price was $46.4 million, of which $3.6 million was deposited in escrow for up to one year to fund potential indemnity of claims. No claims were made and the holdback was paid in January 2012. An additional $1.0 million was deposited in escrow for the retention of certain key employees and was fully paid in installments six months, nine months and twelve months after the closing date. This retention amount was expensed over the period it was earned. Direct acquisition costs associated with the ETI acquisition of $0.3 million are included in Selling, general and administrative expense in our Consolidated Statement of Operations. The acquisition was financed using cash on hand and a draw of $35.0 million on our revolving line of credit. | |||||||||||||||||||||||||||||
The purchase price for each of these acquisitions was allocated to the fair values of the net tangible and intangible assets acquired as follows (in thousands): | |||||||||||||||||||||||||||||
(in thousands): | Blue Leaf | Vasyli | Exos | Dr. Comfort | Circle City | BetterBraces. | ETI | ||||||||||||||||||||||
com | |||||||||||||||||||||||||||||
Cash | $ | — | $ | — | $ | 1,282 | $ | 59 | $ | — | $ | — | $ | 817 | |||||||||||||||
Accounts receivable | — | — | 1,138 | 9,187 | 572 | — | 3,690 | ||||||||||||||||||||||
Inventory | 59 | 542 | 1,754 | 27,241 | 1,736 | — | 2,133 | ||||||||||||||||||||||
Other current assets | — | 31 | 105 | 2,108 | — | — | 1,542 | ||||||||||||||||||||||
Property and equipment | — | 12 | 584 | 2,183 | — | — | 7,230 | ||||||||||||||||||||||
Other non-current assets | — | — | 12 | 1,607 | — | — | 394 | ||||||||||||||||||||||
Liabilities assumed | — | — | (474 | ) | (10,854 | ) | (406 | ) | — | (1,876 | ) | ||||||||||||||||||
Deferred tax liabilities | — | — | (9,137 | ) | (15,111 | ) | — | — | (9,609 | ) | |||||||||||||||||||
Identifiable intangible assets (1): | |||||||||||||||||||||||||||||
Customer relationships | 90 | 308 | — | 72,100 | 3,700 | 75 | 13,400 | ||||||||||||||||||||||
Technology | — | — | 24,200 | 7,000 | — | 1,120 | 6,000 | ||||||||||||||||||||||
Non-compete | 111 | 930 | 1,900 | 1,200 | 200 | 185 | 1,600 | ||||||||||||||||||||||
Trademarks and trade names | — | — | 1,000 | 22,200 | 1,400 | 50 | — | ||||||||||||||||||||||
Goodwill (2) | 322 | 363 | 18,211 | 138,548 | 4,469 | 1,570 | 21,085 | ||||||||||||||||||||||
Total purchase price | $ | 582 | $ | 2,186 | $ | 40,575 | $ | 257,468 | $ | 11,671 | $ | 3,000 | $ | 46,406 | |||||||||||||||
-1 | The fair value of customer relationships was assigned to relationships with major customers existing on the acquisition date based upon an estimate of the future discounted cash flows that would be derived from those customers, after deducting contributory asset charges. | ||||||||||||||||||||||||||||
The fair value of technology was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the patents and technology acquired. | |||||||||||||||||||||||||||||
The fair value of non-compete agreements relate to non-compete agreements entered into with certain members of senior management. The values were determined by estimating the present value of the cash flows associated with having these agreements in place, less the present value of the cash flows assuming the non-compete agreements were not in place. | |||||||||||||||||||||||||||||
The fair value of trademarks and trade names was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the trade names and trademarks acquired. | |||||||||||||||||||||||||||||
The useful lives of the intangible assets acquired were estimated based on the underlying agreements and/or the future economic benefit expected to be received from the assets. | |||||||||||||||||||||||||||||
-2 | Goodwill represents the excess purchase price over the fair value of the identifiable net assets acquired. Among the factors which resulted in the recognition of goodwill for the Blue Leaf and Vasyli assets was the opportunity to expand our direct presence in the local markets with our vascular products. Among the factors which resulted in the recognition of goodwill for Exos was improved our margins on the sale of Exos products and being able to control the rights to future products developed by Exos. Among the factors which resulted in the recognition of goodwill for Dr. Comfort was expanded product offerings and increased markets. Among the factors which resulted in the recognition of goodwill for ETI was expanded product offerings and vertically integrated products which had been purchased from a third party manufacturer. Among the factors which resulted in the recognition of goodwill for Circle City were expected cost savings from consolidation of warehouse facilities and reduction of redundant general and administrative expenses. Among the factors which resulted in the recognition of goodwill for BetterBraces.com were expected cost savings resulting from distribution efficiencies and from reduction of redundant general and administrative expenses. | ||||||||||||||||||||||||||||
Goodwill related to our Circle City and BetterBraces.com acquisitions is expected to be deductible for tax purposes. |
Accounts_Receivable_Reserves
Accounts Receivable Reserves | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accounts Receivable Reserves | ' | ||||||||||||
4 | ACCOUNTS RECEIVABLE RESERVES | ||||||||||||
A summary of activity in our accounts receivable reserves for doubtful accounts is presented below (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 25,211 | $ | 35,649 | $ | 53,076 | |||||||
Provision for doubtful accounts | 33,129 | 19,586 | 27,356 | ||||||||||
Write-offs, net of recoveries | (25,383 | ) | (30,024 | ) | (44,783 | ) | |||||||
Balance, end of year | $ | 32,957 | $ | 25,211 | $ | 35,649 | |||||||
Our allowance for sales returns balance was $3.9 million, $4.0 million and $2.7 million as of December 31, 2013, 2012 and 2011, respectively. |
Inventories
Inventories | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Inventories | ' | ||||||||||||
5 | INVENTORIES | ||||||||||||
Inventories consist of the following (in thousands): | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Components and raw materials | $ | 59,825 | $ | 50,619 | |||||||||
Work in process | 7,373 | 4,563 | |||||||||||
Finished goods | 83,502 | 94,683 | |||||||||||
Inventory held on consignment | 27,969 | 23,763 | |||||||||||
178,669 | 173,628 | ||||||||||||
Inventory reserves | (23,686 | ) | (17,313 | ) | |||||||||
$ | 154,983 | $ | 156,315 | ||||||||||
A summary of the activity in our reserves for estimated slow moving, excess, obsolete and otherwise impaired inventory is presented below (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 17,313 | $ | 14,146 | $ | 12,853 | |||||||
Provision charged to costs of sales | 10,121 | 6,350 | 7,706 | ||||||||||
Write-offs, net of recoveries | (3,748 | ) | (3,183 | ) | (6,413 | ) | |||||||
Balance, end of year | $ | 23,686 | $ | 17,313 | $ | 14,146 | |||||||
The write-offs to the reserve were principally related to the disposition of fully reserved inventory. |
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property and Equipment, Net | ' | ||||||||||
6 | PROPERTY AND EQUIPMENT, NET | ||||||||||
Property and equipment consists of the following (in thousands): | |||||||||||
December 31, | December 31, | Depreciable lives | |||||||||
2013 | 2012 | (years) | |||||||||
Land | $ | 266 | $ | 266 | Indefinite | ||||||
Buildings and improvements | 27,229 | 26,802 | 3 to 25 | ||||||||
Equipment | 119,127 | 105,351 | 2 to 7 | ||||||||
Software | 33,817 | 31,270 | 3 to 10 | ||||||||
Furniture and fixtures | 25,784 | 23,441 | 3 to 8 | ||||||||
Surgical implant instrumentation | 55,841 | 46,504 | 5 | ||||||||
Construction in progress | 7,919 | 8,196 | N/A | ||||||||
269,983 | 241,830 | ||||||||||
Accumulated depreciation and amortization | (162,154 | ) | (134,795 | ) | |||||||
Property and equipment, net | $ | 107,829 | $ | 107,035 | |||||||
Depreciation and amortization expense relating to property and equipment (including equipment under capital leases) was $33.1 million, $30.2 million and $27.3 million for the years ended December 31, 2013, 2012, and 2011, respectively. |
LongLived_Assets
Long-Lived Assets | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Long-Lived Assets | ' | ||||||||||||
7 | LONG-LIVED ASSETS | ||||||||||||
Goodwill | |||||||||||||
Changes in the carrying amount of goodwill are presented in the table below (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Balance, beginning of year | $ | 1,249,305 | $ | 1,228,778 | |||||||||
Acquisitions (see Note 3) | 685 | 18,211 | |||||||||||
Impairment of goodwill | (102,000 | ) | — | ||||||||||
Foreign currency translation | 1,341 | 2,316 | |||||||||||
Balance, end of year | $ | 1,149,331 | $ | 1,249,305 | |||||||||
In performing our 2013 goodwill impairment test, we estimated the fair values of our reporting units using the income approach which includes the discounted cash flow method and the market approach which includes the use of market multiples. These fair value measurements are categorized within Level 3 of the fair value hierarchy. The discounted cash flows for each reporting unit were based on discrete financial forecasts developed by management for planning purposes, and required significant judgment with respect to forecasted sales, gross margin, selling, general and administrative expenses, depreciation, income taxes, capital expenditures, working capital requirements and the selection and use of an appropriate discount rate. For purposes of calculating the discounted cash flows of our reporting units, we used estimated revenue growth rates averaging between (1)% and 7% for the discrete forecast period. Cash flows beyond the discrete forecasts were estimated using a terminal value calculation, which incorporated historical and forecasted financial trends for each identified reporting unit and considered long-term earnings growth rates for publicly traded peer companies. Future cash flows were then discounted to present value at discount rates ranging from 9.9% to 11.6%, and terminal value growth rates ranging from 0.5% to 3%. Publicly available information regarding comparable market capitalization was also considered in assessing the reasonableness of the cumulative fair values of our reporting units estimated using the discounted cash flow methodology. | |||||||||||||
We determined that the carrying values of our Empi and Chattanooga reporting units were in excess of their estimated fair values. As a result, in the fourth quarter of 2013 we recorded goodwill impairment charges for the Empi and Chattanooga reporting units of $52.5 million and $49.5 million, respectively. The impairment charges were included in Impairment of goodwill and intangible assets in our Consolidated Statement of Operations. The goodwill impairment in our Empi reporting unit resulted primarily from reductions in our projected operating results due to unfavorable decisions made by certain third party payors related to insurance pricing for certain products sold by the Empi reporting unit. The goodwill impairment in the Chattanooga reporting unit resulted primarily from reductions in our projected operating results and estimated future cash flows due to slow market conditions for capital equipment. We have four other reporting units with goodwill assigned to them. For each of those four reporting units, the estimated fair values exceed their carrying values. This fair value measurement is categorized within Level 3 of the fair value hierarchy. | |||||||||||||
In 2011, we determined that the carrying values of our Empi and Surgical Implant reporting units were in excess of their estimated fair values. As a result, we recorded goodwill impairment charges for the Empi and Surgical Implant reporting units of $76.7 million and $47.4 million, respectively. These impairment charges were included in Impairment of goodwill and intangible assets in our Consolidated Statement of Operations. The goodwill impairment in our Empi reporting unit in 2011 resulted primarily from reductions in our projected operating results due to unfavorable decisions made by certain third party payors related to insurance pricing for certain products sold by the Empi business. The goodwill impairment in our Surgical Implant reporting unit in 2011 resulted primarily from reductions in our projected operating results and estimated future cash flows for the business. For all other reporting units, estimated fair values at December 31, 2011 exceeded carrying values. | |||||||||||||
Intangible Assets | |||||||||||||
Identifiable intangible assets consisted of the following (in thousands): | |||||||||||||
December 31, 2013 | Gross Carrying | Accumulated | Intangible | ||||||||||
Amount | Amortization | Assets, Net | |||||||||||
Definite-lived intangible assets: | |||||||||||||
Customer relationships | $ | 570,070 | $ | (290,359 | ) | $ | 279,711 | ||||||
Patents and technology | 486,246 | (230,111 | ) | 256,135 | |||||||||
Trademarks and trade names | 25,820 | (7,102 | ) | 18,718 | |||||||||
Distributor contracts and relationships | 5,054 | (3,183 | ) | 1,871 | |||||||||
Non-compete agreements | 6,423 | (3,149 | ) | 3,274 | |||||||||
$ | 1,093,613 | $ | (533,904 | ) | 559,709 | ||||||||
Indefinite-lived intangible assets: | |||||||||||||
Trademarks and trade names | 399,284 | ||||||||||||
Net identifiable intangible assets | $ | 958,993 | |||||||||||
December 31, 2012 | Gross Carrying | Accumulated | Intangible | ||||||||||
Amount | Amortization | Assets, Net | |||||||||||
Definite lived intangible assets: | |||||||||||||
Customer relationships | $ | 570,221 | $ | (236,228 | ) | $ | 333,993 | ||||||
Patents and technology | 485,675 | (195,099 | ) | 290,576 | |||||||||
Trademarks and trade names | 25,773 | (4,248 | ) | 21,525 | |||||||||
Distributor contracts and relationships | 3,662 | (1,659 | ) | 2,003 | |||||||||
Non-compete agreements | 5,547 | (1,722 | ) | 3,825 | |||||||||
$ | 1,090,878 | $ | (438,956 | ) | 651,922 | ||||||||
Indefinite lived intangible assets: | |||||||||||||
Trademarks and trade names | 403,609 | ||||||||||||
Net identifiable intangible assets | $ | 1,055,531 | |||||||||||
In the fourth quarter of 2013 we tested our indefinite lived trade name intangible assets for impairment. This test work compares the fair value of the asset with its carrying amount. To determine the fair value we applied the relief from royalty (RFR) method. Under the RFR method, the value of the trade name is determined by calculating the present value of the after-tax cost savings associated with owning the asset and therefore not being required to pay royalties for its use during the asset’s indefinite life. Significant judgments inherent in this analysis include the selection of appropriate discount rates, estimating future cash flows and the identification of appropriate terminal growth rate assumptions. Discount rate assumptions are based on an assessment of the risk inherent in the projected future cash generated by the respective intangible assets. Also subject to judgment are assumptions about royalty rates, which are based on the estimated rates at which similar brands and trademarks are being licensed in the marketplace. These fair value measurements are categorized within Level 3 of the fair value hierarchy. We determined that that the fair value of these trade names other than Empi exceeds their carrying value. We determined that the carrying value of our Empi trade name was in excess of its estimated fair value, and recorded an impairment charge of $4.5 million. The impairment charge was included in Impairment of goodwill and intangible assets line item in the Consolidated Statement of Operations. This fair value measurement is categorized within Level 3 of the fair value hierarchy. | |||||||||||||
In 2012, we began the process of changing the trade name used for our German operations from Ormed to DJO to be consistent with our global strategy. In conjunction with this change, we revised our assumption as to the useful life of the Ormed trade name intangible asset, which resulted in changing the remaining estimated life of the asset from indefinite to three years. These changes triggered an impairment review of the intangible asset. Based on the application of a differential cash flow method, whereby an investor would be willing to pay a price equal to the present value of the incremental cash flows attributable to the economic benefit derived from defending the trade name in the market, we determined that the carrying amount of the asset was in excess of its estimated fair value. As a result, we recorded an impairment charge of $7.4 million, which is included in the Impairment of goodwill and intangible assets line item in the Consolidated Statements of Operations. This fair value measurement is categorized within Level 3 of the fair value hierarchy. | |||||||||||||
In 2011, we determined that the carrying value of our Empi trade name was in excess of its estimated fair value, and recorded an impairment charge of $16.9 million. The impairment charge was included in Impairment of goodwill and intangible assets line item in the Consolidated Statement of Operations. | |||||||||||||
Our definite lived intangible assets are being amortized using the straight line method over their remaining weighted average useful lives of 5.9 years for customer relationships, 9.1 years for patents and technology, 2.7 years for distributor contracts and relationships, 7.1 years for trademarks and trade names, and 2.9 years for non-compete agreements. Based on our amortizable intangible asset balance as of December 31, 2013, we estimate that amortization expense will be as follows for the next five years and thereafter (in thousands): | |||||||||||||
2014 | $ | 92,793 | |||||||||||
2015 | 87,995 | ||||||||||||
2016 | 83,625 | ||||||||||||
2017 | 72,451 | ||||||||||||
2018 | 62,272 | ||||||||||||
Thereafter | 160,573 | ||||||||||||
$ | 559,709 | ||||||||||||
Our goodwill and intangible assets by segment are as follows (in thousands): | |||||||||||||
December 31, 2013 | Goodwill | Intangible | |||||||||||
Assets, Net | |||||||||||||
Bracing and Vascular | $ | 483,258 | $ | 527,806 | |||||||||
Recovery Sciences | 317,299 | 250,725 | |||||||||||
International | 348,774 | 165,569 | |||||||||||
Surgical Implant | — | 14,893 | |||||||||||
$ | 1,149,331 | $ | 958,993 | ||||||||||
December 31, 2012 | Goodwill | Intangible | |||||||||||
Assets, Net | |||||||||||||
Bracing and Vascular | $ | 483,258 | $ | 572,187 | |||||||||
Recovery Sciences | 419,299 | 283,342 | |||||||||||
International | 346,748 | 182,638 | |||||||||||
Surgical Implant | — | 17,364 | |||||||||||
$ | 1,249,305 | $ | 1,055,531 | ||||||||||
Other_Current_Liabilities
Other Current Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Other Current Liabilities | ' | ||||||||
8 | OTHER CURRENT LIABILITIES | ||||||||
Other current liabilities consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued wages and related expenses | $ | 33,128 | $ | 29,888 | |||||
Accrued commissions | 16,489 | 14,182 | |||||||
Accrued rebates | 10,731 | 6,860 | |||||||
Accrued other taxes | 4,734 | 4,477 | |||||||
Accrued professional expenses | 3,372 | 3,525 | |||||||
Income taxes payable | 2,877 | 4,380 | |||||||
Deferred tax liability | 445 | — | |||||||
Other accrued liabilities | 37,696 | 30,328 | |||||||
$ | 109,472 | $ | 93,640 | ||||||
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended | |
Dec. 31, 2013 | ||
Employee Benefit Plans | ' | |
9 | EMPLOYEE BENEFIT PLANS | |
We have multiple qualified defined contribution plans, which allow for voluntary pre-tax contributions by employees. We pay all general and administrative expenses of the plans and may make contributions to the plans. Based on 100% of the first 1% and 50% of the next 5% of compensation deferred by employees (subject to IRS limits and non-discrimination testing), we made matching contributions of $4.2 million, $4.0 million and $3.7 million, to the plans for the years ended December 31, 2013, 2012 and 2011, respectively. The plans provide for discretionary contributions by us, as approved by the Board of Directors. There have been no such discretionary contributions through December 31, 2013. In addition, we made contributions to our international pension plans of $1.1 million, $1.3 million and $0.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. |
Derivative_Instruments
Derivative Instruments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Derivative Instruments | ' | ||||||||||||||||
10 | DERIVATIVE INSTRUMENTS | ||||||||||||||||
From time to time, we use derivative financial instruments to manage interest rate risk related to our variable rate credit facilities and risk related to foreign currency exchange rates. Our objective is to reduce the risk to earnings and cash flows associated with changes in interest rates and changes in foreign currency exchange rates. Before acquiring a derivative instrument to hedge a specific risk, we evaluate potential natural hedges. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, and the availability, effectiveness and cost of derivative instruments. We do not use derivative instruments for speculative or trading purposes. | |||||||||||||||||
All derivatives, whether designated as hedging relationships or not, are recorded on the balance sheet at fair value. The fair value of our derivatives is determined through the use of models that consider various assumptions, including time value, yield curves and other relevant economic measures which are inputs that are classified as Level 2 in the fair value hierarchy. The classification of gains and losses resulting from changes in the fair values of derivatives is dependent on the intended use of the derivative and its resulting designation. Our interest rate swap agreements were designated as cash flow hedges, and accordingly, effective portions of changes in the fair value of the derivatives were recorded in accumulated other comprehensive income (loss) and subsequently reclassified into our Consolidated Statement of Operations when the hedged forecasted transaction affects income (loss). Ineffective portions of changes in the fair value of cash flow hedges are recognized in income (loss). Our foreign exchange contracts have not been designated as hedges, and accordingly, changes in the fair value of the derivatives are recorded in income (loss). | |||||||||||||||||
Interest Rate Swap Agreements. In prior years, we have used interest rate swaps from time to time to manage the risk of unfavorable movements in interest rates on a portion of our then outstanding variable rate loan balances. Our interest rate swap agreements were designated as cash flow hedges for accounting purposes, and the hedges were considered effective. As such, the effective portion of the gain or loss on the derivative instrument was reported as a component of accumulated other comprehensive income (loss) and reclassified into interest expense in our Consolidated Statement of Operations in the period in which it affected income (loss). We had no interest rate swap agreements outstanding during 2012 or 2013. | |||||||||||||||||
Foreign Exchange Rate Contracts. We utilize Mexican Peso (MXN) foreign exchange forward contracts to hedge a portion of our exposure to fluctuations in foreign exchange rates, as our Mexico-based manufacturing operations incur costs that are largely denominated in MXN. Foreign currency exchange forward contracts held as of December 31, 2013 expire weekly through November 2014. While our foreign exchange forward contracts act as economic hedges, we have not designated such instruments as hedges for accounting purposes. Therefore, gains and losses resulting from changes in the fair values of these derivative instruments are recorded in Other income (expense), net, in our accompanying Consolidated Statements of Operations. | |||||||||||||||||
Information regarding the notional amounts of our foreign exchange forward contracts is presented in the table below (in thousands): | |||||||||||||||||
Notional Amount (MXN) | Notional Amount (USD) | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Foreign exchange contracts not designated as hedges | 302,730 | 92,617 | $ | 22,959 | $ | 6,376 | |||||||||||
The following table summarizes the fair value of derivative instruments in our Consolidated Balance Sheets (in thousands): | |||||||||||||||||
Balance Sheet Location | December 31, | December 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||||
Derivative Assets: | |||||||||||||||||
Foreign exchange forward contracts not designated as hedges | Other current assets | $ | — | $ | 777 | ||||||||||||
Derivative Liabilities: | |||||||||||||||||
Foreign exchange forward contracts not designated as hedges | Other current liabilities | 44 | — | ||||||||||||||
The following table summarizes the effect our derivative instruments have on our Consolidated Statements of Operations (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
Location of gain (loss) | 2013 | 2012 | 2011 | ||||||||||||||
Interest rate swap agreements designated as cash flow hedges | Interest expense (1) | $ | — | $ | — | $ | (7,154 | ) | |||||||||
Foreign exchange forward contracts not designated as hedges | Other (expense) | (821 | ) | 1,322 | (830 | ) | |||||||||||
income, net | |||||||||||||||||
$ | (821 | ) | $ | 1,322 | $ | (7,984 | ) | ||||||||||
-1 | Represents the loss on derivative instruments designated as cash flow hedges, reclassified from accumulated other comprehensive income (loss) into interest expense during the periods presented. | ||||||||||||||||
The pre-tax loss on derivative instruments designated as cash flow hedges recognized in other comprehensive income (loss) is presented below (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Interest rate swap agreements designated as cash flow hedges | $ | — | $ | — | $ | 447 | |||||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
11 | FAIR VALUE MEASUREMENTS | ||||||||||||||||
Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. | |||||||||||||||||
During the year ended December 31, 2013, we remeasured the fair value of the contingent consideration related to our December 2012 acquisition of Exos Corporation. We initially valued the contingent consideration at $8.2 million based on the probability weighted estimate of approximately 95% for the achievement of certain specified milestones and the budgeted 2013 Exos product line revenues. Our remeasurement of the fair value based on the probability of achieving the budgeted Exos revenue and certain specified milestones and the discounted present value of the current estimate of the future contingent payment resulted in a reduction of $2.5 million to the net fair value of the contingent consideration. This fair value measurement is categorized within Level 3 of the fair value hierarchy. | |||||||||||||||||
The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
As of December 31, 2013 | Quoted Prices | Significant | Significant | Recorded | |||||||||||||
in Active | Other | Unobservable | Balance | ||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Liabilities: | |||||||||||||||||
Foreign exchange forward contracts not designated as hedges | $ | — | $ | 44 | $ | — | $ | 44 | |||||||||
Contingent consideration | $ | — | $ | — | $ | 5,690 | $ | 5,690 | |||||||||
As of December 31, 2012 | Quoted Prices | Significant | Significant | Recorded | |||||||||||||
in Active | Other | Unobservable | Balance | ||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Foreign exchange forward contracts not designated as hedges | $ | — | $ | 777 | $ | — | $ | 777 | |||||||||
Liabilities: | |||||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 8,200 | $ | 8,200 | |||||||||
The table below presents reconciliation of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2013 (in thousands): | |||||||||||||||||
Year Ended | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Balance, beginning of period | $ | 8,200 | |||||||||||||||
Total gains: | |||||||||||||||||
Included in Selling, general and administrative expense | (2,510 | ) | |||||||||||||||
Balance, end of period | $ | 5,690 | |||||||||||||||
Debt
Debt | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Debt | ' | ||||||||
12 | DEBT | ||||||||
Debt obligations consists of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Senior secured credit facilities: | |||||||||
Revolving credit facility | $ | 38,000 | $ | 3,000 | |||||
Term Loans: | |||||||||
$853.4 million tranche B term loans, net of unamortized original issuance discount of $7.1 million | 846,297 | — | |||||||
$476.5 million new term loans, net of unamortized original issue discount of $7.3 million | — | 469,200 | |||||||
$385.5 million extended term loans, net of unamortized original issue discount of $1.5 million | — | 383,965 | |||||||
8.75% Second priority senior secured notes, including unamortized original issue premium of $5.5 million and $6.5 million, respectively | 335,490 | 336,509 | |||||||
9.875% Senior unsecured notes | 440,000 | 440,000 | |||||||
7.75% Senior unsecured notes | 300,000 | 300,000 | |||||||
9.75% Senior subordinated notes | 300,000 | 300,000 | |||||||
Total debt | 2,259,787 | 2,232,674 | |||||||
Current maturities | (8,620 | ) | (8,858 | ) | |||||
Long-term debt | $ | 2,251,167 | $ | 2,223,816 | |||||
Senior Secured Credit Facilities | |||||||||
On November 20, 2007, we entered into senior secured credit facilities consisting of a $1,065.0 million term loan facility maturing in May 2014 and a $100.0 million revolving credit facility maturing in November 2013. On March 20, 2012, we amended and restated our senior secured credit facilities, which (1) permitted the issuance of $230.0 million aggregate principal of 8.75% second priority senior secured notes (as defined and further described below); (2) extended the maturity of $564.7 million of the original term loans outstanding under the original senior secured credit facilities to November 1, 2016 (“extended term loans”); (3) provided for the issuance of a new $350.0 million tranche of term loans that will mature on September 15, 2017 (such term loans, the “March 20 new term loans”); (4) deemed certain previous acquisitions and investments to be permitted under the terms of the senior secured credit facilities; (5) increased the total net leverage ratio limitation in the permitted acquisitions covenant from 7.0x to 7.5x; (6) changed the financial maintenance covenant from a senior secured leverage ratio covenant to a senior secured first lien leverage ratio covenant; and (7) replaced our original senior secured revolving credit facilities with a new $100.0 million revolving credit facility (the “revolving credit facility”) which matures on March 15, 2017. | |||||||||
On March 30, 2012, we entered into an amendment to the senior secured credit facilities which, among other things, provided for the issuance of an additional $105.0 million of new term loans that will mature on September 15, 2017 (such term loans, the “March 30 new term loans”). The net proceeds from this issuance were used to repay $103.5 million in aggregate principal amount of term loans under the original senior secured credit facilities and to pay related fees, premiums and expenses. | |||||||||
On December 19, 2012, we entered into an incremental amendment to our senior secured credit facilities which provided for the issuance of an additional $25.0 million of new term loans on December 28, 2012 that mature on September 15, 2017 (such term loans, the “December 28 new term loans”; and, together with the March 20 new term loans and the March 30 new term loans, the “new term loans”). The net proceeds from the issuance were used to partially fund the acquisition of Exos Corporation. | |||||||||
The March 20 new term loans were issued at a 1.5% discount. The March 30 new term loans were issued at a 1.0% discount and the December 28 new term loans were issued at par. | |||||||||
On March 21, 2013, we entered into an amendment to the senior secured credit facilities which, among other things, (1) permitted the issuance of $421.4 million of additional term loans issued at par, the proceeds of which were used to prepay existing term loans; (2) extended the maturity of the extended term loans to September 15, 2017; (3) combined the additional term loans and the extended term loans into one new tranche (“tranche B term loans”); (4) reduced the interest rate margin applicable to all borrowings under the senior secured credit facilities; and (5) set the senior secured first lien leverage ratio covenant at a level of 4.25x for the duration of the agreement. The remaining unamortized original issue discounts from the previous term loan issuances are being amortized over the term of the tranche B term loans using the effective interest method. | |||||||||
As of December 31, 2013, the market values of our tranche B term loans and revolving credit facility were $853.4 million and $35.0 million, respectively. We determine market value using trading prices for the senior secured credit facilities on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. | |||||||||
Interest Rates. Effective March 21, 2013, the interest rate margins applicable to borrowings under the senior secured revolving credit facilities are, at our option, either (a) the Eurodollar rate, plus 375 basis points or (b) a base rate determined by reference to the highest of (1) the prime rate, (2) the federal funds rate, plus 0.50% and (3) the Eurodollar rate for a one-month interest period, plus in each case 375 basis points. The interest rate margins applicable to the tranche B term loans are, at our option, either (a) the Eurodollar rate plus 375 basis points or (b) a base rate plus 375 basis points. There is a minimum LIBOR rate applicable to the Eurodollar component of interest rates on tranche B term loan borrowings of 1.00%. The applicable margin for borrowings under the senior secured revolving credit facilities may be reduced, subject to our attaining certain leverage ratios. As of December 31, 2013, our weighted average interest rate for all borrowings under the senior secured credit facilities was 4.71%. | |||||||||
Fees. In addition to paying interest on outstanding principal under the senior secured credit facilities, we are required to pay a commitment fee to the lenders under the senior secured revolving credit facilities with respect to the unutilized commitments thereunder. The current commitment fee rate is 0.50% per annum, subject to step-downs based upon the achievement of certain leverage ratios. We must also pay customary letter of credit fees. | |||||||||
Principal Payments. We are required to pay annual payments in equal quarterly installments on the tranche B term loans in an amount equal to 1.00% of the funded total principal amount through June 2017, with any remaining amount payable in full at maturity in September 2017. | |||||||||
Prepayments. The senior secured credit facilities require us to prepay outstanding term loans, subject to certain exceptions, with (1) 50% (which percentage is reduced to 25% or 0% upon our attaining certain leverage ratios) of our annual excess cash flow, as defined in the credit agreement relating to the senior secured credit facilities (such agreement, the “credit agreement”); (2) 100% of the net cash proceeds above an annual amount of $25.0 million from non-ordinary course asset sales (including insurance and condemnation proceeds) by us and our restricted subsidiaries, subject to certain exceptions, including a 100% reinvestment right if reinvested or committed to be reinvested within 15 months of such asset sales so long as such reinvestment is completed within 180 days thereafter; and (3) 100% of the net cash proceeds from the issuance or incurrence of debt by us and our restricted subsidiaries, other than proceeds from debt permitted to be incurred under the senior secured credit facilities and related amendments. Any mandatory prepayments are applied to the term loan facility in direct order of maturity. We were not required to make any such prepayments in the twelve months ended December 31, 2013. | |||||||||
Subject to certain exceptions, voluntary prepayments of the tranche B term loans within one year of the effective date of the March 2013 amendment are subject to a 1.0% “soft call” premium, while other voluntary prepayments of outstanding loans under the senior secured credit facilities may be made at any time without premium or penalty, provided that voluntary prepayments of Eurodollar loans made on a date other than the last day of an interest period applicable thereto shall be subject to customary breakage costs. | |||||||||
Guarantee and Security. All obligations under the senior secured credit facilities are unconditionally guaranteed by DJO Holdings LLC (“DJO Holdings”) and each of our existing and future direct and indirect wholly-owned domestic subsidiaries other than immaterial subsidiaries, unrestricted subsidiaries and subsidiaries that are precluded by law or regulation from guaranteeing the obligations (collectively, the “Guarantors”). | |||||||||
All obligations under the senior secured credit facilities, and the guarantees of those obligations, are secured by pledges of 100% of our capital stock, 100% of the capital stock of each wholly-owned domestic subsidiary and 65% of the capital stock of each wholly owned foreign subsidiary that is, in each case, directly owned by us or one of the Guarantors, and a security interest in, and mortgages on, substantially all tangible and intangible assets of DJO Holdings, DJOFL and each Guarantor. | |||||||||
Certain Covenants and Events of Default. The senior secured credit facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, our and our subsidiaries’ ability to: | |||||||||
• | incur additional indebtedness; | ||||||||
• | create liens on assets; | ||||||||
• | change fiscal years; | ||||||||
• | enter into sale and leaseback transactions; | ||||||||
• | engage in mergers or consolidations; | ||||||||
• | sell assets; | ||||||||
• | pay dividends and other restricted payments; | ||||||||
• | make investments, loans or advances; | ||||||||
• | repay subordinated indebtedness; | ||||||||
• | make certain acquisitions; | ||||||||
• | engage in certain transactions with affiliates; | ||||||||
• | restrict the ability of restricted subsidiaries that are not Guarantors to pay dividends or make distributions; | ||||||||
• | amend material agreements governing our subordinated indebtedness; and | ||||||||
• | change our lines of business. | ||||||||
In addition, the senior secured credit facilities require us to maintain a maximum senior secured first lien leverage ratio of consolidated senior secured first lien debt to Adjusted EBITDA (as defined in the credit agreement) of 4.25:1 for the trailing twelve months ended December 31, 2013. The senior secured credit facilities also contain certain customary affirmative covenants and events of default. As of December 31, 2013, our actual senior secured first lien net leverage ratio was 3.18:1, and we were in compliance with all other applicable covenants. | |||||||||
8.75% Second Priority Senior Secured Notes | |||||||||
On March 20, 2012 and October 1, 2012, we issued $330.0 million aggregate principal amount of 8.75% second priority senior secured notes (8.75% Notes) maturing on March 15, 2018. The 8.75% Notes are guaranteed jointly and severally and on a senior secured basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantee any of DJOFL’s indebtedness, or any indebtedness of DJOFL’s domestic subsidiaries, or is an obligor under the senior secured credit facilities. | |||||||||
Pursuant to a second lien security agreement, the 8.75% Notes are secured by second priority liens, subject to permitted liens, on certain of our assets that secure borrowings under the senior secured credit facilities. | |||||||||
December 31, 2013, the market value of the 8.75% Notes was $360.5 million. We determined market value using trading prices for the 8.75% Notes on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. | |||||||||
Optional Redemption. Under the agreement governing the 8.75% Notes (8.75% Indenture), prior to March 15, 2015, we have the option to redeem some or all of the 8.75% Notes for cash at a redemption price equal to 100% of the then outstanding principal balance plus an applicable make-whole premium, plus accrued and unpaid interest. Beginning on March 15, 2015, we may redeem some or all of the 8.75% Notes at a redemption price of 104.375% of the then outstanding principal balance, plus accrued and unpaid interest. The redemption price decreases to 102.188% and 100% of the then outstanding principal balance at March 15, 2016 and 2017, respectively, plus accrued and unpaid interest. Additionally, from time to time, before March 15, 2015, we may redeem up to 35% of the 8.75% Notes at a redemption price equal to 108.75% of the then outstanding principal balance, plus accrued and unpaid interest, in each case, with proceeds we raise, or a direct or indirect parent company raises, in certain offerings of equity of DJOFL or its direct or indirect parent companies, as long as at least 65% of the aggregate principal amount of the 8.75% Notes issued remains outstanding. | |||||||||
9.875% Senior Unsecured Notes | |||||||||
On October 1, 2012, we issued $440.0 million aggregate principal amount of new 9.875% senior unsecured notes (9.875% Notes) maturing on April 15, 2018. The 9.875% Notes are guaranteed jointly and severally and on an unsecured senior basis by each of DJOFL’s existing and future direct and indirect wholly owned domestic subsidiaries that guarantee any of DJOFL’s indebtedness or any indebtedness of DJOFL’s domestic subsidiaries or is an obligor under DJOFL’s senior secured credit facilities. | |||||||||
As of December 31, 2013, the market value of the 9.875% Notes was $473.0 million. We determined market value using trading prices for the 9.875% Notes on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. | |||||||||
Optional Redemption. Under the agreement governing the 9.875% Notes (the 9.875% Indenture), prior to April 15, 2015, we have the option to redeem some or all of the 9.875% Notes for cash at a redemption price equal to 100% of the then outstanding principal balance plus an applicable make-whole premium plus accrued and unpaid interest. Beginning on April 15, 2015, we may redeem some or all of the 9.875% Notes at a redemption price of 104.938% of the then outstanding principal balance plus accrued and unpaid interest. The redemption price decreases to 102.469% and 100% of the then outstanding principal balance at April 2016 and 2017, respectively. Additionally, from time to time, before April 15, 2015, we may redeem up to 35% of the 9.875% Notes at a redemption price equal to 109.875% of the principal amount then outstanding, plus accrued and unpaid interest, in each case, with proceeds we raise, or a direct or indirect parent company raises, in certain offerings of equity of DJOFL or its direct or indirect parent companies, as long as at least 65% of the aggregate principal amount of the 9.875% Notes issued remains outstanding. | |||||||||
7.75% Senior Unsecured Notes | |||||||||
On April 7, 2011, we issued $300.0 million aggregate principal amount of 7.75% senior unsecured notes (7.75% Notes) maturing on April 15, 2018. The 7.75% Notes are guaranteed jointly and severally and on a senior unsecured basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantee any of DJOFL’s indebtedness, or any indebtedness of DJOFL’s domestic subsidiaries, or is an obligor under the senior secured credit facilities. | |||||||||
As of December 31, 2013, the market value of the 7.75% Notes was $305.3 million. We determined market value using trading prices for the 7.75% Notes on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. | |||||||||
Optional Redemption. Under the agreement governing the 7.75% Notes (the 7.75% Indenture), prior to April 15, 2014, we have the option to redeem some or all of the 7.75% Notes for cash at a redemption price equal to 100% of the then outstanding principal balance plus an applicable make-whole premium plus accrued and unpaid interest. Beginning on April 15, 2014, we may redeem some or all of the 7.75% Notes at a redemption price of 105.813% of the then outstanding principal balance plus accrued and unpaid interest. The redemption price decreases to 103.875%, 101.938% and 100% of the then outstanding principal balance at April 15, 2015, 2016 and 2017, respectively. Additionally, from time to time, before April 15, 2014, we may redeem up to 35% of the 7.75% Notes at a redemption price equal to 107.75% of the principal amount then outstanding, plus accrued and unpaid interest, in each case, with proceeds we raise, or a direct or indirect parent company raises, in certain offerings of equity of us or our direct or indirect parent companies, as long as at least 65% of the aggregate principal amount of the 7.75% Notes issued remains outstanding. | |||||||||
9.75% Senior Subordinated Notes | |||||||||
On October 18, 2010, we issued $300.0 million aggregate principal amount of 9.75% senior subordinated notes (9.75% Notes) maturing on October 15, 2017. The 9.75% Notes are guaranteed jointly and severally and on an unsecured senior basis by each of DJOFL’s existing and future direct and indirect wholly-owned domestic subsidiaries that guarantee any of DJOFL’s indebtedness, or any indebtedness of DJOFL’s domestic subsidiaries, or is an obligor under the senior secured credit facilities. | |||||||||
As of December 31, 2013, the market value of the 9.75% Notes was $303.8 million. We determined market value using trading prices for the 9.75% Notes on or near that date. This fair value measurement is categorized within Level 2 of the fair value hierarchy. | |||||||||
Optional Redemption. Under the agreement governing the 9.75% Notes (the 9.75% Indenture), prior to October 15, 2013, we have the option to redeem some or all of the 9.75% Notes for cash at a redemption price equal to 100% of the then outstanding principal balance plus an applicable make-whole premium, plus accrued and unpaid interest. Beginning on October 15, 2013, we may redeem some or all of the 9.75% Notes at a redemption price of 107.313% of the then outstanding principal balance, plus accrued and unpaid interest. The redemption price decreases to 104.875%, 102.438% and 100% of the then outstanding principal balance at October 15, 2014, 2015 and 2016, respectively. Additionally, from time to time, before October 15, 2013, we may redeem up to 35% of the 9.75% Notes at a redemption price equal to 109.75% of the principal amount then outstanding, plus accrued and unpaid interest, in each case, with proceeds we raise, or a direct or indirect parent company raises, in certain offerings of equity of DJOFL or its direct or indirect parent companies, as long as at least 65% of the aggregate principal amount of the 9.75% Notes issued remains outstanding. | |||||||||
Change of Control | |||||||||
Upon the occurrence of a change of control, unless DJOFL has previously sent or concurrently sends a notice exercising its optional redemption rights with respect to its 8.75% Notes, 9.875% Notes, 7.75% Notes, and 9.75% Notes (collectively, the Notes), DJOFL will be required to make an offer to repurchase all of the Notes at 101% of the then outstanding principal balance, plus accrued and unpaid interest. | |||||||||
Covenants | |||||||||
The indentures for each of the Notes issuances contain covenants limiting, among other things, our and our restricted subsidiaries’ ability to (i) incur additional indebtedness or issue certain preferred and convertible shares, pay dividends on, redeem, repurchase or make distributions in respect of the capital stock of DJO or make other restricted payments, (ii) make certain investments, (iii) sell certain assets, (iv) create liens on certain assets to secure debt, (v) consolidate, merge, sell or otherwise dispose of all or substantially all of our assets, (vi) enter into certain transactions with affiliates, or (vii) designate our subsidiaries as unrestricted subsidiaries. As of December 31, 2013, we were in compliance with all applicable covenants. | |||||||||
Our ability to continue to meet the covenants related to our indebtedness specified above in future periods will depend, in part, on events beyond our control, and we may not continue to meet those covenants. A breach of any of these covenants in the future could result in a default under the senior secured credit facilities, the 8.75% Indenture, the 9.75% Indenture, the 9.875% Indenture and the 7.75% Indenture (collectively, the Indentures), at which time the lenders could elect to declare all amounts outstanding under the senior secured credit facilities to be immediately due and payable. Any such acceleration would also result in a default under the Indentures. | |||||||||
At December 31, 2013, the aggregate amounts of annual principal maturities of long-term debt for the next five years and thereafter are as follows (in thousands): | |||||||||
Years Ending December 31, | |||||||||
2014 | $ | 8,620 | |||||||
2015 | 8,620 | ||||||||
2016 | 8,620 | ||||||||
2017 | 1,165,540 | ||||||||
2018 | 1,070,000 | ||||||||
$ | 2,261,400 | ||||||||
Loss on Modification and Extinguishment of Debt | |||||||||
During the year ended December 31, 2013, we recognized a loss on modification and extinguishment of debt of $1.1 million. The loss consists of $0.9 million of arrangement and amendment fees and other fees and expenses incurred in connection with the amendment of our senior secured credit facilities, $0.2 million related to the non-cash write off of unamortized debt issuance costs and original issue discount associated with the portion of our original term loans which were extinguished. | |||||||||
During the year ended December 31, 2012, we recognized a loss on modification and extinguishment of debt of $36.9 million. The loss consists of $8.6 million of arrangement and amendment fees and other fees and expenses incurred in connection with the amendment of our senior secured credit facilities, $0.8 million related to the non-cash write off of unamortized debt issuance costs and original issue discount associated with the portion of our original term loans which were extinguished. The loss also included $17.3 million in premiums related to the repurchase or redemption of our 10.875% Notes, and $12.7 million in unamortized original issuance costs, net of $2.5 million in unamortized original issuance premium in connection with the cash tender offer for our 10.875% Notes. | |||||||||
Debt Issuance Costs | |||||||||
As of December 31, 2013 and 2012, we had $35.7 million and $41.6 million, respectively, of unamortized debt issuance costs, which are included in Other assets in our Consolidated Balance Sheets. During the year ended December 31, 2013, we capitalized $1.5 million of debt issuance costs incurred in connection with the amendment of our senior secured credit facilities. During the year ended December 31, 2012, we capitalized $29.2 million of debt issuance costs incurred in connection with the issuance of the 8.75% Notes, 9.875% Notes and $25 million new term loan, net of the write off of $12.7 million unamortized original issuance costs in connection with the cash tender offer for our 10.875% Notes. During the year ended December 31, 2011, we capitalized $7.7 million of debt issuance costs incurred in connection with the issuance of the 7.75% Notes in April 2011. | |||||||||
For each the years ended December 31, 2013, 2012, and 2011 amortization of debt issuance costs was $7.3 million, $8.9 million, and $7.7 million. Amortization of debt issuance costs was included in Interest expense in our Consolidated Statements of Operations for each of the periods presented. |
Membership_Deficit_Equity
Membership (Deficit) Equity | 12 Months Ended | |
Dec. 31, 2013 | ||
Membership (Deficit) Equity | ' | |
13 | MEMBERSHIP EQUITY | |
During the year ended December 31, 2013, DJO issued 72,151 shares of common stock upon the net exercise of vested stock options that had been granted to employees in 2007 in exchange for options that had previously been granted in the predecessor company to DJO (“Rollover Options”). Our stock incentive plan permits participants to exercise stock options using a net exercise method. In a net exercise, we withhold from the total number of shares that otherwise would be issued to a participant upon exercise of the stock option such number of shares having a fair market value at the time of exercise equal to the aggregate option exercise price and applicable income tax withholdings, and remit the remaining shares to the participant. During the year ended December 31, 2013, the net exercise method was employed by the participants to exercise Rollover Options to acquire 221,057 shares of our common stock; we withheld 148,906 of the shares subject to the Rollover Options to cover $2.5 million of aggregate option exercise price and income tax withholdings and issued the remaining 72,151 shares to the participants. | ||
Additionally, during the year ended December 31, 2013, we entered into an agreement to repurchase Rollover Options from our former chief financial officer, upon her departure, which cancelled vested Rollover Options for 313,681 shares of common stock held by her. The $2.0 million amount to be paid represents the excess of the fair market value of the shares over the exercise price of the options. This amount is included as a reduction to Member capital in our Consolidated Balance Sheet as of December 31, 2013. | ||
During the year ended December 31, 2012, DJO sold 121,506 shares of its common stock at $16.46 per share, consisting of 60,753 shares purchased by the new Chairman of its Board of Directors, and 60,753 shares purchased by another new member of the Board of Directors. Additionally, DJO issued 18,622 shares of its common stock upon the exercise of stock options. Net proceeds of $2.0 million from the share sales were contributed by DJO to us, and are included in Member capital in our Consolidated Balance Sheet as of December 31, 2012. | ||
During the year ended December 31, 2011, we paid cash of $2.0 million to our former chief executive officer, upon his retirement, to cancel vested Rollover Options for 355,155 shares of common stock held by him. The amount paid represents the excess of the fair market value of the shares over the exercise price of the Rollover Options. This amount is included as a reduction to Member capital in our Consolidated Balance Sheet as of December 31, 2011. | ||
In addition, during the year ended December 31, 2011, DJO sold 192,959 shares of common stock for $16.46 per share, consisting of 157,959 shares purchased by our new chief executive officer, and 35,000 shares purchased by a former member of management. Net proceeds of $3.2 million from the share sales were contributed by DJO to us, and are included in Member capital in our Consolidated Balance Sheet as of December 31, 2011. | ||
The proceeds from the DJO sales of shares in the years ended December 31, 2012 and 2011 were used for working capital purposes. All such sales were subject to execution of a stockholder agreement including certain rights and restrictions (See Note 17). |
Stock_Option_Plans_and_StockBa
Stock Option Plans and Stock-Based Compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Stock Option Plans and Stock-Based Compensation | ' | ||||||||||||||||
14 | STOCK OPTION PLANS AND STOCK-BASED COMPENSATION | ||||||||||||||||
Stock Option Plan | |||||||||||||||||
We have one active equity compensation plan, the DJO 2007 Incentive Stock Plan (2007 Plan) under which we are authorized to grant awards of stock, options, and other stock-based awards of shares of common stock of our indirect parent, DJO, subject to adjustment in certain events. The total number of shares available to grant under the 2007 plan is 10,575,529. | |||||||||||||||||
Options issued under the 2007 Plan can be either incentive stock options or non-qualified stock options. The exercise price of stock options granted will not be less than 100% of the fair market value of the underlying shares on the date of grant and will expire no more than ten years from the date of grant. | |||||||||||||||||
Options granted prior to 2012 vest as follows: one-third of each stock option grant vests over a specified period of time contingent solely upon the awardees’ continued employment with us (Time-Based Options). Another one-third of each stock option grant will vest upon achieving a minimum return of money on invested capital (MOIC), as defined, with respect to Blackstone’s aggregate investment in DJO’s capital stock, to be achieved by Blackstone following a liquidation of all or a portion of its investment in DJO’s capital stock (Market Return Options). The final one-third of each stock option grant will vest based upon achieving an increased minimum return of MOIC, as defined, with respect to Blackstone’s aggregate investment in DJO’s capital stock, to be achieved by Blackstone following a liquidation of all or a portion of its investment in DJO’s capital stock (Enhanced Market Return Options). | |||||||||||||||||
Options granted to employees in 2012 vest in four equal installments beginning in 2012 and for each of the three calendar years following 2012, with each such installment vesting only if the final reported financial results for such year show that the Adjusted EBITDA for such year equaled or exceeded the Adjusted EBITDA amount in the financial plan approved by DJO’s Board of Directors for such year (Performance Options). In the event that the Adjusted EBITDA in any of such four years falls short of the amount of Adjusted EBITDA in the financial plan for that year, the installment that did not therefore vest at the end of such year shall be eligible for subsequent vesting at the end of the four year vesting period if the cumulative Adjusted EBITDA for such four years equals or exceeds the cumulative Adjusted EBITDA in the financial plans for such four years and the Adjusted EBITDA in the fourth vesting year equals or exceeds the Adjusted EBITDA in the financial plan for such year. In addition, in the event Blackstone achieves a minimum return of MOIC with respect to Blackstone’s aggregate investment in DJO’s capital stock following a liquidation of all or a portion of its investment in DJO’s capital stock, any unvested installments from prior years and all installments for future years shall thereupon vest. | |||||||||||||||||
In February 2013, 310,000 options previously granted to new employees in 2012 were amended to convert one-third of such options into Time-Based Options, with the remaining two-thirds continuing to be Performance Options. Additionally, all 2012 Performance Options were amended to allow for vesting of the 2012 Adjusted EBITDA tranche if the 2013 Adjusted EBITDA results equal or exceed an enhanced amount of Adjusted EBITDA over the amount reflected in the 2013 financial plan. Options granted in 2013 to existing employees had the same terms as the Performance Options described above and options granted to new employees in 2013 had the same terms as the options amended in February 2013. | |||||||||||||||||
In December 2013, options were granted to employees following the net exercise of their Rollover Options which were scheduled to expire in December 2013. These new options were fully vested on the date of grant and have a term of ten years (“2013 Vested Options”). | |||||||||||||||||
Except for options granted to the Chairman of the Board and two other board members as described below, options are typically granted annually to members of our Board of Directors who are not affiliates of Blackstone (referred to as Director Service Options). The Director Service Options vest in increments of 33 1/3% per year on each of the first through third anniversary dates of the grant date, contingent upon the optionee’s continued service as a director. The options granted to the Chairman of the Board and the two other board members vest as follows: one-third of the stock option grant vests in increments of 33 1/3% per year on each of the first through third anniversary dates from the grant date contingent upon the optionee’s continued service as a director; one-third of the stock option grant will vest in the same manner as the Market Return Options; and one-third of the stock option grant will vest in the same manner as the Enhanced Market Return Options. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
During the year ended December 31, 2013, the compensation committee granted 1,082,397 options to employees, of which 768,677 were Performance Options, 243,323 were Time-Based Options and 70,397 were 2013 Vested Options. Additionally, the compensation committee granted 100,000 options to one board member and 13,800 Director Service Options to certain members of the Board of Directors. The weighted average grant date fair values of the Time-Based Options, the 2013 Vested Options and the Director Service Options granted during the year ended December 31, 2013 were $5.99, $5.23 and $6.02, respectively. | |||||||||||||||||
During the year ended December 31, 2012, we granted 2,482,100 Performance Options to employees, 303,767 options to DJO’s Chairman of the Board, 100,000 to one other board member, and 18,400 Director Service Options to certain members of our Board of Directors. The weighted average grant date fair value of the Performance Options and the Director Service Options granted during the nine months ended September 29, 2012 was $6.09. | |||||||||||||||||
During the year ended December 31, 2011, we granted a total of 983,000 options to employees including 800,000 options granted to Michael P. Mogul, our president and chief executive officer. The weighted average grant date fair value of the options granted was $6.23 per share, for options in the Time-Based Options. In addition, during the year ended December 31, 2011, in connection with Mr. Mogul’s purchase of $2.6 million of DJO common stock, we issued 60,753 restricted shares to Michael P. Mogul. The shares vested 50% per year on each of the first two anniversary dates of his employment commencement date and are now fully vested. | |||||||||||||||||
The fair value of each option award is estimated on the date of grant, or modification, using the Black-Scholes option pricing model for service based awards, and a binomial model for market based awards. In estimating fair value for options issued under the 2007 Plan, expected volatility was based on historical volatility of comparable publicly-traded companies. As our historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term, we used the simplified method. Expected life is calculated in two tranches based on the employment level defined as executive or employee. The risk-free rate used in calculating fair value of stock options for periods within the expected term of the option is based on the U.S. Treasury yield bond curve in effect on the date of grant. | |||||||||||||||||
The following table summarizes certain assumptions we used to estimate the fair value of the Time-Based Options, the 2013 Vested Options and the Director Service Options of stock options granted during the years ended December 31, 2013, 2012, and 2011: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Expected volatility | 33.4-35.1 | % | 35.3-37.7 | % | 34.0-34.4 | % | |||||||||||
Risk-free interest rate | 0.7-2.0 | % | 0.8-1.5 | % | 1.3-2.1 | % | |||||||||||
Expected years until exercise | 5.0-6.3 | 6.1-6.2 | 6.4-6.6 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | |||||||||||
We recorded non-cash stock-based compensation expense during the periods presented as follows (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Cost of goods sold | $ | 52 | $ | 78 | $ | 149 | |||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative | 2,049 | 2,206 | 2,493 | ||||||||||||||
Research and development | 54 | 55 | 59 | ||||||||||||||
$ | 2,155 | $ | 2,339 | $ | 2,701 | ||||||||||||
We have determined that it is not probable that we will meet the Adjusted EBITDA targets related to the Performance Options granted. As such, we did not recognized expense for any of the options which had the potential to vest in 2013. Additionally, we have not recognized expense for any of the options which have the potential to vest based on Adjusted EBITDA for 2014, 2015 and 2016, as some of these targets have not yet been established and we are unable to assess the probability of achieving such targets. Accordingly, we recognized stock-based compensation expense only for the Time-Based Options, the 2013 Vested Options and the Director Service Options granted in 2012 or 2013. | |||||||||||||||||
In each of the periods presented above, for the options granted prior to 2012, we recognized stock-based compensation expense only for Time-Based Options granted to employees, as the performance components of the Market Return and Enhanced Market Return Options are not deemed probable at this time. | |||||||||||||||||
Stock based compensation expense for options granted to non-employees was not significant to the Company for all periods presented, and was included in Selling, general and administrative expense in our Consolidated Statements of Operations. | |||||||||||||||||
A summary of option activity under the 2007 Plan is presented below: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic | ||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||
Contractual Term | |||||||||||||||||
(Years) | |||||||||||||||||
Outstanding at December 31, 2012 | 9,233,369 | $ | 15.39 | 6.3 | $ | 9,940,209 | |||||||||||
Granted | 1,196,197 | $ | 16.46 | ||||||||||||||
Exercised | (221,057 | ) | $ | 8.29 | |||||||||||||
Forfeited or expired | (1,191,219 | ) | $ | 14.76 | |||||||||||||
Outstanding at December 31, 2013 | 9,017,290 | $ | 15.79 | 6.1 | $ | 6,133,210 | |||||||||||
Exercisable at December 31, 2013 | 3,185,477 | $ | 14.55 | 3.6 | $ | 6,133,210 | |||||||||||
The Company’s stock incentive plan permits optionees to exercise stock options using a net exercise method. In a net exercise, the Company withholds from the total number of shares that otherwise would be issued to an optionee upon exercise of the stock option such number of shares having a fair market value at the time of exercise equal to the option exercise price and applicable income tax withholdings and remits the remaining shares to the optionee. | |||||||||||||||||
The following table provides information regarding the use of the net exercise method during the periods presented: | |||||||||||||||||
Year Ended | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | |||||||||||||||||
Options exercised | 221,057 | ||||||||||||||||
Shares withheld | 148,906 | ||||||||||||||||
Shares issued | 72,151 | ||||||||||||||||
Average market value per share withheld | $ | 16.46 | |||||||||||||||
Aggregate market value of shares withheld (in thousands) | $ | 2,451 | |||||||||||||||
As of December 31, 2013, total unrecognized stock-based compensation expense related to unvested stock options granted under the 2007 Plan, excluding options subject to the performance components of the Market Return and Enhanced Market Return Options, was $0.9 million, net of expected forfeitures. We anticipate this expense to be recognized over a weighted-average period of approximately four years. Compensation expense associated with the Market Return and Enhanced Market Return Options granted under the 2007 Plan, with the exception of those that were issued in connection with a modification, will be recognized only to the extent achievement of the performance components are deemed probable. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
15 | INCOME TAXES | ||||||||||||
DJO files consolidated tax returns in the U.S. The income taxes of domestic and foreign subsidiaries not included within the consolidated U.S. tax group are presented in our financial statements based on a separate return basis for each tax-paying entity or group. | |||||||||||||
The components of loss from continuing operations before income tax provision (benefit) consist of the following (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
U.S. operations | $ | (206,769 | ) | $ | (137,268 | ) | $ | (283,137 | ) | ||||
Foreign operations | 17,323 | 13,996 | 17,006 | ||||||||||
$ | (189,446 | ) | $ | (123,272 | ) | $ | (266,131 | ) | |||||
The income tax provision (benefit) consists of the following (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current income taxes: | |||||||||||||
U.S. Federal | $ | 1,135 | $ | (1,205 | ) | $ | (1,175 | ) | |||||
U.S. State | 870 | 1,347 | 1,619 | ||||||||||
Foreign | 6,373 | 6,330 | 6,019 | ||||||||||
Total current income taxes | 8,378 | 6,472 | 6,463 | ||||||||||
Deferred income taxes: | |||||||||||||
U.S. Federal | 7,460 | (3,558 | ) | (54,875 | ) | ||||||||
U.S. State | (2,154 | ) | (5,751 | ) | (2,889 | ) | |||||||
Foreign | (568 | ) | (2,067 | ) | (1,243 | ) | |||||||
Total deferred income taxes | 4,738 | (11,376 | ) | (59,007 | ) | ||||||||
Total income tax provision (benefit) | $ | 13,116 | $ | (4,904 | ) | $ | (52,544 | ) | |||||
The difference between the income tax benefit derived by applying the U.S. Federal statutory income tax rate of 35% to loss before income tax and the income tax provision (benefit) recognized in the Consolidated Financial Statements is as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Benefit)derived by applying the U.S. Federal statutory income tax rate to loss before income taxes | $ | (66,306 | ) | $ | (43,145 | ) | $ | (93,144 | ) | ||||
Add (deduct) the effect of: | |||||||||||||
State tax benefit, net | (3,323 | ) | (4,275 | ) | (5,315 | ) | |||||||
Change in state effective tax rates | (992 | ) | (639 | ) | — | ||||||||
Foreign earnings repatriation | 2,678 | 3,199 | — | ||||||||||
Unrecognized tax benefits | 2,216 | (7,723 | ) | (344 | ) | ||||||||
Goodwill impairment | 33,687 | — | 39,513 | ||||||||||
Prepaid tax asset impairment | 229 | 5,479 | — | ||||||||||
Valuation allowance | 50,516 | 38,845 | 2,100 | ||||||||||
Research tax credit | (1,249 | ) | — | (230 | ) | ||||||||
Prior year purchase accounting | (2,864 | ) | — | — | |||||||||
Permanent differences and other, net | (1,476 | ) | 3,355 | 4,876 | |||||||||
$ | 13,116 | $ | (4,904 | ) | $ | (52,544 | ) | ||||||
The components of deferred income tax assets and liabilities are as follows (in thousands): | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforwards | $ | 202,386 | $ | 181,302 | |||||||||
Receivables reserve | 23,878 | 23,077 | |||||||||||
Other | 38,766 | 38,623 | |||||||||||
Gross deferred tax assets | 265,030 | 243,002 | |||||||||||
Valuation allowance | (94,741 | ) | (43,792 | ) | |||||||||
Net deferred tax assets | 170,289 | 199,210 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Intangible assets | (362,951 | ) | (384,586 | ) | |||||||||
Foreign earnings repatriation | (14,092 | ) | (13,978 | ) | |||||||||
Other | (7,038 | ) | (8,567 | ) | |||||||||
Gross deferred tax liabilities | (384,081 | ) | (407,131 | ) | |||||||||
Net deferred tax liabilities | $ | (213,792 | ) | $ | (207,921 | ) | |||||||
At December 31, 2013, we maintain federal and state net operating loss carryforwards of $528.3 million and $313.0 million respectively, which expire over a period of 1 to 20 years. Our European net operating loss carryforwards of $6.5 million generally are not subject to expiration dates, unless we trigger certain events. | |||||||||||||
At December 31, 2013 and 2012, we had gross deferred tax assets of $265.0 million and $243.0 million, respectively, which we reduced by valuation allowances of $94.7 million and $43.8 million, respectively. | |||||||||||||
We do not intend to permanently reinvest the earnings of foreign operations. Accordingly, we recorded a deferred tax expense of $1.8 million, $2.5 million and $1.5 million for the years ended December 31, 2013, 2012 and 2011, respectively, for unrepatriated foreign earnings in those years. | |||||||||||||
We and our subsidiaries file income tax returns in the U.S. federal, state and local, and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2008. | |||||||||||||
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 12,342 | $ | 19,443 | $ | 17,659 | |||||||
Additions based on tax positions related to current year | 1,531 | 817 | 777 | ||||||||||
Additions for tax positions related to prior years | 975 | 892 | 3,097 | ||||||||||
Reductions for tax positions of prior years | — | — | — | ||||||||||
Reduction due to lapse of statute of limitations | (379 | ) | (990 | ) | (2,065 | ) | |||||||
Reductions for settlements of tax positions | — | (7,820 | ) | (25 | ) | ||||||||
Balance, end of year | $ | 14,469 | $ | 12,342 | $ | 19,443 | |||||||
To the extent all or a portion of our gross unrecognized tax benefits are recognized in the future, no U.S. federal tax benefit for related state income tax deductions would result due to the existence of a U.S. federal valuation allowance. We anticipate that approximately $0.3 million of uncertain tax positions related to amortization of intangible assets and $0.3 million of unrecognized tax positions, each of which are individually immaterial, will decrease in the next twelve months due to the expiration of the statutes of limitations. We have various unrecognized tax benefits totaling approximately $6.6 million, which, if recognized, would impact our effective tax rate in future periods. We recognized interest and penalties of $0.5 million, $0.3 million and $0.2 million in the years ended December 31, 2013, 2012 and 2011, respectively, which was included as a component of income tax benefit in our Consolidated Statements of Operations. As of December 31, 2013 and 2012, we have $2.6 million and $2.1 million, respectively, accrued for interest and penalties. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
16 | COMMITMENTS AND CONTINGENCIES | ||||
Operating Leases. We lease building space, manufacturing facilities and equipment under non-cancelable operating lease agreements that expire at various dates. We record rent incentives as deferred rent and amortize as reductions to lease expense over the lease term. The aggregate minimum rental commitments under non-cancelable leases for the next five years and thereafter, as of December 31, 2013, are as follows (in thousands): | |||||
Years Ending December 31, | |||||
2014 | $ | 16,073 | |||
2015 | 14,148 | ||||
2016 | 12,695 | ||||
2017 | 7,248 | ||||
2018 | 6,738 | ||||
Thereafter | 17,324 | ||||
$ | 74,226 | ||||
Rental expense under operating leases totaled $17.6 million, $16.4 million and $14.3 million for the years ended December 31, 2013, 2012, and 2011 respectively. Scheduled increases in rent expense are amortized on a straight line basis over the life of the lease. | |||||
Litigation | |||||
From time to time, we are plaintiffs or defendants in various litigation matters in the ordinary course of our business, some of which involve claims for damages that are substantial in amount. We believe that the disposition of claims currently pending will not have a material adverse impact on our financial position or results of operations. | |||||
Pain Pump Litigation | |||||
Over the past 6 years, we have been named in numerous product liability lawsuits involving our prior distribution of a disposable drug infusion pump product (pain pump) manufactured by two third party manufacturers that was distributed through our Bracing and Vascular segment. We currently are a defendant in approximately five U.S. cases and a lawsuit in Canada which has been granted class action status for a class of approximately 45 claimants. We discontinued our sale of these products in the second quarter of 2009. These cases have been brought against the manufacturers and certain distributors of these pumps. All of these lawsuits allege that the use of these pumps with certain anesthetics for prolonged periods after certain shoulder surgeries, or less commonly, knee surgeries, has resulted in cartilage damage to the plaintiffs. In the past three years, we have entered into settlements with plaintiffs in approximately 130 pain pump lawsuits. Except for the payment by the Company of policy deductibles or self-insured retentions, our products liability carriers in three policy periods have paid the defense costs and settlements related to these claims, subject to reservation of rights to deny coverage for customary matters, including punitive damages and off-label promotion. The range of potential loss for these claims is not estimable, although we believe we have adequate insurance coverage for such claims. As of December 31, 2013, we have accrued $2.5 million for unpaid settlements in 30 cases, all of which will be paid by our product liability carriers. | |||||
Lawsuit by Insurance Carrier | |||||
In December 2013, one of our product liability insurance carriers, Ironshore Specialty Ins. Co. filed a complaint in the U.S. District Court for the Southern District of California, which seeks (a) either (i) rescission of an insurance policy (the “Policy”) purchased by the Company from the plaintiff and repayment by the Company of all amounts allegedly paid under the Policy, approximately $10 million, less premiums paid by the Company for the Policy, or, in the alternative, (ii) reformation of the Policy to exclude coverage for pain pump claims and repayment by the Company of all amounts allegedly paid under the Policy for such claims, in an unspecified amount; and/or (b) damages and other relief in an unspecified amount for alleged fraud and negligent misrepresentation based on an alleged failure by the Company and/or the involved Policy producers to disclose alleged material information while applying for the Policy. Although the lawsuit was recently filed and is still being investigated, we disagree with the allegations and intend to vigorously defend this matter. | |||||
Cold Therapy Litigation | |||||
DJO is named in nine multi-plaintiff lawsuits involving a total of 172 plaintiffs alleging that the plaintiffs had been injured following use of certain cold therapy products manufactured by DJO. The complaints allege various product liability theories, including inadequate warnings regarding the risks associated with the use of cold therapy and failure to incorporate certain safety features into the design. No specific dollar amounts of damages are alleged in the complaints. These cases have been included in a coordinated proceeding in San Diego Superior Court with a similar number of cases filed against our competitors. Nine of the plaintiffs included in the cases filed against us have been selected as the first cases to be tried. The first of these “bellwether” cases commenced trial in July 2013. This trial ended with a deadlocked jury, resulting in no verdict and declaration of a mistrial. We are engaged in settlement discussions with plaintiffs with the goal of resolving these cases. The remaining bellwether trials which had been scheduled for trial in 2014 have been taken off-calendar pending settlement discussions. As of December 31, 2013, the range of potential loss for these claims is not estimable, although we believe we have adequate insurance coverage for such claims. | |||||
State Licensing Subpoena | |||||
In July 2013 we were served with a subpoena under HIPAA seeking documents relating to the fitting of custom-fabricated or custom-fitted orthoses in the States of New Jersey, Washington and Texas. The subpoena was issued by the United States Attorney’s Office for the District of New Jersey in connection with an investigation of compliance with professional licensing statutes in those states relating to the practice of orthotics. We are in the process of supplying the documents requested under the subpoena. | |||||
California Qui Tam Actions | |||||
On October 11, 2013, we were served with a summons and complaint related to a qui tam action filed in U.S. District Court in Los Angeles, California in August 2012 and amended in December 2012 that names us as a defendant along with each of the other companies that manufactures and sells external bone growth stimulators for spinal applications. The case is captioned United States of America, et al.ex re. Doris Modglin and Russ Milko, v. DJO Global, Inc., DJO, LLC, DJO Finance LLC, Orthofix, Inc., Biomet, Inc., and EBI, LP., Case No. CV12-7152-MMM (JCGx) (C.D. Cal.). The plaintiffs, or relators, allege that the defendants have violated federal and state false claim acts by seeking reimbursement for bone growth stimulators for uses outside of the FDA approved indications for use for such products. The plaintiffs are seeking treble damages alleged to have been sustained by the U.S. and the states, penalties and attorney’s fees and costs. The federal government and all of the named states have declined to intervene in this case. We believe that this lawsuit is without merit. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |
Dec. 31, 2013 | ||
Related Party Transactions | ' | |
17 | RELATED PARTY TRANSACTIONS | |
Management Stockholder’s Agreement | ||
All members of DJO’s management who own shares of DJO common stock or options to purchase DJO common stock are parties to a Management Stockholders Agreement, dated November 3, 2006, among DJO, Grand Slam Holdings, LLC (BCP Holdings), Blackstone, certain of its affiliates (BCP Holdings and Blackstone and its affiliates are referred to as Blackstone Parent Stockholders), and such members of DJO’s management, as amended by the First Amendment to Management Stockholders Agreement (the Management Stockholders Agreement). The Management Stockholders Agreement provides that upon termination of a management stockholder’s employment for any reason, DJO and a Blackstone Parent Stockholder may collectively exercise the right to purchase all of the shares of DJO common stock held by such management stockholder within one year after such termination (or, with respect to shares purchased upon exercise of options after termination of employment, one year following such exercise). If a management stockholder is terminated for cause (as defined in the Agreement), or voluntarily terminates their employment and such termination would have constituted a termination for cause if it would have been initiated by DJO, and DJO or a Blackstone Parent Stockholder exercises its call rights after such termination, the management stockholder would receive the lower of fair market value or cost for the management stockholder’s callable shares. In the case of all other terminations of employment, the management stockholder would receive fair market value for such shares. | ||
The Management Stockholders Agreement provides a right of first refusal to DJO or Blackstone, if DJO fails to exercise such right, on any proposed sale of DJO’s common stock held by a management stockholder following the lapse of the transfer restrictions and prior to the occurrence of a qualified public offering (as such term is defined in that agreement) of DJO. In addition, prior to a qualified public offering, Blackstone will have drag-along rights, and management stockholders will have tag-along rights, in the event of a sale of DJO’s common stock by Blackstone to a third party (or in the event of a sale of BCP Holdings’ equity interests to a third party) in the same proportion as the shares or equity interests sold by Blackstone. The Management Stockholders Agreement also provides that, after the occurrence of a qualified public offering, the management stockholders will receive customary piggyback registration rights with respect to shares of DJO common stock held by them. | ||
All DJO directors who have been granted options or purchased shares of common stock and all other holders of options or purchasers of common stock who are not employees are parties to a Stockholders Agreement which has the same material terms and conditions as the Management Stockholders Agreement. | ||
Transaction and Monitoring Fee Agreement | ||
Blackstone Management Partners LLC (BMP) has agreed to provide certain monitoring, advisory and consulting services to us for an annual monitoring fee equal to the greater of $7.0 million or 2% of consolidated EBITDA as defined in the Transaction and Monitoring Fee Agreement, payable in the first quarter of each year. The monitoring fee agreement will continue until the earlier of November 2019, or such date as DJO and BMP may mutually determine. DJO has agreed to indemnify BMP and its affiliates, directors, officers, employees, agents and representatives from and against all liabilities relating to the services contemplated by the Transaction and Monitoring Fee Agreement and the engagement of BMP pursuant to, and the performance of BMP and its affiliates of the services contemplated by, the Transaction and Monitoring Fee Agreement. At any time in connection with or in anticipation of a change of control of DJO, a sale of all or substantially all of DJO’s assets or an initial public offering of common stock of DJO, BMP may elect to receive, in lieu of remaining annual monitoring fee payments, a single lump sum cash payment equal to the then-present value of all then-current and future annual monitoring fees payable under the Transaction and Monitoring Fee Agreement, assuming a hypothetical termination date of the agreement to be November 2019. For each of the years ended December 31, 2013, 2012 and 2011, we expensed $7.0 million related to the annual monitoring fee, which is recorded as a component of Selling, general and administrative expense in the Consolidated Statements of Operations. | ||
Other Related Party Transactions | ||
During the year ended December 31, 2012, in connection with the Exos acquisition (see Note 3), we paid $0.8 million of transaction and advisory fees to Blackstone Advisory Partners L.P., and BMP. During the year ended December 31, 2011, in connection with the Dr. Comfort acquisition (see Note 3), we paid $5.0 million of transaction and advisory fees to Blackstone Advisory Partners L.P. These fees were recorded as components of Selling, general and administrative expense in the Consolidated Statement of Operations. |
Segment_and_Geographic_Informa
Segment and Geographic Information | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segment and Geographic Information | ' | ||||||||||||
18 | SEGMENT AND GEOGRAPHIC INFORMATION | ||||||||||||
We provide a broad array of orthopedic rehabilitation and CMF products, as well as surgical implants to customers in the United States and abroad. | |||||||||||||
We currently develop, manufacture and distribute our products through the following four operating segments: | |||||||||||||
Bracing and Vascular Segment | |||||||||||||
Our Bracing and Vascular segment, which generates its revenues in the United States, offers our rigid knee bracing products, orthopedic soft goods, cold therapy products, vascular systems, therapeutic shoes and inserts and compression therapy products, primarily under the DonJoy, ProCare, Aircast, Dr. Comfort, Bell-Horn and Exos brands. This segment also includes our OfficeCare business, through which we maintain an inventory of soft goods and other products at healthcare facilities, primarily orthopedic practices, for immediate distribution to patients. | |||||||||||||
Recovery Sciences Segment | |||||||||||||
Our Recovery Sciences segment, which generates its revenues in the United States, is divided into four main businesses: | |||||||||||||
• | Empi. Our Empi business unit offers our home electrotherapy, iontophoresis, and home traction products. We primarily sell these products directly to patients or to physical therapy clinics. For products sold to patients, we arrange billing to the patients and their third party payors. | ||||||||||||
• | CMF. Our CMF business unit sells our bone growth stimulation products. We sell these products either directly to patients or to independent distributors. For products sold to patients, we arrange billing to the patients and their third party payors. | ||||||||||||
• | Chattanooga. Our Chattanooga business unit offers products in the clinical rehabilitation market in the category of clinical electrotherapy devices, clinical traction devices, and other clinical products and supplies such as treatment tables, continuous passive motion (CPM) devices and dry heat therapy. | ||||||||||||
• | Athlete Direct. Our Athlete Direct business unit offers consumers ranging from fitness enthusiasts to competitive athletes our Compex electrostimulation device, which is used in athletic training programs to aid muscle development and to accelerate muscle recovery after training sessions. | ||||||||||||
Surgical Implant Segment | |||||||||||||
Our Surgical Implant segment, which generates its revenues in the United States, develops, manufactures and markets a wide variety of knee, hip and shoulder implant products that serve the orthopedic reconstructive joint implant market. | |||||||||||||
International Segment | |||||||||||||
Our International segment, which generates most of its revenues in Europe, sells all of our products and certain third party products through a combination of direct sales representatives and independent distributors. | |||||||||||||
Information regarding our reportable business segments is presented below (in thousands). Segment results exclude the impact of amortization and impairment of goodwill and intangible assets, certain general corporate expenses, and charges related to various integration activities, as defined by management. The accounting policies of the reportable segments are the same as the accounting policies of the Company. We allocate resources and evaluate the performance of segments based on net sales, gross profit, operating income and other non-GAAP measures, as defined in the senior secured credit facilities. We do not allocate assets to reportable segments because a significant portion of our assets are shared by the segments. | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Net sales: | |||||||||||||
Bracing and Vascular | $ | 476,492 | $ | 444,444 | $ | 388,860 | |||||||
Recovery Sciences | 312,783 | 331,461 | 341,667 | ||||||||||
Surgical Implant | 87,088 | 72,980 | 64,944 | ||||||||||
International | 299,094 | 280,535 | 279,299 | ||||||||||
$ | 1,175,457 | $ | 1,129,420 | $ | 1,074,770 | ||||||||
Gross profit: | |||||||||||||
Bracing and Vascular | $ | 243,916 | $ | 229,430 | $ | 203,908 | |||||||
Recovery Sciences | 234,469 | 249,825 | 258,229 | ||||||||||
Surgical Implant | 62,996 | 54,658 | 46,860 | ||||||||||
International | 165,672 | 155,266 | 161,142 | ||||||||||
Expenses not allocated to segments and eliminations | (4,013 | ) | (3,679 | ) | (13,507 | ) | |||||||
$ | 703,040 | $ | 685,500 | $ | 656,632 | ||||||||
Operating (loss) income: | |||||||||||||
Bracing and Vascular | $ | 86,447 | $ | 87,694 | $ | 75,607 | |||||||
Recovery Sciences | 83,028 | 90,353 | 92,882 | ||||||||||
Surgical Implant | 8,669 | 6,747 | 4,323 | ||||||||||
International | 57,515 | 54,442 | 57,501 | ||||||||||
Expenses not allocated to segments and eliminations | (245,217 | ) | (146,318 | ) | (322,578 | ) | |||||||
$ | (9,558 | ) | $ | 92,918 | $ | (92,265 | ) | ||||||
Geographic Area | |||||||||||||
Following are our net sales by geographic area (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States | $ | 876,363 | $ | 848,885 | $ | 795,471 | |||||||
Other Europe, Middle East, and Africa | 139,252 | 135,030 | 135,216 | ||||||||||
Germany | 88,236 | 84,527 | 90,000 | ||||||||||
Australia and Asia Pacific | 35,025 | 26,786 | 23,262 | ||||||||||
Canada | 27,035 | 24,588 | 22,591 | ||||||||||
Latin America | 9,546 | 9,604 | 8,230 | ||||||||||
$ | 1,175,457 | $ | 1,129,420 | $ | 1,074,770 | ||||||||
Net sales are attributed to countries based on location of customer. In each of the years ended December 31, 2013, 2012 and 2011, no individual customer or distributor accounted for 10% or more of total annual net sales. | |||||||||||||
Following are our long-lived assets by geographic area (in thousands): | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
United States | $ | 2,099,381 | $ | 2,312,127 | |||||||||
International | 156,271 | 144,960 | |||||||||||
$ | 2,255,652 | $ | 2,457,087 | ||||||||||
Unaudited_Quarterly_Consolidat
Unaudited Quarterly Consolidated Financial Data | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Unaudited Quarterly Consolidated Financial Data | ' | ||||||||||||||||
19 | UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA | ||||||||||||||||
We operate our business on a manufacturing calendar, with our fiscal year always ending on December 31. Each quarter is 13 weeks, consisting of two four-week periods and one five-week period. Our first and fourth quarters may have more or fewer shipping days from year to year based on the days of the week on which holidays and December 31 fall. | |||||||||||||||||
During the fourth quarter of fiscal year 2011, we identified and corrected an immaterial error which impacted the consolidated financial statements for the years ended December 31, 2010 and 2009, related to the elimination of intercompany profits on the sale of products between subsidiaries. This error resulted in an overstatement of cost of goods sold of $1.1 million and $3.1 million for the years ended December 31, 2009 and 2010, respectively. Based on a quantitative and qualitative analysis of the error as required by SAB 108, we determined that correcting the cumulative impact of this error, which decreased cost of goods sold and increased property and equipment by $4.2 million in the fourth quarter of the year ended December 31, 2011, was not material to the results for the year ended December 31, 2011. | |||||||||||||||||
The following table presents our unaudited quarterly consolidated financial data (in thousands): | |||||||||||||||||
Three months ended | |||||||||||||||||
March 30, | June 29, | September 28, | December 31, | ||||||||||||||
2013 | 2013 | 2013 | 2013 | ||||||||||||||
Net sales | $ | 279,077 | $ | 294,745 | $ | 288,049 | $ | 313,586 | |||||||||
Gross profit | 169,438 | 175,783 | 169,889 | 187,930 | |||||||||||||
Operating income (loss) | 19,793 | 26,423 | 25,375 | (81,149 | ) | ||||||||||||
Net loss | (32,126 | ) | (20,642 | ) | (18,375 | ) | (131,419 | ) | |||||||||
Net loss attributable to DJOFL | (32,364 | ) | (20,814 | ) | (18,488 | ) | (131,786 | ) | |||||||||
Three months ended | |||||||||||||||||
March 31, | June 30, | September 29, | December 31, | ||||||||||||||
2012 | 2012 | 2012 | 2012 | ||||||||||||||
Net sales | $ | 278,947 | $ | 285,977 | $ | 273,986 | $ | 290,510 | |||||||||
Gross profit | 170,712 | 174,175 | 165,689 | 174,924 | |||||||||||||
Operating income | 21,869 | 28,361 | 22,529 | 20,159 | |||||||||||||
Net loss | (29,043 | ) | (19,922 | ) | (22,535 | ) | (46,868 | ) | |||||||||
Net loss attributable to DJOFL | (29,354 | ) | (20,198 | ) | (22,562 | ) | (47,036 | ) |
Supplemental_Guarantor_Condens
Supplemental Guarantor Condensed Consolidating Financial Statements | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Supplemental Guarantor Condensed Consolidating Financial Statements | ' | ||||||||||||||||||||
20 | SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | ||||||||||||||||||||
DJOFL and its direct wholly owned subsidiary, DJO Finco, jointly issued the 9.75% Notes, 7.75% Notes, 8.75% Notes and the 9.875% Notes. DJO Finco was formed solely to act as a co-issuer of the notes, has only nominal assets and does not conduct any operations. The Indentures generally prohibit DJO Finco from holding any assets, becoming liable for any obligations or engaging in any business activity. | |||||||||||||||||||||
The 8.75% Notes are jointly and severally, fully and unconditionally guaranteed, on a senior secured basis by all of DJOFL’s domestic subsidiaries (other than the co-issuer) that are 100% owned, directly or indirectly, by DJOFL (the Guarantors). The 9.875% Notes and the 7.75% Notes are guaranteed jointly and severally and on an unsecured senior basis by the Guarantors. The 9.75% Notes are jointly and severally, fully and unconditionally guaranteed, on an unsecured senior subordinated basis by the Guarantors. Our foreign subsidiaries (the Non-Guarantors) do not guarantee the notes. | |||||||||||||||||||||
The following tables present the financial position, results of operations and cash flows of DJOFL, the Guarantors, the Non-Guarantors and certain eliminations as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012, and 2011. | |||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||||
Assets | |||||||||||||||||||||
Current assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 22,370 | $ | 358 | $ | 20,848 | $ | 2 | $ | 43,578 | |||||||||||
Accounts receivable, net | — | 141,121 | 43,967 | — | 185,088 | ||||||||||||||||
Inventories, net | — | 126,529 | 33,439 | (4,985 | ) | 154,983 | |||||||||||||||
Deferred tax assets, net | — | 27,286 | 241 | — | 27,527 | ||||||||||||||||
Prepaid expenses and other current assets | 160 | 16,469 | 10,596 | 726 | 27,951 | ||||||||||||||||
Total current assets | 22,530 | 311,763 | 109,091 | (4,257 | ) | 439,127 | |||||||||||||||
Property and equipment, net | — | 93,229 | 14,834 | (234 | ) | 107,829 | |||||||||||||||
Goodwill | — | 1,066,479 | 121,998 | (39,146 | ) | 1,149,331 | |||||||||||||||
Intangible assets, net | — | 941,550 | 17,443 | — | 958,993 | ||||||||||||||||
Investment in subsidiaries | 1,297,699 | 1,686,557 | 62,344 | (3,046,600 | ) | — | |||||||||||||||
Intercompany receivables | 911,630 | — | — | (911,630 | ) | — | |||||||||||||||
Other non-current assets | 35,675 | 1,828 | 1,996 | — | 39,499 | ||||||||||||||||
Total assets | $ | 2,267,534 | $ | 4,101,406 | $ | 327,706 | $ | (4,001,867 | ) | $ | 2,694,779 | ||||||||||
Liabilities and (Deficit) Equity | |||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||
Accounts payable | $ | — | $ | 45,639 | $ | 10,736 | $ | (1 | ) | $ | 56,374 | ||||||||||
Current portion of debt obligations | 8,620 | — | — | — | 8,620 | ||||||||||||||||
Other current liabilities | 29,673 | 77,220 | 31,564 | 697 | 139,154 | ||||||||||||||||
Total current liabilities | 38,293 | 122,859 | 42,300 | 696 | 204,148 | ||||||||||||||||
Long-term debt obligations | 2,251,167 | — | — | — | 2,251,167 | ||||||||||||||||
Deferred tax liabilities, net | — | 236,230 | 5,798 | — | 242,028 | ||||||||||||||||
Intercompany payables, net | — | 693,513 | 143,637 | (837,150 | ) | — | |||||||||||||||
Other long-term liabilities | — | 13,820 | 2,898 | — | 16,718 | ||||||||||||||||
Total liabilities | 2,289,460 | 1,066,422 | 194,633 | (836,454 | ) | 2,714,061 | |||||||||||||||
Noncontrolling interests | — | — | 2,644 | — | 2,644 | ||||||||||||||||
Total membership (deficit) equity | (21,926 | ) | 3,034,984 | 130,429 | (3,165,413 | ) | (21,926 | ) | |||||||||||||
Total liabilities and (deficit) equity | $ | 2,267,534 | $ | 4,101,406 | $ | 327,706 | $ | (4,001,867 | ) | $ | 2,694,779 | ||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Operations | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||||
Net sales | $ | — | $ | 1,026,249 | $ | 282,317 | $ | (133,109 | ) | $ | 1,175,457 | ||||||||||
Cost of sales (exclusive of amortization of intangible assets of $35,125) | — | 426,960 | 191,816 | (146,359 | ) | 472,417 | |||||||||||||||
Gross profit | — | 599,289 | 90,501 | 13,250 | 703,040 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Selling, general and administrative | — | 383,890 | 93,341 | 7 | 477,238 | ||||||||||||||||
Research and development | — | 29,621 | 3,577 | 23 | 33,221 | ||||||||||||||||
Amortization of intangible assets | — | 90,170 | 5,369 | — | 95,539 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | 106,600 | — | — | 106,600 | ||||||||||||||||
— | 610,281 | 102,287 | 30 | 712,598 | |||||||||||||||||
Operating (loss) income | — | (10,992 | ) | (11,786 | ) | 13,220 | (9,558 | ) | |||||||||||||
Other (expense) income: | |||||||||||||||||||||
Interest expense | (177,587 | ) | — | (146 | ) | — | (177,733 | ) | |||||||||||||
Interest income | 17 | 109 | 65 | — | 191 | ||||||||||||||||
Loss on modification and extinguishment of debt | (1,059 | ) | — | — | — | (1,059 | ) | ||||||||||||||
Other income (expense), net | — | (315 | ) | (10,684 | ) | 9,712 | (1,287 | ) | |||||||||||||
Intercompany income (expense), net | — | 4,379 | 17,799 | (22,178 | ) | — | |||||||||||||||
Equity in (loss) income of subsidiaries, net | (24,823 | ) | — | — | 24,823 | — | |||||||||||||||
(203,452 | ) | 4,173 | 7,034 | 12,357 | (179,888 | ) | |||||||||||||||
(Loss) income before income taxes | (203,452 | ) | (6,819 | ) | (4,752 | ) | 25,577 | (189,446 | ) | ||||||||||||
Income tax provision | — | (7,828 | ) | (5,288 | ) | — | (13,116 | ) | |||||||||||||
Net (loss) income | (203,452 | ) | (14,647 | ) | (10,040 | ) | 25,577 | (202,562 | ) | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (890 | ) | — | (890 | ) | ||||||||||||||
Net (loss) income attributable to DJOFL | $ | (203,452 | ) | $ | (14,647 | ) | $ | (10,930 | ) | $ | 25,577 | $ | (203,452 | ) | |||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Loss | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||||
Net (loss) income | $ | (203,452 | ) | $ | (14,647 | ) | $ | (10,040 | ) | $ | 25,577 | $ | (202,562 | ) | |||||||
Other comprehensive income, net of taxes: | |||||||||||||||||||||
Foreign currency translation adjustments, net of tax provision of $1,212 | — | — | 19 | — | 19 | ||||||||||||||||
Other comprehensive income | — | — | 19 | — | 19 | ||||||||||||||||
Comprehensive (loss) income | (203,452 | ) | (14,647 | ) | (10,021 | ) | 25,577 | (202,543 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (1,010 | ) | — | (1,010 | ) | ||||||||||||||
Comprehensive (loss) income attributable to DJO Finance LLC | $ | (203,452 | ) | $ | (14,647 | ) | $ | (11,031 | ) | $ | 25,577 | $ | (203,553 | ) | |||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Cash Flows from Operating Activities: | |||||||||||||||||||||
Net (loss) income | $ | (203,452 | ) | $ | (14,647 | ) | $ | (10,040 | ) | $ | 25,577 | $ | (202,562 | ) | |||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||||||||
Depreciation | — | 28,002 | 5,383 | (258 | ) | 33,127 | |||||||||||||||
Amortization of intangible assets | — | 90,170 | 5,369 | — | 95,539 | ||||||||||||||||
Amortization of debt issuance costs and non-cash interest expense | 8,012 | — | — | — | 8,012 | ||||||||||||||||
Loss on modification and extinguishment of debt | 1,059 | — | — | — | 1,059 | ||||||||||||||||
Stock-based compensation expense | — | 2,155 | — | — | 2,155 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | 106,600 | — | — | 106,600 | ||||||||||||||||
Loss on disposal of assets, net | — | 424 | 684 | — | 1,108 | ||||||||||||||||
Deferred income tax expense (benefit) | — | 5,824 | (1,233 | ) | 147 | 4,738 | |||||||||||||||
Provision for doubtful accounts and sales returns | — | 32,767 | 318 | — | 33,085 | ||||||||||||||||
Inventory reserves | — | 8,309 | 1,812 | — | 10,121 | ||||||||||||||||
Equity in income of subsidiaries, net | 24,823 | — | — | (24,823 | ) | — | |||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||
Accounts receivable | — | (44,300 | ) | (6,650 | ) | — | (50,950 | ) | |||||||||||||
Inventories | — | (2,510 | ) | 5,926 | (9,064 | ) | (5,648 | ) | |||||||||||||
Prepaid expenses and other assets | — | (1,076 | ) | (7,368 | ) | (311 | ) | (8,755 | ) | ||||||||||||
Accounts payable and other current liabilities | (1,839 | ) | (2,863 | ) | 7,597 | (744 | ) | 2,151 | |||||||||||||
Net cash (used in) provided by operating activities | (171,397 | ) | 208,855 | 1,798 | (9,476 | ) | 29,780 | ||||||||||||||
Cash Flows from Investing Activities: | |||||||||||||||||||||
Cash paid in connection with acquisitions, net of cash acquired | — | (192 | ) | (1,761 | ) | — | (1,953 | ) | |||||||||||||
Purchases of property and equipment | — | (29,158 | ) | (8,310 | ) | (16 | ) | (37,484 | ) | ||||||||||||
Other investing activities, net | — | (1,239 | ) | (387 | ) | — | (1,626 | ) | |||||||||||||
Net cash used in investing activities | — | (30,589 | ) | (10,458 | ) | (16 | ) | (41,063 | ) | ||||||||||||
Cash Flows from Financing Activities: | |||||||||||||||||||||
Intercompany | 156,598 | (181,030 | ) | 14,944 | 9,488 | — | |||||||||||||||
Proceeds from issuance of debt | 549,417 | — | — | — | 549,417 | ||||||||||||||||
Repayments of debt and capital lease obligations | (523,037 | ) | — | — | — | (523,037 | ) | ||||||||||||||
Payment of debt issuance costs | (2,387 | ) | — | — | — | (2,387 | ) | ||||||||||||||
Dividend paid by subsidiary to owners of noncontrolling interest | — | — | (684 | ) | — | (684 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | 180,591 | (181,030 | ) | 14,260 | 9,488 | 23,309 | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 329 | — | 329 | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 9,194 | (2,764 | ) | 5,929 | (4 | ) | 12,355 | ||||||||||||||
Cash and cash equivalents at beginning of period | 13,176 | 3,122 | 14,919 | 6 | 31,223 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 22,370 | $ | 358 | $ | 20,848 | $ | 2 | $ | 43,578 | |||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Current assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 13,176 | $ | 3,122 | $ | 14,919 | $ | 6 | $ | 31,223 | |||||||||||
Accounts receivable, net | — | 129,588 | 37,154 | — | 166,742 | ||||||||||||||||
Inventories, net | — | 132,130 | 26,824 | (2,639 | ) | 156,315 | |||||||||||||||
Deferred tax assets, net | — | 33,102 | 181 | — | 33,283 | ||||||||||||||||
Prepaid expenses and other current assets | 160 | 14,513 | 2,985 | 415 | 18,073 | ||||||||||||||||
Total current assets | 13,336 | 312,455 | 82,063 | (2,218 | ) | 405,636 | |||||||||||||||
Property and equipment, net | — | 94,899 | 12,634 | (498 | ) | 107,035 | |||||||||||||||
Goodwill | — | 1,168,479 | 110,257 | (29,431 | ) | 1,249,305 | |||||||||||||||
Intangible assets, net | — | 1,035,066 | 20,465 | — | 1,055,531 | ||||||||||||||||
Investment in subsidiaries | 1,297,699 | 1,680,446 | 80,386 | (3,058,531 | ) | — | |||||||||||||||
Intercompany receivables | 1,093,618 | — | — | (1,093,618 | ) | — | |||||||||||||||
Other assets | 41,624 | 1,988 | 1,604 | — | 45,216 | ||||||||||||||||
Total assets | $ | 2,446,277 | $ | 4,293,333 | $ | 307,409 | $ | (4,184,296 | ) | $ | 2,862,723 | ||||||||||
Liabilities and Equity | |||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||
Accounts payable | $ | — | $ | 46,283 | $ | 9,147 | $ | (1,136 | ) | $ | 54,294 | ||||||||||
Current portion of debt obligations | 8,858 | — | — | — | 8,858 | ||||||||||||||||
Other current liabilities | 31,511 | 68,413 | 25,017 | 352 | 125,293 | ||||||||||||||||
Total current liabilities | 40,369 | 114,696 | 34,164 | (784 | ) | 188,445 | |||||||||||||||
Long-term debt obligations | 2,223,816 | — | — | — | 2,223,816 | ||||||||||||||||
Deferred tax liabilities, net | — | 234,332 | 6,870 | — | 241,202 | ||||||||||||||||
Intercompany payables, net | — | 861,014 | 131,558 | (992,572 | ) | — | |||||||||||||||
Other long-term liabilities | — | 22,917 | 1,933 | — | 24,850 | ||||||||||||||||
Total liabilities | 2,264,185 | 1,232,959 | 174,525 | (993,356 | ) | 2,678,313 | |||||||||||||||
Noncontrolling interests | — | — | 2,318 | — | 2,318 | ||||||||||||||||
Total membership equity | 182,092 | 3,060,374 | 130,566 | (3,190,940 | ) | 182,092 | |||||||||||||||
Total liabilities and equity | $ | 2,446,277 | $ | 4,293,333 | $ | 307,409 | $ | (4,184,296 | ) | $ | 2,862,723 | ||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Operations | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Net sales | $ | — | $ | 976,874 | $ | 265,137 | $ | (112,591 | ) | $ | 1,129,420 | ||||||||||
Cost of sales (exclusive of amortization of intangible assets of $38,355) | — | 392,397 | 178,659 | (127,136 | ) | 443,920 | |||||||||||||||
Gross profit | — | 584,477 | 86,478 | 14,545 | 685,500 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Selling, general and administrative | — | 377,073 | 82,988 | 4 | 460,065 | ||||||||||||||||
Research and development | — | 23,585 | 4,292 | — | 27,877 | ||||||||||||||||
Amortization of intangible assets | — | 93,038 | 4,205 | — | 97,243 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | — | 7,397 | — | 7,397 | ||||||||||||||||
— | 493,696 | 98,882 | 4 | 592,582 | |||||||||||||||||
Operating income (loss) | — | 90,781 | (12,404 | ) | 14,541 | 92,918 | |||||||||||||||
Other (expense) income: | |||||||||||||||||||||
Interest expense | (182,925 | ) | — | (130 | ) | — | (183,055 | ) | |||||||||||||
Interest income | 16 | 93 | 92 | — | 201 | ||||||||||||||||
Loss on modification of debt | (36,889 | ) | — | — | — | (36,889 | ) | ||||||||||||||
Other income, net | — | 2,453 | 1,100 | — | 3,553 | ||||||||||||||||
Intercompany (expense) income, net | — | (1,297 | ) | 10,584 | (9,287 | ) | — | ||||||||||||||
Equity in income of subsidiaries, net | 100,648 | — | — | (100,648 | ) | — | |||||||||||||||
(119,150 | ) | 1,249 | 11,646 | (109,935 | ) | (216,190 | ) | ||||||||||||||
(Loss) income before income taxes | (119,150 | ) | 92,030 | (758 | ) | (95,394 | ) | (123,272 | ) | ||||||||||||
Income tax benefit (provision) | — | 8,333 | (3,429 | ) | — | 4,904 | |||||||||||||||
Net (loss) income | (119,150 | ) | 100,363 | (4,187 | ) | (95,394 | ) | (118,368 | ) | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (782 | ) | — | (782 | ) | ||||||||||||||
Net (loss) income attributable to DJOFL | $ | (119,150 | ) | $ | 100,363 | $ | (4,969 | ) | $ | (95,394 | ) | $ | (119,150 | ) | |||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Loss | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Net (loss) income | $ | (119,150 | ) | $ | 100,363 | $ | (4,187 | ) | $ | (95,394 | ) | $ | (118,368 | ) | |||||||
Other comprehensive income, net of taxes: | |||||||||||||||||||||
Foreign currency translation adjustments, net of tax provision of $1,386 | — | — | 1,108 | — | 1,108 | ||||||||||||||||
Other comprehensive income | — | — | 1,108 | — | 1,108 | ||||||||||||||||
Comprehensive (loss) income | (119,150 | ) | 100,363 | (3,079 | ) | (95,394 | ) | (117,260 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (824 | ) | — | (824 | ) | ||||||||||||||
Comprehensive (loss) income attributable to DJO Finance LLC | $ | (119,150 | ) | $ | 100,363 | $ | (3,903 | ) | $ | (95,394 | ) | $ | (118,084 | ) | |||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||
Net (loss) income | $ | (119,150 | ) | $ | 100,363 | $ | (4,187 | ) | $ | (95,394 | ) | $ | (118,368 | ) | |||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||||||||
Depreciation | — | 25,529 | 5,049 | (362 | ) | 30,216 | |||||||||||||||
Amortization of intangible assets | — | 93,038 | 4,205 | — | 97,243 | ||||||||||||||||
Amortization of debt issuance costs and non-cash interest expense | 9,732 | — | — | — | 9,732 | ||||||||||||||||
Stock-based compensation expense | — | 2,339 | — | — | 2,339 | ||||||||||||||||
Loss on disposal of assets, net | — | 1,098 | 588 | — | 1,686 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | — | 7,397 | — | 7,397 | ||||||||||||||||
Deferred income benefit | — | (8,493 | ) | (3,088 | ) | — | (11,581 | ) | |||||||||||||
Equity in (income) loss of subsidiaries, net | (100,648 | ) | — | — | 100,648 | — | |||||||||||||||
Provision for doubtful accounts and sales returns | — | 21,889 | 337 | — | 22,226 | ||||||||||||||||
Inventory reserves | — | 5,895 | 455 | — | 6,350 | ||||||||||||||||
Loss on modification and extinguishment of debt | 36,889 | — | — | — | 36,889 | ||||||||||||||||
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||||||||||||||||
Accounts receivable | — | (26,380 | ) | (3,110 | ) | — | (29,490 | ) | |||||||||||||
Inventories | — | (24,582 | ) | 9,270 | (12,975 | ) | (28,287 | ) | |||||||||||||
Prepaid expenses and other assets | — | 1,108 | 169 | 36 | 1,313 | ||||||||||||||||
Accounts payable and other current liabilities | 10,648 | 9,675 | (5,420 | ) | 2,051 | 16,954 | |||||||||||||||
Net cash (used in) provided by operating activities | (162,529 | ) | 201,479 | 11,665 | (5,996 | ) | 44,619 | ||||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||
Cash paid in connection with acquisitions, net of cash acquired | — | (29,909 | ) | — | — | (29,909 | ) | ||||||||||||||
Purchases of property and equipment | — | (27,929 | ) | (5,008 | ) | (13 | ) | (32,950 | ) | ||||||||||||
Other investing activities, net | — | (1,106 | ) | — | — | (1,106 | ) | ||||||||||||||
Net cash used in investing activities | — | (58,944 | ) | (5,008 | ) | (13 | ) | (63,965 | ) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||
Intercompany | 149,292 | (141,153 | ) | (14,153 | ) | 6,014 | — | ||||||||||||||
Proceeds from issuance of debt | 1,342,450 | — | — | — | 1,342,450 | ||||||||||||||||
Repayments of debt and capital lease obligations | (1,276,007 | ) | (38 | ) | — | — | (1,276,045 | ) | |||||||||||||
Payment of debt issuance, modification and extinguishment costs | (55,827 | ) | — | — | — | (55,827 | ) | ||||||||||||||
Investment by parent | 2,000 | — | — | — | 2,000 | ||||||||||||||||
Exercise of indirect parent stock options | 24 | — | — | — | 24 | ||||||||||||||||
Dividend paid by subsidiary to owners of noncontrolling interests | — | — | (649 | ) | — | (649 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | 161,932 | (141,191 | ) | (14,802 | ) | 6,014 | 11,953 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 447 | — | 447 | ||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (597 | ) | 1,344 | (7,698 | ) | 5 | (6,946 | ) | |||||||||||||
Cash and cash equivalents, beginning of year | 13,773 | 1,778 | 22,617 | 1 | 38,169 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 13,176 | $ | 3,122 | $ | 14,919 | $ | 6 | $ | 31,223 | |||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Operations | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Net sales | $ | — | $ | 893,036 | $ | 263,908 | $ | (82,174 | ) | $ | 1,074,770 | ||||||||||
Cost of sales (exclusive of amortization of intangible assets of $38,668) | — | 360,601 | 168,307 | (110,770 | ) | 418,138 | |||||||||||||||
Gross profit | — | 532,435 | 95,601 | 28,596 | 656,632 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Selling, general and administrative | — | 394,588 | 92,496 | — | 487,084 | ||||||||||||||||
Research and development | — | 23,050 | 3,800 | — | 26,850 | ||||||||||||||||
Amortization of intangible assets | — | 89,637 | 4,320 | — | 93,957 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | 141,006 | — | — | 141,006 | ||||||||||||||||
— | 648,281 | 100,616 | — | 748,897 | |||||||||||||||||
Operating (loss) income | — | (115,846 | ) | (5,015 | ) | 28,596 | (92,265 | ) | |||||||||||||
Other (expense) income: | |||||||||||||||||||||
Interest expense | (169,117 | ) | (22 | ) | (193 | ) | — | (169,332 | ) | ||||||||||||
Interest income | 14 | 127 | 204 | — | 345 | ||||||||||||||||
Loss on modification of debt | (2,065 | ) | — | — | — | (2,065 | ) | ||||||||||||||
Other income (expense), net | — | 986 | (3,745 | ) | (55 | ) | (2,814 | ) | |||||||||||||
Intercompany income (expense), net | 10,625 | 18,126 | (18,381 | ) | (10,370 | ) | — | ||||||||||||||
Equity in loss of subsidiaries, net | (53,926 | ) | — | — | 53,926 | — | |||||||||||||||
(214,469 | ) | 19,217 | (22,115 | ) | 43,501 | (173,866 | ) | ||||||||||||||
(Loss) income before income taxes | (214,469 | ) | (96,629 | ) | (27,130 | ) | 72,097 | (266,131 | ) | ||||||||||||
Income tax benefit (provision) | — | 57,173 | 4,775 | (146 | ) | 52,544 | |||||||||||||||
Net (loss) income | (214,469 | ) | (39,456 | ) | (31,905 | ) | 72,243 | (213,587 | ) | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (882 | ) | — | (882 | ) | ||||||||||||||
Net (loss) income attributable to DJOFL | $ | (214,469 | ) | $ | (39,456 | ) | $ | (32,787 | ) | $ | 72,243 | $ | (214,469 | ) | |||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Loss | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Net (loss) income | $ | (214,469 | ) | $ | (39,456 | ) | $ | (31,905 | ) | $ | 72,243 | $ | (213,587 | ) | |||||||
Other comprehensive income, net of taxes: | |||||||||||||||||||||
Foreign currency translation adjustments, net of tax benefit of $1,681 | — | — | (1,896 | ) | — | (1,896 | ) | ||||||||||||||
Unrealized loss on cash flow hedges, net of tax benefit of $175 | (272 | ) | — | — | — | (272 | ) | ||||||||||||||
Reclassification adjustment for losses on cash flow hedges included in net loss, net of tax provision of $2,773 | 4,381 | — | — | — | 4,381 | ||||||||||||||||
Other comprehensive income (loss) | 4,109 | — | (1,896 | ) | — | 2,213 | |||||||||||||||
Comprehensive (loss) income | (210,360 | ) | (39,456 | ) | (33,801 | ) | 72,243 | (211,374 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (829 | ) | — | (829 | ) | ||||||||||||||
Comprehensive (loss) income attributable to DJO Finance LLC | $ | (210,360 | ) | $ | (39,456 | ) | $ | (34,630 | ) | $ | 72,243 | $ | (212,203 | ) | |||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||
Net (loss) income | $ | (214,469 | ) | $ | (39,456 | ) | $ | (31,905 | ) | $ | 72,243 | $ | (213,587 | ) | |||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||||||||
Depreciation | — | 23,231 | 5,083 | (1,020 | ) | 27,294 | |||||||||||||||
Amortization of intangible assets | — | 89,637 | 4,320 | — | 93,957 | ||||||||||||||||
Amortization of debt issuance costs and non-cash interest expense | 8,476 | — | — | — | 8,476 | ||||||||||||||||
Stock-based compensation expense | — | 2,701 | — | — | 2,701 | ||||||||||||||||
Loss on disposal of assets, net | — | 7,434 | 438 | (3,487 | ) | 4,385 | |||||||||||||||
Impairment of goodwill and intangible assets | — | 141,006 | — | — | 141,006 | ||||||||||||||||
Deferred income tax (benefit) expense | (2,599 | ) | (56,651 | ) | (1,224 | ) | (146 | ) | (60,620 | ) | |||||||||||
Equity in loss of subsidiaries, net | 53,926 | — | — | (53,926 | ) | — | |||||||||||||||
Provision for doubtful accounts and sales returns | — | 31,000 | 673 | — | 31,673 | ||||||||||||||||
Inventory reserves | — | 6,798 | 908 | — | 7,706 | ||||||||||||||||
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||||||||||||||||
Accounts receivable | — | (30,398 | ) | (1,833 | ) | — | (32,231 | ) | |||||||||||||
Inventories | — | (7,631 | ) | 6,402 | (11,961 | ) | (13,190 | ) | |||||||||||||
Prepaid expenses and other assets | (17 | ) | 7,351 | (1,090 | ) | 2,191 | 8,435 | ||||||||||||||
Accounts payable and other current liabilities | 5,336 | 3,877 | 13,062 | (4,675 | ) | 17,602 | |||||||||||||||
Net cash (used in) provided by operating activities | (149,347 | ) | 178,899 | (5,166 | ) | (781 | ) | 23,605 | |||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||
Cash paid in connection with acquisitions, net of cash acquired | — | (317,669 | ) | — | — | (317,669 | ) | ||||||||||||||
Purchases of property and equipment | — | (33,673 | ) | (5,536 | ) | (188 | ) | (39,397 | ) | ||||||||||||
Other investing activities, net | — | (1,603 | ) | 7 | — | (1,596 | ) | ||||||||||||||
Net cash used in investing activities | — | (352,945 | ) | (5,529 | ) | (188 | ) | (358,662 | ) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||
Intercompany | (191,181 | ) | 177,245 | 12,966 | 970 | — | |||||||||||||||
Proceeds from issuance of debt | 439,000 | — | — | — | 439,000 | ||||||||||||||||
Repayments of debt and capital lease obligations | (96,782 | ) | (42 | ) | (2 | ) | — | (96,826 | ) | ||||||||||||
Payment of debt issuance, modification and extinguishment costs | (7,694 | ) | — | — | — | (7,694 | ) | ||||||||||||||
Investment by parent | 3,176 | — | — | — | 3,176 | ||||||||||||||||
Cancellation of vested options | — | (2,000 | ) | — | — | (2,000 | ) | ||||||||||||||
Dividend paid by subsidiary to owners of noncontrolling interests | — | — | (1,366 | ) | — | (1,366 | ) | ||||||||||||||
Net cash provided by financing activities | 146,519 | 175,203 | 11,598 | 970 | 334,290 | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 804 | — | 804 | ||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (2,828 | ) | 1,157 | 1,707 | 1 | 37 | |||||||||||||||
Cash and cash equivalents, beginning of year | 16,601 | 621 | 20,910 | — | 38,132 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 13,773 | $ | 1,778 | $ | 22,617 | $ | 1 | $ | 38,169 | |||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended | |
Dec. 31, 2013 | ||
Subsequent Events | ' | |
21 | SUBSEQUENT EVENTS | |
On January 23, 2014, we acquired all of the outstanding shares of capital stock of Speetec Implantate GmbH (Speetec). The purchase price consisted of a cash payment at closing of 3.7 million EUR ($5.0 million at exchange rates in effect in January 2014), a holdback of 0.9 million EUR ($1.3 million for potential indemnity claims and 5.4 million EUR ($7.3 million) in total potential contingent consideration. Speetec is a distributor and manufacturer of knee, hip and shoulder arthroplasty products. | ||
The purchase price is subject to a working capital adjustment. The indemnity holdback accrues interest at the Eurodollar rate plus 100 basis points and is 50% payable in March 2015 and March 2016, respectively, if not used for indemnification claims. The contingent consideration is based on the achievement of revenue targets for 2014 and 2015 and is 50% payable in March 2015 and March 2016, respectively, if earned. |
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Schedule II - Valuation and Qualifying Accounts | ' | ||||
DJO FINANCE LLC | |||||
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | |||||
(in thousands) | |||||
Allowance for | |||||
Sales | |||||
Discounts and | |||||
Other Allowances (1) | |||||
Balance as of December 31, 2010 | $ | 58,698 | |||
Provision | 184,605 | ||||
Write-offs, net of recoveries | (189,933 | ) | |||
Balance as of December 31, 2011 | 53,370 | ||||
Provision | 194,656 | ||||
Write-offs, net of recoveries | (186,203 | ) | |||
Balance as of December 31, 2012 | $ | 61,823 | |||
Provision | 209,057 | ||||
Write-offs, net of recoveries | (203,857 | ) | |||
Balance as of December 31, 2013 | $ | 67,023 | |||
-1 | Amounts are excluded from the provisions included in the Consolidated Statements of Cash Flows as the inclusion would not provide meaningful information. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Infrequent Events | ' | ||||||||||||
Infrequent Events | |||||||||||||
In September 2013, a fire occurred at our factory in Tunisia. As a result of the fire, certain inventory and fixed assets were destroyed and the leased facility became inoperable. Estimated losses of $5.0 million related to destroyed inventory and fixed assets, excess expenses incurred and building reconstruction costs have been recorded for the year ended December 31, 2013. Additionally, we have recorded $1.3 million in revenue from business interruption insurance proceeds. As the amounts are recoverable against our property and business interruption insurance policies and recovery is considered probable, we have recorded a corresponding insurance receivable of $6.3 million as of December 31, 2013. | |||||||||||||
Segment Reporting | ' | ||||||||||||
Segment Reporting | |||||||||||||
In the first quarter of 2013, we reassigned certain product lines between our Bracing and Vascular segment and Recovery Sciences segment and revised the way we allocate costs among all of our segments. Segment information for all periods presented herein has been restated to reflect these changes. | |||||||||||||
We market and distribute our products through four operating segments, Bracing and Vascular, Recovery Sciences, Surgical Implant, and International. Our Bracing and Vascular, Recovery Sciences, and Surgical Implant segments generate their revenues within the United States. Our Bracing and Vascular segment offers rigid knee braces, orthopedic soft goods cold therapy products, vascular systems, compression therapy products and therapeutic footwear for the diabetes care market. Our Recovery Sciences segment offers home electrotherapy, iontophoresis, home traction products, bone growth stimulation products and clinical physical therapy equipment. Our Surgical Implant segment offers a comprehensive suite of reconstructive joint products for the knee, hip and shoulder. Our International segment offers all of our products to customers outside the United States. See Note 18 for additional information about our reportable segments. | |||||||||||||
Use of Estimates | ' | ||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are used in accounting for, among other things, contractual allowances, rebates, product returns, warranty obligations, allowances for doubtful accounts, valuation of inventories, self-insurance reserves, income taxes, loss contingencies, fair values of derivative instruments, fair values of long-lived assets and any related impairments, capitalization of costs associated with internally developed software and stock-based compensation. Actual results could differ from those estimates. | |||||||||||||
Basis of Presentation | ' | ||||||||||||
Basis of Presentation | |||||||||||||
We consolidate the results of operations of our 50% owned subsidiary Medireha GmbH (Medireha) and reflect the 50% share of results not owned by us as noncontrolling interests in our Consolidated Statements of Operations. We maintain control of Medireha through certain rights that enable us to prohibit certain business activities that are not consistent with our plans for the business and provide us with exclusive distribution rights for products manufactured by Medireha. | |||||||||||||
The accompanying Consolidated Financial Statements include our accounts and all voting interest entities where we exercise a controlling financial interest through the ownership of a direct or indirect majority voting interest. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||
Reclassifications | ' | ||||||||||||
Reclassifications | |||||||||||||
Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The reclassifications were not material to the Consolidated Financial Statements. | |||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||
Cash and Cash Equivalents. Cash consists of deposits with financial institutions. We consider all short-term, highly liquid investments and investments in money market funds and commercial paper with remaining maturities of less than three months at the time of purchase to be cash equivalents. While our cash and cash equivalents are on deposit with high-quality institutions, such deposits exceed Federal Deposit Insurance Corporation insured limits. | |||||||||||||
Allowance for Doubtful Accounts | ' | ||||||||||||
Allowance for Doubtful Accounts. We make estimates of the collectibility of accounts receivable. Management analyzes accounts receivable historical collection rates and bad debts write-offs, customer concentrations, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. | |||||||||||||
Sales Returns and Allowances | ' | ||||||||||||
Sales Returns and Allowances. We make estimates of the amount of sales returns and allowances that will eventually be incurred. Management analyzes sales programs that are in effect, contractual arrangements, market acceptance and historical trends when evaluating the adequacy of sales returns and allowance accounts. We estimate contractual discounts and allowances for reimbursement amounts from our third party payor customers based on negotiated contracts and historical experience. | |||||||||||||
Inventories | ' | ||||||||||||
Inventories. We state our inventories at the lower of cost or market. We use standard cost methodology to determine cost basis for our inventories. This methodology approximates actual cost on a first-in, first-out basis. We establish reserves for slow moving and excess inventory, product obsolescence, shrinkage and other valuation impairments based on future demand and historical experience. | |||||||||||||
Property and Equipment | ' | ||||||||||||
Property and Equipment. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets that range from three to 25 years. Leasehold improvements and equipment under capital leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. We capitalize surgical implant instruments that we provide to surgeons, free of charge, for use while implanting our products and the related depreciation expense is recorded as a component of Selling, general and administrative expense. We also capitalize electrotherapy devices that we rent to patients and record the related depreciation expense in cost of sales. | |||||||||||||
Software Developed for Internal Use | ' | ||||||||||||
Software Developed For Internal Use. Software is stated at cost less accumulated amortization and is amortized on a straight-line basis over estimated useful lives ranging from three to ten years. We capitalize costs of internally developed software during the development stage, including external consulting costs, cost of software licenses, and internal payroll and payroll-related costs for employees who are directly associated with a software project. Software assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable. Upgrades and enhancements are capitalized if they result in added functionality. Amortization expense related to internally developed software was $1.9 million, $1.9 million and $2.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
In 2008, we began implementing a new ERP system to replace six legacy accounting and finance systems and numerous other software systems with a single-entry ERP system that will be used by most of our businesses. During the year ended December 31, 2011, we determined that certain capitalized ERP assets would not be used and we recorded an impairment charge of $7.1 million which is included in Selling and general administrative expense in our Consolidated Statement of Operations. As of December 31, 2013 and 2012, we had $10.5 million and $12.4 million respectively, of unamortized internally developed software costs included within property and equipment in our Consolidated Balance Sheets. | |||||||||||||
Intangible Assets | ' | ||||||||||||
Intangible Assets. Our primary intangible assets are goodwill, customer relationships, patents and technology and trademarks and trade names. Goodwill represents the excess purchase price over the fair value of the identifiable net assets acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized, but instead are tested for impairment at least annually. Intangible assets with definite lives are amortized over their respective estimated useful lives and reviewed for impairment when circumstances warrant. | |||||||||||||
We evaluate the carrying value of goodwill and indefinite life intangible assets annually on the first day of the fourth quarter or whenever events or circumstances indicate the carrying value may not be recoverable. We evaluate the carrying value of finite life intangible assets whenever events or circumstances indicate the carrying value may not be recoverable. Significant assumptions are required to estimate the fair value of goodwill and intangible assets, most notably estimated future cash flows generated by these assets. As such, these fair valuation measurements use significant unobservable inputs, which are inputs that are classified as Level 3 in the fair value hierarchy. Changes to these assumptions could require us to record impairment charges on these assets. | |||||||||||||
Warranty Costs | ' | ||||||||||||
Warranty Costs. We provide expressed warranties on certain products for periods typically ranging from one to three years. We estimate our warranty obligations at the time of sale based upon historical experience and known product issues, if any. | |||||||||||||
A summary of the activity in our warranty reserves is as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 1,488 | $ | 1,756 | $ | 2,222 | |||||||
Amount charged to expense for estimated warranty costs | 1,138 | 338 | 105 | ||||||||||
Deductions for actual costs incurred | (779 | ) | (606 | ) | (571 | ) | |||||||
Balance, end of year | $ | 1,847 | $ | 1,488 | $ | 1,756 | |||||||
Self Insurance | ' | ||||||||||||
Self Insurance. We are partially self insured for certain employee health benefits and product liability claims. Accruals for losses are provided based upon claims experience and actuarial assumptions, including provisions for incurred but not reported losses. | |||||||||||||
Revenue Recognition | ' | ||||||||||||
Revenue Recognition. We recognize revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) shipment of goods and passage of title occurs; (iii) the selling price is fixed or determinable; and (iv) collectibility is reasonably assured. | |||||||||||||
We sell our products through a variety of distribution channels. We generally recognize revenue when we ship our products to our customers. We recognize revenue, both rental and purchase, for products sold directly to patients or their third party insurance payors, when our product has been dispensed or shipped to the patient and the patient’s insurance has been verified. | |||||||||||||
We record revenues from sales or our surgical implant products when the products are used in a surgical procedure (implanted in a patient). We include amounts billed to customers for freight in revenue. | |||||||||||||
We reduce revenue by estimates of potential future product returns and other allowances. Revenues are also reduced by rebates related to sales transacted through distribution agreements that provide the distributors with a right to return inventory or take certain pricing adjustments based on sales mix or volume. Provisions for product returns and other allowances are recorded as a reduction to revenue in the period sales are recognized. | |||||||||||||
Advertising Costs | ' | ||||||||||||
Advertising Costs. We expense advertising costs as they are incurred. For the years ended December 31, 2013, 2012 and 2011, advertising costs were $6.4 million, $6.5 million and $7.0 million, respectively. In 2013 we revised our definition of advertising costs to exclude certain other marketing and promotion costs. The amounts for the years ended December 31, 2012 and 2011 have been revised to conform to the 2013 definition. | |||||||||||||
Shipping and Handling Expenses | ' | ||||||||||||
Shipping and Handling Expenses. Shipping and handling expenses are included within cost of sales in our Consolidated Statements of Operations. | |||||||||||||
Stock Based Compensation | ' | ||||||||||||
Stock Based Compensation. We maintain a stock option plan under which stock options of our indirect parent, DJO, have been granted to both employees and non-employees. All share based payments to employees are recognized in the financial statements based on their grant date fair values and our estimates of forfeitures. We amortize stock-based compensation for service-based awards granted on a straight-line basis over the requisite service (vesting) period for the entire award. Other awards vest upon the achievement of certain pre-determined performance targets, and compensation expense is recognized to the extent the achievement of the performance targets is deemed probable. | |||||||||||||
Income Taxes | ' | ||||||||||||
Income Taxes. Income taxes are accounted for under the asset and liability method, whereby deferred tax assets and liabilities are recognized and measured using enacted tax rates in effect for each taxing jurisdiction in which we operate for the year in which those temporary differences are expected to be recognized. Net deferred tax assets are then reduced by a valuation allowance if we believe it more-likely-than-not such net deferred tax assets will not be realized. | |||||||||||||
Foreign Currency Translation and Transactions | ' | ||||||||||||
Foreign Currency Translation and Transactions. The reporting currency of DJOFL is the U.S. Dollar. Assets and liabilities of foreign subsidiaries (including intercompany balances for which settlement is not anticipated in the foreseeable future) are translated at the spot rate in effect at the applicable reporting date, and our Consolidated Statement of Operations is translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is recorded as a component of accumulated other comprehensive income (loss) in our Consolidated Statement of Comprehensive Loss. Cash flows from our operations in foreign countries are translated at the average rate for the applicable period. The effect of exchange rates on cash balances held in foreign currencies are separately reported in our Consolidated Statements of Cash Flows. | |||||||||||||
Transactions denominated in currencies other than our or our subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in our Consolidated Balance Sheets related to such transactions result in transaction gains and losses that are reflected in our Consolidated Statements of Operations as either unrealized (based on the applicable period end translation) or realized (upon settlement of the transactions). For the years ended December 31, 2013, 2012 and 2011, foreign transaction (losses) gains were $(1.5) million, $3.6 million and $(2.8) million, respectively. | |||||||||||||
Derivative Financial Instruments | ' | ||||||||||||
Derivative Financial Instruments. All derivative instruments are recognized in the financial statements and measured at fair value regardless of the purpose or intent for holding them. | |||||||||||||
We use foreign exchange forward contracts to hedge expense commitments that are denominated in currencies other than the U.S. dollar. The purpose of our foreign currency hedging activities is to fix the dollar value of specific commitments and payments to foreign vendors. Before acquiring a derivative instrument to hedge a specific risk, potential natural hedges are evaluated. While our foreign exchange contracts act as economic hedges, we have not designated such instruments as hedges for accounting purposes. Therefore, gains and losses resulting from changes in the fair values of these derivative instruments are recorded in other income (expense), net, in our Consolidated Statements of Operations. | |||||||||||||
The fair value of our derivative instruments has been determined through the use of models that consider various assumptions, including time value and other relevant economic measures, which are inputs that are classified as Level 2 in the fair value hierarchy (see Notes 10 and 11). | |||||||||||||
Comprehensive Income (Loss) | ' | ||||||||||||
Comprehensive Income (Loss). Comprehensive income (loss) includes net income (loss) as per our Consolidated Statement of Operations and other comprehensive income (loss). Other comprehensive income (loss), which is comprised of unrealized gains and losses on foreign currency translation adjustments and cash flow hedges, net of tax, is included in our Consolidated Statement of Comprehensive Loss. | |||||||||||||
Concentration of Credit Risk | ' | ||||||||||||
Concentration of Credit Risk. We sell the majority of our products in the United States to orthopedic professionals, hospitals, distributors, specialty dealers, insurance companies, managed care companies and certain governmental payors such as Medicare. International sales comprised 25.5%, 24.8% and 26.0% of our net sales for the years ended December 31, 2013, 2012, and 2011, respectively. International sales are generated from a diverse group of customers through our wholly owned subsidiaries and certain independent distributors. Credit is extended based on an evaluation of the customer’s financial condition and generally collateral is not required. We provide a reserve for estimated bad debts. Management reviews and revises its estimates for credit losses from time to time and such credit losses have generally been within management’s estimates. In each of the years ended December 31, 2013, 2012 and 2011, we had no individual customer or distributor that accounted for 10% or more of our total annual net sales. | |||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||
Fair Value of Financial Instruments. The carrying amounts of our short-term financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate fair values due to their short-term nature. See Note 12 for information concerning the fair value of our variable and fixed rate debt. | |||||||||||||
Recent Accounting Standards | ' | ||||||||||||
Recent Accounting Standards. In July 2012, the FASB issued an accounting standard update regarding testing of intangible assets for impairment. This standard update allows companies the option to perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not the asset is impaired. We adopted this standard update during the first quarter of 2013. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements. | |||||||||||||
In February 2013, the FASB issued an accounting standard update regarding reporting amounts reclassified out of accumulated other comprehensive income. This update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional details about those amounts. The amended guidance was effective for interim and annual periods beginning after December 15, 2012. The Company adopted this standard update during the first quarter of 2013. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements. | |||||||||||||
In July 2013, the FASB issued an accounting standard update regarding the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. This update is consistent with our current financial statement presentation and therefore we do not believe the adoption of this standard will have an impact on the Company’s consolidated financial statements. |
Significant_Accounting_Policie1
Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Activity in our Warranty Reserves | ' | ||||||||||||
A summary of the activity in our warranty reserves is as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 1,488 | $ | 1,756 | $ | 2,222 | |||||||
Amount charged to expense for estimated warranty costs | 1,138 | 338 | 105 | ||||||||||
Deductions for actual costs incurred | (779 | ) | (606 | ) | (571 | ) | |||||||
Balance, end of year | $ | 1,847 | $ | 1,488 | $ | 1,756 | |||||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Purchase Price for Acquisitions Allocated to Fair Values of Net Tangible and Intangible Assets Acquired | ' | ||||||||||||||||||||||||||||
The purchase price for each of these acquisitions was allocated to the fair values of the net tangible and intangible assets acquired as follows (in thousands): | |||||||||||||||||||||||||||||
(in thousands): | Blue Leaf | Vasyli | Exos | Dr. Comfort | Circle City | BetterBraces. | ETI | ||||||||||||||||||||||
com | |||||||||||||||||||||||||||||
Cash | $ | — | $ | — | $ | 1,282 | $ | 59 | $ | — | $ | — | $ | 817 | |||||||||||||||
Accounts receivable | — | — | 1,138 | 9,187 | 572 | — | 3,690 | ||||||||||||||||||||||
Inventory | 59 | 542 | 1,754 | 27,241 | 1,736 | — | 2,133 | ||||||||||||||||||||||
Other current assets | — | 31 | 105 | 2,108 | — | — | 1,542 | ||||||||||||||||||||||
Property and equipment | — | 12 | 584 | 2,183 | — | — | 7,230 | ||||||||||||||||||||||
Other non-current assets | — | — | 12 | 1,607 | — | — | 394 | ||||||||||||||||||||||
Liabilities assumed | — | — | (474 | ) | (10,854 | ) | (406 | ) | — | (1,876 | ) | ||||||||||||||||||
Deferred tax liabilities | — | — | (9,137 | ) | (15,111 | ) | — | — | (9,609 | ) | |||||||||||||||||||
Identifiable intangible assets (1): | |||||||||||||||||||||||||||||
Customer relationships | 90 | 308 | — | 72,100 | 3,700 | 75 | 13,400 | ||||||||||||||||||||||
Technology | — | — | 24,200 | 7,000 | — | 1,120 | 6,000 | ||||||||||||||||||||||
Non-compete | 111 | 930 | 1,900 | 1,200 | 200 | 185 | 1,600 | ||||||||||||||||||||||
Trademarks and trade names | — | — | 1,000 | 22,200 | 1,400 | 50 | — | ||||||||||||||||||||||
Goodwill (2) | 322 | 363 | 18,211 | 138,548 | 4,469 | 1,570 | 21,085 | ||||||||||||||||||||||
Total purchase price | $ | 582 | $ | 2,186 | $ | 40,575 | $ | 257,468 | $ | 11,671 | $ | 3,000 | $ | 46,406 | |||||||||||||||
-1 | The fair value of customer relationships was assigned to relationships with major customers existing on the acquisition date based upon an estimate of the future discounted cash flows that would be derived from those customers, after deducting contributory asset charges. |
Accounts_Receivable_Reserves_T
Accounts Receivable Reserves (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Activity in Accounts Receivable Reserves for Doubtful Accounts and Sales Returns | ' | ||||||||||||
A summary of activity in our accounts receivable reserves for doubtful accounts is presented below (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 25,211 | $ | 35,649 | $ | 53,076 | |||||||
Provision for doubtful accounts | 33,129 | 19,586 | 27,356 | ||||||||||
Write-offs, net of recoveries | (25,383 | ) | (30,024 | ) | (44,783 | ) | |||||||
Balance, end of year | $ | 32,957 | $ | 25,211 | $ | 35,649 | |||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Summary of Inventories | ' | ||||||||||||
Inventories consist of the following (in thousands): | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Components and raw materials | $ | 59,825 | $ | 50,619 | |||||||||
Work in process | 7,373 | 4,563 | |||||||||||
Finished goods | 83,502 | 94,683 | |||||||||||
Inventory held on consignment | 27,969 | 23,763 | |||||||||||
178,669 | 173,628 | ||||||||||||
Inventory reserves | (23,686 | ) | (17,313 | ) | |||||||||
$ | 154,983 | $ | 156,315 | ||||||||||
Summary of Activity of Reserves in Inventory | ' | ||||||||||||
A summary of the activity in our reserves for estimated slow moving, excess, obsolete and otherwise impaired inventory is presented below (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 17,313 | $ | 14,146 | $ | 12,853 | |||||||
Provision charged to costs of sales | 10,121 | 6,350 | 7,706 | ||||||||||
Write-offs, net of recoveries | (3,748 | ) | (3,183 | ) | (6,413 | ) | |||||||
Balance, end of year | $ | 23,686 | $ | 17,313 | $ | 14,146 | |||||||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Property and Equipment | ' | ||||||||||
Property and equipment consists of the following (in thousands): | |||||||||||
December 31, | December 31, | Depreciable lives | |||||||||
2013 | 2012 | (years) | |||||||||
Land | $ | 266 | $ | 266 | Indefinite | ||||||
Buildings and improvements | 27,229 | 26,802 | 3 to 25 | ||||||||
Equipment | 119,127 | 105,351 | 2 to 7 | ||||||||
Software | 33,817 | 31,270 | 3 to 10 | ||||||||
Furniture and fixtures | 25,784 | 23,441 | 3 to 8 | ||||||||
Surgical implant instrumentation | 55,841 | 46,504 | 5 | ||||||||
Construction in progress | 7,919 | 8,196 | N/A | ||||||||
269,983 | 241,830 | ||||||||||
Accumulated depreciation and amortization | (162,154 | ) | (134,795 | ) | |||||||
Property and equipment, net | $ | 107,829 | $ | 107,035 | |||||||
LongLived_Assets_Tables
Long-Lived Assets (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Changes in Carrying Amount of Goodwill | ' | ||||||||||||
Changes in the carrying amount of goodwill are presented in the table below (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Balance, beginning of year | $ | 1,249,305 | $ | 1,228,778 | |||||||||
Acquisitions (see Note 3) | 685 | 18,211 | |||||||||||
Impairment of goodwill | (102,000 | ) | — | ||||||||||
Foreign currency translation | 1,341 | 2,316 | |||||||||||
Balance, end of year | $ | 1,149,331 | $ | 1,249,305 | |||||||||
Summary of Identifiable Intangible Assets | ' | ||||||||||||
Identifiable intangible assets consisted of the following (in thousands): | |||||||||||||
December 31, 2013 | Gross Carrying | Accumulated | Intangible | ||||||||||
Amount | Amortization | Assets, Net | |||||||||||
Definite-lived intangible assets: | |||||||||||||
Customer relationships | $ | 570,070 | $ | (290,359 | ) | $ | 279,711 | ||||||
Patents and technology | 486,246 | (230,111 | ) | 256,135 | |||||||||
Trademarks and trade names | 25,820 | (7,102 | ) | 18,718 | |||||||||
Distributor contracts and relationships | 5,054 | (3,183 | ) | 1,871 | |||||||||
Non-compete agreements | 6,423 | (3,149 | ) | 3,274 | |||||||||
$ | 1,093,613 | $ | (533,904 | ) | 559,709 | ||||||||
Indefinite-lived intangible assets: | |||||||||||||
Trademarks and trade names | 399,284 | ||||||||||||
Net identifiable intangible assets | $ | 958,993 | |||||||||||
December 31, 2012 | Gross Carrying | Accumulated | Intangible | ||||||||||
Amount | Amortization | Assets, Net | |||||||||||
Definite lived intangible assets: | |||||||||||||
Customer relationships | $ | 570,221 | $ | (236,228 | ) | $ | 333,993 | ||||||
Patents and technology | 485,675 | (195,099 | ) | 290,576 | |||||||||
Trademarks and trade names | 25,773 | (4,248 | ) | 21,525 | |||||||||
Distributor contracts and relationships | 3,662 | (1,659 | ) | 2,003 | |||||||||
Non-compete agreements | 5,547 | (1,722 | ) | 3,825 | |||||||||
$ | 1,090,878 | $ | (438,956 | ) | 651,922 | ||||||||
Indefinite lived intangible assets: | |||||||||||||
Trademarks and trade names | 403,609 | ||||||||||||
Net identifiable intangible assets | $ | 1,055,531 | |||||||||||
Schedule of Estimated Amortization Expense | ' | ||||||||||||
Based on our amortizable intangible asset balance as of December 31, 2013, we estimate that amortization expense will be as follows for the next five years and thereafter (in thousands): | |||||||||||||
2014 | $ | 92,793 | |||||||||||
2015 | 87,995 | ||||||||||||
2016 | 83,625 | ||||||||||||
2017 | 72,451 | ||||||||||||
2018 | 62,272 | ||||||||||||
Thereafter | 160,573 | ||||||||||||
$ | 559,709 | ||||||||||||
Goodwill and Intangible Assets by Segments | ' | ||||||||||||
Our goodwill and intangible assets by segment are as follows (in thousands): | |||||||||||||
December 31, 2013 | Goodwill | Intangible | |||||||||||
Assets, Net | |||||||||||||
Bracing and Vascular | $ | 483,258 | $ | 527,806 | |||||||||
Recovery Sciences | 317,299 | 250,725 | |||||||||||
International | 348,774 | 165,569 | |||||||||||
Surgical Implant | — | 14,893 | |||||||||||
$ | 1,149,331 | $ | 958,993 | ||||||||||
December 31, 2012 | Goodwill | Intangible | |||||||||||
Assets, Net | |||||||||||||
Bracing and Vascular | $ | 483,258 | $ | 572,187 | |||||||||
Recovery Sciences | 419,299 | 283,342 | |||||||||||
International | 346,748 | 182,638 | |||||||||||
Surgical Implant | — | 17,364 | |||||||||||
$ | 1,249,305 | $ | 1,055,531 | ||||||||||
Other_Current_Liabilities_Tabl
Other Current Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Schedule of Other Current Liabilities | ' | ||||||||
Other current liabilities consist of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued wages and related expenses | $ | 33,128 | $ | 29,888 | |||||
Accrued commissions | 16,489 | 14,182 | |||||||
Accrued rebates | 10,731 | 6,860 | |||||||
Accrued other taxes | 4,734 | 4,477 | |||||||
Accrued professional expenses | 3,372 | 3,525 | |||||||
Income taxes payable | 2,877 | 4,380 | |||||||
Deferred tax liability | 445 | — | |||||||
Other accrued liabilities | 37,696 | 30,328 | |||||||
$ | 109,472 | $ | 93,640 | ||||||
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Schedule of Information Regarding Notional Amounts of Foreign Exchange Forward Contracts | ' | ||||||||||||||||
Information regarding the notional amounts of our foreign exchange forward contracts is presented in the table below (in thousands): | |||||||||||||||||
Notional Amount (MXN) | Notional Amount (USD) | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Foreign exchange contracts not designated as hedges | 302,730 | 92,617 | $ | 22,959 | $ | 6,376 | |||||||||||
Summary of Location and Fair Value of Derivative Instruments in Condensed Consolidated Balance Sheets | ' | ||||||||||||||||
The following table summarizes the fair value of derivative instruments in our Consolidated Balance Sheets (in thousands): | |||||||||||||||||
Balance Sheet Location | December 31, | December 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||||
Derivative Assets: | |||||||||||||||||
Foreign exchange forward contracts not designated as hedges | Other current assets | $ | — | $ | 777 | ||||||||||||
Derivative Liabilities: | |||||||||||||||||
Foreign exchange forward contracts not designated as hedges | Other current liabilities | 44 | — | ||||||||||||||
Summary of Effect of Derivative Instruments on Condensed Consolidated Statements of Operations | ' | ||||||||||||||||
The following table summarizes the effect our derivative instruments have on our Consolidated Statements of Operations (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
Location of gain (loss) | 2013 | 2012 | 2011 | ||||||||||||||
Interest rate swap agreements designated as cash flow hedges | Interest expense (1) | $ | — | $ | — | $ | (7,154 | ) | |||||||||
Foreign exchange forward contracts not designated as hedges | Other (expense) | (821 | ) | 1,322 | (830 | ) | |||||||||||
income, net | |||||||||||||||||
$ | (821 | ) | $ | 1,322 | $ | (7,984 | ) | ||||||||||
Summary of Pre-tax Loss on Derivative Instruments Designated as Cash Flow Hedges Recognized in Other Comprehensive Income (Loss) | ' | ||||||||||||||||
The pre-tax loss on derivative instruments designated as cash flow hedges recognized in other comprehensive income (loss) is presented below (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Interest rate swap agreements designated as cash flow hedges | $ | — | $ | — | $ | 447 | |||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||
The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
As of December 31, 2013 | Quoted Prices | Significant | Significant | Recorded | |||||||||||||
in Active | Other | Unobservable | Balance | ||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Liabilities: | |||||||||||||||||
Foreign exchange forward contracts not designated as hedges | $ | — | $ | 44 | $ | — | $ | 44 | |||||||||
Contingent consideration | $ | — | $ | — | $ | 5,690 | $ | 5,690 | |||||||||
As of December 31, 2012 | Quoted Prices | Significant | Significant | Recorded | |||||||||||||
in Active | Other | Unobservable | Balance | ||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Assets: | |||||||||||||||||
Foreign exchange forward contracts not designated as hedges | $ | — | $ | 777 | $ | — | $ | 777 | |||||||||
Liabilities: | |||||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 8,200 | $ | 8,200 | |||||||||
Reconciliation of All Financial Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) | ' | ||||||||||||||||
The table below presents reconciliation of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2013 (in thousands): | |||||||||||||||||
Year Ended | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Balance, beginning of period | $ | 8,200 | |||||||||||||||
Total gains: | |||||||||||||||||
Included in Selling, general and administrative expense | (2,510 | ) | |||||||||||||||
Balance, end of period | $ | 5,690 | |||||||||||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Schedule of Debt Obligations | ' | ||||||||
Debt obligations consists of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
Senior secured credit facilities: | |||||||||
Revolving credit facility | $ | 38,000 | $ | 3,000 | |||||
Term Loans: | |||||||||
$853.4 million tranche B term loans, net of unamortized original issuance discount of $7.1 million | 846,297 | — | |||||||
$476.5 million new term loans, net of unamortized original issue discount of $7.3 million | — | 469,200 | |||||||
$385.5 million extended term loans, net of unamortized original issue discount of $1.5 million | — | 383,965 | |||||||
8.75% Second priority senior secured notes, including unamortized original issue premium of $5.5 million and $6.5 million, respectively | 335,490 | 336,509 | |||||||
9.875% Senior unsecured notes | 440,000 | 440,000 | |||||||
7.75% Senior unsecured notes | 300,000 | 300,000 | |||||||
9.75% Senior subordinated notes | 300,000 | 300,000 | |||||||
Total debt | 2,259,787 | 2,232,674 | |||||||
Current maturities | (8,620 | ) | (8,858 | ) | |||||
Long-term debt | $ | 2,251,167 | $ | 2,223,816 | |||||
Aggregate Amounts of Annual Principal Maturities of Long-term Debt | ' | ||||||||
At December 31, 2013, the aggregate amounts of annual principal maturities of long-term debt for the next five years and thereafter are as follows (in thousands): | |||||||||
Years Ending December 31, | |||||||||
2014 | $ | 8,620 | |||||||
2015 | 8,620 | ||||||||
2016 | 8,620 | ||||||||
2017 | 1,165,540 | ||||||||
2018 | 1,070,000 | ||||||||
$ | 2,261,400 | ||||||||
Stock_Option_Plans_and_StockBa1
Stock Option Plans and Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary of Assumptions Used to Estimate Fair Value of Time-Based Options, 2013 Vested Options and Director Service Options of Stock Options Granted | ' | ||||||||||||||||
The following table summarizes certain assumptions we used to estimate the fair value of the Time-Based Options, the 2013 Vested Options and the Director Service Options of stock options granted during the years ended December 31, 2013, 2012, and 2011: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Expected volatility | 33.4-35.1 | % | 35.3-37.7 | % | 34.0-34.4 | % | |||||||||||
Risk-free interest rate | 0.7-2.0 | % | 0.8-1.5 | % | 1.3-2.1 | % | |||||||||||
Expected years until exercise | 5.0-6.3 | 6.1-6.2 | 6.4-6.6 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | |||||||||||
Schedule of Recorded Non-cash Stock-based Compensation Expense | ' | ||||||||||||||||
We recorded non-cash stock-based compensation expense during the periods presented as follows (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Cost of goods sold | $ | 52 | $ | 78 | $ | 149 | |||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative | 2,049 | 2,206 | 2,493 | ||||||||||||||
Research and development | 54 | 55 | 59 | ||||||||||||||
$ | 2,155 | $ | 2,339 | $ | 2,701 | ||||||||||||
Summary of Option Activity | ' | ||||||||||||||||
A summary of option activity under the 2007 Plan is presented below: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic | ||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||
Contractual Term | |||||||||||||||||
(Years) | |||||||||||||||||
Outstanding at December 31, 2012 | 9,233,369 | $ | 15.39 | 6.3 | $ | 9,940,209 | |||||||||||
Granted | 1,196,197 | $ | 16.46 | ||||||||||||||
Exercised | (221,057 | ) | $ | 8.29 | |||||||||||||
Forfeited or expired | (1,191,219 | ) | $ | 14.76 | |||||||||||||
Outstanding at December 31, 2013 | 9,017,290 | $ | 15.79 | 6.1 | $ | 6,133,210 | |||||||||||
Exercisable at December 31, 2013 | 3,185,477 | $ | 14.55 | 3.6 | $ | 6,133,210 | |||||||||||
Exercise of Stock Options Using Net Exercise Method | ' | ||||||||||||||||
The following table provides information regarding the use of the net exercise method during the periods presented: | |||||||||||||||||
Year Ended | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | |||||||||||||||||
Options exercised | 221,057 | ||||||||||||||||
Shares withheld | 148,906 | ||||||||||||||||
Shares issued | 72,151 | ||||||||||||||||
Average market value per share withheld | $ | 16.46 | |||||||||||||||
Aggregate market value of shares withheld (in thousands) | $ | 2,451 | |||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Loss from Continuing Operations Before Income Tax Provision (Benefit) | ' | ||||||||||||
The components of loss from continuing operations before income tax provision (benefit) consist of the following (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
U.S. operations | $ | (206,769 | ) | $ | (137,268 | ) | $ | (283,137 | ) | ||||
Foreign operations | 17,323 | 13,996 | 17,006 | ||||||||||
$ | (189,446 | ) | $ | (123,272 | ) | $ | (266,131 | ) | |||||
Components of Income Tax Provision (Benefit) | ' | ||||||||||||
The income tax provision (benefit) consists of the following (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current income taxes: | |||||||||||||
U.S. Federal | $ | 1,135 | $ | (1,205 | ) | $ | (1,175 | ) | |||||
U.S. State | 870 | 1,347 | 1,619 | ||||||||||
Foreign | 6,373 | 6,330 | 6,019 | ||||||||||
Total current income taxes | 8,378 | 6,472 | 6,463 | ||||||||||
Deferred income taxes: | |||||||||||||
U.S. Federal | 7,460 | (3,558 | ) | (54,875 | ) | ||||||||
U.S. State | (2,154 | ) | (5,751 | ) | (2,889 | ) | |||||||
Foreign | (568 | ) | (2,067 | ) | (1,243 | ) | |||||||
Total deferred income taxes | 4,738 | (11,376 | ) | (59,007 | ) | ||||||||
Total income tax provision (benefit) | $ | 13,116 | $ | (4,904 | ) | $ | (52,544 | ) | |||||
Difference Between Income Tax Benefit Derived by Applying U.S. Federal Statutory Income Tax Rate to Loss from Continuing Operations Before Income Tax and Income Tax Provision (Benefit) Recognized | ' | ||||||||||||
The difference between the income tax benefit derived by applying the U.S. Federal statutory income tax rate of 35% to loss before income tax and the income tax provision (benefit) recognized in the Consolidated Financial Statements is as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Benefit)derived by applying the U.S. Federal statutory income tax rate to loss before income taxes | $ | (66,306 | ) | $ | (43,145 | ) | $ | (93,144 | ) | ||||
Add (deduct) the effect of: | |||||||||||||
State tax benefit, net | (3,323 | ) | (4,275 | ) | (5,315 | ) | |||||||
Change in state effective tax rates | (992 | ) | (639 | ) | — | ||||||||
Foreign earnings repatriation | 2,678 | 3,199 | — | ||||||||||
Unrecognized tax benefits | 2,216 | (7,723 | ) | (344 | ) | ||||||||
Goodwill impairment | 33,687 | — | 39,513 | ||||||||||
Prepaid tax asset impairment | 229 | 5,479 | — | ||||||||||
Valuation allowance | 50,516 | 38,845 | 2,100 | ||||||||||
Research tax credit | (1,249 | ) | — | (230 | ) | ||||||||
Prior year purchase accounting | (2,864 | ) | — | — | |||||||||
Permanent differences and other, net | (1,476 | ) | 3,355 | 4,876 | |||||||||
$ | 13,116 | $ | (4,904 | ) | $ | (52,544 | ) | ||||||
Components of Deferred Income Tax Assets and Liabilities | ' | ||||||||||||
The components of deferred income tax assets and liabilities are as follows (in thousands): | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforwards | $ | 202,386 | $ | 181,302 | |||||||||
Receivables reserve | 23,878 | 23,077 | |||||||||||
Other | 38,766 | 38,623 | |||||||||||
Gross deferred tax assets | 265,030 | 243,002 | |||||||||||
Valuation allowance | (94,741 | ) | (43,792 | ) | |||||||||
Net deferred tax assets | 170,289 | 199,210 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Intangible assets | (362,951 | ) | (384,586 | ) | |||||||||
Foreign earnings repatriation | (14,092 | ) | (13,978 | ) | |||||||||
Other | (7,038 | ) | (8,567 | ) | |||||||||
Gross deferred tax liabilities | (384,081 | ) | (407,131 | ) | |||||||||
Net deferred tax liabilities | $ | (213,792 | ) | $ | (207,921 | ) | |||||||
Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits | ' | ||||||||||||
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 12,342 | $ | 19,443 | $ | 17,659 | |||||||
Additions based on tax positions related to current year | 1,531 | 817 | 777 | ||||||||||
Additions for tax positions related to prior years | 975 | 892 | 3,097 | ||||||||||
Reductions for tax positions of prior years | — | — | — | ||||||||||
Reduction due to lapse of statute of limitations | (379 | ) | (990 | ) | (2,065 | ) | |||||||
Reductions for settlements of tax positions | — | (7,820 | ) | (25 | ) | ||||||||
Balance, end of year | $ | 14,469 | $ | 12,342 | $ | 19,443 | |||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Aggregate Minimum Rental Commitments Under Non-cancelable Leases | ' | ||||
lease expense over the lease term. The aggregate minimum rental commitments under non-cancelable leases for the next five years and thereafter, as of December 31, 2013, are as follows (in thousands): | |||||
Years Ending December 31, | |||||
2014 | $ | 16,073 | |||
2015 | 14,148 | ||||
2016 | 12,695 | ||||
2017 | 7,248 | ||||
2018 | 6,738 | ||||
Thereafter | 17,324 | ||||
$ | 74,226 | ||||
Segment_and_Geographic_Informa1
Segment and Geographic Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Information Regarding Reportable Business Segments | ' | ||||||||||||
Information regarding our reportable business segments is presented below (in thousands). Segment results exclude the impact of amortization and impairment of goodwill and intangible assets, certain general corporate expenses, and charges related to various integration activities, as defined by management. The accounting policies of the reportable segments are the same as the accounting policies of the Company. We allocate resources and evaluate the performance of segments based on net sales, gross profit, operating income and other non-GAAP measures, as defined in the senior secured credit facilities. We do not allocate assets to reportable segments because a significant portion of our assets are shared by the segments. | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Net sales: | |||||||||||||
Bracing and Vascular | $ | 476,492 | $ | 444,444 | $ | 388,860 | |||||||
Recovery Sciences | 312,783 | 331,461 | 341,667 | ||||||||||
Surgical Implant | 87,088 | 72,980 | 64,944 | ||||||||||
International | 299,094 | 280,535 | 279,299 | ||||||||||
$ | 1,175,457 | $ | 1,129,420 | $ | 1,074,770 | ||||||||
Gross profit: | |||||||||||||
Bracing and Vascular | $ | 243,916 | $ | 229,430 | $ | 203,908 | |||||||
Recovery Sciences | 234,469 | 249,825 | 258,229 | ||||||||||
Surgical Implant | 62,996 | 54,658 | 46,860 | ||||||||||
International | 165,672 | 155,266 | 161,142 | ||||||||||
Expenses not allocated to segments and eliminations | (4,013 | ) | (3,679 | ) | (13,507 | ) | |||||||
$ | 703,040 | $ | 685,500 | $ | 656,632 | ||||||||
Operating (loss) income: | |||||||||||||
Bracing and Vascular | $ | 86,447 | $ | 87,694 | $ | 75,607 | |||||||
Recovery Sciences | 83,028 | 90,353 | 92,882 | ||||||||||
Surgical Implant | 8,669 | 6,747 | 4,323 | ||||||||||
International | 57,515 | 54,442 | 57,501 | ||||||||||
Expenses not allocated to segments and eliminations | (245,217 | ) | (146,318 | ) | (322,578 | ) | |||||||
$ | (9,558 | ) | $ | 92,918 | $ | (92,265 | ) | ||||||
Net Sales by Geographic Area | ' | ||||||||||||
Following are our net sales by geographic area (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States | $ | 876,363 | $ | 848,885 | $ | 795,471 | |||||||
Other Europe, Middle East, and Africa | 139,252 | 135,030 | 135,216 | ||||||||||
Germany | 88,236 | 84,527 | 90,000 | ||||||||||
Australia and Asia Pacific | 35,025 | 26,786 | 23,262 | ||||||||||
Canada | 27,035 | 24,588 | 22,591 | ||||||||||
Latin America | 9,546 | 9,604 | 8,230 | ||||||||||
$ | 1,175,457 | $ | 1,129,420 | $ | 1,074,770 | ||||||||
Long-lived Assets by Geographic Area | ' | ||||||||||||
Following are our long-lived assets by geographic area (in thousands): | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
United States | $ | 2,099,381 | $ | 2,312,127 | |||||||||
International | 156,271 | 144,960 | |||||||||||
$ | 2,255,652 | $ | 2,457,087 | ||||||||||
Unaudited_Quarterly_Consolidat1
Unaudited Quarterly Consolidated Financial Data (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Unaudited Quarterly Consolidated Financial Data | ' | ||||||||||||||||
The following table presents our unaudited quarterly consolidated financial data (in thousands): | |||||||||||||||||
Three months ended | |||||||||||||||||
March 30, | June 29, | September 28, | December 31, | ||||||||||||||
2013 | 2013 | 2013 | 2013 | ||||||||||||||
Net sales | $ | 279,077 | $ | 294,745 | $ | 288,049 | $ | 313,586 | |||||||||
Gross profit | 169,438 | 175,783 | 169,889 | 187,930 | |||||||||||||
Operating income (loss) | 19,793 | 26,423 | 25,375 | (81,149 | ) | ||||||||||||
Net loss | (32,126 | ) | (20,642 | ) | (18,375 | ) | (131,419 | ) | |||||||||
Net loss attributable to DJOFL | (32,364 | ) | (20,814 | ) | (18,488 | ) | (131,786 | ) | |||||||||
Three months ended | |||||||||||||||||
March 31, | June 30, | September 29, | December 31, | ||||||||||||||
2012 | 2012 | 2012 | 2012 | ||||||||||||||
Net sales | $ | 278,947 | $ | 285,977 | $ | 273,986 | $ | 290,510 | |||||||||
Gross profit | 170,712 | 174,175 | 165,689 | 174,924 | |||||||||||||
Operating income | 21,869 | 28,361 | 22,529 | 20,159 | |||||||||||||
Net loss | (29,043 | ) | (19,922 | ) | (22,535 | ) | (46,868 | ) | |||||||||
Net loss attributable to DJOFL | (29,354 | ) | (20,198 | ) | (22,562 | ) | (47,036 | ) |
Supplemental_Guarantor_Condens1
Supplemental Guarantor Condensed Consolidating Financial Statements (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Two Thousand And Thirteen | ' | ||||||||||||||||||||
Schedule of Condensed Consolidating Balance Sheets | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||||
Assets | |||||||||||||||||||||
Current assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 22,370 | $ | 358 | $ | 20,848 | $ | 2 | $ | 43,578 | |||||||||||
Accounts receivable, net | — | 141,121 | 43,967 | — | 185,088 | ||||||||||||||||
Inventories, net | — | 126,529 | 33,439 | (4,985 | ) | 154,983 | |||||||||||||||
Deferred tax assets, net | — | 27,286 | 241 | — | 27,527 | ||||||||||||||||
Prepaid expenses and other current assets | 160 | 16,469 | 10,596 | 726 | 27,951 | ||||||||||||||||
Total current assets | 22,530 | 311,763 | 109,091 | (4,257 | ) | 439,127 | |||||||||||||||
Property and equipment, net | — | 93,229 | 14,834 | (234 | ) | 107,829 | |||||||||||||||
Goodwill | — | 1,066,479 | 121,998 | (39,146 | ) | 1,149,331 | |||||||||||||||
Intangible assets, net | — | 941,550 | 17,443 | — | 958,993 | ||||||||||||||||
Investment in subsidiaries | 1,297,699 | 1,686,557 | 62,344 | (3,046,600 | ) | — | |||||||||||||||
Intercompany receivables | 911,630 | — | — | (911,630 | ) | — | |||||||||||||||
Other non-current assets | 35,675 | 1,828 | 1,996 | — | 39,499 | ||||||||||||||||
Total assets | $ | 2,267,534 | $ | 4,101,406 | $ | 327,706 | $ | (4,001,867 | ) | $ | 2,694,779 | ||||||||||
Liabilities and (Deficit) Equity | |||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||
Accounts payable | $ | — | $ | 45,639 | $ | 10,736 | $ | (1 | ) | $ | 56,374 | ||||||||||
Current portion of debt obligations | 8,620 | — | — | — | 8,620 | ||||||||||||||||
Other current liabilities | 29,673 | 77,220 | 31,564 | 697 | 139,154 | ||||||||||||||||
Total current liabilities | 38,293 | 122,859 | 42,300 | 696 | 204,148 | ||||||||||||||||
Long-term debt obligations | 2,251,167 | — | — | — | 2,251,167 | ||||||||||||||||
Deferred tax liabilities, net | — | 236,230 | 5,798 | — | 242,028 | ||||||||||||||||
Intercompany payables, net | — | 693,513 | 143,637 | (837,150 | ) | — | |||||||||||||||
Other long-term liabilities | — | 13,820 | 2,898 | — | 16,718 | ||||||||||||||||
Total liabilities | 2,289,460 | 1,066,422 | 194,633 | (836,454 | ) | 2,714,061 | |||||||||||||||
Noncontrolling interests | — | — | 2,644 | — | 2,644 | ||||||||||||||||
Total membership (deficit) equity | (21,926 | ) | 3,034,984 | 130,429 | (3,165,413 | ) | (21,926 | ) | |||||||||||||
Total liabilities and (equity) equity | $ | 2,267,534 | $ | 4,101,406 | $ | 327,706 | $ | (4,001,867 | ) | $ | 2,694,779 | ||||||||||
Schedule of Condensed Consolidating Statements of Operations | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Operations | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||||
Net sales | $ | — | $ | 1,026,249 | $ | 282,317 | $ | (133,109 | ) | $ | 1,175,457 | ||||||||||
Cost of sales (exclusive of amortization of intangible assets of $35,125) | — | 426,960 | 191,816 | (146,359 | ) | 472,417 | |||||||||||||||
Gross profit | — | 599,289 | 90,501 | 13,250 | 703,040 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Selling, general and administrative | — | 383,890 | 93,341 | 7 | 477,238 | ||||||||||||||||
Research and development | — | 29,621 | 3,577 | 23 | 33,221 | ||||||||||||||||
Amortization of intangible assets | — | 90,170 | 5,369 | — | 95,539 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | 106,600 | — | — | 106,600 | ||||||||||||||||
— | 610,281 | 102,287 | 30 | 712,598 | |||||||||||||||||
Operating (loss) income | — | (10,992 | ) | (11,786 | ) | 13,220 | (9,558 | ) | |||||||||||||
Other (expense) income: | |||||||||||||||||||||
Interest expense | (177,587 | ) | — | (146 | ) | — | (177,733 | ) | |||||||||||||
Interest income | 17 | 109 | 65 | — | 191 | ||||||||||||||||
Loss on modification and extinguishment of debt | (1,059 | ) | — | — | — | (1,059 | ) | ||||||||||||||
Other income (expense), net | — | (315 | ) | (10,684 | ) | 9,712 | (1,287 | ) | |||||||||||||
Intercompany income (expense), net | — | 4,379 | 17,799 | (22,178 | ) | — | |||||||||||||||
Equity in (loss) income of subsidiaries, net | (24,823 | ) | — | — | 24,823 | — | |||||||||||||||
(203,452 | ) | 4,173 | 7,034 | 12,357 | (179,888 | ) | |||||||||||||||
(Loss) income before income taxes | (203,452 | ) | (6,819 | ) | (4,752 | ) | 25,577 | (189,446 | ) | ||||||||||||
Income tax provision | — | (7,828 | ) | (5,288 | ) | — | (13,116 | ) | |||||||||||||
Net (loss) income | (203,452 | ) | (14,647 | ) | (10,040 | ) | 25,577 | (202,562 | ) | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (890 | ) | — | (890 | ) | ||||||||||||||
Net (loss) income attributable to DJOFL | $ | (203,452 | ) | $ | (14,647 | ) | $ | (10,930 | ) | $ | 25,577 | $ | (203,452 | ) | |||||||
Schedule of Condensed Consolidating Statements of Comprehensive Loss | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Loss | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non-Guarantors | Eliminations | Consolidated | |||||||||||||||||
Net (loss) income | $ | (203,452 | ) | $ | (14,647 | ) | $ | (10,040 | ) | $ | 25,577 | $ | (202,562 | ) | |||||||
Other comprehensive income, net of taxes: | |||||||||||||||||||||
Foreign currency translation adjustments, net of tax provision of $1,212 | — | — | 19 | — | 19 | ||||||||||||||||
Other comprehensive income | — | — | 19 | — | 19 | ||||||||||||||||
Comprehensive (loss) income | (203,452 | ) | (14,647 | ) | (10,021 | ) | 25,577 | (202,543 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (1,010 | ) | — | (1,010 | ) | ||||||||||||||
Comprehensive (loss) income attributable to DJO Finance LLC | $ | (203,452 | ) | $ | (14,647 | ) | $ | (11,031 | ) | $ | 25,577 | $ | (203,553 | ) | |||||||
Schedule of Condensed Consolidating Statements of Cash Flows | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Cash Flows from Operating Activities: | |||||||||||||||||||||
Net (loss) income | $ | (203,452 | ) | $ | (14,647 | ) | $ | (10,040 | ) | $ | 25,577 | $ | (202,562 | ) | |||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||||||||
Depreciation | — | 28,002 | 5,383 | (258 | ) | 33,127 | |||||||||||||||
Amortization of intangible assets | — | 90,170 | 5,369 | — | 95,539 | ||||||||||||||||
Amortization of debt issuance costs and non-cash interest expense | 8,012 | — | — | — | 8,012 | ||||||||||||||||
Loss on modification and extinguishment of debt | 1,059 | — | — | — | 1,059 | ||||||||||||||||
Stock-based compensation expense | — | 2,155 | — | — | 2,155 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | 106,600 | — | — | 106,600 | ||||||||||||||||
Loss on disposal of assets, net | — | 424 | 684 | — | 1,108 | ||||||||||||||||
Deferred income tax expense (benefit) | — | 5,824 | (1,233 | ) | 147 | 4,738 | |||||||||||||||
Provision for doubtful accounts and sales returns | — | 32,767 | 318 | — | 33,085 | ||||||||||||||||
Inventory reserves | — | 8,309 | 1,812 | — | 10,121 | ||||||||||||||||
Equity in income of subsidiaries, net | 24,823 | — | — | (24,823 | ) | — | |||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||
Accounts receivable | — | (44,300 | ) | (6,650 | ) | — | (50,950 | ) | |||||||||||||
Inventories | — | (2,510 | ) | 5,926 | (9,064 | ) | (5,648 | ) | |||||||||||||
Prepaid expenses and other assets | — | (1,076 | ) | (7,368 | ) | (311 | ) | (8,755 | ) | ||||||||||||
Accounts payable and other current liabilities | (1,839 | ) | (2,863 | ) | 7,597 | (744 | ) | 2,151 | |||||||||||||
Net cash (used in) provided by operating activities | (171,397 | ) | 208,855 | 1,798 | (9,476 | ) | 29,780 | ||||||||||||||
Cash Flows from Investing Activities: | |||||||||||||||||||||
Cash paid in connection with acquisitions, net of cash acquired | — | (192 | ) | (1,761 | ) | — | (1,953 | ) | |||||||||||||
Purchases of property and equipment | — | (29,158 | ) | (8,310 | ) | (16 | ) | (37,484 | ) | ||||||||||||
Other investing activities, net | — | (1,239 | ) | (387 | ) | — | (1,626 | ) | |||||||||||||
Net cash used in investing activities | — | (30,589 | ) | (10,458 | ) | (16 | ) | (41,063 | ) | ||||||||||||
Cash Flows from Financing Activities: | |||||||||||||||||||||
Intercompany | 156,598 | (181,030 | ) | 14,944 | 9,488 | — | |||||||||||||||
Proceeds from issuance of debt | 549,417 | — | — | — | 549,417 | ||||||||||||||||
Repayments of debt and capital lease obligations | (523,037 | ) | — | — | — | (523,037 | ) | ||||||||||||||
Payment of debt issuance costs | (2,387 | ) | — | — | — | (2,387 | ) | ||||||||||||||
Dividend paid by subsidiary to owners of noncontrolling interest | — | — | (684 | ) | — | (684 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | 180,591 | (181,030 | ) | 14,260 | 9,488 | 23,309 | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 329 | — | 329 | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 9,194 | (2,764 | ) | 5,929 | (4 | ) | 12,355 | ||||||||||||||
Cash and cash equivalents at beginning of period | 13,176 | 3,122 | 14,919 | 6 | 31,223 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 22,370 | $ | 358 | $ | 20,848 | $ | 2 | $ | 43,578 | |||||||||||
Two Thousand And Twelve | ' | ||||||||||||||||||||
Schedule of Condensed Consolidating Balance Sheets | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Balance Sheets | |||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Current assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 13,176 | $ | 3,122 | $ | 14,919 | $ | 6 | $ | 31,223 | |||||||||||
Accounts receivable, net | — | 129,588 | 37,154 | — | 166,742 | ||||||||||||||||
Inventories, net | — | 132,130 | 26,824 | (2,639 | ) | 156,315 | |||||||||||||||
Deferred tax assets, net | — | 33,102 | 181 | — | 33,283 | ||||||||||||||||
Prepaid expenses and other current assets | 160 | 14,513 | 2,985 | 415 | 18,073 | ||||||||||||||||
Total current assets | 13,336 | 312,455 | 82,063 | (2,218 | ) | 405,636 | |||||||||||||||
Property and equipment, net | — | 94,899 | 12,634 | (498 | ) | 107,035 | |||||||||||||||
Goodwill | — | 1,168,479 | 110,257 | (29,431 | ) | 1,249,305 | |||||||||||||||
Intangible assets, net | — | 1,035,066 | 20,465 | — | 1,055,531 | ||||||||||||||||
Investment in subsidiaries | 1,297,699 | 1,680,446 | 80,386 | (3,058,531 | ) | — | |||||||||||||||
Intercompany receivables | 1,093,618 | — | — | (1,093,618 | ) | — | |||||||||||||||
Other assets | 41,624 | 1,988 | 1,604 | — | 45,216 | ||||||||||||||||
Total assets | $ | 2,446,277 | $ | 4,293,333 | $ | 307,409 | $ | (4,184,296 | ) | $ | 2,862,723 | ||||||||||
Liabilities and Equity | |||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||
Accounts payable | $ | — | $ | 46,283 | $ | 9,147 | $ | (1,136 | ) | $ | 54,294 | ||||||||||
Current portion of debt obligations | 8,858 | — | — | — | 8,858 | ||||||||||||||||
Other current liabilities | 31,511 | 68,413 | 25,017 | 352 | 125,293 | ||||||||||||||||
Total current liabilities | 40,369 | 114,696 | 34,164 | (784 | ) | 188,445 | |||||||||||||||
Long-term debt obligations | 2,223,816 | — | — | — | 2,223,816 | ||||||||||||||||
Deferred tax liabilities, net | — | 234,332 | 6,870 | — | 241,202 | ||||||||||||||||
Intercompany payables, net | — | 861,014 | 131,558 | (992,572 | ) | — | |||||||||||||||
Other long-term liabilities | — | 22,917 | 1,933 | — | 24,850 | ||||||||||||||||
Total liabilities | 2,264,185 | 1,232,959 | 174,525 | (993,356 | ) | 2,678,313 | |||||||||||||||
Noncontrolling interests | — | — | 2,318 | — | 2,318 | ||||||||||||||||
Total membership equity | 182,092 | 3,060,374 | 130,566 | (3,190,940 | ) | 182,092 | |||||||||||||||
Total liabilities and equity | $ | 2,446,277 | $ | 4,293,333 | $ | 307,409 | $ | (4,184,296 | ) | $ | 2,862,723 | ||||||||||
Schedule of Condensed Consolidating Statements of Operations | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Operations | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Net sales | $ | — | $ | 976,874 | $ | 265,137 | $ | (112,591 | ) | $ | 1,129,420 | ||||||||||
Cost of sales (exclusive of amortization of intangible assets of $38,355) | — | 392,397 | 178,659 | (127,136 | ) | 443,920 | |||||||||||||||
Gross profit | — | 584,477 | 86,478 | 14,545 | 685,500 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Selling, general and administrative | — | 377,073 | 82,988 | 4 | 460,065 | ||||||||||||||||
Research and development | — | 23,585 | 4,292 | — | 27,877 | ||||||||||||||||
Amortization of intangible assets | — | 93,038 | 4,205 | — | 97,243 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | — | 7,397 | — | 7,397 | ||||||||||||||||
— | 493,696 | 98,882 | 4 | 592,582 | |||||||||||||||||
Operating income (loss) | — | 90,781 | (12,404 | ) | 14,541 | 92,918 | |||||||||||||||
Other (expense) income: | |||||||||||||||||||||
Interest expense | (182,925 | ) | — | (130 | ) | — | (183,055 | ) | |||||||||||||
Interest income | 16 | 93 | 92 | — | 201 | ||||||||||||||||
Loss on modification of debt | (36,889 | ) | — | — | — | (36,889 | ) | ||||||||||||||
Other income, net | — | 2,453 | 1,100 | — | 3,553 | ||||||||||||||||
Intercompany (expense) income, net | — | (1,297 | ) | 10,584 | (9,287 | ) | — | ||||||||||||||
Equity in income of subsidiaries, net | 100,648 | — | — | (100,648 | ) | — | |||||||||||||||
(119,150 | ) | 1,249 | 11,646 | (109,935 | ) | (216,190 | ) | ||||||||||||||
(Loss) income before income taxes | (119,150 | ) | 92,030 | (758 | ) | (95,394 | ) | (123,272 | ) | ||||||||||||
Income tax benefit (provision) | — | 8,333 | (3,429 | ) | — | 4,904 | |||||||||||||||
Net (loss) income | (119,150 | ) | 100,363 | (4,187 | ) | (95,394 | ) | (118,368 | ) | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (782 | ) | — | (782 | ) | ||||||||||||||
Net (loss) income attributable to DJOFL | $ | (119,150 | ) | $ | 100,363 | $ | (4,969 | ) | $ | (95,394 | ) | $ | (119,150 | ) | |||||||
Schedule of Condensed Consolidating Statements of Comprehensive Loss | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Loss | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Net (loss) income | $ | (119,150 | ) | $ | 100,363 | $ | (4,187 | ) | $ | (95,394 | ) | $ | (118,368 | ) | |||||||
Other comprehensive income, net of taxes: | |||||||||||||||||||||
Foreign currency translation adjustments, net of tax provision of $1,386 | — | — | 1,108 | — | 1,108 | ||||||||||||||||
Other comprehensive income | — | — | 1,108 | — | 1,108 | ||||||||||||||||
Comprehensive (loss) income | (119,150 | ) | 100,363 | (3,079 | ) | (95,394 | ) | (117,260 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (824 | ) | — | (824 | ) | ||||||||||||||
Comprehensive (loss) income attributable to DJO Finance LLC | $ | (119,150 | ) | $ | 100,363 | $ | (3,903 | ) | $ | (95,394 | ) | $ | (118,084 | ) | |||||||
Schedule of Condensed Consolidating Statements of Cash Flows | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||
Net (loss) income | $ | (119,150 | ) | $ | 100,363 | $ | (4,187 | ) | $ | (95,394 | ) | $ | (118,368 | ) | |||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||||||||
Depreciation | — | 25,529 | 5,049 | (362 | ) | 30,216 | |||||||||||||||
Amortization of intangible assets | — | 93,038 | 4,205 | — | 97,243 | ||||||||||||||||
Amortization of debt issuance costs and non-cash interest expense | 9,732 | — | — | — | 9,732 | ||||||||||||||||
Stock-based compensation expense | — | 2,339 | — | — | 2,339 | ||||||||||||||||
Loss on disposal of assets, net | — | 1,098 | 588 | — | 1,686 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | — | 7,397 | — | 7,397 | ||||||||||||||||
Deferred income benefit | — | (8,493 | ) | (3,088 | ) | — | (11,581 | ) | |||||||||||||
Equity in (income) loss of subsidiaries, net | (100,648 | ) | — | — | 100,648 | — | |||||||||||||||
Provision for doubtful accounts and sales returns | — | 21,889 | 337 | — | 22,226 | ||||||||||||||||
Inventory reserves | — | 5,895 | 455 | — | 6,350 | ||||||||||||||||
Loss on modification and extinguishment of debt | 36,889 | — | — | — | 36,889 | ||||||||||||||||
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||||||||||||||||
Accounts receivable | — | (26,380 | ) | (3,110 | ) | — | (29,490 | ) | |||||||||||||
Inventories | — | (24,582 | ) | 9,270 | (12,975 | ) | (28,287 | ) | |||||||||||||
Prepaid expenses and other assets | — | 1,108 | 169 | 36 | 1,313 | ||||||||||||||||
Accounts payable and other current liabilities | 10,648 | 9,675 | (5,420 | ) | 2,051 | 16,954 | |||||||||||||||
Net cash (used in) provided by operating activities | (162,529 | ) | 201,479 | 11,665 | (5,996 | ) | 44,619 | ||||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||
Cash paid in connection with acquisitions, net of cash acquired | — | (29,909 | ) | — | — | (29,909 | ) | ||||||||||||||
Purchases of property and equipment | — | (27,929 | ) | (5,008 | ) | (13 | ) | (32,950 | ) | ||||||||||||
Other investing activities, net | — | (1,106 | ) | — | — | (1,106 | ) | ||||||||||||||
Net cash used in investing activities | — | (58,944 | ) | (5,008 | ) | (13 | ) | (63,965 | ) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||
Intercompany | 149,292 | (141,153 | ) | (14,153 | ) | 6,014 | — | ||||||||||||||
Proceeds from issuance of debt | 1,342,450 | — | — | — | 1,342,450 | ||||||||||||||||
Repayments of debt and capital lease obligations | (1,276,007 | ) | (38 | ) | — | — | (1,276,045 | ) | |||||||||||||
Payment of debt issuance, modification and extinguishment costs | (55,827 | ) | — | — | — | (55,827 | ) | ||||||||||||||
Investment by parent | 2,000 | — | — | — | 2,000 | ||||||||||||||||
Exercise of indirect parent stock options | 24 | — | — | — | 24 | ||||||||||||||||
Dividend paid by subsidiary to owners of noncontrolling interests | — | — | (649 | ) | — | (649 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | 161,932 | (141,191 | ) | (14,802 | ) | 6,014 | 11,953 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 447 | — | 447 | ||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (597 | ) | 1,344 | (7,698 | ) | 5 | (6,946 | ) | |||||||||||||
Cash and cash equivalents, beginning of year | 13,773 | 1,778 | 22,617 | 1 | 38,169 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 13,176 | $ | 3,122 | $ | 14,919 | $ | 6 | $ | 31,223 | |||||||||||
Two Thousand And Eleven | ' | ||||||||||||||||||||
Schedule of Condensed Consolidating Statements of Operations | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Operations | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Net sales | $ | — | $ | 893,036 | $ | 263,908 | $ | (82,174 | ) | $ | 1,074,770 | ||||||||||
Cost of sales (exclusive of amortization of intangible assets of $38,668) | — | 360,601 | 168,307 | (110,770 | ) | 418,138 | |||||||||||||||
Gross profit | — | 532,435 | 95,601 | 28,596 | 656,632 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Selling, general and administrative | — | 394,588 | 92,496 | — | 487,084 | ||||||||||||||||
Research and development | — | 23,050 | 3,800 | — | 26,850 | ||||||||||||||||
Amortization of intangible assets | — | 89,637 | 4,320 | — | 93,957 | ||||||||||||||||
Impairment of goodwill and intangible assets | — | 141,006 | — | — | 141,006 | ||||||||||||||||
— | 648,281 | 100,616 | — | 748,897 | |||||||||||||||||
Operating (loss) income | — | (115,846 | ) | (5,015 | ) | 28,596 | (92,265 | ) | |||||||||||||
Other (expense) income: | |||||||||||||||||||||
Interest expense | (169,117 | ) | (22 | ) | (193 | ) | — | (169,332 | ) | ||||||||||||
Interest income | 14 | 127 | 204 | — | 345 | ||||||||||||||||
Loss on modification of debt | (2,065 | ) | — | — | — | (2,065 | ) | ||||||||||||||
Other income (expense), net | — | 986 | (3,745 | ) | (55 | ) | (2,814 | ) | |||||||||||||
Intercompany income (expense), net | 10,625 | 18,126 | (18,381 | ) | (10,370 | ) | — | ||||||||||||||
Equity in loss of subsidiaries, net | (53,926 | ) | — | — | 53,926 | — | |||||||||||||||
(214,469 | ) | 19,217 | (22,115 | ) | 43,501 | (173,866 | ) | ||||||||||||||
(Loss) income before income taxes | (214,469 | ) | (96,629 | ) | (27,130 | ) | 72,097 | (266,131 | ) | ||||||||||||
Income tax benefit (provision) | — | 57,173 | 4,775 | (146 | ) | 52,544 | |||||||||||||||
Net (loss) income | (214,469 | ) | (39,456 | ) | (31,905 | ) | 72,243 | (213,587 | ) | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (882 | ) | — | (882 | ) | ||||||||||||||
Net (loss) income attributable to DJOFL | $ | (214,469 | ) | $ | (39,456 | ) | $ | (32,787 | ) | $ | 72,243 | $ | (214,469 | ) | |||||||
Schedule of Condensed Consolidating Statements of Comprehensive Loss | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Loss | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Net (loss) income | $ | (214,469 | ) | $ | (39,456 | ) | $ | (31,905 | ) | $ | 72,243 | $ | (213,587 | ) | |||||||
Other comprehensive income, net of taxes: | |||||||||||||||||||||
Foreign currency translation adjustments, net of tax benefit of $1,681 | — | — | (1,896 | ) | — | (1,896 | ) | ||||||||||||||
Unrealized loss on cash flow hedges, net of tax benefit of $175 | (272 | ) | — | — | — | (272 | ) | ||||||||||||||
Reclassification adjustment for losses on cash flow hedges included in net loss, net of tax provision of $2,773 | 4,381 | — | — | — | 4,381 | ||||||||||||||||
Other comprehensive income (loss) | 4,109 | — | (1,896 | ) | — | 2,213 | |||||||||||||||
Comprehensive (loss) income | (210,360 | ) | (39,456 | ) | (33,801 | ) | 72,243 | (211,374 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (829 | ) | — | (829 | ) | ||||||||||||||
Comprehensive (loss) income attributable to DJO Finance LLC | $ | (210,360 | ) | $ | (39,456 | ) | $ | (34,630 | ) | $ | 72,243 | $ | (212,203 | ) | |||||||
Schedule of Condensed Consolidating Statements of Cash Flows | ' | ||||||||||||||||||||
DJO Finance LLC | |||||||||||||||||||||
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||
For the Year Ended December 31, 2011 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
DJOFL | Guarantors | Non- | Eliminations | Consolidated | |||||||||||||||||
Guarantors | |||||||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||||
Net (loss) income | $ | (214,469 | ) | $ | (39,456 | ) | $ | (31,905 | ) | $ | 72,243 | $ | (213,587 | ) | |||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||||||||
Depreciation | — | 23,231 | 5,083 | (1,020 | ) | 27,294 | |||||||||||||||
Amortization of intangible assets | — | 89,637 | 4,320 | — | 93,957 | ||||||||||||||||
Amortization of debt issuance costs and non-cash interest expense | 8,476 | — | — | — | 8,476 | ||||||||||||||||
Stock-based compensation expense | — | 2,701 | — | — | 2,701 | ||||||||||||||||
Loss on disposal of assets, net | — | 7,434 | 438 | (3,487 | ) | 4,385 | |||||||||||||||
Impairment of goodwill and intangible assets | — | 141,006 | — | — | 141,006 | ||||||||||||||||
Deferred income tax (benefit) expense | (2,599 | ) | (56,651 | ) | (1,224 | ) | (146 | ) | (60,620 | ) | |||||||||||
Equity in loss of subsidiaries, net | 53,926 | — | — | (53,926 | ) | — | |||||||||||||||
Provision for doubtful accounts and sales returns | — | 31,000 | 673 | — | 31,673 | ||||||||||||||||
Inventory reserves | — | 6,798 | 908 | — | 7,706 | ||||||||||||||||
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||||||||||||||||
Accounts receivable | — | (30,398 | ) | (1,833 | ) | — | (32,231 | ) | |||||||||||||
Inventories | — | (7,631 | ) | 6,402 | (11,961 | ) | (13,190 | ) | |||||||||||||
Prepaid expenses and other assets | (17 | ) | 7,351 | (1,090 | ) | 2,191 | 8,435 | ||||||||||||||
Accounts payable and other current liabilities | 5,336 | 3,877 | 13,062 | (4,675 | ) | 17,602 | |||||||||||||||
Net cash (used in) provided by operating activities | (149,347 | ) | 178,899 | (5,166 | ) | (781 | ) | 23,605 | |||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||||
Cash paid in connection with acquisitions, net of cash acquired | — | (317,669 | ) | — | — | (317,669 | ) | ||||||||||||||
Purchases of property and equipment | — | (33,673 | ) | (5,536 | ) | (188 | ) | (39,397 | ) | ||||||||||||
Other investing activities, net | — | (1,603 | ) | 7 | — | (1,596 | ) | ||||||||||||||
Net cash used in investing activities | — | (352,945 | ) | (5,529 | ) | (188 | ) | (358,662 | ) | ||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||||
Intercompany | (191,181 | ) | 177,245 | 12,966 | 970 | — | |||||||||||||||
Proceeds from issuance of debt | 439,000 | — | — | — | 439,000 | ||||||||||||||||
Repayments of debt and capital lease obligations | (96,782 | ) | (42 | ) | (2 | ) | — | (96,826 | ) | ||||||||||||
Payment of debt issuance, modification and extinguishment costs | (7,694 | ) | — | — | — | (7,694 | ) | ||||||||||||||
Investment by parent | 3,176 | — | — | — | 3,176 | ||||||||||||||||
Cancellation of vested options | — | (2,000 | ) | — | — | (2,000 | ) | ||||||||||||||
Dividend paid by subsidiary to owners of noncontrolling interests | — | — | (1,366 | ) | — | (1,366 | ) | ||||||||||||||
Net cash provided by financing activities | 146,519 | 175,203 | 11,598 | 970 | 334,290 | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 804 | — | 804 | ||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (2,828 | ) | 1,157 | 1,707 | 1 | 37 | |||||||||||||||
Cash and cash equivalents, beginning of year | 16,601 | 621 | 20,910 | — | 38,132 | ||||||||||||||||
Cash and cash equivalents, end of year | $ | 13,773 | $ | 1,778 | $ | 22,617 | $ | 1 | $ | 38,169 | |||||||||||
Organization_and_Basis_of_Pres2
Organization and Basis of Presentation - Additional Information (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Segment | |
Organization And Basis Of Presentation [Line Items] | ' |
Number of operating segments | 4 |
Percentage of ownership interest in subsidiary Medireha GmbH | 50.00% |
Tunisia | ' |
Organization And Basis Of Presentation [Line Items] | ' |
Description of infrequent event | 'In September 2013, a fire occurred at our factory in Tunisia. As a result of the fire, certain inventory and fixed assets were destroyed and the leased facility became inoperable. |
Estimated losses for destroyed inventory and fixed assets, excess expenses incurred and building reconstruction | 5 |
Revenue from business interruption insurance proceeds | 1.3 |
Insurance receivable | 6.3 |
Significant_Accounting_Policie2
Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Customer | Customer | Customer | |
Accounting Policies [Line Items] | ' | ' | ' |
Amortization expense | $95,539,000 | $97,243,000 | $93,957,000 |
Impairment charge | ' | ' | 7,100,000 |
Unamortized internally developed software costs | 10,500,000 | 12,400,000 | ' |
Product warranty, description | 'We provide expressed warranties on certain products for periods typically ranging from one to three years. We estimate our warranty obligations at the time of sale based upon historical experience and known product issues, if any. | ' | ' |
Advertising cost | 6,400,000 | 6,500,000 | 7,000,000 |
Foreign transaction (losses) gains | -1,500,000 | 3,600,000 | -2,800,000 |
Disclosure of major customers | 0 | 0 | 0 |
Software Developed For Internal Use | ' | ' | ' |
Accounting Policies [Line Items] | ' | ' | ' |
Amortization expense | $1,900,000 | $1,900,000 | $2,400,000 |
International | ' | ' | ' |
Accounting Policies [Line Items] | ' | ' | ' |
Percentage of net sales | 25.50% | 24.80% | 26.00% |
Minimum | ' | ' | ' |
Accounting Policies [Line Items] | ' | ' | ' |
Product warranty period | '1 year | ' | ' |
Minimum | Software Developed For Internal Use | ' | ' | ' |
Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful lives | '3 years | ' | ' |
Maximum | ' | ' | ' |
Accounting Policies [Line Items] | ' | ' | ' |
Product warranty period | '3 years | ' | ' |
Maximum | Software Developed For Internal Use | ' | ' | ' |
Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful lives | '10 years | ' | ' |
Property and Equipment | Minimum | ' | ' | ' |
Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful lives of property and equipment | '3 years | ' | ' |
Property and Equipment | Maximum | ' | ' | ' |
Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful lives of property and equipment | '25 years | ' | ' |
Summary_of_Activity_in_Warrant
Summary of Activity in Warranty Reserves (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Warranty Liability [Line Items] | ' | ' | ' |
Balance, beginning of year | $1,488 | $1,756 | $2,222 |
Amount charged to expense for estimated warranty costs | 1,138 | 338 | 105 |
Deductions for actual costs incurred | -779 | -606 | -571 |
Balance, end of year | $1,847 | $1,488 | $1,756 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||||
Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2011 | Dec. 31, 2013 | Jul. 01, 2013 | Mar. 07, 2013 | Dec. 31, 2013 | Dec. 28, 2012 | Dec. 31, 2013 | Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Apr. 07, 2011 | Mar. 10, 2011 | Feb. 04, 2011 | Jan. 04, 2011 | |
Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | 7.75% Notes | 7.75% Notes | Blue Leaf | Vasyli | Vasyli | Exos | Exos | Exos | Exos | Exos | Rikco International, LLC, D/B/A Dr. Comfort (Dr. Comfort) | Rikco International, LLC, D/B/A Dr. Comfort (Dr. Comfort) | Circle City Medical, Inc. (Circle City) | BetterBraces.com | Elastic Therapy, Inc. (ETI) | ||||
Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, total purchase price | ' | ' | ' | ' | ' | ' | ' | $582,000 | $2,186,000 | ' | $40,575,000 | ' | ' | ' | ' | ' | $257,468,000 | $11,671,000 | $3,000,000 | $46,406,000 |
Business acquisition, cash payment | ' | ' | ' | ' | ' | ' | ' | 400,000 | 1,300,000 | ' | 31,200,000 | ' | ' | ' | ' | ' | ' | ' | 1,800,000 | ' |
Business acquisition, inventory payment | ' | ' | ' | ' | ' | ' | ' | 59,000 | 542,000 | ' | 1,754,000 | ' | ' | ' | ' | ' | 27,241,000 | 1,736,000 | ' | 2,133,000 |
Consideration held as security for potential indemnification claims | ' | ' | ' | ' | ' | ' | ' | 100,000 | 400,000 | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' |
Business acquisition, contingent consideration fair value | ' | 5,690,000 | 8,200,000 | 5,690,000 | 8,200,000 | ' | ' | ' | 300,000 | 0 | 8,200,000 | ' | 8,200,000 | ' | 8,200,000 | ' | ' | ' | ' | ' |
Business acquisition settlement of existing contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, contingent consideration amount total | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, contingent consideration percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95.00% | ' | 95.00% | ' | ' | ' | ' | ' |
Business acquisition, reduction in fair Value of contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' | ' |
Contingent consideration, payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,700,000 | ' | ' | ' | ' | ' | ' |
Contingent consideration, payment date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2014-04 | ' | ' | ' | ' | ' | ' |
Proceeds from new senior notes issued | 25,000,000 | ' | ' | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Direct acquisition costs incurred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | ' | ' | 11,300,000 | ' | 100,000 | ' | 300,000 |
Legal fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction and advisory fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | 5,000,000 | ' | ' | ' | ' |
Legal and other professional fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' | ' | ' |
Bridge financing fees paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,100,000 | ' | ' | ' | ' |
Debt instrument, stated percentage rate | ' | ' | ' | ' | ' | 7.75% | 7.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Escrow deposit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | 3,600,000 |
Additional escrow deposit for retention of key employee union | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | 1,000,000 |
Amount drawn from revolving line of credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,000,000 | ' | 35,000,000 |
Potential royalty payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Consideration offset against accounts receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' |
Consideration retained to fully repay outstanding principal and accrued interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $500,000 | ' |
Purchase_Price_for_Acquisition
Purchase Price for Acquisitions Allocated to Fair Values of Net Tangible and Intangible Assets Acquired (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 01, 2013 | Jul. 01, 2013 | Jul. 01, 2013 | Mar. 07, 2013 | Mar. 07, 2013 | Mar. 07, 2013 | Dec. 28, 2012 | Dec. 28, 2012 | Dec. 28, 2012 | Dec. 28, 2012 | Apr. 07, 2011 | Apr. 07, 2011 | Apr. 07, 2011 | Apr. 07, 2011 | Apr. 07, 2011 | Mar. 10, 2011 | Mar. 10, 2011 | Mar. 10, 2011 | Mar. 10, 2011 | Feb. 04, 2011 | Feb. 04, 2011 | Feb. 04, 2011 | Feb. 04, 2011 | Feb. 04, 2011 | Jan. 04, 2011 | Jan. 04, 2011 | Jan. 04, 2011 | Jan. 04, 2011 | ||||||||||||||||||||||||||||
In Thousands, unless otherwise specified | Blue Leaf | Blue Leaf | Blue Leaf | Vasyli | Vasyli | Vasyli | Exos | Exos | Exos | Exos | Rikco International, LLC, D/B/A Dr. Comfort (Dr. Comfort) | Rikco International, LLC, D/B/A Dr. Comfort (Dr. Comfort) | Rikco International, LLC, D/B/A Dr. Comfort (Dr. Comfort) | Rikco International, LLC, D/B/A Dr. Comfort (Dr. Comfort) | Rikco International, LLC, D/B/A Dr. Comfort (Dr. Comfort) | Circle City Medical, Inc. (Circle City) | Circle City Medical, Inc. (Circle City) | Circle City Medical, Inc. (Circle City) | Circle City Medical, Inc. (Circle City) | BetterBraces.com | BetterBraces.com | BetterBraces.com | BetterBraces.com | BetterBraces.com | Elastic Therapy, Inc. (ETI) | Elastic Therapy, Inc. (ETI) | Elastic Therapy, Inc. (ETI) | Elastic Therapy, Inc. (ETI) | |||||||||||||||||||||||||||||||
Customer Relationships | Non-compete | Customer Relationships | Non-compete | Technology | Non-compete | Trademarks and Trade Names | Customer Relationships | Technology | Non-compete | Trademarks and Trade Names | Customer Relationships | Non-compete | Trademarks and Trade Names | Customer Relationships | Technology | Non-compete | Trademarks and Trade Names | Customer Relationships | Technology | Non-compete | |||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||||||||||||||||||||
Cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,282 | ' | ' | ' | $59 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $817 | ' | ' | ' | ||||||||||||||||||||||||||||
Accounts receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,138 | ' | ' | ' | 9,187 | ' | ' | ' | ' | 572 | ' | ' | ' | ' | ' | ' | ' | ' | 3,690 | ' | ' | ' | ||||||||||||||||||||||||||||
Inventory | ' | ' | ' | 59 | ' | ' | 542 | ' | ' | 1,754 | ' | ' | ' | 27,241 | ' | ' | ' | ' | 1,736 | ' | ' | ' | ' | ' | ' | ' | ' | 2,133 | ' | ' | ' | ||||||||||||||||||||||||||||
Other current assets | ' | ' | ' | ' | ' | ' | 31 | ' | ' | 105 | ' | ' | ' | 2,108 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,542 | ' | ' | ' | ||||||||||||||||||||||||||||
Property and equipment | ' | ' | ' | ' | ' | ' | 12 | ' | ' | 584 | ' | ' | ' | 2,183 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,230 | ' | ' | ' | ||||||||||||||||||||||||||||
Other non-current assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12 | ' | ' | ' | 1,607 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 394 | ' | ' | ' | ||||||||||||||||||||||||||||
Liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | -474 | ' | ' | ' | -10,854 | ' | ' | ' | ' | -406 | ' | ' | ' | ' | ' | ' | ' | ' | -1,876 | ' | ' | ' | ||||||||||||||||||||||||||||
Deferred tax liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | -9,137 | ' | ' | ' | -15,111 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -9,609 | ' | ' | ' | ||||||||||||||||||||||||||||
Identifiable intangible assets | ' | ' | ' | ' | 90 | [1] | 111 | [1] | ' | 308 | [1] | 930 | [1] | ' | 24,200 | [1] | 1,900 | [1] | 1,000 | [1] | ' | 72,100 | [1] | 7,000 | [1] | 1,200 | [1] | 22,200 | [1] | ' | 3,700 | [1] | 200 | [1] | 1,400 | [1] | ' | 75 | [1] | 1,120 | [1] | 185 | [1] | 50 | [1] | ' | 13,400 | [1] | 6,000 | [1] | 1,600 | [1] | |||||||
Goodwill | 1,149,331 | 1,249,305 | 1,228,778 | 322 | [2] | ' | ' | 363 | [2] | ' | ' | 18,211 | [2] | ' | ' | ' | 138,548 | [2] | ' | ' | ' | ' | 4,469 | [2] | ' | ' | ' | 1,570 | [2] | ' | ' | ' | ' | 21,085 | [2] | ' | ' | ' | |||||||||||||||||||||
Total purchase price | ' | ' | ' | $582 | ' | ' | $2,186 | ' | ' | $40,575 | ' | ' | ' | $257,468 | ' | ' | ' | ' | $11,671 | ' | ' | ' | $3,000 | ' | ' | ' | ' | $46,406 | ' | ' | ' | ||||||||||||||||||||||||||||
[1] | The fair value of customer relationships was assigned to relationships with major customers existing on the acquisition date based upon an estimate of the future discounted cash flows that would be derived from those customers, after deducting contributory asset charges. The fair value of technology was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the patents and technology acquired. The fair value of non-compete agreements relate to non-compete agreements entered into with certain members of senior management. The values were determined by estimating the present value of the cash flows associated with having these agreements in place, less the present value of the cash flows assuming the non-compete agreements were not in place. The fair value of trademarks and trade names was determined primarily by estimating the present value of future royalty costs that will be avoided due to our ownership of the trade names and trademarks acquired. The useful lives of the intangible assets acquired were estimated based on the underlying agreements and/or the future economic benefit expected to be received from the assets. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | Goodwill represents the excess purchase price over the fair value of the identifiable net assets acquired. Among the factors which resulted in the recognition of goodwill for the Blue Leaf and Vasyli assets was the opportunity to expand our direct presence in the local markets with our vascular products. Among the factors which resulted in the recognition of goodwill for Exos was improved our margins on the sale of Exos products and being able to control the rights to future products developed by Exos. Among the factors which resulted in the recognition of goodwill for Dr. Comfort was expanded product offerings and increased markets. Among the factors which resulted in the recognition of goodwill for ETI was expanded product offerings and vertically integrated products which had been purchased from a third party manufacturer. Among the factors which resulted in the recognition of goodwill for Circle City were expected cost savings from consolidation of warehouse facilities and reduction of redundant general and administrative expenses. Among the factors which resulted in the recognition of goodwill for BetterBraces.com were expected cost savings resulting from distribution efficiencies and from reduction of redundant general and administrative expenses. Goodwill related to our Circle City and BetterBraces.com acquisitions is expected to be deductible for tax purposes. |
Summary_of_Activity_in_Account
Summary of Activity in Accounts Receivable Reserves for Doubtful Accounts and Sales Returns (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' |
Balance, beginning of year | $25,211 | $35,649 | $53,076 |
Provision for doubtful accounts | 33,085 | 22,226 | 31,673 |
Write-offs, net of recoveries | -25,383 | -30,024 | -44,783 |
Balance, end of year | $32,957 | $25,211 | $35,649 |
Accounts_Receivable_Reserves_A
Accounts Receivable Reserves - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ' |
Provision for sales returns | $3.90 | $4 | $2.70 |
Summary_of_Inventories_Detail
Summary of Inventories (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Inventory [Line Items] | ' | ' | ' | ' |
Components and raw materials | $59,825 | $50,619 | ' | ' |
Work in process | 7,373 | 4,563 | ' | ' |
Finished goods | 83,502 | 94,683 | ' | ' |
Inventory held on consignment | 27,969 | 23,763 | ' | ' |
Inventory, Gross, Total | 178,669 | 173,628 | ' | ' |
Inventory reserves | -23,686 | -17,313 | -14,146 | -12,853 |
Inventories, net | $154,983 | $156,315 | ' | ' |
Summary_of_Activity_of_Reserve
Summary of Activity of Reserves in Inventory (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Inventory [Line Items] | ' | ' | ' |
Balance, beginning of year | $17,313 | $14,146 | $12,853 |
Provision charged to costs of sales | 10,121 | 6,350 | 7,706 |
Write-offs, net of recoveries | -3,748 | -3,183 | -6,413 |
Balance, end of year | $23,686 | $17,313 | $14,146 |
Components_of_Property_and_Equ
Components of Property and Equipment (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Land | Building and Improvements | Building and Improvements | Equipment | Equipment | Software | Software | Furniture and Fixtures | Furniture and Fixtures | Surgical Implant Instrumentation | Construction in Progress | ||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | ||||||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Land | $266 | $266 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Buildings and improvements | 27,229 | 26,802 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equipment | 119,127 | 105,351 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Software | 33,817 | 31,270 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Furniture and fixtures | 25,784 | 23,441 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Surgical implant instrumentation | 55,841 | 46,504 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Construction in progress | 7,919 | 8,196 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property, Plant and Equipment, Gross, Total | 269,983 | 241,830 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated depreciation and amortization | -162,154 | -134,795 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | $107,829 | $107,035 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property, Plant and Equipment useful life | ' | ' | 'Indefinite | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'N/A |
Property, Plant and Equipment useful life | ' | ' | ' | '3 years | '25 years | '2 years | '7 years | '3 years | '10 years | '3 years | '8 years | '5 years | ' |
Property_and_Equipment_Net_Add
Property and Equipment, Net - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation and amortization expense | $33.10 | $30.20 | $27.30 |
Schedule_of_Changes_in_Carryin
Schedule of Changes in Carrying Amount of Goodwill (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Line Items] | ' | ' |
Balance, beginning of year | $1,249,305 | $1,228,778 |
Acquisitions (see Note 3) | 685 | 18,211 |
Impairment of goodwill | -102,000 | ' |
Foreign currency translation | 1,341 | 2,316 |
Balance, end of year | $1,149,331 | $1,249,305 |
Long_Lived_Assets_Additional_I
Long Lived Assets - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2012 | |
Segment | Significant Unobservable Inputs (Level 3) | Significant Unobservable Inputs (Level 3) | Customer Relationships | Patents and Technology | Distributor Contracts And Relationships | Trademarks and Trade Names | Non-compete | Chattanooga | Empi | Empi | Empi | Empi | Surgical Implant | Germany | |
Minimum | Maximum | Trade Names | Trade Names | Trade Names | |||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated revenue growth rate | ' | -1.00% | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rates | ' | 9.90% | 11.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Terminal value growth rate | ' | 0.50% | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment charges | $102,000,000 | ' | ' | ' | ' | ' | ' | ' | $52,500,000 | $49,500,000 | $76,700,000 | ' | ' | $47,400,000 | ' |
Number of reporting units without impairment | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment charge of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,500,000 | $16,900,000 | ' | $7,400,000 |
Estimated useful lives | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years |
Definite-lived intangible assets, weighted average useful lives | ' | ' | ' | '5 years 10 months 24 days | '9 years 1 month 6 days | '2 years 8 months 12 days | '7 years 1 month 6 days | '2 years 10 months 24 days | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Identifiable_Intang
Summary of Identifiable Intangible Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Net identifiable intangible assets | $958,993 | $1,055,531 |
Gross Carrying Amount | 1,093,613 | 1,090,878 |
Accumulated Amortization | -533,904 | -438,956 |
Intangible Assets, Net | 559,709 | 651,922 |
Customer Relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 570,070 | 570,221 |
Accumulated Amortization | -290,359 | -236,228 |
Intangible Assets, Net | 279,711 | 333,993 |
Patents and Technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 486,246 | 485,675 |
Accumulated Amortization | -230,111 | -195,099 |
Intangible Assets, Net | 256,135 | 290,576 |
Trademarks and Trade Names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 25,820 | 25,773 |
Accumulated Amortization | -7,102 | -4,248 |
Intangible Assets, Net | 18,718 | 21,525 |
Indefinite lived intangible assets | 399,284 | 403,609 |
Distributor Contracts And Relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 5,054 | 3,662 |
Accumulated Amortization | -3,183 | -1,659 |
Intangible Assets, Net | 1,871 | 2,003 |
Non-compete | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | 6,423 | 5,547 |
Accumulated Amortization | -3,149 | -1,722 |
Intangible Assets, Net | $3,274 | $3,825 |
Schedule_of_Estimated_Amortiza
Schedule of Estimated Amortization Expense (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Finite Lived Intangible Assets Future Amortization Expense [Line Items] | ' | ' |
2014 | $92,793 | ' |
2015 | 87,995 | ' |
2016 | 83,625 | ' |
2017 | 72,451 | ' |
2018 | 62,272 | ' |
Thereafter | 160,573 | ' |
Intangible Assets, Net | $559,709 | $651,922 |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets by Segment (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Goodwill And Intangible Assets [Line Items] | ' | ' | ' |
Goodwill | $1,149,331 | $1,249,305 | $1,228,778 |
Intangible assets, net | 958,993 | 1,055,531 | ' |
Bracing and Vascular | ' | ' | ' |
Goodwill And Intangible Assets [Line Items] | ' | ' | ' |
Goodwill | 483,258 | 483,258 | ' |
Intangible assets, net | 527,806 | 572,187 | ' |
Recovery Sciences | ' | ' | ' |
Goodwill And Intangible Assets [Line Items] | ' | ' | ' |
Goodwill | 317,299 | 419,299 | ' |
Intangible assets, net | 250,725 | 283,342 | ' |
International | ' | ' | ' |
Goodwill And Intangible Assets [Line Items] | ' | ' | ' |
Goodwill | 348,774 | 346,748 | ' |
Intangible assets, net | 165,569 | 182,638 | ' |
Surgical Implant | ' | ' | ' |
Goodwill And Intangible Assets [Line Items] | ' | ' | ' |
Intangible assets, net | $14,893 | $17,364 | ' |
Schedule_of_Other_Current_Liab
Schedule of Other Current Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other Current Liabilities [Line Items] | ' | ' |
Accrued wages and related expenses | $33,128 | $29,888 |
Accrued commissions | 16,489 | 14,182 |
Accrued rebates | 10,731 | 6,860 |
Accrued other taxes | 4,734 | 4,477 |
Accrued professional expenses | 3,372 | 3,525 |
Income taxes payable | 2,877 | 4,380 |
Deferred tax liability | 445 | ' |
Other accrued liabilities | 37,696 | 30,328 |
Other current liabilities | $109,472 | $93,640 |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Benefit And Retirement Plans [Line Items] | ' | ' | ' |
Contributions made according to the plans | $4.20 | $4 | $3.70 |
Contributions towards international contribution plans | $1.10 | $1.30 | $0.80 |
The first 1% | ' | ' | ' |
Employee Benefit And Retirement Plans [Line Items] | ' | ' | ' |
Matching contributions made as a percentage of employee contribution | 100.00% | 100.00% | 100.00% |
The next 5% | ' | ' | ' |
Employee Benefit And Retirement Plans [Line Items] | ' | ' | ' |
Matching contributions made as a percentage of employee contribution | 50.00% | 50.00% | 50.00% |
Schedule_of_Information_Regard
Schedule of Information Regarding Notional Amounts of Foreign Exchange Forward Contracts (Detail) (Foreign Exchange Contract, Not Designated as Hedging Instrument) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | USD ($) | MXN | USD ($) | MXN |
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' |
Foreign exchange contracts not designated as hedges | $22,959 | 302,730 | $6,376 | 92,617 |
Summary_of_Location_and_Fair_V
Summary of Location and Fair Value of Derivative Instruments in Condensed Consolidated Balance Sheets (Detail) (Not Designated as Hedging Instrument, Foreign Exchange Forward, USD $) | Dec. 31, 2012 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Other Current Assets | Other Current Liabilities |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative assets | $777 | ' |
Derivative Liabilities | ' | $44 |
Summary_of_Effect_of_Derivativ
Summary of Effect of Derivative Instruments on Condensed Consolidated Statements of Operation (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | |
Effect of derivative instruments | ($821) | $1,322 | ($7,984) | |
Interest Rate Swap | Cash Flow Hedging | Interest Expense | ' | ' | ' | |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | |
Effect of derivative instruments | ' | ' | -7,154 | [1] |
Foreign Exchange Forward | Other (expense) income, net | Not Designated as Hedging Instrument | ' | ' | ' | |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | |
Effect of derivative instruments | ($821) | $1,322 | ($830) | |
[1] | Represents the loss on derivative instruments designated as cash flow hedges, reclassified from accumulated other comprehensive income (loss) into interest expense during the periods presented. |
Summary_of_Pretax_Loss_on_Deri
Summary of Pre-tax Loss on Derivative Instruments Designated as Cash Flow Hedges Recognized in Other Comprehensive Income (Loss) (Detail) (Interest Rate Derivatives Designated As Hedges Of Cash Flows, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2011 |
Interest Rate Derivatives Designated As Hedges Of Cash Flows | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' |
Pre-tax loss on derivative instruments | $447 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 28, 2012 | |
Fair Value Measurements Disclosure [Line Items] | ' | ' | ' |
Contingent consideration | $5,690,000 | $8,200,000 | ' |
Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Fair Value Measurements Disclosure [Line Items] | ' | ' | ' |
Contingent consideration | 5,690,000 | 8,200,000 | ' |
Exos | ' | ' | ' |
Fair Value Measurements Disclosure [Line Items] | ' | ' | ' |
Contingent consideration | ' | ' | 8,200,000 |
Exos | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Fair Value Measurements Disclosure [Line Items] | ' | ' | ' |
Contingent consideration | ' | 8,200,000 | 8,200,000 |
Business acquisition, contingent consideration percentage | ' | 95.00% | 95.00% |
Business acquisition, reduction in fair Value of contingent consideration | $2,500,000 | ' | ' |
Schedule_of_Assets_and_Liabili
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Foreign exchange forward contracts not designated as hedges | $44 | ' |
Foreign exchange forward contracts not designated as hedges | ' | 777 |
Contingent consideration | 5,690 | 8,200 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Foreign exchange forward contracts not designated as hedges | 44 | ' |
Foreign exchange forward contracts not designated as hedges | ' | 777 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Contingent consideration | $5,690 | $8,200 |
Reconciliation_of_All_Financia
Reconciliation of All Financial Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Balance, beginning of period | $8,200 |
Total gains: | ' |
Included in Selling, general and administrative expense | -2,510 |
Balance, end of period | $5,690 |
Schedule_of_Debt_and_Capital_L
Schedule of Debt and Capital Lease Obligations (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Debt and Capital Lease Obligations | $2,259,787 | $2,232,674 |
Current maturities | -8,620 | -8,858 |
Long-term debt | 2,251,167 | 2,223,816 |
Revolving Credit Facility | Senior Secured Credit Facility | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and Capital Lease Obligations | 38,000 | 3,000 |
Tranche B Term Loan Facility | Senior Secured Credit Facility | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and Capital Lease Obligations | 846,297 | ' |
Four Hundred Seventy Six Point Five Million Term Loan Facility | Senior Secured Credit Facility | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and Capital Lease Obligations | ' | 469,200 |
Three Hundred Eighty Five Point Five Million Term Loan Facility | Senior Secured Credit Facility | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and Capital Lease Obligations | ' | 383,965 |
8.75% Second Priority Senior Secured Notes | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and Capital Lease Obligations | 335,490 | 336,509 |
9.875% Senior unsecured notes | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and Capital Lease Obligations | 440,000 | 440,000 |
7.75% Senior Unsecured Notes | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and Capital Lease Obligations | 300,000 | 300,000 |
9.75% Senior subordinated notes | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt and Capital Lease Obligations | $300,000 | $300,000 |
Schedule_of_Debt_and_Capital_L1
Schedule of Debt and Capital Lease Obligations (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Mar. 20, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 18, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 9.875% Senior unsecured notes | 7.75% Senior Unsecured Notes | 9.75% Senior subordinated notes | 9.75% Senior subordinated notes | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility |
Tranche B Term Loan Facility | Four Hundred Seventy Six Point Five Million Term Loan Facility | Three Hundred Eighty Five Point Five Million Term Loan Facility | |||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term loan facility, face amount net | ' | ' | $330 | $330 | ' | ' | ' | $300 | $853.40 | $476.50 | $385.50 |
Term loan facility, unamortized original issue discount | ' | ' | ' | ' | ' | ' | ' | ' | 7.1 | 7.3 | 1.5 |
Stated percentage rate | 8.75% | ' | 8.75% | 8.75% | 9.88% | 7.75% | 9.75% | ' | ' | ' | ' |
Unamortized original issue premium | $5.50 | $6.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Mar. 20, 2012 | Dec. 31, 2013 | Mar. 30, 2012 | Nov. 20, 2007 | Nov. 20, 2007 | Dec. 31, 2013 | Mar. 21, 2013 | Mar. 20, 2012 | Mar. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 20, 2012 | Mar. 20, 2012 | Mar. 20, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 19, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Revolving Credit Facility | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | New Term Loans | Original Senior Secured Credit Facility | Original Senior Secured Credit Facility | Original Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Amended Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Senior Secured Credit Facility | Amendment To Senior Credit Facility | Amendment To Senior Credit Facility | Tranche B Term Loan Facility | Tranche B Term Loan Facility | Tranche B Term Loan Facility | Tranche B Term Loan Facility | ||||
Original Term Loans | Original Term Loans | Revolving Credit Facility | Original Term Loans | Original Term Loans | Original Term Loans | Original Term Loans | Original Term Loans | Original Term Loans | Revolving Credit Facility | Revolving Credit Facility | 8.75% Second Priority Senior Secured Notes | Extended Term Loans | Minimum | Maximum | Domestic Subsidiaries | Foreign Subsidiaries | Revolving Credit Facility | Revolving Credit Facility | Eurodollar Rate Plus | Federal Funds Rate Plus | One Month Eurodollar Rate | Original Term Loans | Original Term Loans | LIBOR | Eurodollar Rate Plus | Base Rate Borrowings | |||||||||||||
Minimum | Maximum | ||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior Secured Credit Facility, face amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,065,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior Secured Credit Facility, maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2014-05 | '2013-11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior Secured Credit Facility, face amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stated percentage rate | ' | ' | ' | ' | 8.75% | ' | 8.75% | 8.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt and Capital Lease Obligations | ' | 2,259,787,000 | 2,232,674,000 | ' | 335,490,000 | 336,509,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 230,000,000 | ' | ' | ' | ' | ' | ' | 38,000,000 | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term loans outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 564,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument maturity date | ' | ' | ' | ' | 15-Mar-18 | ' | ' | ' | ' | ' | ' | ' | ' | 15-Sep-17 | 1-Nov-16 | ' | 15-Sep-17 | ' | ' | 15-Mar-17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15-Sep-17 | ' | ' | ' | ' |
Issuance of term loans | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 421,400,000 | 350,000,000 | 105,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' |
Replaced Revolving Credit Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 425.00% | ' | ' | ' | 700.00% | 750.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of term loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | 103,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of term Loans, discount rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Market Values of credit facility | ' | ' | ' | 35,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 853,400,000 | ' | ' | ' |
Revolving Credit Facility, percentage points added to the reference rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.75% | 0.50% | 3.75% | ' | ' | ' | 1.00% | 3.75% | 3.75% |
Weighted Average Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.71% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment Fees Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of annual payments quarterly installments | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of prepay outstanding term loans of annual excess cash flow | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | 25.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of prepay outstanding term loans of non-ordinary course asset sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual amount from non-ordinary course asset sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reinvestment right on-non ordinary course asset, percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of cash proceeds from issuance of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Soft call premium, percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior Secured Credit Facility secured by pledges, capital stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | 100.00% | 65.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Leverage ratio of consolidated senior secured first lien to adjusted EBITDA | ' | 425.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 318.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt_Senior_Notes_Debt_Issuanc
Debt (Senior Notes, Debt Issuance Costs and Loss on Modification and Extinguishment of Debt) - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||
Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Mar. 20, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 30, 2011 | Dec. 31, 2013 | Apr. 07, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 18, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Original Term Loans | Amended Senior Secured Credit Facility | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 8.75% Second Priority Senior Secured Notes | 9.875% Notes | 9.875% Notes | 9.875% Notes | 9.875% Notes | 9.875% Notes | 9.875% Notes | 7.75% Notes | 7.75% Notes | 7.75% Notes | 7.75% Notes | 7.75% Notes | 7.75% Notes | 7.75% Notes | 7.75% Notes | 9.75% Senior subordinated notes | 9.75% Senior subordinated notes | 9.75% Senior subordinated notes | 9.75% Senior subordinated notes | 9.75% Senior subordinated notes | 9.75% Senior subordinated notes | 9.75% Senior subordinated notes | 10.875% Notes | 10.875% Notes | 7.75% Notes | Significant Other Observable Inputs (Level 2) | Significant Other Observable Inputs (Level 2) | Significant Other Observable Inputs (Level 2) | Significant Other Observable Inputs (Level 2) | |||||
8.75 % Second Priority Senior Secured Notes Optional Redemption on March 15, 2015 | 8.75 % Second Priority Senior Secured Notes Optional Redemption On March 15, 2016 | 8.75 % Second Priority Senior Secured Notes Optional Redemption on March 15, 2017 | 8.75 % Second Priority Senior Secured Notes Optional Redemption prior to March 15, 2015 | Nine Point Eight Seven Five Percentage Senior Notes Optional Redemption On April Fifteen Two Thousand Fifteen | Nine Point Eight Seven Five Percentage Senior Notes Optional Redemption On April Fifteen Two Thousand Sixteen | Nine Point Eight Seven Five Percentage Senior Notes Optional Redemption On April Fifteen Two Thousand Seventeen | Senior Notes Redeemable Prior to April 15th 2015 | 7.75 % Senior Notes Optional Redemption On April 15, 2014 | 7.75 % Senior Notes Optional Redemption On April 15, 2015 | 7.75 % Senior Notes Optional Redemption On April 15, 2016 | 7.75 % Senior Notes Optional Redemption On April 15, 2017 | 7.75 % Senior Notes Optional Redemption On Prior To April 15, 2014 | 9.75 % Senior Subordinated Notes Optional Redemption On October 15, 2013 | 9.75 % Senior Subordinated Notes Optional Redemption On October 15, 2014 | 9.75 % Senior Subordinated Notes Optional Redemption On October 15, 2015 | 9.75 % Senior Subordinated Notes Optional Redemption On October 15, 2016 | 9.75 % Senior Subordinated Notes Optional Redemption On Prior To October 15, 2013 | Tender Offer | 8.75% Second Priority Senior Secured Notes | 9.875% Notes | 7.75% Notes | 9.75% Senior subordinated notes | ||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount of debt issued | ' | ' | ' | ' | ' | ' | ' | ' | $330,000,000 | $330,000,000 | ' | ' | ' | ' | $440,000,000 | ' | ' | ' | ' | ' | ' | ' | $300,000,000 | ' | ' | ' | ' | ' | ' | $300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, stated percentage rate | ' | ' | ' | ' | ' | ' | 8.75% | ' | 8.75% | 8.75% | 104.38% | 102.19% | 100.00% | 108.75% | 9.88% | ' | ' | ' | ' | ' | 7.75% | 7.75% | ' | ' | ' | ' | ' | ' | 9.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.75% | ' | ' | ' |
Debt instrument maturity date | ' | ' | ' | ' | ' | ' | 15-Mar-18 | ' | ' | ' | ' | ' | ' | ' | 15-Apr-18 | ' | ' | ' | ' | ' | ' | 15-Apr-18 | ' | ' | ' | ' | ' | ' | 15-Oct-17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Market value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 360,500,000 | 473,000,000 | 305,300,000 | 303,800,000 |
Percentage of debt redeemed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' |
Percentage of aggregate principal amount of notes to be outstanding | ' | ' | ' | ' | ' | ' | 65.00% | ' | ' | ' | ' | ' | ' | ' | ' | 65.00% | ' | ' | ' | ' | ' | 65.00% | ' | ' | ' | ' | ' | ' | 65.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 104.94% | 102.47% | 100.00% | 109.88% | ' | ' | ' | 105.81% | 103.88% | 101.94% | 100.00% | 107.75% | ' | ' | 107.31% | 104.88% | 102.44% | 100.00% | 109.75% | ' | ' | ' | ' | ' | ' | ' |
Repurchase price percentage | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss on modification and extinguishment of debt | ' | -1,059,000 | -36,889,000 | -2,065,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Arrangement, amendment and other fees of debt | ' | 900,000 | 8,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-cash write off of unamortized debt issuance costs | ' | 200,000 | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,700,000 | ' | ' | ' | ' | ' |
Aggregate tender premium cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,300,000 | ' | ' | ' | ' | ' | ' |
Unamortized debt issuance costs | ' | 35,700,000 | 41,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,700,000 | ' | ' | ' | ' | ' | ' |
Unamortized original issuance premium | ' | ' | ' | ' | ' | ' | 5,500,000 | 6,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' | ' |
Capitalized debt issuance costs | ' | ' | ' | ' | ' | 1,500,000 | ' | 29,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,700,000 | ' | ' | ' | ' |
Issuance of term loans | 25,000,000 | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of debt issuance costs | ' | $7,300,000 | $8,900,000 | $7,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal_Maturities_of_LongTe
Principal Maturities of Long-Term Debt and Capital Leases (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Debt and Capital Lease Obligations [Line Items] | ' |
2014 | $8,620 |
2015 | 8,620 |
2016 | 8,620 |
2017 | 1,165,540 |
2018 | 1,070,000 |
Long-term Debt, Total | $2,261,400 |
Membership_Deficit_Equity_Addi
Membership (Deficit) Equity - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Class of Stock [Line Items] | ' | ' | ' |
Shares issued | 72,151 | ' | ' |
Options exercised | 221,057 | 18,622 | ' |
Shares withheld | 148,906 | ' | ' |
Aggregate market value of shares withheld | $2,451,000 | ' | ' |
Remaining common stock issued, shares | 72,151 | ' | ' |
Cash paid upon retirement to former chief executive officer | ' | ' | 2,000,000 |
Common stock issued, shares | ' | 121,506 | 192,959 |
Common stock, value per share | ' | $16.46 | $16.46 |
Net proceeds from stock purchases | ' | 2,000,000 | 3,200,000 |
Chief Executive Officer | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Common stock issued, shares | ' | 60,753 | 157,959 |
New Board Member | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Common stock issued, shares | ' | 60,753 | ' |
Member of Senior Management | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Common stock issued, shares | ' | ' | 35,000 |
Rollover Options | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Shares of vested rollover options canceled | 313,681 | ' | 355,155 |
Reduction in Members Equity | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Cash paid upon retirement to former chief executive officer | $2,000,000 | ' | ' |
Stock_Option_Plans_and_StockBa2
Stock Option Plans and Stock-Based Compensation - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||||
Sep. 29, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Feb. 28, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | |
Chief Executive Officer | Employee Stock Option | Employee Stock Option | Employee Stock Option | Employee Stock Option | Performance Options | Time-Based Options | 2013 Vested Options | Other board member | Other board member | Director | Director | Chairman of the Board | Restricted Stock | Maximum | |||||
Chief Executive Officer | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares available to grant | ' | 10,575,529 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price as a percentage of the fair market value of underlying shares on the date of grant | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted shares expiration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | '10 years |
Granted stock options modified | ' | ' | ' | ' | ' | 310,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option vest | ' | 33.33% | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted stock options | ' | 1,196,197 | ' | ' | 800,000 | ' | 1,082,397 | 2,482,100 | 983,000 | 768,677 | 243,323 | 70,397 | 100,000 | 100,000 | 13,800 | 18,400 | 303,767 | ' | ' |
Option granted, weighted average grant date fair value | $6.09 | ' | ' | $6.23 | ' | ' | ' | ' | ' | ' | $5.99 | $5.23 | ' | ' | $6.02 | ' | ' | ' | ' |
Common stock issued, value | ' | ' | $2,000,000 | $3,176,000 | $2,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted shares granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,753 | ' |
Stock options granted, total unrecognized stock-based compensation expense | ' | $900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized stock-based compensation expense, weighted-average period | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Assumptions_Used_to
Summary of Assumptions Used to Estimate Fair Value of Time-Based Options, 2013 Vested Options and Director Service Options of Stock Options Granted (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Expected volatility, minimum | 33.40% | 35.30% | 34.00% |
Expected volatility, maximum | 35.10% | 37.70% | 34.40% |
Risk-free interest rate, minimum | 0.70% | 0.80% | 1.30% |
Risk-free interest rate, maximum | 2.00% | 1.50% | 2.10% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Minimum | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Expected years until exercise | '5 years | '6 years 1 month 6 days | '6 years 4 months 24 days |
Maximum | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Expected years until exercise | '6 years 3 months 18 days | '6 years 2 months 12 days | '6 years 7 months 6 days |
Schedule_of_Recorded_Noncash_S
Schedule of Recorded Non-cash Stock-based Compensation Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Non-cash stock-based compensation expense | $2,155 | $2,339 | $2,701 |
Cost of Goods Sold | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Non-cash stock-based compensation expense | 52 | 78 | 149 |
Selling, General and Administrative Expenses | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Non-cash stock-based compensation expense | 2,049 | 2,206 | 2,493 |
Research and Development Expense | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Non-cash stock-based compensation expense | $54 | $55 | $59 |
Summary_of_Option_Activity_Det
Summary of Option Activity (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Number of Shares | ' | ' |
Outstanding at beginning of period | 9,233,369 | ' |
Granted | 1,196,197 | ' |
Exercised | -221,057 | -18,622 |
Forfeited or expired | -1,191,219 | ' |
Outstanding at end of period | 9,017,290 | 9,233,369 |
Exercisable at end of period | 3,185,477 | ' |
Weighted-Average Exercise Price per Share | ' | ' |
Outstanding at beginning of period | $15.39 | ' |
Granted | $16.46 | ' |
Exercised | $8.29 | ' |
Forfeited or expired | $14.76 | ' |
Outstanding at end of period | $15.79 | $15.39 |
Exercisable at end of period | $14.55 | ' |
Weighted-Average Remaining Contractual Term (Years) | ' | ' |
Outstanding at end of period | '6 years 1 month 6 days | '6 years 3 months 18 days |
Exercisable at end of period | '3 years 7 months 6 days | ' |
Aggregate Intrinsic Value | ' | ' |
Outstanding at beginning of period | $9,940,209 | ' |
Outstanding at end of period | 6,133,210 | 9,940,209 |
Exercisable at end of period | $6,133,210 | ' |
Exercise_of_Stock_Options_Usin
Exercise of Stock Options Using Net Exercise Method (Detail) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items] | ' | ' |
Options exercised | 221,057 | 18,622 |
Shares withheld | 148,906 | ' |
Shares issued | 72,151 | ' |
Average market value per share withheld | $16.46 | ' |
Aggregate market value of shares withheld | $2,451 | ' |
Components_of_Loss_from_Contin
Components of Loss from Continuing Operations (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items] | ' | ' | ' |
U.S. operations | ($206,769) | ($137,268) | ($283,137) |
Foreign operations | 17,323 | 13,996 | 17,006 |
Loss before income taxes | ($189,446) | ($123,272) | ($266,131) |
Components_of_Income_Tax_Provi
Components of Income Tax Provision (Benefit) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current income taxes: | ' | ' | ' |
U.S. Federal | $1,135 | ($1,205) | ($1,175) |
U.S. State | 870 | 1,347 | 1,619 |
Foreign | 6,373 | 6,330 | 6,019 |
Total current income taxes | 8,378 | 6,472 | 6,463 |
Deferred income taxes: | ' | ' | ' |
U.S. Federal | 7,460 | -3,558 | -54,875 |
U.S. State | -2,154 | -5,751 | -2,889 |
Foreign | -568 | -2,067 | -1,243 |
Total deferred income taxes | 4,738 | -11,376 | -59,007 |
Total income tax provision (benefit) | $13,116 | ($4,904) | ($52,544) |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Taxes [Line Items] | ' | ' | ' |
Gross deferred tax assets | $265,030,000 | $243,002,000 | ' |
Valuation allowances | 94,741,000 | 43,792,000 | ' |
Deferred tax expense for unrepatriated foreign earnings | 2,678,000 | 3,199,000 | ' |
Expected decrease in unrecognized tax positions related to amortization of intangible assets | 300,000 | ' | ' |
Expected decrease in unrecognized tax benefits | 379,000 | 990,000 | 2,065,000 |
Unrecognized tax benefits impacting effective tax rate | 6,600,000 | ' | ' |
Interest and penalties included as a component of income tax benefit | 500,000 | 300,000 | 200,000 |
Accrued Interest Or Penalties Related To Tax Amounts | 2,600,000 | 2,100,000 | ' |
United States | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' |
Federal statutory income tax rate | 35.00% | ' | ' |
Operating loss carryforwards, expiration dates | 'Over a period of 1 to 20 years | ' | ' |
Federal | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' |
Net operating loss carryforwards | 528,300,000 | ' | ' |
State | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' |
Net operating loss carryforwards | 313,000,000 | ' | ' |
Europe | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' |
Net operating loss carryforwards | 6,500,000 | ' | ' |
Foreign Tax | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' |
Deferred tax expense for unrepatriated foreign earnings | $1,800,000 | $2,500,000 | $1,500,000 |
Difference_Between_Income_Tax_
Difference Between Income Tax Provision (Benefit) Derived by Applying U.S. Federal Statutory Income Tax Rate to Loss from Continuing Operations Before Income Tax and Income Tax Provision (Benefit) Recognized (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Rate Reconciliation [Line Items] | ' | ' | ' |
Benefit)derived by applying the U.S. Federal statutory income tax rate to loss before income taxes | ($66,306) | ($43,145) | ($93,144) |
State tax benefit, net | -3,323 | -4,275 | -5,315 |
Change in state effective tax rates | -992 | -639 | ' |
Foreign earnings repatriation | 2,678 | 3,199 | ' |
Unrecognized tax benefits | 2,216 | -7,723 | -344 |
Goodwill impairment | 33,687 | ' | 39,513 |
Prepaid tax asset impairment | 229 | 5,479 | ' |
Valuation allowance | 50,516 | 38,845 | 2,100 |
Research tax credit | -1,249 | ' | -230 |
Prior year purchase accounting | -2,864 | ' | ' |
Permanent differences and other, net | -1,476 | 3,355 | 4,876 |
Total income tax provision (benefit) | $13,116 | ($4,904) | ($52,544) |
Component_of_Deferred_Tax_Asse
Component of Deferred Tax Asset and Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Net operating loss carryforwards | $202,386 | $181,302 |
Receivables reserve | 23,878 | 23,077 |
Other | 38,766 | 38,623 |
Gross deferred tax assets | 265,030 | 243,002 |
Valuation allowance | -94,741 | -43,792 |
Net deferred tax assets | 170,289 | 199,210 |
Deferred tax liabilities: | ' | ' |
Intangible assets | -362,951 | -384,586 |
Foreign earnings repatriation | -14,092 | -13,978 |
Other | -7,038 | -8,567 |
Gross deferred tax liabilities | -384,081 | -407,131 |
Net deferred tax liabilities | ($213,792) | ($207,921) |
Reconciliation_of_Beginning_an
Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Contingency [Line Items] | ' | ' | ' |
Balance, beginning of year | $12,342 | $19,443 | $17,659 |
Additions based on tax positions related to current year | 1,531 | 817 | 777 |
Additions for tax positions related to prior years | 975 | 892 | 3,097 |
Reductions for tax positions of prior years | ' | ' | ' |
Reduction due to lapse of statute of limitations | -379 | -990 | -2,065 |
Reductions for settlements of tax positions | ' | -7,820 | -25 |
Balance, end of year | $14,469 | $12,342 | $19,443 |
Aggregate_Minimum_Rental_Commi
Aggregate Minimum Rental Commitments Under Non-Cancelable Leases (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Years Ending December 31, | ' |
2014 | $16,073 |
2015 | 14,148 |
2016 | 12,695 |
2017 | 7,248 |
2018 | 6,738 |
Thereafter | 17,324 |
Operating Leases, Future Minimum Payments Due, Total | $74,226 |
Recovered_Sheet1
Commitments And Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 11, 2013 |
LegalMatter | Canada | Lawsuit by Insurance Carrier | Cold Therapy Litigation | Cold Therapy Litigation | California Qui Tam Actions | |||
Plaintiff | Plaintiff | First Trial | ||||||
Commitments and Contingencies Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Rental expense under operating leases | $17.60 | $16.40 | $14.30 | ' | ' | ' | ' | ' |
Number of pending cases | 5 | ' | ' | ' | ' | ' | ' | ' |
Number of plaintiffs | ' | ' | ' | 45 | ' | 172 | ' | ' |
Number of cases settled | 130 | ' | ' | ' | ' | ' | ' | ' |
Accrued unpaid settlement | 2.5 | ' | ' | ' | ' | ' | ' | ' |
Damages sought value | ' | ' | ' | ' | $10 | ' | ' | ' |
Number of lawsuits | ' | ' | ' | ' | ' | 9 | ' | ' |
Initial plaintiffs selected by court for trial | ' | ' | ' | ' | ' | 9 | ' | ' |
Expected trial commencement for the initial cases | ' | ' | ' | ' | ' | ' | '2013-07 | ' |
Lawsuit court filing date | ' | ' | ' | ' | ' | ' | ' | 'August 2012 |
Lawsuit amendment date | ' | ' | ' | ' | ' | ' | ' | '2012-12 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Related Party Transaction [Line Items] | ' | ' | ' |
Maximum annual monitoring fee under advisory and consulting services | $7 | ' | ' |
Annual monitoring fee maximum under advisory and consulting services, percentage | 2.00% | ' | ' |
Annual monitoring fee recorded as component of selling, general and administrative expense | 7 | 7 | 7 |
Exos | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Transaction and Monitoring Fee Agreement, amount paid | ' | 0.8 | ' |
Rikco International, LLC, D/B/A Dr. Comfort (Dr. Comfort) | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Transaction and Monitoring Fee Agreement, amount paid | ' | ' | $5 |
Segment_and_Geographic_Informa2
Segment and Geographic Information - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Customer | Customer | Customer | |
Segment | |||
Segment Reporting Information [Line Items] | ' | ' | ' |
Number of operating segments | 4 | ' | ' |
Number of individual customer or distributor accounted for 10% or more of total annual net sales | 0 | 0 | 0 |
Information_Regarding_Reportab
Information Regarding Reportable Business Segments (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 31, 2012 | Sep. 29, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net sales: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $313,586 | $288,049 | $294,745 | $279,077 | $290,510 | $273,986 | $285,977 | $278,947 | $1,175,457 | $1,129,420 | $1,074,770 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | 187,930 | 169,889 | 175,783 | 169,438 | 174,924 | 165,689 | 174,175 | 170,712 | 703,040 | 685,500 | 656,632 |
Operating (loss) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating (loss) income | -81,149 | 25,375 | 26,423 | 19,793 | 20,159 | 22,529 | 28,361 | 21,869 | -9,558 | 92,918 | -92,265 |
Bracing and Vascular | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 476,492 | 444,444 | 388,860 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 243,916 | 229,430 | 203,908 |
Operating (loss) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | 86,447 | 87,694 | 75,607 |
Recovery Sciences | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 312,783 | 331,461 | 341,667 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 234,469 | 249,825 | 258,229 |
Operating (loss) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | 83,028 | 90,353 | 92,882 |
Surgical Implant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 87,088 | 72,980 | 64,944 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 62,996 | 54,658 | 46,860 |
Operating (loss) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | 8,669 | 6,747 | 4,323 |
International | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 299,094 | 280,535 | 279,299 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 165,672 | 155,266 | 161,142 |
Operating (loss) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | 57,515 | 54,442 | 57,501 |
Expenses not allocated to segments and eliminations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | -4,013 | -3,679 | -13,507 |
Operating (loss) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | ($245,217) | ($146,318) | ($322,578) |
Net_Sales_by_Geographic_Area_D
Net Sales by Geographic Area (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 31, 2012 | Sep. 29, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales revenue goods net | $313,586 | $288,049 | $294,745 | $279,077 | $290,510 | $273,986 | $285,977 | $278,947 | $1,175,457 | $1,129,420 | $1,074,770 |
United States | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales revenue goods net | ' | ' | ' | ' | ' | ' | ' | ' | 876,363 | 848,885 | 795,471 |
Other Europe, Middle East, and Africa | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales revenue goods net | ' | ' | ' | ' | ' | ' | ' | ' | 139,252 | 135,030 | 135,216 |
Germany | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales revenue goods net | ' | ' | ' | ' | ' | ' | ' | ' | 88,236 | 84,527 | 90,000 |
Australia And Asia Pacific | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales revenue goods net | ' | ' | ' | ' | ' | ' | ' | ' | 35,025 | 26,786 | 23,262 |
Canada | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales revenue goods net | ' | ' | ' | ' | ' | ' | ' | ' | 27,035 | 24,588 | 22,591 |
Latin America | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales revenue goods net | ' | ' | ' | ' | ' | ' | ' | ' | $9,546 | $9,604 | $8,230 |
LongLived_Assets_by_Geographic
Long-Lived Assets by Geographic Area (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Long-Lived Assets by Geographic Area: | ' | ' |
Long-lived assets | $2,255,652 | $2,457,087 |
United States | ' | ' |
Long-Lived Assets by Geographic Area: | ' | ' |
Long-lived assets | 2,099,381 | 2,312,127 |
International | ' | ' |
Long-Lived Assets by Geographic Area: | ' | ' |
Long-lived assets | $156,271 | $144,960 |
Unaudited_Quarterly_Consolidat2
Unaudited Quarterly Consolidated Financial Data - Additional Information (Detail) (USD $) | 12 Months Ended | ||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | |
Cost of Goods, Total | Property Plant and Equipment | Overstatement | Overstatement | ||||
Effect of Fourth Quarter Events [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Overstatement of cost of goods sold | $472,417,000 | $443,920,000 | $418,138,000 | ' | ' | $3,100,000 | $1,100,000 |
Cumulative impact of error | ' | ' | ' | ($4,200,000) | $4,200,000 | ' | ' |
Unaudited_Quarterly_Consolidat3
Unaudited Quarterly Consolidated Financial Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 31, 2012 | Sep. 29, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Unaudited Quarterly Consolidated Financial Data: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $313,586 | $288,049 | $294,745 | $279,077 | $290,510 | $273,986 | $285,977 | $278,947 | $1,175,457 | $1,129,420 | $1,074,770 |
Gross profit | 187,930 | 169,889 | 175,783 | 169,438 | 174,924 | 165,689 | 174,175 | 170,712 | 703,040 | 685,500 | 656,632 |
Operating (loss) income | -81,149 | 25,375 | 26,423 | 19,793 | 20,159 | 22,529 | 28,361 | 21,869 | -9,558 | 92,918 | -92,265 |
Net loss | -131,419 | -18,375 | -20,642 | -32,126 | -46,868 | -22,535 | -19,922 | -29,043 | -202,562 | -118,368 | -213,587 |
Net loss attributable to DJOFL | ($131,786) | ($18,488) | ($20,814) | ($32,364) | ($47,036) | ($22,562) | ($20,198) | ($29,354) | ($203,452) | ($119,150) | ($214,469) |
Supplemental_Guarantor_Condens2
Supplemental Guarantor Condensed Consolidating Financial Statements - Additional Information (Detail) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 28, 2012 | Dec. 31, 2013 |
DJO Finco | 9.75% Notes | 7.75% Senior Unsecured Notes | 7.75% Senior Unsecured Notes | 8.75% Notes | 9.875% Notes | 9.875% Notes | |
DJO Finco | DJO Finco | DJO Finco | DJO Finco | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Stated percentage rate | ' | 9.75% | 7.75% | 7.75% | 8.75% | 9.88% | 9.88% |
Subsidiaries owned | 100.00% | ' | ' | ' | ' | ' | ' |
Schedule_of_Condensed_Consolid
Schedule of Condensed Consolidating Balance Sheets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Current assets: | ' | ' | ' | ' |
Cash and cash equivalents | $43,578 | $31,223 | $38,169 | $38,132 |
Accounts receivable, net | 185,088 | 166,742 | ' | ' |
Inventories, net | 154,983 | 156,315 | ' | ' |
Deferred tax assets, net | 27,527 | 33,283 | ' | ' |
Prepaid expenses and other current assets | 27,951 | 18,073 | ' | ' |
Total current assets | 439,127 | 405,636 | ' | ' |
Property and equipment, net | 107,829 | 107,035 | ' | ' |
Goodwill | 1,149,331 | 1,249,305 | 1,228,778 | ' |
Intangible assets, net | 958,993 | 1,055,531 | ' | ' |
Other assets | 39,499 | 45,216 | ' | ' |
Total assets | 2,694,779 | 2,862,723 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 56,374 | 54,294 | ' | ' |
Current portion of debt obligations | 8,620 | 8,858 | ' | ' |
Other current liabilities | 139,154 | 125,293 | ' | ' |
Total current liabilities | 204,148 | 188,445 | ' | ' |
Long-term debt obligations | 2,251,167 | 2,223,816 | ' | ' |
Deferred tax liabilities, net | 242,028 | 241,202 | ' | ' |
Other long-term liabilities | 16,718 | 24,850 | ' | ' |
Total liabilities | 2,714,061 | 2,678,313 | ' | ' |
Noncontrolling interests | 2,644 | 2,318 | ' | ' |
Total membership (deficit) equity | -21,926 | 182,092 | ' | ' |
Total liabilities and (deficit) equity | 2,694,779 | 2,862,723 | ' | ' |
DJOFL | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and cash equivalents | 22,370 | 13,176 | 13,773 | 16,601 |
Prepaid expenses and other current assets | 160 | 160 | ' | ' |
Total current assets | 22,530 | 13,336 | ' | ' |
Investment in subsidiaries | 1,297,699 | 1,297,699 | ' | ' |
Intercompany receivables | 911,630 | 1,093,618 | ' | ' |
Other assets | 35,675 | 41,624 | ' | ' |
Total assets | 2,267,534 | 2,446,277 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Current portion of debt obligations | 8,620 | 8,858 | ' | ' |
Other current liabilities | 29,673 | 31,511 | ' | ' |
Total current liabilities | 38,293 | 40,369 | ' | ' |
Long-term debt obligations | 2,251,167 | 2,223,816 | ' | ' |
Total liabilities | 2,289,460 | 2,264,185 | ' | ' |
Total membership (deficit) equity | -21,926 | 182,092 | ' | ' |
Total liabilities and (deficit) equity | 2,267,534 | 2,446,277 | ' | ' |
Guarantors | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and cash equivalents | 358 | 3,122 | 1,778 | 621 |
Accounts receivable, net | 141,121 | 129,588 | ' | ' |
Inventories, net | 126,529 | 132,130 | ' | ' |
Deferred tax assets, net | 27,286 | 33,102 | ' | ' |
Prepaid expenses and other current assets | 16,469 | 14,513 | ' | ' |
Total current assets | 311,763 | 312,455 | ' | ' |
Property and equipment, net | 93,229 | 94,899 | ' | ' |
Goodwill | 1,066,479 | 1,168,479 | ' | ' |
Intangible assets, net | 941,550 | 1,035,066 | ' | ' |
Investment in subsidiaries | 1,686,557 | 1,680,446 | ' | ' |
Other assets | 1,828 | 1,988 | ' | ' |
Total assets | 4,101,406 | 4,293,333 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 45,639 | 46,283 | ' | ' |
Other current liabilities | 77,220 | 68,413 | ' | ' |
Total current liabilities | 122,859 | 114,696 | ' | ' |
Deferred tax liabilities, net | 236,230 | 234,332 | ' | ' |
Intercompany payables, net | 693,513 | 861,014 | ' | ' |
Other long-term liabilities | 13,820 | 22,917 | ' | ' |
Total liabilities | 1,066,422 | 1,232,959 | ' | ' |
Total membership (deficit) equity | 3,034,984 | 3,060,374 | ' | ' |
Total liabilities and (deficit) equity | 4,101,406 | 4,293,333 | ' | ' |
Non-Guarantors | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and cash equivalents | 20,848 | 14,919 | 22,617 | 20,910 |
Accounts receivable, net | 43,967 | 37,154 | ' | ' |
Inventories, net | 33,439 | 26,824 | ' | ' |
Deferred tax assets, net | 241 | 181 | ' | ' |
Prepaid expenses and other current assets | 10,596 | 2,985 | ' | ' |
Total current assets | 109,091 | 82,063 | ' | ' |
Property and equipment, net | 14,834 | 12,634 | ' | ' |
Goodwill | 121,998 | 110,257 | ' | ' |
Intangible assets, net | 17,443 | 20,465 | ' | ' |
Investment in subsidiaries | 62,344 | 80,386 | ' | ' |
Other assets | 1,996 | 1,604 | ' | ' |
Total assets | 327,706 | 307,409 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 10,736 | 9,147 | ' | ' |
Other current liabilities | 31,564 | 25,017 | ' | ' |
Total current liabilities | 42,300 | 34,164 | ' | ' |
Deferred tax liabilities, net | 5,798 | 6,870 | ' | ' |
Intercompany payables, net | 143,637 | 131,558 | ' | ' |
Other long-term liabilities | 2,898 | 1,933 | ' | ' |
Total liabilities | 194,633 | 174,525 | ' | ' |
Noncontrolling interests | 2,644 | 2,318 | ' | ' |
Total membership (deficit) equity | 130,429 | 130,566 | ' | ' |
Total liabilities and (deficit) equity | 327,706 | 307,409 | ' | ' |
Eliminations | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and cash equivalents | 2 | 6 | 1 | ' |
Inventories, net | -4,985 | -2,639 | ' | ' |
Prepaid expenses and other current assets | 726 | 415 | ' | ' |
Total current assets | -4,257 | -2,218 | ' | ' |
Property and equipment, net | -234 | -498 | ' | ' |
Goodwill | -39,146 | -29,431 | ' | ' |
Investment in subsidiaries | -3,046,600 | -3,058,531 | ' | ' |
Intercompany receivables | -911,630 | -1,093,618 | ' | ' |
Total assets | -4,001,867 | -4,184,296 | ' | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | -1 | -1,136 | ' | ' |
Other current liabilities | 697 | 352 | ' | ' |
Total current liabilities | 696 | -784 | ' | ' |
Intercompany payables, net | -837,150 | -992,572 | ' | ' |
Total liabilities | -836,454 | -993,356 | ' | ' |
Total membership (deficit) equity | -3,165,413 | -3,190,940 | ' | ' |
Total liabilities and (deficit) equity | ($4,001,867) | ($4,184,296) | ' | ' |
Schedule_of_Condensed_Consolid1
Schedule of Condensed Consolidating Statements of Operations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 31, 2012 | Sep. 29, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net sales | $313,586 | $288,049 | $294,745 | $279,077 | $290,510 | $273,986 | $285,977 | $278,947 | $1,175,457 | $1,129,420 | $1,074,770 |
Cost of sales (exclusive of amortization of intangible assets) | ' | ' | ' | ' | ' | ' | ' | ' | 472,417 | 443,920 | 418,138 |
Gross profit | 187,930 | 169,889 | 175,783 | 169,438 | 174,924 | 165,689 | 174,175 | 170,712 | 703,040 | 685,500 | 656,632 |
Operating expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 477,238 | 460,065 | 487,084 |
Research and development | ' | ' | ' | ' | ' | ' | ' | ' | 33,221 | 27,877 | 26,850 |
Amortization of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 95,539 | 97,243 | 93,957 |
Impairment of goodwill and intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 106,600 | 7,397 | 141,006 |
Operating Expenses | ' | ' | ' | ' | ' | ' | ' | ' | 712,598 | 592,582 | 748,897 |
Operating (loss) income | -81,149 | 25,375 | 26,423 | 19,793 | 20,159 | 22,529 | 28,361 | 21,869 | -9,558 | 92,918 | -92,265 |
Other (expense) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -177,733 | -183,055 | -169,332 |
Interest income | ' | ' | ' | ' | ' | ' | ' | ' | 191 | 201 | 345 |
Loss on modification and extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | -1,059 | -36,889 | -2,065 |
Other income (expense), net | ' | ' | ' | ' | ' | ' | ' | ' | -1,287 | 3,553 | -2,814 |
Nonoperating Income (Expense), Total | ' | ' | ' | ' | ' | ' | ' | ' | -179,888 | -216,190 | -173,866 |
(Loss) income before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -189,446 | -123,272 | -266,131 |
Income tax benefit (provision) | ' | ' | ' | ' | ' | ' | ' | ' | -13,116 | 4,904 | 52,544 |
Net (loss) income | -131,419 | -18,375 | -20,642 | -32,126 | -46,868 | -22,535 | -19,922 | -29,043 | -202,562 | -118,368 | -213,587 |
Net income attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | -890 | -782 | -882 |
Net (loss) income attributable to DJOFL | -131,786 | -18,488 | -20,814 | -32,364 | -47,036 | -22,562 | -20,198 | -29,354 | -203,452 | -119,150 | -214,469 |
DJOFL | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other (expense) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -177,587 | -182,925 | -169,117 |
Interest income | ' | ' | ' | ' | ' | ' | ' | ' | 17 | 16 | 14 |
Loss on modification and extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | -1,059 | -36,889 | -2,065 |
Intercompany (expense) income, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,625 |
Equity in (loss) income of subsidiaries, net | ' | ' | ' | ' | ' | ' | ' | ' | -24,823 | 100,648 | -53,926 |
Nonoperating Income (Expense), Total | ' | ' | ' | ' | ' | ' | ' | ' | -203,452 | -119,150 | -214,469 |
(Loss) income before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -203,452 | -119,150 | -214,469 |
Net (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -203,452 | -119,150 | -214,469 |
Net (loss) income attributable to DJOFL | ' | ' | ' | ' | ' | ' | ' | ' | -203,452 | -119,150 | -214,469 |
Guarantors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,026,249 | 976,874 | 893,036 |
Cost of sales (exclusive of amortization of intangible assets) | ' | ' | ' | ' | ' | ' | ' | ' | 426,960 | 392,397 | 360,601 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 599,289 | 584,477 | 532,435 |
Operating expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 383,890 | 377,073 | 394,588 |
Research and development | ' | ' | ' | ' | ' | ' | ' | ' | 29,621 | 23,585 | 23,050 |
Amortization of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 90,170 | 93,038 | 89,637 |
Impairment of goodwill and intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 106,600 | ' | 141,006 |
Operating Expenses | ' | ' | ' | ' | ' | ' | ' | ' | 610,281 | 493,696 | 648,281 |
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -10,992 | 90,781 | -115,846 |
Other (expense) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -22 |
Interest income | ' | ' | ' | ' | ' | ' | ' | ' | 109 | 93 | 127 |
Other income (expense), net | ' | ' | ' | ' | ' | ' | ' | ' | -315 | 2,453 | 986 |
Intercompany (expense) income, net | ' | ' | ' | ' | ' | ' | ' | ' | 4,379 | -1,297 | 18,126 |
Nonoperating Income (Expense), Total | ' | ' | ' | ' | ' | ' | ' | ' | 4,173 | 1,249 | 19,217 |
(Loss) income before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -6,819 | 92,030 | -96,629 |
Income tax benefit (provision) | ' | ' | ' | ' | ' | ' | ' | ' | -7,828 | 8,333 | 57,173 |
Net (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -14,647 | 100,363 | -39,456 |
Net (loss) income attributable to DJOFL | ' | ' | ' | ' | ' | ' | ' | ' | -14,647 | 100,363 | -39,456 |
Non-Guarantors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 282,317 | 265,137 | 263,908 |
Cost of sales (exclusive of amortization of intangible assets) | ' | ' | ' | ' | ' | ' | ' | ' | 191,816 | 178,659 | 168,307 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 90,501 | 86,478 | 95,601 |
Operating expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 93,341 | 82,988 | 92,496 |
Research and development | ' | ' | ' | ' | ' | ' | ' | ' | 3,577 | 4,292 | 3,800 |
Amortization of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 5,369 | 4,205 | 4,320 |
Impairment of goodwill and intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,397 | ' |
Operating Expenses | ' | ' | ' | ' | ' | ' | ' | ' | 102,287 | 98,882 | 100,616 |
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -11,786 | -12,404 | -5,015 |
Other (expense) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -146 | -130 | -193 |
Interest income | ' | ' | ' | ' | ' | ' | ' | ' | 65 | 92 | 204 |
Other income (expense), net | ' | ' | ' | ' | ' | ' | ' | ' | -10,684 | 1,100 | -3,745 |
Intercompany (expense) income, net | ' | ' | ' | ' | ' | ' | ' | ' | 17,799 | 10,584 | -18,381 |
Nonoperating Income (Expense), Total | ' | ' | ' | ' | ' | ' | ' | ' | 7,034 | 11,646 | -22,115 |
(Loss) income before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | -4,752 | -758 | -27,130 |
Income tax benefit (provision) | ' | ' | ' | ' | ' | ' | ' | ' | -5,288 | -3,429 | 4,775 |
Net (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -10,040 | -4,187 | -31,905 |
Net income attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | -890 | -782 | -882 |
Net (loss) income attributable to DJOFL | ' | ' | ' | ' | ' | ' | ' | ' | -10,930 | -4,969 | -32,787 |
Eliminations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | -133,109 | -112,591 | -82,174 |
Cost of sales (exclusive of amortization of intangible assets) | ' | ' | ' | ' | ' | ' | ' | ' | -146,359 | -127,136 | -110,770 |
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 13,250 | 14,545 | 28,596 |
Operating expenses: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Selling, general and administrative | ' | ' | ' | ' | ' | ' | ' | ' | 7 | 4 | ' |
Research and development | ' | ' | ' | ' | ' | ' | ' | ' | 23 | ' | ' |
Operating Expenses | ' | ' | ' | ' | ' | ' | ' | ' | 30 | 4 | ' |
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | 13,220 | 14,541 | 28,596 |
Other (expense) income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other income (expense), net | ' | ' | ' | ' | ' | ' | ' | ' | 9,712 | ' | -55 |
Intercompany (expense) income, net | ' | ' | ' | ' | ' | ' | ' | ' | -22,178 | -9,287 | -10,370 |
Equity in (loss) income of subsidiaries, net | ' | ' | ' | ' | ' | ' | ' | ' | 24,823 | -100,648 | 53,926 |
Nonoperating Income (Expense), Total | ' | ' | ' | ' | ' | ' | ' | ' | 12,357 | -109,935 | 43,501 |
(Loss) income before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 25,577 | -95,394 | 72,097 |
Income tax benefit (provision) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -146 |
Net (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | 25,577 | -95,394 | 72,243 |
Net (loss) income attributable to DJOFL | ' | ' | ' | ' | ' | ' | ' | ' | $25,577 | ($95,394) | $72,243 |
Schedule_of_Condensed_Consolid2
Schedule of Condensed Consolidating Statements of Operations (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Amortization of intangible assets | $35,125 | $38,355 | $38,668 |
Schedule_of_Condensed_Consolid3
Schedule of Condensed Consolidating Statements of Comprehensive Loss (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 31, 2012 | Sep. 29, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net (loss) income | ($131,419) | ($18,375) | ($20,642) | ($32,126) | ($46,868) | ($22,535) | ($19,922) | ($29,043) | ($202,562) | ($118,368) | ($213,587) |
Other comprehensive income, net of taxes: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments, net of tax provision (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 19 | 1,108 | -1,896 |
Unrealized loss on cash flow hedges, net of tax benefit of $175 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -272 |
Reclassification adjustment for losses on cash flow hedges included in net loss, net of tax provision of $2,773 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,381 |
Other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | 19 | 1,108 | 2,213 |
Comprehensive (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -202,543 | -117,260 | -211,374 |
Comprehensive income attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | -1,010 | -824 | -829 |
Comprehensive (loss) income attributable to DJO Finance LLC | ' | ' | ' | ' | ' | ' | ' | ' | -203,553 | -118,084 | -212,203 |
DJOFL | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -203,452 | -119,150 | -214,469 |
Other comprehensive income, net of taxes: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized loss on cash flow hedges, net of tax benefit of $175 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -272 |
Reclassification adjustment for losses on cash flow hedges included in net loss, net of tax provision of $2,773 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,381 |
Other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,109 |
Comprehensive (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -203,452 | -119,150 | -210,360 |
Comprehensive (loss) income attributable to DJO Finance LLC | ' | ' | ' | ' | ' | ' | ' | ' | -203,452 | -119,150 | -210,360 |
Guarantors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -14,647 | 100,363 | -39,456 |
Other comprehensive income, net of taxes: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Comprehensive (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -14,647 | 100,363 | -39,456 |
Comprehensive (loss) income attributable to DJO Finance LLC | ' | ' | ' | ' | ' | ' | ' | ' | -14,647 | 100,363 | -39,456 |
Non-Guarantors | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -10,040 | -4,187 | -31,905 |
Other comprehensive income, net of taxes: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments, net of tax provision (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 19 | 1,108 | -1,896 |
Other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | 19 | 1,108 | -1,896 |
Comprehensive (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -10,021 | -3,079 | -33,801 |
Comprehensive income attributable to noncontrolling interests | ' | ' | ' | ' | ' | ' | ' | ' | -1,010 | -824 | -829 |
Comprehensive (loss) income attributable to DJO Finance LLC | ' | ' | ' | ' | ' | ' | ' | ' | -11,031 | -3,903 | -34,630 |
Eliminations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | 25,577 | -95,394 | 72,243 |
Other comprehensive income, net of taxes: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Comprehensive (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | 25,577 | -95,394 | 72,243 |
Comprehensive (loss) income attributable to DJO Finance LLC | ' | ' | ' | ' | ' | ' | ' | ' | $25,577 | ($95,394) | $72,243 |
Schedule_of_Condensed_Consolid4
Schedule of Condensed Consolidating Statements of Comprehensive Loss (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Foreign currency translation adjustment, tax benefit (provision) | ($1,212) | ($1,386) | $1,681 |
Unrealized loss on cash flow hedges, tax benefit | ' | ' | 175 |
Reclassification adjustment for losses on cash flow hedges included in net loss, net of tax provision | ' | ' | $2,773 |
Schedule_of_Condensed_Consolid5
Schedule of Condensed Consolidating Statements of Cash Flows (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash Flows From Operating Activities: | ' | ' | ' |
Net (loss) income | ($202,562) | ($118,368) | ($213,587) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' | ' |
Depreciation | 33,127 | 30,216 | 27,294 |
Amortization of intangible assets | 95,539 | 97,243 | 93,957 |
Amortization of debt issuance costs and non-cash interest expense | 8,012 | 9,732 | 8,476 |
Stock-based compensation expense | 2,155 | 2,339 | 2,701 |
Loss on disposal of assets, net | 1,108 | 1,686 | 4,385 |
Impairment of goodwill and intangible assets | 106,600 | 7,397 | 141,006 |
Deferred income benefit | 4,738 | -11,581 | -60,620 |
Provision for doubtful accounts and sales returns | 33,085 | 22,226 | 31,673 |
Inventory reserves | 10,121 | 6,350 | 7,706 |
Loss on modification and extinguishment of debt | 1,059 | 36,889 | 2,065 |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | ' | ' | ' |
Accounts receivable | -50,950 | -29,490 | -32,231 |
Inventories | -5,648 | -28,287 | -13,190 |
Prepaid expenses and other assets | -8,755 | 1,313 | 8,435 |
Accounts payable and other current liabilities | 2,151 | 16,954 | 17,602 |
Net cash (used in) provided by operating activities | 29,780 | 44,619 | 23,605 |
Cash Flows From Investing Activities: | ' | ' | ' |
Cash paid in connection with acquisitions, net of cash acquired | -1,953 | -29,909 | -317,669 |
Purchases of property and equipment | -37,484 | -32,950 | -39,397 |
Other investing activities, net | -1,626 | -1,106 | -1,596 |
Net cash used in investing activities | -41,063 | -63,965 | -358,662 |
Cash Flows From Financing Activities: | ' | ' | ' |
Proceeds from issuance of debt | 549,417 | 1,342,450 | 439,000 |
Repayments of debt and capital lease obligations | -523,037 | -1,276,045 | -96,826 |
Payment of debt issuance, modification and extinguishment costs | -2,387 | -55,827 | -7,694 |
Investment by parent | ' | 2,000 | 3,176 |
Exercise of indirect parent stock options | ' | 24 | ' |
Cancellation of vested options | ' | ' | -2,000 |
Dividend paid by subsidiary to owners of noncontrolling interests | -684 | -649 | -1,366 |
Net cash provided by (used in) financing activities | 23,309 | 11,953 | 334,290 |
Effect of exchange rate changes on cash and cash equivalents | 329 | 447 | 804 |
Net (decrease) increase in cash and cash equivalents | 12,355 | -6,946 | 37 |
Cash and cash equivalents at beginning of period | 31,223 | 38,169 | 38,132 |
Cash and cash equivalents at end of period | 43,578 | 31,223 | 38,169 |
DJOFL | ' | ' | ' |
Cash Flows From Operating Activities: | ' | ' | ' |
Net (loss) income | -203,452 | -119,150 | -214,469 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' | ' |
Amortization of debt issuance costs and non-cash interest expense | 8,012 | 9,732 | 8,476 |
Deferred income benefit | ' | ' | -2,599 |
Equity in (income) loss of subsidiaries, net | 24,823 | -100,648 | 53,926 |
Loss on modification and extinguishment of debt | 1,059 | 36,889 | 2,065 |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | ' | ' | ' |
Prepaid expenses and other assets | ' | ' | -17 |
Accounts payable and other current liabilities | -1,839 | 10,648 | 5,336 |
Net cash (used in) provided by operating activities | -171,397 | -162,529 | -149,347 |
Cash Flows From Financing Activities: | ' | ' | ' |
Intercompany | 156,598 | 149,292 | -191,181 |
Proceeds from issuance of debt | 549,417 | 1,342,450 | 439,000 |
Repayments of debt and capital lease obligations | -523,037 | -1,276,007 | -96,782 |
Payment of debt issuance, modification and extinguishment costs | -2,387 | -55,827 | -7,694 |
Investment by parent | ' | 2,000 | 3,176 |
Exercise of indirect parent stock options | ' | 24 | ' |
Net cash provided by (used in) financing activities | 180,591 | 161,932 | 146,519 |
Net (decrease) increase in cash and cash equivalents | 9,194 | -597 | -2,828 |
Cash and cash equivalents at beginning of period | 13,176 | 13,773 | 16,601 |
Cash and cash equivalents at end of period | 22,370 | 13,176 | 13,773 |
Guarantors | ' | ' | ' |
Cash Flows From Operating Activities: | ' | ' | ' |
Net (loss) income | -14,647 | 100,363 | -39,456 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' | ' |
Depreciation | 28,002 | 25,529 | 23,231 |
Amortization of intangible assets | 90,170 | 93,038 | 89,637 |
Stock-based compensation expense | 2,155 | 2,339 | 2,701 |
Loss on disposal of assets, net | 424 | 1,098 | 7,434 |
Impairment of goodwill and intangible assets | 106,600 | ' | 141,006 |
Deferred income benefit | 5,824 | -8,493 | -56,651 |
Provision for doubtful accounts and sales returns | 32,767 | 21,889 | 31,000 |
Inventory reserves | 8,309 | 5,895 | 6,798 |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | ' | ' | ' |
Accounts receivable | -44,300 | -26,380 | -30,398 |
Inventories | -2,510 | -24,582 | -7,631 |
Prepaid expenses and other assets | -1,076 | 1,108 | 7,351 |
Accounts payable and other current liabilities | -2,863 | 9,675 | 3,877 |
Net cash (used in) provided by operating activities | 208,855 | 201,479 | 178,899 |
Cash Flows From Investing Activities: | ' | ' | ' |
Cash paid in connection with acquisitions, net of cash acquired | -192 | -29,909 | -317,669 |
Purchases of property and equipment | -29,158 | -27,929 | -33,673 |
Other investing activities, net | -1,239 | -1,106 | -1,603 |
Net cash used in investing activities | -30,589 | -58,944 | -352,945 |
Cash Flows From Financing Activities: | ' | ' | ' |
Intercompany | -181,030 | -141,153 | 177,245 |
Repayments of debt and capital lease obligations | ' | -38 | -42 |
Cancellation of vested options | ' | ' | -2,000 |
Net cash provided by (used in) financing activities | -181,030 | -141,191 | 175,203 |
Net (decrease) increase in cash and cash equivalents | -2,764 | 1,344 | 1,157 |
Cash and cash equivalents at beginning of period | 3,122 | 1,778 | 621 |
Cash and cash equivalents at end of period | 358 | 3,122 | 1,778 |
Non-Guarantors | ' | ' | ' |
Cash Flows From Operating Activities: | ' | ' | ' |
Net (loss) income | -10,040 | -4,187 | -31,905 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' | ' |
Depreciation | 5,383 | 5,049 | 5,083 |
Amortization of intangible assets | 5,369 | 4,205 | 4,320 |
Loss on disposal of assets, net | 684 | 588 | 438 |
Impairment of goodwill and intangible assets | ' | 7,397 | ' |
Deferred income benefit | -1,233 | -3,088 | -1,224 |
Provision for doubtful accounts and sales returns | 318 | 337 | 673 |
Inventory reserves | 1,812 | 455 | 908 |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | ' | ' | ' |
Accounts receivable | -6,650 | -3,110 | -1,833 |
Inventories | 5,926 | 9,270 | 6,402 |
Prepaid expenses and other assets | -7,368 | 169 | -1,090 |
Accounts payable and other current liabilities | 7,597 | -5,420 | 13,062 |
Net cash (used in) provided by operating activities | 1,798 | 11,665 | -5,166 |
Cash Flows From Investing Activities: | ' | ' | ' |
Cash paid in connection with acquisitions, net of cash acquired | -1,761 | ' | ' |
Purchases of property and equipment | -8,310 | -5,008 | -5,536 |
Other investing activities, net | -387 | ' | 7 |
Net cash used in investing activities | -10,458 | -5,008 | -5,529 |
Cash Flows From Financing Activities: | ' | ' | ' |
Intercompany | 14,944 | -14,153 | 12,966 |
Repayments of debt and capital lease obligations | ' | ' | -2 |
Dividend paid by subsidiary to owners of noncontrolling interests | ' | -649 | -1,366 |
Net cash provided by (used in) financing activities | 14,260 | -14,802 | 11,598 |
Effect of exchange rate changes on cash and cash equivalents | 329 | 447 | 804 |
Net (decrease) increase in cash and cash equivalents | 5,929 | -7,698 | 1,707 |
Cash and cash equivalents at beginning of period | 14,919 | 22,617 | 20,910 |
Cash and cash equivalents at end of period | 20,848 | 14,919 | 22,617 |
Eliminations | ' | ' | ' |
Cash Flows From Operating Activities: | ' | ' | ' |
Net (loss) income | 25,577 | -95,394 | 72,243 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' | ' |
Depreciation | -258 | -362 | -1,020 |
Loss on disposal of assets, net | ' | ' | -3,487 |
Deferred income benefit | 147 | ' | -146 |
Equity in (income) loss of subsidiaries, net | -24,823 | 100,648 | -53,926 |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | ' | ' | ' |
Inventories | -9,064 | -12,975 | -11,961 |
Prepaid expenses and other assets | -311 | 36 | 2,191 |
Accounts payable and other current liabilities | -744 | 2,051 | -4,675 |
Net cash (used in) provided by operating activities | -9,476 | -5,996 | -781 |
Cash Flows From Investing Activities: | ' | ' | ' |
Purchases of property and equipment | -16 | -13 | -188 |
Net cash used in investing activities | -16 | -13 | -188 |
Cash Flows From Financing Activities: | ' | ' | ' |
Intercompany | 9,488 | 6,014 | 970 |
Net cash provided by (used in) financing activities | 9,488 | 6,014 | 970 |
Net (decrease) increase in cash and cash equivalents | -4 | 5 | 1 |
Cash and cash equivalents at beginning of period | 6 | 1 | ' |
Cash and cash equivalents at end of period | $2 | $6 | $1 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) | 12 Months Ended | 1 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 23, 2014 | Jan. 23, 2014 |
Period 1 | Period 2 | Subsequent Event | Subsequent Event | ||
Speetec | Speetec | ||||
USD ($) | EUR (€) | ||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' |
Assets acquired, initial payment | ' | ' | ' | $5 | € 3.70 |
Assets acquired, earn out payment | ' | ' | ' | 1.3 | 0.9 |
Business acquisition, contingent consideration, potential cash payments | ' | ' | ' | $7.30 | € 5.40 |
Indemnification Asset | 'The indemnity holdback accrues interest at the Eurodollar rate plus 100 basis points and is 50% payable in March 2015 and March 2016, respectively, if not used for indemnification claims. | ' | ' | ' | ' |
Business Acquisition, Payment Date of Contingent Consideration | ' | '2015-03 | '2016-03 | ' | ' |
Schedule_IIValuation_And_Quali
Schedule II-Valuation And Qualifying Accounts (Detail) (Allowance for Sales Discounts and Other Allowances, USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Allowance for Sales Discounts and Other Allowances | ' | ' | ' | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | ' | ' | ' | |||
Beginning Balance | $61,823 | [1] | $53,370 | [1] | $58,698 | [1] |
Provision | 209,057 | [1] | 194,656 | [1] | 184,605 | [1] |
Write-offs, net of recoveries | -203,857 | [1] | -186,203 | [1] | -189,933 | [1] |
Ending Balance | $67,023 | [1] | $61,823 | [1] | $53,370 | [1] |
[1] | Amounts are excluded from the provisions included in the Consolidated Statements of Cash Flows as the inclusion would not provide meaningful information. |