DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Entity [Abstract] | ||
Entity Registrant Name | K2M Group Holdings, Inc. | |
Entity Central Index Key | 1,499,807 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 41,228,829 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 43,676 | $ 11,411 |
Accounts receivable, net | 41,785 | 33,937 |
Inventory, net | 61,102 | 52,617 |
Deferred income taxes | 2,223 | 3,437 |
Prepaid expenses and other current assets | 10,198 | 3,911 |
Total current assets | 158,984 | 105,313 |
Property and equipment, net | 5,125 | 4,220 |
Goodwill | 121,814 | 121,814 |
Intangible assets, net | 34,401 | 41,609 |
Other assets, net | 23,873 | 29,672 |
Total assets | 344,197 | 302,628 |
Current liabilities: | ||
Accounts payable | 20,422 | 14,018 |
Accrued expenses | 11,114 | 10,077 |
Accrued payroll liabilities | 12,153 | 11,488 |
Total current liabilities | 43,689 | 35,583 |
Deferred income taxes | 7,265 | 8,479 |
Other liabilities | 847 | 112 |
Total liabilities | $ 51,801 | $ 44,174 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value, 750,000,000 shares authorized; 41,223,685 and 37,366,098 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | $ 41 | $ 37 |
Additional paid-in capital | 450,736 | 386,795 |
Accumulated other comprehensive income | 2,546 | 1,827 |
Accumulated deficit | (160,927) | (130,205) |
Total stockholders’ equity | 292,396 | 258,454 |
Total liabilities and stockholders’ equity | $ 344,197 | $ 302,628 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value per share (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 41,223,685 | 37,366,098 |
Common stock, shares outstanding (in shares) | 41,223,685 | 37,366,098 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenue | $ 55,009 | $ 47,624 | $ 161,787 | $ 137,363 |
Cost of revenue | 17,390 | 16,135 | 53,507 | 46,583 |
Gross profit | 37,619 | 31,489 | 108,280 | 90,780 |
Operating expenses: | ||||
Research, development and engineering | 5,154 | 4,872 | 14,808 | 11,854 |
Sales and marketing | 26,808 | 25,016 | 79,588 | 71,185 |
General and administrative | 15,667 | 14,507 | 42,575 | 47,158 |
Total operating expenses | 47,629 | 44,395 | 136,971 | 130,197 |
Loss from operations | (10,010) | (12,906) | (28,691) | (39,417) |
Other expense: | ||||
Foreign currency transaction loss | (12) | (3,081) | (1,552) | (2,131) |
Related Party Discount on Prepayment of Debt | 0 | 0 | 0 | (4,825) |
Interest expense | (110) | (116) | (354) | (2,115) |
Total other expense, net | (122) | (3,197) | (1,906) | (9,071) |
Loss before income tax expense | (10,132) | (16,103) | (30,597) | (48,488) |
Income tax expense | 83 | 37 | 125 | 82 |
Net loss | (10,215) | (16,140) | (30,722) | (48,570) |
Accretion and adjustment of preferred stock to fair value | 0 | 6,879 | ||
Accretion and adjustment of preferred stock to fair value | 0 | 0 | ||
Net loss attributable to stockholders | $ (10,215) | $ (16,140) | $ (30,722) | $ (41,691) |
Net loss per share attributable to common stockholders: | ||||
Basic and diluted (in dollars per share) | $ (0.25) | $ (0.43) | $ (0.77) | $ (1.39) |
Weighted average shares outstanding: | ||||
Basic and diluted (in shares) | 41,074,245 | 37,127,155 | 39,892,068 | 30,084,010 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (10,215) | $ (16,140) | $ (30,722) | $ (48,570) |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustment | (951) | (1,650) | 719 | (1,380) |
Other comprehensive (loss) income | (951) | (1,650) | 719 | (1,380) |
Comprehensive loss | $ (11,166) | $ (17,790) | $ (30,003) | $ (49,950) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | IPO [Member] | IPO [Member]Common Stock [Member] | IPO [Member]Additional Paid-in Capital [Member] |
Beginning Balance (in shares) at Dec. 31, 2014 | 37,366,098 | 37,366,098 | ||||||
Beginning Balance at Dec. 31, 2014 | $ 258,454 | $ 37 | $ 386,795 | $ 1,827 | $ (130,205) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (30,722) | (30,722) | ||||||
Other comprehensive income | 719 | 719 | ||||||
Stock-based compensation | $ 8,863 | 8,863 | ||||||
Issuances of common stock (in shares) | 2,907,490 | |||||||
Issuances of common stock | $ 54,157 | $ 3 | $ 54,154 | |||||
Exercise of options (in shares) | 818,840 | 950,097 | ||||||
Issuances and exercise of stock-based compensation benefit plans, net of income tax | $ 925 | $ 1 | 924 | |||||
Ending Balance (in shares) at Sep. 30, 2015 | 41,223,685 | 41,223,685 | ||||||
Ending Balance at Sep. 30, 2015 | $ 292,396 | $ 41 | $ 450,736 | $ 2,546 | $ (160,927) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities | ||
Net loss | $ (30,722) | $ (48,570) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 18,396 | 27,339 |
Provision for allowance for doubtful accounts | 177 | 351 |
Provision for inventory allowances | 1,128 | 1,368 |
Stock-based compensation | 8,863 | 3,830 |
Amortization of issuance and discount costs included in interest expense | 0 | 4,928 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (7,729) | (283) |
Inventory | (6,839) | (17,190) |
Prepaid expenses and other assets | (5,262) | (4,472) |
Accounts payable, accrued expenses, and accrued payroll liabilities | 8,795 | 4,175 |
Net cash used in operating activities | (13,193) | (28,524) |
Investing activities | ||
Purchase of surgical instruments | (6,595) | (9,111) |
Purchase of property and equipment | (2,424) | (1,507) |
Purchase of intangible assets | (538) | (20) |
Net cash used in investing activities | (9,557) | (10,638) |
Financing activities | ||
Borrowings on bank line of credit | 25,000 | 0 |
Repayments on bank line of credit | (25,000) | (23,500) |
Proceeds from issuances of notes to stockholders | 0 | 14,634 |
Prepayment of notes to stockholders | 0 | (39,212) |
Payment of dividends on Series A and Series B redeemable convertible preferred stock | 0 | (18,547) |
Proceeds from issuances of common stock, net of issuance costs | 54,401 | 121,898 |
Issuances and exercise of stock-based compensation benefit plans, net of income tax | 925 | (279) |
Net cash provided by financing activities | 55,326 | 54,994 |
Effect of exchange rate changes on cash and cash equivalents | (311) | (66) |
Net increase in cash and cash equivalents | 32,265 | 15,766 |
Cash and cash equivalents at beginning of period | 11,411 | 7,419 |
Cash and cash equivalents at end of period | 43,676 | 23,185 |
Significant noncash financing activities | ||
Adjustment of preferred stock to fair value | 0 | (8,059) |
Deferred offering costs | 244 | 720 |
Cash paid for: | ||
Income taxes | 93 | 36 |
Interest | 91 | 1,736 |
Series A Redeemable Convertible Preferred Stock [Member] | ||
Significant noncash financing activities | ||
Accretion of redeemable convertible preferred stock | 0 | 1,195 |
Series B Redeemable Convertible Preferred Stock [Member] | ||
Significant noncash financing activities | ||
Accretion of redeemable convertible preferred stock | $ 0 | $ (15) |
GENERAL AND SUMMARY OF SIGNIFIC
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to “K2M,” “the Company,” “we,” “us” and “our,” refer to K2M Group Holdings, Inc. together with its consolidated subsidiaries. K2M Group Holdings, Inc. was formed as a Delaware corporation on June 29, 2010. On July 2, 2010, K2M, Inc., a company initially incorporated in 2004, entered into an Agreement and Plan of Merger (the Merger Agreement) with Altitude Group Holdings, Inc. (Altitude) and Altitude Merger Sub, Inc. (Merger Sub). Altitude was a newly formed corporation and an indirect wholly-owned subsidiary of Welsh, Carson, Anderson & Stowe XI, L.P. On August 12, 2010 (the Merger Date), upon the closing of the transactions under the Merger Agreement, Merger Sub merged with and into K2M with K2M being the surviving corporation of such merger (the Merger) and Altitude was renamed K2M Group Holdings, Inc. We are a global medical device company focused on designing, developing and commercializing innovative and proprietary complex spine technologies and techniques. Our complex spine products are used by spine surgeons to treat some of the most difficult and challenging spinal pathologies, such as deformity (primarily scoliosis), trauma, and tumor. We have applied our product development expertise in innovating complex spine technologies and techniques to the design, development, and commercialization of an expanding number of proprietary Minimally Invasive surgery, or MIS products. Our MIS products are designed to allow for less invasive access to the spine and faster patient recovery times as compared to traditional open access surgical approaches for both complex spine and degenerative spine pathologies. We have leveraged these core competencies in the design, development and commercialization of an increasing number of products for patients suffering from degenerative spinal conditions. Unaudited Interim Results The accompanying condensed consolidated balance sheets as of September 30, 2015 and December 31, 2014 , the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2015 and 2014 , the condensed consolidated statements of changes in stockholders’ equity as of September 30, 2015 , and the condensed consolidated statements of cash flows for the nine months ended September 30, 2015 and 2014 are unaudited. The unaudited interim financial statements have been prepared on the same basis of accounting as the annual financial statements and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary to present fairly our financial position and results of operations and cash flows for the periods presented. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of future results. All information as of September 30, 2015 and for the three and nine month periods ending September 30, 2015 and 2014 within these notes to the condensed consolidated financial statements is unaudited. We have changed our presentation of goodwill and intangible assets, net on our condensed consolidated balance sheets to present each separately. Formerly, these were presented and included in the line item goodwill and intangible assets, net. Out-of-Period Adjustments During the third quarter of fiscal year 2015, we recorded out-of-period adjustments impacting stock-based compensation and net inventories of which a majority related to stock-based compensation. The out-of-period adjustment related to stock-based compensation was to correct an error in the recognition of stock-based compensation expense related to performance based stock options we granted primarily in 2010 and 2011. Previously, we had deferred such recognition since the market condition associated with the grants had not been met but we now believe that, consistent with accounting guidance, the expense recognition should have commenced as of the date of our IPO in May, 2014. The net impact of the adjustments to the nine months ended September 30, 2015 was to increase our net loss before taxes and net loss attributable to K2M by approximately $ 2,100 resulting in an increase in net loss per share of $ 0.05 . The Company has determined that the impact of the error on the originating periods was immaterial and does not believe that the impact of correcting the error in fiscal 2015 will be material. Accordingly, a restatement of prior period amounts was not considered necessary. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States or US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Net Loss per Share Basic net loss per common share is determined by dividing the net loss allocable to common stockholders by the weighted average number of common shares outstanding during the periods presented, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the net loss allocable to common stockholders by the weighted average number of shares of common stock and common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of our stock option grants and the if-converted method is used to determine the dilutive effect of our Series A redeemable convertible preferred stock or Series A Preferred and Series B redeemable convertible preferred stock or Series B Preferred, until their conversion into common stock in May 2014. The weighted average shares used to calculate both basic and diluted loss per share are the same because common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive. Foreign Currency Translation and Other Comprehensive Loss The account balances of foreign subsidiaries are translated into U.S. dollars using exchange rates for assets and liabilities at the balance sheet date and average prevailing exchange rates for the period for revenue and expense accounts. Adjustments resulting from translation are included in other comprehensive income (loss), which is our only component of accumulated other comprehensive loss. Remeasurement gains and losses from foreign currency transactions are included in the consolidated statements of operations in the period in which they occur. Issuance of Common Stock On February 2, 2015, we completed a second public offering of 6,044,990 shares of our common stock at a price of $ 18.75 per share. We sold 2,044,990 shares of common stock in the offering and selling stockholders sold 4,000,000 shares of common stock in the offering. We received net proceeds from the offering of approximately $ 35,400 after deducting the underwriting discount and offering expenses. In connection with the offering, certain of the selling stockholders granted the underwriters an option to purchase from them additional shares of common stock at the public offering price, less underwriting discounts. On February 12, 2015, the underwriters exercised this option and purchased 906,748 shares of common stock from the selling stockholders at a price of $ 18.75 per share before underwriting discounts. We did not receive any proceeds from the sale of these shares. On July 13, 2015, we completed an additional public offering of 4,500,000 shares of our common stock at a price to the public of $ 22.60 per share. We sold 750,000 shares of common stock in the offering and selling stockholders sold 3,750,000 shares of common stock. We received net proceeds from the offering of approximately $ 16,300 after deducting the underwriting discount and estimated offering costs. We did not receive any proceeds from shares of common stock sold by the selling stockholders. On July 17, 2015, the underwriters purchased an additional 112,500 shares offered by us and 562,500 shares of common stock offered by the selling stockholders, at an offering price of $ 22.60 per share. We received net proceeds of approximately $ 2,400 after deducting underwriting discounts and estimated offering costs. We did not receive any proceeds from shares of common stock sold by the selling stockholders. We expect to use proceeds of the primary portion of these offerings for working capital and general corporate purposes which is expected to include the expansion of our global distribution network and the purchase of inventory to support sales efforts. Use of proceeds may also include the acquisition of or investment in complementary products, technologies or businesses. The principal purposes of the offerings were to facilitate an orderly distribution of shares by the selling stockholders and to increase the public float of our shares. Recent Accounting Pronouncements We qualify as an “emerging growth company” (EGC) pursuant to the provisions of the JOBS Act and elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act which permits EGCs to defer compliance with new or revised accounting standards (the EGC extension) until non-issuers are required to comply with such standards. Accordingly, so long as we continue to qualify as an EGC, we will not have to adopt or comply with new accounting standards until non-issuers are required to comply with such standards. In May 2014, the Financial Accounting Standards Board, or FASB, amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In July 2015, the FASB issued guidance on deferral of the effective date by one year for public entities, other than EGCs that have elected the EGC extension. The guidance will now be effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for annual reporting periods beginning after December 15, 2018. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of the initial application. We are evaluating the impact of these amendments and the transition alternatives on our consolidated financial statements. In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs by requiring them to be presented as a deduction from the corresponding debt liability, rather than reported as an asset. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts and premiums. The recognition and measurement guidance for debt issuance costs are not affected by this new guidance. In August 2015, the FASB issued further guidance to clarify that the SEC staff would not object to an entity presenting debt issuance costs relating to line-of-credit arrangements as an asset that is subsequently amortized ratably over the terms of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. For public entities other than EGCs that have elected the EGC extension, this guidance will be effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years. EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance on a retrospective basis for fiscal years beginning after December 15, 2015, and interim periods within the fiscal years beginning after December 15, 2016. Although adoption of this new guidance may impact how such items are classified on our balance sheet, we do not anticipate that the adoption of this guidance will have a material impact on our financial position, results of operations or cash flows. There will be no changes to the presentations of our other consolidated financial statements. In July 2015, the FASB issued authoritative guidance to simplify the subsequent measurement of inventory. Under this new standard, an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. For public entities other than EGCs that have elected the EGC extension, the guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments in this guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We are currently evaluating the impact of this guidance. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The following table summarizes the accounts receivables, net of allowances: September 30, December 31, Accounts receivable $ 44,411 $ 36,431 Allowances (2,626 ) (2,494 ) Accounts receivable, net $ 41,785 $ 33,937 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The following table summarizes the inventory, net of allowance: September 30, December 31, Finished goods $ 89,333 $ 78,331 Inventory allowances (28,231 ) (25,714 ) Inventory, net $ 61,102 $ 52,617 Inventory includes surgical instruments available for sale with a carrying value of $ 9,244 and $ 8,491 at September 30, 2015 and December 31, 2014 , respectively. |
PREPAID AND OTHER CURRENT ASSET
PREPAID AND OTHER CURRENT ASSETS (Notes) | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAIDS AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS The following table summarizes prepaid expenses and other current assets: September 30, December 31, Restricted cash $ 6,669 $ — Prepaid expenses 2,015 2,385 Other 1,514 1,526 Total $ 10,198 $ 3,911 As of September 30, 2015 , restricted cash consisted of amounts held in escrow for tenant improvement costs for our new corporate headquarters, which we expect to incur in the first half of 2016. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | INTANGIBLE ASSETS, NET Intangible assets, net comprise the following: September 30, 2015 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 272 — 272 Subtotal 14,072 — 14,072 Subject to amortization Developed technology 4 - 6 years 62,000 (50,797 ) 11,203 Licensed technology 4 - 6 years 52,600 (52,287 ) 313 Customer relationships 4 - 7 years 29,700 (21,745 ) 7,955 Patents and other 2 - 17 years 1,945 (1,087 ) 858 Subtotal 146,245 (125,916 ) 20,329 Total Intangible Assets, net $ 160,317 $ (125,916 ) $ 34,401 December 31, 2014 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 278 — 278 Subtotal 14,078 — 14,078 Subject to amortization Developed technology 4 - 6 years 62,000 (46,460 ) 15,540 Licensed technology 4 - 6 years 52,600 (52,175 ) 425 Customer relationships 4 - 7 years 29,700 (18,563 ) 11,137 Patents and other 2 - 17 years 1,414 (985 ) 429 Subtotal 145,714 (118,183 ) 27,531 Total Intangible Assets, net $ 159,792 $ (118,183 ) $ 41,609 Amortization expense of intangible assets was $ 2,560 and $ 5,038 for the three months ended September 30, 2015 and 2014 , respectively, and $ 7,733 and $ 20,130 for the nine months ended September 30, 2015 and 2014 , respectively. As of September 30, 2015 , the expected amortization expense for the remainder of 2015 and the following four years and thereafter is as follows: September 30, 2015 2015 $ 2,562 2016 10,249 2017 6,634 2018 140 2019 and thereafter 744 Total $ 20,329 |
OTHER ASSETS
OTHER ASSETS | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | OTHER ASSETS Other assets consist of the following: September 30, December 31, Surgical instruments, net $ 22,090 $ 21,392 Restricted cash 1,337 8,114 Other 446 166 Total $ 23,873 $ 29,672 Surgical instruments are stated net of accumulated amortization of $ 24,235 and $ 18,610 at September 30, 2015 and December 31, 2014 , respectively. Amortization expense was $ 2,304 and $ 1,726 for the three months ended September 30, 2015 and 2014 , respectively, and $ 6,688 and $ 4,498 for the nine months ended September 30, 2015 and 2014 , respectively. As of December 31, 2014 , restricted cash included amounts placed in escrow for tenant improvement costs of approximately $ 6,700 for our new corporate headquarters. These amounts included as restricted cash were reclassed to prepaid expenses and other current assets in June 2015, because we believe such tenant improvements will be incurred by June 30, 2016. Restricted cash also includes deposits made on pending bids or contracts with customers of $ 1,337 and $ 1,447 as of September 30, 2015 and December 31, 2014 , respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consist of the following: September 30, December 31, Accrued commissions $ 5,096 $ 4,942 Accrued royalties 2,328 2,464 Other 3,690 2,671 Total $ 11,114 $ 10,077 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION We have four stock-based compensation plans including the 2014 Employee Omnibus Incentive Plan (Omnibus Incentive Plan), the 2014 Employee Stock Purchase Plan (ESPP), the 2010 Equity Award Plan and the 2010 Independent Agent Plan, collectively, “the Plans”. The purpose of the Plans are to provide incentives to employees, directors, agents and advisors. The Plans are administered by our board of directors or their delegates. The number, type of equity incentive, exercise or share purchase price, and vesting terms are determined in accordance with the Plans, as applicable. As of September 30, 2015 , there was a total of 745,101 shares of common stock available for future grants under the plans. In the three months ended September 30, 2015 , stock-based compensation expense included previously unrecognized compensation expense related to performance-based options that had been subject to a performance target measurement event, which was met as of the date of our IPO. Although the measurement event has occurred for purposes of accounting expense recognition, such options are not yet exercisable until our Sponsor achieves the internal rate of return performance criteria defined in the underlying Non-Qualified Stock Option Award Agreement under the 2010 Equity Award Plan. Stock-based compensation expense by financial statement line item, employees and non-employees and type of award for the respective period is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Cost of revenue $ 200 $ 156 $ 517 $ 267 Research, development, and engineering 374 156 673 299 Sales and marketing 1,672 749 3,143 1,382 General and administrative 2,709 1,010 4,530 1,882 $ 4,955 $ 2,071 $ 8,863 $ 3,830 Employees $ 4,907 $ 2,047 $ 8,638 $ 3,785 Non-employees 48 24 225 45 Total $ 4,955 $ 2,071 $ 8,863 $ 3,830 Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options $ 3,279 $ 694 $ 4,388 $ 1,456 Restricted stock and restricted stock units 1,590 1,326 4,259 2,294 ESPP 86 51 216 80 Total $ 4,955 $ 2,071 $ 8,863 $ 3,830 A summary of stock option plans activity during the nine months ended September 30, 2015 is as follows: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2014 4,277,229 $ 9.55 5.83 $ 48,418 Granted 377,826 23.01 Exercised (818,840 ) 7.27 Expired (12,403 ) 5.57 Forfeited (72,982 ) 13.49 Outstanding at September 30, 2015 (2) 3,750,830 $ 11.34 6.11 $ 28,880 Vested or expected to vest: At September 30, 2015 (3) 3,131,416 $ 10.14 5.72 $ 26,508 Vested: At September 30, 2015 1,853,537 $ 9.45 4.87 $ 21,170 (1) Calculated using the estimated per-share fair market value of our common stock on September 30, 2015 and December 31, 2014 , which was $ 18.60 , and $ 20.87 , respectively. (2) The total includes 979,927 vested and 14,841 unvested performance-based options at September 30, 2015 which are not exercisable until a market condition is met. (3) Outstanding options, net of forfeiture rate. A summary of restricted stock and restricted stock units activity during the nine months ended September 30, 2015 is as follows: Unvested Restricted stock and Restricted Stock Units Unvested at December 31, 2014 765,023 Grants of restricted stock 79,940 Vested (1) (351,022 ) Unvested at September 30, 2015 493,941 (1) Represents restricted stock units which vested in 2015. The restricted stock units were net settled, which resulted in the forfeiture of 155,494 units in lieu of withholding taxes during the nine months ended September 30, 2015 , which are included in this total. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES On December 11, 2014, we entered into a Deed of Lease (the “Lease Agreement”) with TC Oaklawn Owner, LLC (the “Landlord”) with respect to our new corporate headquarters to be located in two adjacent buildings in Leesburg, Virginia (the “Buildings”). On March 13, 2015 we received $ 790 of cash grant incentives from several government originators, which were included in cash and cash equivalents. There are no restrictions on the use of the cash proceeds. Pursuant to the grant agreements, we or the Landlord are required to make certain investments in the Buildings and we are required to increase our workforce in Leesburg by 96 full-time employees no later than by December 31, 2017. As a result of these commitments, we have recorded a long-term liability within other liabilities of $790 at September 30, 2015 until such conditions are met. Intellectual Property In the normal course of business, we enter into agreements to obtain the rights to certain intellectual property. These agreements may require an up-front payment, milestone payments and/or royalties. Typically, we have certain rights to cancel these agreements, with notice, without additional payments due other than the amount due at the time of cancellation. As of September 30, 2015 , the aggregate amount of these future payments, assuming achievement of applicable milestones and non-cancellation, was $ 1,420 over a period not less than five years. Royalties ranging from 2% to 10% of net sales may be due on the sales of related products. Some of the agreements contain minimum annual royalty amounts. In November 2011, we entered into an agreement to purchase certain proprietary technology which could require us to make additional aggregate payments of up to $ 13,350 should certain milestones be met, including milestones related to regulatory applications and approvals. Cumulative payments under this agreement totaled $ 100 through September 30, 2015 . In addition, milestone payments of $ 500 , $ 2,000 and $ 4,000 are due upon the achievement of net sales of related products of $ 10,000 , $ 25,000 and $ 50,000 , respectively. A royalty payment of 7% of net sales of related products may be due until such sales reaches $ 20,000 . The product related to this agreement has not yet been commercialized. The medical device industry is characterized by frequent claims and litigation, including claims regarding patent and other intellectual property rights, as well as, improper hiring practices. We are not aware of any pending or threatened legal proceeding against us that would have a material adverse effect on our business, operating results or financial condition. However, we are a party in multiple legal actions involving claimants seeking various remedies, including monetary damages, and none of the outcomes are certain or entirely within our control. |
RELATED PARTIES
RELATED PARTIES | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | RELATED PARTIES In connection with the 2010 Merger, we and our subsidiary K2M Inc. entered into a management agreement with our major stockholder. This agreement terminated in May 2014; we incurred general and administrative expenses of $ 0 and $ 373 for the nine months ended September 30, 2015 and 2014 , respectively. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The provision for income taxes for the three and nine months ended September 30, 2015 and 2014 includes both domestic and foreign income taxes at applicable statutory rates adjusted for permanent differences and valuation allowances. For the three months ended September 30, 2015 and 2014 , the income tax expense was $ 83 and $ 37 , resulting in an effective tax rate of (0.8)% and (0.2)% , respectively. For the nine months ended September 30, 2015 and 2014 , income tax expense was $ 125 and $ 82 , resulting in an effective tax rate of (0.4)% and (0.2)% , respectively. The effective tax rate differs from the statutory rate due to permanent differences, an increase to the valuation allowance and foreign tax rate differentials. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE The following table sets forth the computation of basic and diluted loss per share attributable to our common stockholders: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net loss per common share: Net loss $ (10,215 ) $ (16,140 ) $ (30,722 ) $ (48,570 ) Less: accretion and adjustment of Series A Preferred and Series B Preferred — — — 6,879 Net loss attributable to common stockholders $ (10,215 ) $ (16,140 ) $ (30,722 ) $ (41,691 ) Basic and diluted loss per common share Basic and diluted weighted average common shares outstanding 41,074,245 37,127,155 39,892,068 30,084,010 Basic and diluted loss per common share $ (0.25 ) $ (0.43 ) $ (0.77 ) $ (1.39 ) Diluted loss per share for the three and nine months ended September 30, 2015 and 2014 does not reflect the following weighted average potential common shares, as the effect would be antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options 3,750,830 4,476,615 3,750,830 4,476,615 Restricted stock and restricted stock units 493,941 765,023 493,941 765,023 |
SEGMENT AND GEOGRAPHICAL CONCEN
SEGMENT AND GEOGRAPHICAL CONCENTRATION | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHICAL CONCENTRATION | SEGMENT AND GEOGRAPHICAL CONCENTRATION Operating segments are defined as components of an enterprise for which separate discrete financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. We manage the business globally within one reporting segment. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. Products are sold principally in the United States. International revenue represented 28.3% of total revenue for both the three and nine months ended September 30, 2015 ; however, revenue earned in any individual foreign country is below 10% of our consolidated revenue. The following table represents total revenue by geographic area, based on the location of the customer: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 United States $ 39,459 $ 34,385 $ 116,055 $ 97,371 International 15,550 13,239 45,732 39,992 Total $ 55,009 $ 47,624 $ 161,787 $ 137,363 We classify sales within the United States into three categories: complex spine pathologies, minimally invasive procedures and degenerative and other conditions. A significant portion of our international revenue is derived from our distributor partners who do not report their product usage at the surgeon or hospital level, which prevents us from providing a specific breakdown for our international revenue among our three product categories. These sales transactions are settled when we ship the product to the distributor. The following table represents domestic revenue by procedure category: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Complex spine $ 16,852 $ 14,585 $ 48,204 $ 40,375 Minimally invasive 7,401 5,258 20,124 15,138 Degenerative 15,206 14,542 47,727 41,858 39,459 34,385 116,055 97,371 International 15,550 13,239 45,732 39,992 Total $ 55,009 $ 47,624 $ 161,787 $ 137,363 |
SUBSEQUENT EVENTS (Notes)
SUBSEQUENT EVENTS (Notes) | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS On October 29, 2015, certain of our subsidiaries entered into an amendment (the “Eighth Amendment”) to the Company’s senior secured credit facilities credit agreement, dated as of October 29, 2012 (as amended from time to time), by and among K2M Holdings, Inc. as the guarantor (“Guarantor”), K2M, Inc. and K2M UK Limited as the borrower (“Borrower”), and Silicon Valley Bank and Comerica Bank as lenders. The Eighth Amendment, among other things, extended the maturity date of the revolving credit facility to October 29, 2017 and increases the total revolving commitments from $ 40,000 to $ 55,000 . ABR loans under the revolving credit facility bear interest at a rate per annum equal to ABR, plus 0.75% . LIBOR loans under the revolving credit facility bear interest at a rate per annum equal to LIBOR plus 3.00% . The total obligations under the amended credit facility cannot exceed (i) the lesser of the total revolving commitment of $ 55,000 or (ii) the borrowing base, which is calculated as (x) 85% of accounts receivable so long as certain of those accounts receivable do not exceed, in the aggregate, 50% of the borrowing base plus (y) 50% of the value of the eligible inventory provided that the contribution of the value of the eligible inventory not exceed the lesser of 40% of the borrowing base or $ 15,000 plus (z) up to $ 7,500 to the extent the Borrower and its subsidiaries maintain at least $ 12,500 on deposit with a lender or an affiliate of a lender. Borrowings under the revolving credit facility remain secured by a first priority lien on substantially all of the Borrower’s personal property assets, including intellectual property. The revolving credit facility also continues to contain other restrictive covenants with which the Guarantor and/or Borrower must comply, including restrictive covenants which limit the ability to pay dividends on common stock and make certain investments. |
GENERAL AND SUMMARY OF SIGNIF22
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States or US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates |
Net Loss per Share | Net Loss per Share Basic net loss per common share is determined by dividing the net loss allocable to common stockholders by the weighted average number of common shares outstanding during the periods presented, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the net loss allocable to common stockholders by the weighted average number of shares of common stock and common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of our stock option grants and the if-converted method is used to determine the dilutive effect of our Series A redeemable convertible preferred stock or Series A Preferred and Series B redeemable convertible preferred stock or Series B Preferred, until their conversion into common stock in May 2014. The weighted average shares used to calculate both basic and diluted loss per share are the same because common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive |
Foreign Currency Translation and Other Comprehensive Loss | Foreign Currency Translation and Other Comprehensive Loss The account balances of foreign subsidiaries are translated into U.S. dollars using exchange rates for assets and liabilities at the balance sheet date and average prevailing exchange rates for the period for revenue and expense accounts. Adjustments resulting from translation are included in other comprehensive income (loss), which is our only component of accumulated other comprehensive loss. Remeasurement gains and losses from foreign currency transactions are included in the consolidated statements of operations in the period in which they occur |
Recent Accounting Pronouncements | Recent Accounting Pronouncements We qualify as an “emerging growth company” (EGC) pursuant to the provisions of the JOBS Act and elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act which permits EGCs to defer compliance with new or revised accounting standards (the EGC extension) until non-issuers are required to comply with such standards. Accordingly, so long as we continue to qualify as an EGC, we will not have to adopt or comply with new accounting standards until non-issuers are required to comply with such standards. In May 2014, the Financial Accounting Standards Board, or FASB, amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In July 2015, the FASB issued guidance on deferral of the effective date by one year for public entities, other than EGCs that have elected the EGC extension. The guidance will now be effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for annual reporting periods beginning after December 15, 2018. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of the initial application. We are evaluating the impact of these amendments and the transition alternatives on our consolidated financial statements. In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs by requiring them to be presented as a deduction from the corresponding debt liability, rather than reported as an asset. This will make the presentation of debt issuance costs consistent with the presentation of debt discounts and premiums. The recognition and measurement guidance for debt issuance costs are not affected by this new guidance. In August 2015, the FASB issued further guidance to clarify that the SEC staff would not object to an entity presenting debt issuance costs relating to line-of-credit arrangements as an asset that is subsequently amortized ratably over the terms of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. For public entities other than EGCs that have elected the EGC extension, this guidance will be effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years. EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance on a retrospective basis for fiscal years beginning after December 15, 2015, and interim periods within the fiscal years beginning after December 15, 2016. Although adoption of this new guidance may impact how such items are classified on our balance sheet, we do not anticipate that the adoption of this guidance will have a material impact on our financial position, results of operations or cash flows. There will be no changes to the presentations of our other consolidated financial statements. In July 2015, the FASB issued authoritative guidance to simplify the subsequent measurement of inventory. Under this new standard, an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. For public entities other than EGCs that have elected the EGC extension, the guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. For all other entities, EGCs that have elected the EGC extension, including us, and non-public entities will be required to comply with the guidance for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments in this guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We are currently evaluating the impact of this guidance. |
ACCOUNTS RECEIVABLE - (Tables)
ACCOUNTS RECEIVABLE - (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | The following table summarizes the accounts receivables, net of allowances: September 30, December 31, Accounts receivable $ 44,411 $ 36,431 Allowances (2,626 ) (2,494 ) Accounts receivable, net $ 41,785 $ 33,937 |
INVENTORY - (Tables)
INVENTORY - (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Current Inventory | The following table summarizes the inventory, net of allowance: September 30, December 31, Finished goods $ 89,333 $ 78,331 Inventory allowances (28,231 ) (25,714 ) Inventory, net $ 61,102 $ 52,617 |
PREPAID AND OTHER CURRENT ASS25
PREPAID AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses and other current assets | The following table summarizes prepaid expenses and other current assets: September 30, December 31, Restricted cash $ 6,669 $ — Prepaid expenses 2,015 2,385 Other 1,514 1,526 Total $ 10,198 $ 3,911 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS - (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | ntangible assets, net comprise the following: September 30, 2015 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 272 — 272 Subtotal 14,072 — 14,072 Subject to amortization Developed technology 4 - 6 years 62,000 (50,797 ) 11,203 Licensed technology 4 - 6 years 52,600 (52,287 ) 313 Customer relationships 4 - 7 years 29,700 (21,745 ) 7,955 Patents and other 2 - 17 years 1,945 (1,087 ) 858 Subtotal 146,245 (125,916 ) 20,329 Total Intangible Assets, net $ 160,317 $ (125,916 ) $ 34,401 December 31, 2014 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 278 — 278 Subtotal 14,078 — 14,078 Subject to amortization Developed technology 4 - 6 years 62,000 (46,460 ) 15,540 Licensed technology 4 - 6 years 52,600 (52,175 ) 425 Customer relationships 4 - 7 years 29,700 (18,563 ) 11,137 Patents and other 2 - 17 years 1,414 (985 ) 429 Subtotal 145,714 (118,183 ) 27,531 Total Intangible Assets, net $ 159,792 $ (118,183 ) $ 41,609 |
Schedule of Expected Amortization Expense | As of September 30, 2015 , the expected amortization expense for the remainder of 2015 and the following four years and thereafter is as follows: September 30, 2015 2015 $ 2,562 2016 10,249 2017 6,634 2018 140 2019 and thereafter 744 Total $ 20,329 |
OTHER ASSETS - (Tables)
OTHER ASSETS - (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following: September 30, December 31, Surgical instruments, net $ 22,090 $ 21,392 Restricted cash 1,337 8,114 Other 446 166 Total $ 23,873 $ 29,672 |
ACCRUED EXPENSES - (Tables)
ACCRUED EXPENSES - (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following: September 30, December 31, Accrued commissions $ 5,096 $ 4,942 Accrued royalties 2,328 2,464 Other 3,690 2,671 Total $ 11,114 $ 10,077 |
STOCK-BASED COMPENSATION - (Tab
STOCK-BASED COMPENSATION - (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation expense | Stock-based compensation expense by financial statement line item, employees and non-employees and type of award for the respective period is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Cost of revenue $ 200 $ 156 $ 517 $ 267 Research, development, and engineering 374 156 673 299 Sales and marketing 1,672 749 3,143 1,382 General and administrative 2,709 1,010 4,530 1,882 $ 4,955 $ 2,071 $ 8,863 $ 3,830 Employees $ 4,907 $ 2,047 $ 8,638 $ 3,785 Non-employees 48 24 225 45 Total $ 4,955 $ 2,071 $ 8,863 $ 3,830 Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options $ 3,279 $ 694 $ 4,388 $ 1,456 Restricted stock and restricted stock units 1,590 1,326 4,259 2,294 ESPP 86 51 216 80 Total $ 4,955 $ 2,071 $ 8,863 $ 3,830 |
Schedule of employee stock option plan activity | A summary of stock option plans activity during the nine months ended September 30, 2015 is as follows: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2014 4,277,229 $ 9.55 5.83 $ 48,418 Granted 377,826 23.01 Exercised (818,840 ) 7.27 Expired (12,403 ) 5.57 Forfeited (72,982 ) 13.49 Outstanding at September 30, 2015 (2) 3,750,830 $ 11.34 6.11 $ 28,880 Vested or expected to vest: At September 30, 2015 (3) 3,131,416 $ 10.14 5.72 $ 26,508 Vested: At September 30, 2015 1,853,537 $ 9.45 4.87 $ 21,170 (1) Calculated using the estimated per-share fair market value of our common stock on September 30, 2015 and December 31, 2014 , which was $ 18.60 , and $ 20.87 , respectively. (2) The total includes 979,927 vested and 14,841 unvested performance-based options at September 30, 2015 which are not exercisable until a market condition is met. (3) Outstanding options, net of forfeiture rate |
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | A summary of restricted stock and restricted stock units activity during the nine months ended September 30, 2015 is as follows: Unvested Restricted stock and Restricted Stock Units Unvested at December 31, 2014 765,023 Grants of restricted stock 79,940 Vested (1) (351,022 ) Unvested at September 30, 2015 493,941 |
NET LOSS PER SHARE - (Tables)
NET LOSS PER SHARE - (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted loss per share attributable to our common stockholders: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net loss per common share: Net loss $ (10,215 ) $ (16,140 ) $ (30,722 ) $ (48,570 ) Less: accretion and adjustment of Series A Preferred and Series B Preferred — — — 6,879 Net loss attributable to common stockholders $ (10,215 ) $ (16,140 ) $ (30,722 ) $ (41,691 ) Basic and diluted loss per common share Basic and diluted weighted average common shares outstanding 41,074,245 37,127,155 39,892,068 30,084,010 Basic and diluted loss per common share $ (0.25 ) $ (0.43 ) $ (0.77 ) $ (1.39 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Diluted loss per share for the three and nine months ended September 30, 2015 and 2014 does not reflect the following weighted average potential common shares, as the effect would be antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options 3,750,830 4,476,615 3,750,830 4,476,615 Restricted stock and restricted stock units 493,941 765,023 493,941 765,023 |
SEGMENT AND GEOGRAPHICAL CONC31
SEGMENT AND GEOGRAPHICAL CONCENTRATION - (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Area | The following table represents total revenue by geographic area, based on the location of the customer: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 United States $ 39,459 $ 34,385 $ 116,055 $ 97,371 International 15,550 13,239 45,732 39,992 Total $ 55,009 $ 47,624 $ 161,787 $ 137,363 |
Schedule of Revenue by Products | The following table represents domestic revenue by procedure category: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Complex spine $ 16,852 $ 14,585 $ 48,204 $ 40,375 Minimally invasive 7,401 5,258 20,124 15,138 Degenerative 15,206 14,542 47,727 41,858 39,459 34,385 116,055 97,371 International 15,550 13,239 45,732 39,992 Total $ 55,009 $ 47,624 $ 161,787 $ 137,363 |
GENERAL AND SUMMARY OF SIGNIF32
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 17, 2015 | Jul. 13, 2015 | Feb. 12, 2015 | Feb. 02, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Loss before income tax expense | $ 10,132 | $ 16,103 | $ 30,597 | $ 48,488 | ||||
Net loss | $ 10,215 | $ 16,140 | $ 30,722 | $ 48,570 | ||||
Basic and diluted (in dollars per share) | $ 0.25 | $ 0.43 | $ 0.77 | $ 1.39 | ||||
Significant Accounting Policies [Line Items] | ||||||||
Issuances of common stock (in shares) | 750,000 | 2,044,990 | ||||||
Proceeds from issuances of common stock, net of issuance costs | $ 54,401 | $ 121,898 | ||||||
Stock Issued During Period, Shares, Issued for Services (in shares) | 112,500 | |||||||
Investor [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Stock Issued During Period, Shares, Shares Held by Company and Shareholders (in share) | 4,500,000 | 6,044,990 | ||||||
Shares Issued, Price Per Share | $ 22.60 | $ 18.75 | ||||||
Issuances of common stock (in shares) | 3,750,000 | |||||||
Proceeds from issuances of common stock, net of issuance costs | $ 16,300 | $ 35,400 | ||||||
Stock Issued During Period, Shares, Issued for Services (in shares) | 4,000,000 | |||||||
Underwriters [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Shares Issued, Price Per Share | $ 22.60 | |||||||
Proceeds from issuances of common stock, net of issuance costs | $ 2,400 | |||||||
Stock Issued During Period, Shares, Issued for Services (in shares) | 562,500 | 906,748 | ||||||
Recognition of Stock-Based Compensation Expense Related to 2010 and 2011 Performance Based Stock Options [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Loss before income tax expense | 2,100 | |||||||
Net loss | $ 2,100 | |||||||
Basic and diluted (in dollars per share) | $ 0.05 |
GENERAL AND SUMMARY OF SIGNIF33
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Follow-on offering stock issuance (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 17, 2015 | Jul. 13, 2015 | Feb. 12, 2015 | Feb. 02, 2015 | Sep. 30, 2015 | Sep. 30, 2014 |
Class of Stock [Line Items] | ||||||
Stock Issued During Period, Shares, Issued for Services (in shares) | 112,500 | |||||
Issuances of common stock (in shares) | 750,000 | 2,044,990 | ||||
Proceeds from issuances of common stock, net of issuance costs | $ 54,401 | $ 121,898 | ||||
Investor [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock Issued During Period, Shares, Shares Held by Company and Shareholders (in share) | 4,500,000 | 6,044,990 | ||||
Stock Issued During Period, Shares, Issued for Services (in shares) | 4,000,000 | |||||
Shares Issued, Price Per Share | $ 22.60 | $ 18.75 | ||||
Issuances of common stock (in shares) | 3,750,000 | |||||
Proceeds from issuances of common stock, net of issuance costs | $ 16,300 | $ 35,400 | ||||
Underwriters [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock Issued During Period, Shares, Issued for Services (in shares) | 562,500 | 906,748 | ||||
Shares Issued, Price Per Share | $ 22.60 | |||||
Proceeds from issuances of common stock, net of issuance costs | $ 2,400 |
ACCOUNTS RECEIVABLE - (Details)
ACCOUNTS RECEIVABLE - (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Accounts receivable | $ 44,411 | $ 36,431 |
Allowances | (2,626) | (2,494) |
Accounts receivable, net | $ 41,785 | $ 33,937 |
INVENTORY - (Details)
INVENTORY - (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory [Line Items] | ||
Finished goods | $ 89,333 | $ 78,331 |
Inventory allowances | (28,231) | (25,714) |
Inventory, net | 61,102 | 52,617 |
Surgical and Medical Instruments [Member] | ||
Inventory [Line Items] | ||
Inventory, net | $ 9,244 | $ 8,491 |
PREPAID AND OTHER CURRENT ASS36
PREPAID AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Restricted cash | $ 6,669 | $ 0 |
Prepaid expenses | 2,015 | 2,385 |
Other | 1,514 | 1,526 |
Total | $ 10,198 | $ 3,911 |
GOODWILL AND INTANGIBLE ASSET37
GOODWILL AND INTANGIBLE ASSETS - (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Indefinite-lived intangible assets | $ 14,072 | $ 14,072 | $ 14,078 | ||
Subject to amortization, Gross | 146,245 | 146,245 | 145,714 | ||
Accumulated Amortization | (125,916) | (125,916) | (118,183) | ||
Total | 20,329 | 20,329 | 27,531 | ||
Intangible Assets, Gross | 160,317 | 160,317 | 159,792 | ||
Intangible Assets, Net | 34,401 | 34,401 | 41,609 | ||
Amortization expense | 2,560 | $ 5,038 | 7,733 | $ 20,130 | |
Developed Technology Rights [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Subject to amortization, Gross | 62,000 | 62,000 | 62,000 | ||
Accumulated Amortization | (50,797) | (50,797) | (46,460) | ||
Total | 11,203 | 11,203 | 15,540 | ||
Licensed technology [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Subject to amortization, Gross | 52,600 | 52,600 | 52,600 | ||
Accumulated Amortization | (52,287) | (52,287) | (52,175) | ||
Total | 313 | 313 | 425 | ||
Customer Relationships [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Subject to amortization, Gross | 29,700 | 29,700 | 29,700 | ||
Accumulated Amortization | (21,745) | (21,745) | (18,563) | ||
Total | 7,955 | 7,955 | 11,137 | ||
Patents and Other [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Subject to amortization, Gross | 1,945 | 1,945 | 1,414 | ||
Accumulated Amortization | (1,087) | (1,087) | (985) | ||
Total | 858 | 858 | 429 | ||
Trademarks [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Indefinite-lived intangible assets | 12,900 | 12,900 | 12,900 | ||
In-process research and development [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Indefinite-lived intangible assets | 900 | 900 | 900 | ||
Other [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Indefinite-lived intangible assets | $ 272 | $ 272 | $ 278 | ||
Minimum [Member] | Developed Technology Rights [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Estimated Useful Lives | 4 years | 4 years | |||
Minimum [Member] | Licensed technology [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Estimated Useful Lives | 4 years | 4 years | |||
Minimum [Member] | Customer Relationships [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Estimated Useful Lives | 4 years | 4 years | |||
Minimum [Member] | Patents and Other [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Estimated Useful Lives | 2 years | 2 years | |||
Maximum [Member] | Developed Technology Rights [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Estimated Useful Lives | 6 years | 6 years | |||
Maximum [Member] | Licensed technology [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Estimated Useful Lives | 6 years | 6 years | |||
Maximum [Member] | Customer Relationships [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Estimated Useful Lives | 7 years | 7 years | |||
Maximum [Member] | Patents and Other [Member] | |||||
Schedule of Intangible Asset by Major Class [Line Items] | |||||
Estimated Useful Lives | 17 years | 17 years |
GOODWILL AND INTANGIBLE ASSET38
GOODWILL AND INTANGIBLE ASSETS Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Intangible assets, net | $ 34,401 | $ 34,401 | $ 41,609 | ||
Amortization of Intangible Assets | 2,560 | $ 5,038 | 7,733 | $ 20,130 | |
2,015 | 2,562 | 2,562 | |||
2,016 | 10,249 | 10,249 | |||
2,017 | 6,634 | 6,634 | |||
2,018 | 140 | 140 | |||
2019 and thereafter | 744 | 744 | |||
Total | 20,329 | 20,329 | 27,531 | ||
Intangible Assets, Gross (Excluding Goodwill) | $ 160,317 | $ 160,317 | $ 159,792 |
OTHER ASSETS - (Details)
OTHER ASSETS - (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Surgical instruments, net | $ 22,090 | $ 22,090 | $ 21,392 | ||
Deposits Assets, Noncurrent | 1,337 | 1,337 | 8,114 | ||
Other | 446 | 446 | 166 | ||
Total | 23,873 | 23,873 | 29,672 | ||
Surgical instruments accumulated amortization | 24,235 | 24,235 | 18,610 | ||
Amortization expense | 2,304 | $ 1,726 | 6,688 | $ 4,498 | |
Escrow Deposits [Member] | Other Assets [Member] | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted Cash and Cash Equivalents | 6,700 | 6,700 | |||
Demand Deposits [Member] | Other Assets [Member] | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted Cash and Cash Equivalents | $ 1,337 | $ 1,337 | $ 1,447 |
OTHER ASSETS HQ lease escow (De
OTHER ASSETS HQ lease escow (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Escrow Deposits [Member] | Other Assets [Member] | |
Restricted Cash and Cash Equivalents Items [Line Items] | |
Restricted Cash and Cash Equivalents | $ 6,700 |
ACCRUED EXPENSES - (Details)
ACCRUED EXPENSES - (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued commissions | $ 5,096 | $ 4,942 |
Accrued royalties | 2,328 | 2,464 |
Other | 3,690 | 2,671 |
Total | $ 11,114 | $ 10,077 |
STOCK-BASED COMPENSATION - Allo
STOCK-BASED COMPENSATION - Allocation of Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | $ 4,955 | $ 2,071 | $ 8,863 | $ 3,830 |
Cost of Revenue [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 200 | 156 | 517 | 267 |
Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 374 | 156 | 673 | 299 |
Selling and Marketing Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 1,672 | 749 | 3,143 | 1,382 |
General and Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 2,709 | 1,010 | 4,530 | 1,882 |
Employee [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 4,907 | 2,047 | 8,638 | 3,785 |
Nonemployee [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | $ 48 | $ 24 | $ 225 | $ 45 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock option award type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | $ 4,955 | $ 2,071 | $ 8,863 | $ 3,830 |
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 3,279 | 694 | 4,388 | 1,456 |
Restricted Stock and Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 1,590 | 1,326 | 4,259 | 2,294 |
Employee Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | $ 86 | $ 51 | $ 216 | $ 80 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding Beginning Balance, Shares | 4,277,229 | |||
Granted, Shares | 377,826 | |||
Exercised, Shares | (818,840) | |||
Expired, Shares | (12,403) | |||
Forfeited, Shares | (72,982) | |||
Outstanding Ending Balance, Shares | 3,750,830 | [1] | 4,277,229 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Beginning, Weighted-Average Exercise Price (in usd per share) | $ 9.55 | |||
Granted, Weighted-Average Exercise Price (in usd per share) | 23.01 | |||
Exercised, Weighted-Average Exercise Price (in usd per share) | 7.27 | |||
Expired, Weighted-Average Exercise Price (in usd per share) | 5.57 | |||
Forfeited, Weighted-Average Exercise Price (in usd per share) | 13.49 | |||
Ending, Weighted-Average Exercise Price (in usd per share) | $ 11.34 | $ 9.55 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Outstanding, Weighted- Average Remaining Contractual Term (years) | 6 years 1 month 9 days | 5 years 9 months 29 days | ||
Outstanding, Aggregate Intrinsic Value | [2] | $ 48,418 | ||
Outstanding, Aggregate Intrinsic Value | [2] | $ 28,880 | $ 48,418 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | ||||
Vested or expected to vest, shares | [3] | 3,131,416 | ||
Vested or expected to vest, Weighted-Average Exercise Price (in usd per share) | $ 10.14 | |||
Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 5 years 8 months 19 days | |||
Vested or expected to vest, Aggregate Intrinsic Value | [2] | $ 26,508 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested [Abstract] | ||||
Vested, shares | 1,853,537 | |||
Vested, Weighted-Average Exercise Price (in usd per share) | $ 9.45 | |||
Vested, Weighted-Average Remaining Contractual Term | 4 years 10 months 13 days | |||
Vested, Aggregate Intrinsic Value | [2] | $ 21,170 | ||
Fair value valuation, estimated fair market value of stock (in dollars per share) | $ 18.60 | $ 20.87 | ||
Time vested but not performance vested | Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested [Abstract] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 979,927 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 14,841 | |||
[1] | The total includes 979,927 vested and 14,841 unvested performance-based options at September 30, 2015 | |||
[2] | Calculated using the estimated per-share fair market value of our common stock on September 30, 2015 and December 31, 2014, which was $18.60, and $20.87, respectively | |||
[3] | Outstanding options, net of forfeiture rate. |
STOCK-BASED COMPENSATION Share-
STOCK-BASED COMPENSATION Share-Based Compensation Related to Restricted (Details) | 9 Months Ended |
Sep. 30, 2015shares | |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 155,000 |
Restricted Stock and Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 765,023 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 79,940 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (351,022) |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 493,941 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | Sep. 30, 2015planshares |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Stock Plans | plan | 4 |
Employee Stock Purchase Plans, Shares Reserved for Future Issuance (in shares) | 745,101 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Details) | 1 Months Ended | 9 Months Ended | |
Nov. 30, 2011USD ($) | Sep. 30, 2015USD ($)Position | Sep. 30, 2014USD ($) | |
Long-term Purchase Commitment [Line Items] | |||
Revenue from Grants | $ 790,000 | ||
Grant, Terms and Conditions, Required Increase in Workforce by Specified Date | Position | 96 | ||
Unearned Grants | $ 790,000 | ||
Initial payment to acquire proprietary technology | 538,000 | $ 20,000 | |
Licensed technology [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Other Commitment | $ 1,420,000 | ||
Minimum contractual term | 5 years | ||
Licensed technology [Member] | Minimum [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Future maximum royalty payments | 2.00% | ||
Licensed technology [Member] | Maximum [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Future maximum royalty payments | 10.00% | ||
In Process Research and Development [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Future maximum royalty payments | 7.00% | ||
Initial payment to acquire proprietary technology | $ 100,000 | ||
Milestone payment one | $ 500,000 | ||
Milestone payment two | 2,000,000 | ||
Milestone payment three | 4,000,000 | ||
Milestone for milestone payment one | 10,000,000 | ||
Milestone for milestone payment two | 25,000,000 | ||
Milestone for milestone payment three | 50,000,000 | ||
Milestone for ending royalty payments, cumulative sales | 20,000,000 | ||
In Process Research and Development [Member] | Maximum [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Other Commitment | $ 13,350,000 |
RELATED PARTIES - (Details)
RELATED PARTIES - (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Major Stockholder [Member] | Related Party Transaction, Management Service Fee [Member] | ||
Related Party Transaction [Line Items] | ||
General and administrative | $ 0 | $ 373 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ 83 | $ 37 | $ 125 | $ 82 |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | (0.80%) | (0.20%) | (0.40%) | (0.20%) |
NET LOSS PER SHARE - (Details)
NET LOSS PER SHARE - (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (10,215) | $ (16,140) | $ (30,722) | $ (48,570) |
Less: accretion and adjustment of Series A Preferred and Series B Preferred | 0 | 0 | ||
Less: accretion and adjustment of Series A Preferred and Series B Preferred | 0 | 6,879 | ||
Net loss attributable to stockholders | $ (10,215) | $ (16,140) | $ (30,722) | $ (41,691) |
Basic and diluted weighted average common shares outstanding | 41,074,245 | 37,127,155 | 39,892,068 | 30,084,010 |
Basic and diluted loss per common share (in dollars per share) | $ (0.25) | $ (0.43) | $ (0.77) | $ (1.39) |
NET LOSS PER SHARE - Antidiluti
NET LOSS PER SHARE - Antidilutive Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Earnings Per Share (in shares) | 3,750,830 | 4,476,615 | 3,750,830 | 4,476,615 |
Restricted Stock and Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Earnings Per Share (in shares) | 493,941 | 765,023 | 493,941 | 765,023 |
SEGMENT AND GEOGRAPHICAL CONC52
SEGMENT AND GEOGRAPHICAL CONCENTRATION - Narrative (Details) - Segment | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 1 | |
Sales Revenue, Net [Member] | Geographic Concentration Risk [Member] | International [Member] | ||
Segment Reporting Information [Line Items] | ||
International revenue as a percentage of total revenue | 28.30% | 28.30% |
Sales Revenue, Net [Member] | Geographic Concentration Risk [Member] | United States [Member] | ||
Segment Reporting Information [Line Items] | ||
International revenue as a percentage of total revenue | 10.00% |
SEGMENT AND GEOGRAPHICAL CONC53
SEGMENT AND GEOGRAPHICAL CONCENTRATION - Revenues by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 55,009 | $ 47,624 | $ 161,787 | $ 137,363 |
Sales Revenue, Net [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 55,009 | 47,624 | 161,787 | 137,363 |
United States [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 39,459 | 34,385 | 116,055 | 97,371 |
United States [Member] | Sales Revenue, Net [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 39,459 | 34,385 | 116,055 | 97,371 |
International [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 15,550 | 13,239 | 45,732 | 39,992 |
International [Member] | Sales Revenue, Net [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 15,550 | $ 13,239 | $ 45,732 | $ 39,992 |
SEGMENT AND GEOGRAPHICAL CONC54
SEGMENT AND GEOGRAPHICAL CONCENTRATION - Revenues by Product (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue from External Customer [Line Items] | ||||
Revenue | $ 55,009 | $ 47,624 | $ 161,787 | $ 137,363 |
United States [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 39,459 | 34,385 | 116,055 | 97,371 |
United States [Member] | Complex Spine [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 16,852 | 14,585 | 48,204 | 40,375 |
United States [Member] | Minimally Invasive [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 7,401 | 5,258 | 20,124 | 15,138 |
United States [Member] | Degenerative [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 15,206 | 14,542 | 47,727 | 41,858 |
International [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 15,550 | $ 13,239 | $ 45,732 | $ 39,992 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - Revolving Credit Facility [Member] - USD ($) | Oct. 29, 2015 | Oct. 29, 2012 |
Credit Agreement 2012 [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000,000 | |
October 2015 Amendment [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 55,000,000 | |
Debt Instrument, Restrictive Covenant, Maximum Borrowing Capacity | $ 55,000,000 | |
Debt Instrument, Restrictive Covenant, Receivables Applicable to Borrowing Base, Percentage | 85.00% | |
Debt Instrument, Restrictive Covenant, Maximum Receivables to Borrowing Base Ratio | 50.00% | |
Debt Instrument, Restrictive Covenant, Inventory Applicable to Borrowing Base, Percentage | 50.00% | |
Debt Instrument, Restrictive Covenant, Maximum Inventory to Borrowing Base Ratio | 40.00% | |
Debt Instrument, Restrictive Covenant, Inventory Applicable to Borrowing Base, Maximum, Amount | $ 15,000,000 | |
Debt Instrument, Restrictive Covenant, Deposit Applicable to Borrowing Base, Maximum Amount | 7,500,000 | |
Debt Instrument, Restrictive Covenant, Minimum Deposit Requirement for Additional Capacity | $ 12,500,000 | |
Base Rate [Member] | October 2015 Amendment [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | |
London Interbank Offered Rate (LIBOR) [Member] | October 2015 Amendment [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 3.00% |