DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION DOCUMENT AND ENTITY INFORMATION - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 25, 2016 | |
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 | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 41,485,126 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 21,177 | $ 34,646 |
Accounts receivable, net | 41,675 | 38,773 |
Inventory, net | 64,564 | 62,002 |
Prepaid expenses and other current assets | 10,737 | 19,820 |
Total current assets | 138,153 | 155,241 |
Property, plant and equipment, net | 50,133 | 38,318 |
Goodwill | 121,814 | 121,814 |
Intangible assets, net | 30,554 | 33,123 |
Other assets, net | 25,946 | 26,016 |
Total assets | 366,600 | 374,512 |
Current liabilities: | ||
Current maturities under capital lease obligation | 508 | 284 |
Accounts payable | 21,198 | 22,483 |
Accrued expenses | 11,103 | 13,559 |
Accrued payroll liabilities | 10,250 | 11,507 |
Total current liabilities | 43,059 | 47,833 |
Bank line of credit | 5,000 | 0 |
Capital lease obligation, net of current maturities | 34,487 | 34,140 |
Deferred income taxes, net | 5,042 | 5,042 |
Other liabilities | 830 | 835 |
Total liabilities | $ 88,418 | $ 87,850 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value, 750,000,000 shares authorized; 41,481,461 and 41,337,692 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | $ 41 | $ 41 |
Additional paid-in capital | 456,624 | 454,153 |
Accumulated other comprehensive income | 1,123 | 1,889 |
Accumulated deficit | (179,606) | (169,421) |
Total stockholders’ equity | 278,182 | 286,662 |
Total liabilities and stockholders’ equity | $ 366,600 | $ 374,512 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
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) | 41,481,461 | 41,337,692 |
Common stock, shares outstanding (in shares) | 41,481,461 | 41,337,692 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Revenue | $ 56,306 | $ 50,424 |
Cost of revenue | 19,604 | 17,497 |
Gross profit | 36,702 | 32,927 |
Operating expenses: | ||
Research and development | 5,028 | 4,633 |
Sales and marketing | 27,755 | 25,010 |
General and administrative | 13,848 | 13,329 |
Total operating expenses | 46,631 | 42,972 |
Loss from operations | (9,929) | (10,045) |
Other income (expense), net: | ||
Foreign currency transaction gain (loss) | 420 | (4,137) |
Interest expense | (651) | (80) |
Total other income (expense), net | (231) | (4,217) |
Loss before income taxes | (10,160) | (14,262) |
Income tax expense | 25 | 23 |
Net loss | $ (10,185) | $ (14,285) |
Net loss per share attributable to common stockholders: | ||
Basic and diluted (in dollars per share) | $ (0.25) | $ (0.37) |
Weighted average shares outstanding: | ||
Basic and diluted (in shares) | 41,353,123 | 38,739,798 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (10,185) | $ (14,285) |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustment | (766) | 2,646 |
Other comprehensive (loss) income | (766) | 2,646 |
Comprehensive loss | $ (10,951) | $ (11,639) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Beginning Balance (in shares) at Dec. 31, 2015 | 41,337,692 | 41,337,692 | |||
Beginning Balance at Dec. 31, 2015 | $ 286,662 | $ 41 | $ 454,153 | $ 1,889 | $ (169,421) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (10,185) | (10,185) | |||
Other comprehensive income | (766) | (766) | |||
Stock-based compensation expense | $ 2,106 | 2,106 | |||
Exercise of options (in shares) | 63,829 | 143,769 | |||
Issuances and exercise of stock-based compensation benefit plans, net of income tax | $ 365 | $ 0 | 365 | ||
Ending Balance (in shares) at Mar. 31, 2016 | 41,481,461 | 41,481,461 | |||
Ending Balance at Mar. 31, 2016 | $ 278,182 | $ 41 | $ 456,624 | $ 1,123 | $ (179,606) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities | ||
Net loss | $ (10,185) | $ (14,285) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 6,743 | 6,036 |
Provision for allowance for doubtful accounts | (57) | 41 |
Provision for inventory reserves | 1,013 | 1,239 |
Stock-based compensation expense | 2,106 | 1,901 |
Deferred income taxes | 0 | 21 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,862) | (1,345) |
Inventory | (2,139) | (1,536) |
Prepaid expenses and other assets | (2,705) | (2,745) |
Accounts payable, accrued expenses, and accrued payroll liabilities | (3,351) | 3,655 |
Net cash used in operating activities | (11,437) | (7,018) |
Investing activities | ||
Purchase of surgical instruments | (3,339) | (1,430) |
Purchase of property, plant and equipment | (6,141) | (649) |
Restricted cash used for leasehold improvements | 3,333 | 0 |
Purchase of intangible assets | (1,282) | (17) |
Net cash used in investing activities | (7,429) | (2,096) |
Financing activities | ||
Borrowings on bank line of credit | 5,000 | 0 |
Proceeds from issuances of common stock, net of issuance costs | 0 | 36,455 |
Issuances and exercise of stock-based compensation benefit plans, net of income tax | 365 | 382 |
Net cash provided by financing activities | 5,365 | 36,837 |
Effect of exchange rate changes on cash and cash equivalents | 32 | (114) |
Net increase in cash and cash equivalents | (13,469) | 27,609 |
Cash and cash equivalents at beginning of period | 34,646 | 11,411 |
Cash and cash equivalents at end of period | 21,177 | 39,020 |
Significant non-cash financing activities | ||
Leasehold improvements under capital lease | 8,562 | 0 |
Additions to property, plant and equipment | 1,234 | 0 |
Deferred offering costs | 0 | 1,007 |
Cash paid for: | ||
Income taxes | 109 | 52 |
Interest | $ 623 | $ 24 |
GENERAL AND SUMMARY OF SIGNIFIC
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2016 | |
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. 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 March 31, 2016 and December 31, 2015 , the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2016 and 2015 , the condensed consolidated statements of changes in stockholders’ equity as of March 31, 2016 , and the condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 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 months ended March 31, 2016 are not necessarily indicative of future results. All information as of March 31, 2016 and for the three month periods ending March 31, 2016 and 2015 within these notes to the condensed consolidated financial statements is unaudited. 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. 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. Although included in our outstanding share total as of March 31, 2016, shares of restricted stock are contingently issuable until their restrictions lapse and have been excluded from the weighted average shares outstanding. Foreign Currency Translation and Other Comprehensive Loss Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar, which is also the functional currency of our domestic entities, while the functional currency of our foreign subsidiaries are the British Pound, Euro and Swiss Franc. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the balance sheet date. Revenues and expenses are translated using the average exchange rate for the period. Net gains and losses resulting from the translation of foreign financial statements are recorded in other comprehensive income (loss). Net foreign currency gains or losses resulting from transactions in currencies other than the functional currencies are included in other expense, net on the consolidated statements of operations. 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 March 2016, the FASB issued implementation guidance on principal versus agent considerations, reporting revenue gross versus net in the new revenue recognition standard. The guidance clarifies how an entity should evaluate the unit of accounting to determine whether it is a specified good or service and how it should apply the control principle to certain types of arrangements. The guidance will 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 guidance 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 currently assessing the impact of this guidance. In March 2016, the FASB issued authoritative guidance intended to improve employee share-based payment accounting for companies that issue share-based awards to their employees. This guidance simplifies the accounting for share-based payment transactions, including consequences of income tax award, classification as either equity or liability, treatment of forfeitures, and classification on statement of cash flows. The recognition, measurement and reporting for share-based payments will be affected by this new guidance. 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, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted in any annual or interim period for which financial statements have not been issued or made available for issuance, but all of the guidance must be adopted in the same period. We are currently evaluating the impact of this guidance. In April 2016, the FASB issued final amendments to clarify the guidance on identifying performance obligations and accounting for licenses of intellectual property ("IP") in its new revenue recognition standard. The amendment allows entities to disregard goods or services that are immaterial in the context of a contract, assess whether these performance obligations are separately identifiable and whether the shipping and handling activities are a promised service in a contract. This guidance also clarifies how an entity should evaluate the nature of its promise in granting a license of IP and when a promised good or service is distinct within the context of a contract. The guidance will 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. We are currently assessing the impact of this guidance. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The following table summarizes the accounts receivables, net of allowances: March 31, December 31, Accounts receivable $ 44,086 $ 41,210 Allowances (2,411 ) (2,437 ) Accounts receivable, net $ 41,675 $ 38,773 |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The following table summarizes the inventory, net of allowance: March 31, December 31, Finished goods $ 93,636 $ 90,226 Inventory allowances (29,072 ) (28,224 ) Inventory, net $ 64,564 $ 62,002 Inventory includes surgical instruments available for sale with a carrying value of $ 8,637 and $ 8,946 at March 31, 2016 and December 31, 2015 , respectively. |
PREPAID AND OTHER CURRENT ASSET
PREPAID AND OTHER CURRENT ASSETS (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
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: March 31, December 31, Restricted cash $ 3,336 $ 6,669 Landlord incentives for leasehold improvements — 6,454 Prepaid expenses 2,947 2,408 Other 4,454 4,289 Total $ 10,737 $ 19,820 Restricted cash represents funds designated for tenant improvements related to the new headquarters and operations facilities. Landlord incentives for leasehold improvements represents incentives to be provided by the Landlord of our new headquarters and operations facilities under the capital lease agreement, which commenced in October 2015. Such incentives are received from our landlord upon the completion of actual improvements. |
Property, plant and equipment (
Property, plant and equipment (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | PROPERTY, PLANT AND EQUIPMENT The following table summarizes property, plant and equipment: Estimated Useful Lives March 31, December 31, Buildings under capital lease 16 years $ 26,469 $ 26,469 Leasehold improvements, including property under capital lease Various 18,447 9,717 Equipment 3 years 2,862 3,054 Software 3 years 4,902 4,231 Computer equipment 3 years 1,494 1,493 Furniture and office equipment 5 years 4,890 1,050 Vehicles and other Various 426 795 Total 59,490 46,809 Less accumulated depreciation and amortization (9,357 ) (8,491 ) Property, plant and equipment, net $ 50,133 $ 38,318 Depreciation and amortization expense for property, plant and equipment was $ 877 and $ 458 for the three months ended March 31, 2016 and 2015 , respectively, and included $ 416 and $ 0 of amortization expense for buildings under capital lease for the same periods. Interest expense on the capital lease obligation was $ 568 for the three months ended March 31, 2016 . As of March 31, 2016 and December 31, 2015 , we had leasehold improvements of approximately $ 16,996 and $ 8,242 , respectively for our new headquarters and operations facilities that are under construction and will commence depreciating and amortizing these assets when they are placed in service in the second quarter of 2016. Furniture and equipment at March 31, 2016 includes $ 3,637 of furniture and equipment acquired for use in our new headquarters and operations facilities which we expect to put into service and begin depreciation of during the second quarter of 2016 following our occupancy of the new premises. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets, net comprise the following: March 31, 2016 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 266 — 266 Subtotal 14,066 — 14,066 Subject to amortization Developed technology 4 - 6 years 62,000 (53,689 ) 8,311 Licensed technology 4 - 6 years 52,600 (52,363 ) 237 Customer relationships 4 - 7 years 29,700 (23,866 ) 5,834 Patents and other 2 - 17 years 3,277 (1,171 ) 2,106 Subtotal 147,577 (131,089 ) 16,488 Total Intangible Assets, net $ 161,643 $ (131,089 ) $ 30,554 December 31, 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 — 266 — 266 Subtotal 14,066 — 14,066 Subject to amortization Developed technology 4 - 6 years 62,000 (52,243 ) 9,757 Licensed technology 4 - 6 years 52,600 (52,325 ) 275 Customer relationships 4 - 7 years 29,700 (22,805 ) 6,895 Patents and other 2 - 17 years 3,245 (1,115 ) 2,130 Subtotal 147,545 (128,488 ) 19,057 Total Intangible Assets, net $ 161,611 $ (128,488 ) $ 33,123 Amortization expense of intangible assets was $ 2,601 and $ 2,622 for the three months ended March 31, 2016 and 2015 , respectively. As of March 31, 2016 , the expected amortization expense for the remainder of 2016 and the following four years and thereafter is as follows: March 31, 2016 2016 $ 7,833 2017 6,763 2018 267 2019 257 2020 227 Thereafter 1,141 Total $ 16,488 |
OTHER ASSETS
OTHER ASSETS | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | OTHER ASSETS Other assets consist of the following: March 31, December 31, Surgical instruments, net $ 24,164 $ 23,945 Restricted cash 928 1,298 Other 854 773 Total $ 25,946 $ 26,016 Surgical instruments are stated net of accumulated amortization and allowances of $ 28,388 and $ 26,609 at March 31, 2016 and December 31, 2015 , respectively. Amortization expense was $ 2,395 and $ 2,155 for the three months ended March 31, 2016 and 2015 , respectively. Restricted cash balances includes deposits made on pending bids or contracts with customers. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consist of the following: March 31, December 31, Accrued commissions $ 4,784 $ 5,336 Accrued royalties 2,474 2,704 Other 3,845 5,519 Total $ 11,103 $ 13,559 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION As of March 31, 2016 , there was a total of 666,161 shares of common stock available for future grants under our stock purchase and equity award or incentive plans. The following table summarizes the stock-based compensation expense by financial statement line item, employees and non-employees and type of award: Three Months Ended March 31, 2016 2015 Cost of revenue $ 60 $ 181 Research and development 181 149 Sales and marketing 542 756 General and administrative 1,323 815 $ 2,106 $ 1,901 Employees $ 2,106 $ 1,827 Non-employees — 74 Total $ 2,106 $ 1,901 Three Months Ended March 31, 2016 2015 Stock options $ 649 $ 537 Restricted stock and restricted stock units 1,358 1,298 ESPP 99 66 Total $ 2,106 $ 1,901 The following table summarizes stock option plans activity: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2015 3,682,019 $ 11.51 5.98 $ 31,586 Granted 20,000 9.64 Exercised (63,829 ) 5.73 Expired (5,771 ) 5.73 Forfeited (9,901 ) 11.50 Outstanding at March 31, 2016 (2) 3,622,518 $ 11.61 5.87 $ 14,899 Vested or expected to vest: At March 31, 2016 (3) 3,338,259 $ 11.72 5.89 $ 13,557 Vested: At March 31, 2016 1,744,272 $ 9.63 4.91 $ 9,175 (1) Calculated using the estimated per-share fair market value of our common stock on March 31, 2016 and December 31, 2015 , which was $ 14.83 , and $ 19.74 , respectively. (2) The total includes 994,768 performance-based options at March 31, 2016 and December 31, 2015 . (3) Outstanding options, net of forfeiture rate. As of March 31, 2016 , we had 414,001 and 79,940 unvested restricted stock units (“RSUs”) and shares of restricted stock outstanding, respectively. No RSUs or shares of restricted stock were granted or vested during the three months ended March 31, 2016 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES 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 March 31, 2016 , the aggregate amount of these future payments, assuming achievement of applicable milestones and non-cancellation, was $ 1,358 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 $ 1,350 through March 31, 2016 . 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 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. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The provision for income taxes for the three months ended March 31, 2016 and 2015 includes both domestic and foreign income taxes at applicable statutory rates adjusted for permanent differences and valuation allowances. For the three months ended March 31, 2016 and 2015 , the income tax expense was $ 25 and $ 23 , resulting in an effective tax rate of (0.2)% 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 | 3 Months Ended |
Mar. 31, 2016 | |
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: Three Months Ended March 31, 2016 2015 Net loss per common share: Net loss $ (10,185 ) $ (14,285 ) Basic and diluted loss per common share: Basic and diluted weighted average common shares outstanding 41,353,123 38,739,798 Basic and diluted loss per common share $ (0.25 ) $ (0.37 ) Diluted loss per share for the three months ended March 31, 2016 and 2015 does not reflect the following outstanding common shares, as the effect would be antidilutive: Three Months Ended March 31, 2016 2015 Stock options 3,622,518 4,023,206 Restricted stock units 414,001 765,023 Restricted stock 79,940 — |
SEGMENT AND GEOGRAPHICAL CONCEN
SEGMENT AND GEOGRAPHICAL CONCENTRATION | 3 Months Ended |
Mar. 31, 2016 | |
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 25.1% of total revenue for the three months ended March 31, 2016 ; 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 March 31, 2016 2015 United States $ 42,193 $ 35,162 International 14,113 15,262 Total $ 56,306 $ 50,424 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 its three product categories. These sales transactions are settled when we ship the product to the agent. In the fourth quarter of 2015, we refined our reporting of procedure revenue that included the sale of certain single-use MIS products which are sold in support of degenerative surgical procedures as degenerative revenue. Historically these sales were reflected in the MIS product category. As a result of this reclassification, our historically reported MIS revenue has decreased and our degenerative revenue has increased by approximately $ 429 for the three months ended March 31, 2015 to conform to the current year presentation. The following table represents domestic revenue by current procedure category: Three Months Ended March 31, 2016 2015 Complex spine $ 15,930 $ 14,221 Minimally invasive 6,881 5,380 Degenerative 19,382 15,561 42,193 35,162 International 14,113 15,262 Total $ 56,306 $ 50,424 |
GENERAL AND SUMMARY OF SIGNIF21
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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. 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 Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar, which is also the functional currency of our domestic entities, while the functional currency of our foreign subsidiaries are the British Pound, Euro and Swiss Franc. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the balance sheet date. Revenues and expenses are translated using the average exchange rate for the period. Net gains and losses resulting from the translation of foreign financial statements are recorded in other comprehensive income (loss). Net foreign currency gains or losses resulting from transactions in currencies other than the functional currencies are included in other expense, net on the consolidated statements of operations. |
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 March 2016, the FASB issued implementation guidance on principal versus agent considerations, reporting revenue gross versus net in the new revenue recognition standard. The guidance clarifies how an entity should evaluate the unit of accounting to determine whether it is a specified good or service and how it should apply the control principle to certain types of arrangements. The guidance will 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 guidance 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 currently assessing the impact of this guidance. In March 2016, the FASB issued authoritative guidance intended to improve employee share-based payment accounting for companies that issue share-based awards to their employees. This guidance simplifies the accounting for share-based payment transactions, including consequences of income tax award, classification as either equity or liability, treatment of forfeitures, and classification on statement of cash flows. The recognition, measurement and reporting for share-based payments will be affected by this new guidance. 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, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted in any annual or interim period for which financial statements have not been issued or made available for issuance, but all of the guidance must be adopted in the same period. We are currently evaluating the impact of this guidance. In April 2016, the FASB issued final amendments to clarify the guidance on identifying performance obligations and accounting for licenses of intellectual property ("IP") in its new revenue recognition standard. The amendment allows entities to disregard goods or services that are immaterial in the context of a contract, assess whether these performance obligations are separately identifiable and whether the shipping and handling activities are a promised service in a contract. This guidance also clarifies how an entity should evaluate the nature of its promise in granting a license of IP and when a promised good or service is distinct within the context of a contract. The guidance will 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. We are currently assessing the impact of this guidance. |
ACCOUNTS RECEIVABLE - (Tables)
ACCOUNTS RECEIVABLE - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | The following table summarizes the accounts receivables, net of allowances: March 31, December 31, Accounts receivable $ 44,086 $ 41,210 Allowances (2,411 ) (2,437 ) Accounts receivable, net $ 41,675 $ 38,773 |
INVENTORY - (Tables)
INVENTORY - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Current Inventory | The following table summarizes the inventory, net of allowance: March 31, December 31, Finished goods $ 93,636 $ 90,226 Inventory allowances (29,072 ) (28,224 ) Inventory, net $ 64,564 $ 62,002 |
PREPAID AND OTHER CURRENT ASS24
PREPAID AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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: March 31, December 31, Restricted cash $ 3,336 $ 6,669 Landlord incentives for leasehold improvements — 6,454 Prepaid expenses 2,947 2,408 Other 4,454 4,289 Total $ 10,737 $ 19,820 |
Property, plant and equipment25
Property, plant and equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | The following table summarizes property, plant and equipment: Estimated Useful Lives March 31, December 31, Buildings under capital lease 16 years $ 26,469 $ 26,469 Leasehold improvements, including property under capital lease Various 18,447 9,717 Equipment 3 years 2,862 3,054 Software 3 years 4,902 4,231 Computer equipment 3 years 1,494 1,493 Furniture and office equipment 5 years 4,890 1,050 Vehicles and other Various 426 795 Total 59,490 46,809 Less accumulated depreciation and amortization (9,357 ) (8,491 ) Property, plant and equipment, net $ 50,133 $ 38,318 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Intangible assets, net comprise the following: March 31, 2016 Estimated Useful Lives Gross Accumulated Amortization Net Indefinite-lived intangible assets: Trademarks — $ 12,900 $ — $ 12,900 In-process research and development — 900 — 900 Other — 266 — 266 Subtotal 14,066 — 14,066 Subject to amortization Developed technology 4 - 6 years 62,000 (53,689 ) 8,311 Licensed technology 4 - 6 years 52,600 (52,363 ) 237 Customer relationships 4 - 7 years 29,700 (23,866 ) 5,834 Patents and other 2 - 17 years 3,277 (1,171 ) 2,106 Subtotal 147,577 (131,089 ) 16,488 Total Intangible Assets, net $ 161,643 $ (131,089 ) $ 30,554 December 31, 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 — 266 — 266 Subtotal 14,066 — 14,066 Subject to amortization Developed technology 4 - 6 years 62,000 (52,243 ) 9,757 Licensed technology 4 - 6 years 52,600 (52,325 ) 275 Customer relationships 4 - 7 years 29,700 (22,805 ) 6,895 Patents and other 2 - 17 years 3,245 (1,115 ) 2,130 Subtotal 147,545 (128,488 ) 19,057 Total Intangible Assets, net $ 161,611 $ (128,488 ) $ 33,123 |
Schedule of Expected Amortization Expense | As of March 31, 2016 , the expected amortization expense for the remainder of 2016 and the following four years and thereafter is as follows: March 31, 2016 2016 $ 7,833 2017 6,763 2018 267 2019 257 2020 227 Thereafter 1,141 Total $ 16,488 |
OTHER ASSETS - (Tables)
OTHER ASSETS - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following: March 31, December 31, Surgical instruments, net $ 24,164 $ 23,945 Restricted cash 928 1,298 Other 854 773 Total $ 25,946 $ 26,016 |
ACCRUED EXPENSES - (Tables)
ACCRUED EXPENSES - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following: March 31, December 31, Accrued commissions $ 4,784 $ 5,336 Accrued royalties 2,474 2,704 Other 3,845 5,519 Total $ 11,103 $ 13,559 |
STOCK-BASED COMPENSATION - (Tab
STOCK-BASED COMPENSATION - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation expense | The following table summarizes the stock-based compensation expense by financial statement line item, employees and non-employees and type of award: Three Months Ended March 31, 2016 2015 Cost of revenue $ 60 $ 181 Research and development 181 149 Sales and marketing 542 756 General and administrative 1,323 815 $ 2,106 $ 1,901 Employees $ 2,106 $ 1,827 Non-employees — 74 Total $ 2,106 $ 1,901 Three Months Ended March 31, 2016 2015 Stock options $ 649 $ 537 Restricted stock and restricted stock units 1,358 1,298 ESPP 99 66 Total $ 2,106 $ 1,901 |
Schedule of employee stock option plan activity | The following table summarizes stock option plans activity: Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) Outstanding at December 31, 2015 3,682,019 $ 11.51 5.98 $ 31,586 Granted 20,000 9.64 Exercised (63,829 ) 5.73 Expired (5,771 ) 5.73 Forfeited (9,901 ) 11.50 Outstanding at March 31, 2016 (2) 3,622,518 $ 11.61 5.87 $ 14,899 Vested or expected to vest: At March 31, 2016 (3) 3,338,259 $ 11.72 5.89 $ 13,557 Vested: At March 31, 2016 1,744,272 $ 9.63 4.91 $ 9,175 (1) Calculated using the estimated per-share fair market value of our common stock on March 31, 2016 and December 31, 2015 , which was $ 14.83 , and $ 19.74 , respectively. (2) The total includes 994,768 performance-based options at March 31, 2016 and December 31, 2015 . (3) Outstanding options, net of forfeiture rate |
NET LOSS PER SHARE - (Tables)
NET LOSS PER SHARE - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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: Three Months Ended March 31, 2016 2015 Net loss per common share: Net loss $ (10,185 ) $ (14,285 ) Basic and diluted loss per common share: Basic and diluted weighted average common shares outstanding 41,353,123 38,739,798 Basic and diluted loss per common share $ (0.25 ) $ (0.37 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Diluted loss per share for the three months ended March 31, 2016 and 2015 does not reflect the following outstanding common shares, as the effect would be antidilutive: Three Months Ended March 31, 2016 2015 Stock options 3,622,518 4,023,206 Restricted stock units 414,001 765,023 Restricted stock 79,940 — |
SEGMENT AND GEOGRAPHICAL CONC31
SEGMENT AND GEOGRAPHICAL CONCENTRATION - (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 2015 United States $ 42,193 $ 35,162 International 14,113 15,262 Total $ 56,306 $ 50,424 |
Schedule of Revenue by Products | The following table represents domestic revenue by current procedure category: Three Months Ended March 31, 2016 2015 Complex spine $ 15,930 $ 14,221 Minimally invasive 6,881 5,380 Degenerative 19,382 15,561 42,193 35,162 International 14,113 15,262 Total $ 56,306 $ 50,424 |
ACCOUNTS RECEIVABLE - (Details)
ACCOUNTS RECEIVABLE - (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Accounts receivable | $ 44,086 | $ 41,210 |
Allowances | (2,411) | (2,437) |
Accounts receivable, net | $ 41,675 | $ 38,773 |
INVENTORY - (Details)
INVENTORY - (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory [Line Items] | ||
Finished goods | $ 93,636 | $ 90,226 |
Inventory allowances | (29,072) | (28,224) |
Inventory, net | 64,564 | 62,002 |
Surgical and Medical Instruments [Member] | ||
Inventory [Line Items] | ||
Inventory, net | $ 8,637 | $ 8,946 |
PREPAID AND OTHER CURRENT ASS34
PREPAID AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Restricted cash | $ 3,336 | $ 6,669 |
Landlord incentives for leasehold improvements | 0 | 6,454 |
Prepaid expenses | 2,947 | 2,408 |
Other | 4,454 | 4,289 |
Total | $ 10,737 | $ 19,820 |
Property, plant and equipment35
Property, plant and equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Total | $ 59,490 | $ 46,809 |
Less accumulated depreciation and amortization | (9,357) | (8,491) |
Property, plant and equipment, net | $ 50,133 | 38,318 |
Buildings under capital lease | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 16 years | |
Total | $ 26,469 | 26,469 |
Leasehold improvements, including property under capital lease | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 18,447 | 9,717 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Total | $ 2,862 | 3,054 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Total | $ 4,902 | 4,231 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Total | $ 1,494 | 1,493 |
Furniture and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Total | $ 4,890 | 1,050 |
Vehicles and other | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 426 | $ 795 |
Property, plant and equipment P
Property, plant and equipment PPE narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 877 | $ 458 | |
Capital Leases, Income Statement, Amortization Expense | 416 | $ 0 | |
Interest Expense, Lessee, Assets under Capital Lease | 568 | ||
Total | 59,490 | $ 46,809 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Leasehold Improvements, Gross | 16,996 | 8,242 | |
Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total | 4,890 | $ 1,050 | |
Corporate Headquarters and Other Operational Facilities [Member] | Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total | $ 3,637 |
GOODWILL AND INTANGIBLE ASSET37
GOODWILL AND INTANGIBLE ASSETS - (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Schedule of Intangible Asset by Major Class [Line Items] | |||
Indefinite-lived intangible assets | $ 14,066 | $ 14,066 | |
Subject to amortization, Gross | 147,577 | 147,545 | |
Accumulated Amortization | (131,089) | (128,488) | |
Total | 16,488 | 19,057 | |
Intangible Assets, Gross | 161,643 | 161,611 | |
Intangible Assets, Net | 30,554 | 33,123 | |
Amortization expense | 2,601 | $ 2,622 | |
Developed Technology Rights [Member] | |||
Schedule of Intangible Asset by Major Class [Line Items] | |||
Subject to amortization, Gross | 62,000 | 62,000 | |
Accumulated Amortization | (53,689) | (52,243) | |
Total | 8,311 | 9,757 | |
Licensed technology [Member] | |||
Schedule of Intangible Asset by Major Class [Line Items] | |||
Subject to amortization, Gross | 52,600 | 52,600 | |
Accumulated Amortization | (52,363) | (52,325) | |
Total | 237 | 275 | |
Customer Relationships [Member] | |||
Schedule of Intangible Asset by Major Class [Line Items] | |||
Subject to amortization, Gross | 29,700 | 29,700 | |
Accumulated Amortization | (23,866) | (22,805) | |
Total | 5,834 | 6,895 | |
Patents and Other [Member] | |||
Schedule of Intangible Asset by Major Class [Line Items] | |||
Subject to amortization, Gross | 3,277 | 3,245 | |
Accumulated Amortization | (1,171) | (1,115) | |
Total | 2,106 | 2,130 | |
Trademarks [Member] | |||
Schedule of Intangible Asset by Major Class [Line Items] | |||
Indefinite-lived intangible assets | 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 | |
Other [Member] | |||
Schedule of Intangible Asset by Major Class [Line Items] | |||
Indefinite-lived intangible assets | $ 266 | $ 266 | |
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 | Mar. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,016 | $ 7,833 | |
2,017 | 6,763 | |
2,018 | 267 | |
2,019 | 257 | |
2,020 | 227 | |
Thereafter | 1,141 | |
Total | $ 16,488 | $ 19,057 |
OTHER ASSETS - (Details)
OTHER ASSETS - (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Surgical instruments, net | $ 24,164 | $ 23,945 | |
Deposits Assets, Noncurrent | 928 | 1,298 | |
Other | 854 | 773 | |
Total | 25,946 | 26,016 | |
Surgical instruments accumulated amortization | 28,388 | $ 26,609 | |
Amortization expense | $ 2,395 | $ 2,155 |
ACCRUED EXPENSES - (Details)
ACCRUED EXPENSES - (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued commissions | $ 4,784 | $ 5,336 |
Accrued royalties | 2,474 | 2,704 |
Other | 3,845 | 5,519 |
Total | $ 11,103 | $ 13,559 |
STOCK-BASED COMPENSATION - Allo
STOCK-BASED COMPENSATION - Allocation of Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | $ 2,106 | $ 1,901 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | 60 | 181 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | 181 | 149 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | 542 | 756 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | 1,323 | 815 |
Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | 2,106 | 1,827 |
Non-employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | 0 | 74 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | 649 | 537 |
Restricted stock and restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | 1,358 | 1,298 |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated stock-based compensation expense | $ 99 | $ 66 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding Beginning Balance, Shares | 3,682,019 | |||
Granted, Shares | 20,000 | |||
Exercised, Shares | (63,829) | |||
Expired, Shares | (5,771) | |||
Forfeited, Shares | (9,901) | |||
Outstanding Ending Balance, Shares | 3,622,518 | [1] | 3,682,019 | |
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) | $ 11.51 | |||
Granted, Weighted-Average Exercise Price (in usd per share) | 9.64 | |||
Exercised, Weighted-Average Exercise Price (in usd per share) | 5.73 | |||
Expired, Weighted-Average Exercise Price (in usd per share) | 5.73 | |||
Forfeited, Weighted-Average Exercise Price (in usd per share) | 11.50 | |||
Ending, Weighted-Average Exercise Price (in usd per share) | $ 11.61 | $ 11.51 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Outstanding, Weighted- Average Remaining Contractual Term (years) | 5 years 10 months 13 days | 5 years 11 months 23 days | ||
Outstanding, Aggregate Intrinsic Value | [2] | $ 31,586 | ||
Outstanding, Aggregate Intrinsic Value | [2] | $ 14,899 | $ 31,586 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | ||||
Vested or expected to vest, shares | [3] | 3,338,259 | ||
Vested or expected to vest, Weighted-Average Exercise Price (in usd per share) | $ 11.72 | |||
Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 5 years 10 months 20 days | |||
Vested or expected to vest, Aggregate Intrinsic Value | [2] | $ 13,557 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested [Abstract] | ||||
Vested, shares | 1,744,272 | |||
Vested, Weighted-Average Exercise Price (in usd per share) | $ 9.63 | |||
Vested, Weighted-Average Remaining Contractual Term | 4 years 10 months 27 days | |||
Vested, Aggregate Intrinsic Value | [2] | $ 9,175 | ||
Fair value valuation, estimated fair market value of stock (in dollars per share) | $ 14.83 | $ 19.74 | ||
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding Beginning Balance, Shares | 994,768 | |||
Outstanding Ending Balance, Shares | 994,768 | 994,768 | ||
[1] | The total includes 994,768 performance-based options at March 31, 2016 and December 31, 2015. | |||
[2] | Calculated using the estimated per-share fair market value of our common stock on March 31, 2016 and December 31, 2015, which was $14.83, and $19.74, respectively | |||
[3] | Outstanding options, net of forfeiture rate. |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | 3 Months Ended |
Mar. 31, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee Stock Purchase Plans, Shares Reserved for Future Issuance (in shares) | 666,161 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity instruments, other than options, outstanding | 414,001 |
Shares, other than options, granted | 0 |
Shares, other than options, vested | 0 |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity instruments, other than options, outstanding | 79,940 |
Shares, other than options, granted | 0 |
Shares, other than options, vested | 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Nov. 30, 2011 | Mar. 31, 2016 | Mar. 31, 2015 | |
Long-term Purchase Commitment [Line Items] | |||
Initial payment to acquire proprietary technology | $ 1,282,000 | $ 17,000 | |
Licensed technology [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Other Commitment | $ 1,358,000 | ||
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 | $ 1,350,000 | ||
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 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) expense | $ 25 | $ 23 |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | (0.20%) | (0.20%) |
NET LOSS PER SHARE - (Details)
NET LOSS PER SHARE - (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (10,185) | $ (14,285) |
Basic and diluted weighted average common shares outstanding | 41,353,123 | 38,739,798 |
Basic and diluted loss per common share (in dollars per share) | $ (0.25) | $ (0.37) |
NET LOSS PER SHARE - Antidiluti
NET LOSS PER SHARE - Antidilutive Shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Earnings Per Share (in shares) | 3,622,518 | 4,023,206 |
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) | 414,001 | 765,023 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Earnings Per Share (in shares) | 79,940 | 0 |
SEGMENT AND GEOGRAPHICAL CONC48
SEGMENT AND GEOGRAPHICAL CONCENTRATION - Narrative (Details) | 3 Months Ended |
Mar. 31, 2016Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 1 |
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% |
Sales Revenue, Net [Member] | Geographic Concentration Risk [Member] | International [Member] | |
Segment Reporting Information [Line Items] | |
International revenue as a percentage of total revenue | 25.10% |
SEGMENT AND GEOGRAPHICAL CONC49
SEGMENT AND GEOGRAPHICAL CONCENTRATION - Revenues by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 56,306 | $ 50,424 |
Sales Revenue, Net [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 56,306 | 50,424 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 42,193 | 35,162 |
United States [Member] | Sales Revenue, Net [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 42,193 | 35,162 |
International [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 14,113 | 15,262 |
International [Member] | Sales Revenue, Net [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 14,113 | $ 15,262 |
SEGMENT AND GEOGRAPHICAL CONC50
SEGMENT AND GEOGRAPHICAL CONCENTRATION - Revenues by Product (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue from External Customer [Line Items] | ||
Revenue | $ 56,306 | $ 50,424 |
United States [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 42,193 | 35,162 |
United States [Member] | Complex Spine [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 15,930 | 14,221 |
United States [Member] | Minimally Invasive [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 6,881 | 5,380 |
United States [Member] | Degenerative [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | 19,382 | 15,561 |
International [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | $ 14,113 | 15,262 |
Scenario, Adjustment [Member] | Minimally Invasive [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenue | $ (429) |