| Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies
Basis of Consolidation and Presentation
The financial statements have been prepared in United States
dollars, in accordance with accounting principles generally
accepted in the United States of America, or U.S. GAAP. The
consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All intercompany
accounts and transactions have been eliminated in
consolidation.
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
discharge of liabilities in the normal course of business. The
Company incurred a net loss of $14.7 million during the year ended
December 31, 2015 and had an accumulated deficit of $359.2
million at December 31, 2015.
On June 25, 2015, in conjunction with its initial public
offering, or IPO, the Company effected a corporate reorganization,
whereby Lantheus MI Intermediate, Inc. (formerly the direct parent
of LMI and the direct subsidiary of Holdings) was merged with and
into Holdings, or the Merger.
On June 30, 2015, the Company completed an IPO of its common
stock at a price to the public of $6.00 per share. The
Company’s common stock is now traded on the NASDAQ under the
symbol “LNTH”. The Company issued and sold 12,256,577
shares of common stock in the IPO, including 1,423,243 shares that
were offered and sold pursuant to the underwriters’ exercise
in full of their overallotment option. The IPO resulted in proceeds
to the Company of approximately $67.2 million, after deducting $6.4
million in underwriting discounts, commissions and related
expenses.
On June 30, 2015, the Company also entered into a $365.0
million senior secured term loan facility, or the Term Facility.
The net proceeds of the Term Facility, together with the net
proceeds from the IPO and cash on hand of $10.9 million were used
to repay in full the aggregate principal amount of LMI’s
$400.0 million 9.750% Senior Notes due 2017, or the Notes, pay
related premiums, interest and expenses and pay down the $8.0
million of outstanding borrowings under LMI’s $50.0 million
revolving credit facility, or the Revolving Facility.
The Company currently relies on Jubilant HollisterStier, or JHS, as
its sole source manufacturer of DEFINITY, Neurolite and evacuation
vials for TechneLite. The Company has additional ongoing technology
transfer activities at JHS for its Cardiolite product supply, which
is currently approved for manufacture by a single manufacturer. In
addition, the Company has ongoing technology transfer activities at
Pharmalucence for the manufacture and supply of DEFINITY.
The Company has historically been dependent on key customers and
group purchasing organizations for the majority of the sales of its
medical imaging products. The Company’s ability to maintain
and profitably renew those contracts and relationships with those
key customers and group purchasing organizations is an important
aspect of the Company’s strategy. The Company’s written
supply agreements with Cardinal Health, or Cardinal, relating to
TechneLite, Xenon, Neurolite, Cardiolite and certain other products
expired in accordance with contract terms on December 31,
2014. Following extended discussions with Cardinal, on
November 19, 2015, the Company entered into a new contract for
the distribution of TechneLite, Xenon, Neurolite and other products
beginning in 2015 through 2017. The agreement specifies pricing
levels and requirements to purchase minimum volumes of certain
products during certain periods. The agreement, which expires on
December 31, 2017, may be terminated upon the occurrence of
specified events, including a material breach by the other party
and certain force majeure events. From January 1, 2015 until
the signing of the new agreement on November 19, 2015, the
Company continued to accept and fulfill product orders from
Cardinal on a purchase order basis at supply price.
Until the Company successfully becomes dual sourced for its
principal products, the Company is vulnerable to future supply
shortages. Disruption in the financial performance of the Company
could also occur if it experiences significant adverse changes in
customer mix, broad economic downturns, adverse industry or Company
conditions or catastrophic external events. If the Company
experiences one or more of these events in the future, it may be
required to implement additional expense reductions, such as a
delay or elimination of discretionary spending in all functional
areas, as well as scaling back select operating and strategic
initiatives.
During 2013 and 2014, the Company utilized its Revolving Facility
as a source of liquidity from time to time. Borrowing capacity
under the Revolving Facility is calculated by reference to a
borrowing base consisting of a percentage of certain eligible
accounts receivable, inventory and machinery and equipment minus
any reserves, or the Borrowing Base. If the Company is not
successful in achieving its forecasted operating results, the
Company’s accounts receivable and inventory could be
negatively affected, thus reducing the Borrowing Base and limiting
the Company’s borrowing capacity. As of December 31,
2015, the aggregate Borrowing Base was approximately $48.2 million,
which was reduced by the $8.8 million unfunded Standby Letter of
Credit and
$0.1 million in accrued interest, resulting in a net Borrowing Base
availability of approximately $39.3 million. The Company’s
new Term Facility contains a number of affirmative, negative,
reporting and financial covenants, in each case subject to certain
exceptions and materiality thresholds. Incremental borrowings under
the Revolving Facility may affect the Company’s ability to
comply with the covenants in the Term Facility, including the
financial covenant restricting total net leverage. Accordingly, the
Company may be limited in utilizing its net Borrowing Base
availability as a source of liquidity.
Based on the Company’s current operating plans, the Company
believes its existing cash and cash equivalents, results of
operations and availability under the Revolving Facility will be
sufficient to continue to fund the Company’s liquidity
requirements for at least the next twelve months.
Use of Estimates
The preparation of consolidated financial statements in conformity
with U.S. GAAP requires management to make certain estimates and
assumptions that affect the reported amounts of assets and
liabilities at the date of the consolidated financial statements,
and the reported amounts of revenues and expenses during the
reporting period. The more significant estimates reflected in the
Company’s consolidated financial statements include certain
judgments regarding revenue recognition, goodwill, tangible and
intangible asset valuation, inventory valuation, asset retirement
obligations, income tax liabilities and related indemnification
receivable, deferred tax assets and liabilities and accrued
expenses. Actual results could materially differ from those
estimates or assumptions.
Stock Split
In conjunction with the Merger, the Company effected a
0.355872-for-1 reverse stock split for its common stock. Upon
consummation of the Merger, the par value of the common stock
changed from $0.001 to $0.01. Accordingly, all references to share
and per share information in the consolidated financial statements
have been adjusted to reflect the stock split and new par value for
all periods presented.
Revenue Recognition
The Company recognizes revenue when evidence of an arrangement
exists, title has passed, the risks and rewards of ownership have
transferred to the customer, the selling price is fixed and
determinable, and collectability is reasonably assured. For
transactions for which revenue recognition criteria have not yet
been met, the respective amounts are recorded as deferred revenue
until such point in time the criteria are met and revenue can be
recognized. Revenue is recognized net of reserves, which consist of
allowances for returns and rebates.
Revenue arrangements with multiple elements are divided into
separate units of accounting if certain criteria are met, including
whether the delivered element has stand-alone value to the
customer. The arrangement’s consideration is then allocated
to each separate unit of accounting based on the relative selling
price of each deliverable. The estimated selling price of each
deliverable is determined using the following hierarchy of values:
(i) vendor-specific objective evidence of fair value;
(ii) third-party evidence of selling price; and
(iii) best estimate of selling price. The best estimate of
selling price reflects the Company’s best estimate of what
the selling price would be if the deliverable was regularly sold by
the Company on a stand-alone basis. The consideration allocated to
each unit of accounting is then recognized as the related goods or
services are delivered, limited to the consideration that is not
contingent upon future deliverables. Supply or service transactions
may involve the charge of a nonrefundable initial fee with
subsequent periodic payments for future products or services. The
up-front fees, even if nonrefundable, are recognized as revenue as
the products and/or services are delivered and performed over the
term of the arrangement.
Product Returns
The Company provides a reserve for its estimate of sales recorded
for which the related products are expected to be returned. The
Company does not typically accept product returns unless an over
shipment or non-conforming shipment was provided to the customer,
or if the product was defective. The Company adjusts its estimate
of product returns if it becomes aware of other factors that it
believes could significantly impact its expected returns, including
product recalls. These factors include its estimate of actual and
historical return rates for non-conforming product and open return
requests. Historically, the Company’s estimates of returns
have reasonably approximated actual returns.
Distributor Relationships
Revenue for product sold to distributors is recognized at shipment,
unless revenue recognition criteria have not been met. In those
instances where collectability cannot be determined or the selling
price cannot be reasonably estimated until the distributor has sold
through the goods, the Company defers that revenue until such time
as the goods have been sold through to the end-user customer, or
the selling price can be reasonably estimated based on history of
transactions with that distributor.
Rebates and Allowances
Estimates for rebates and allowances represent the Company’s
estimated obligations under contractual arrangements with third
parties. Rebate accruals and allowances are recorded in the same
period the related revenue is recognized, resulting in a reduction
to revenue and the establishment of a liability which is included
in accrued expenses in the accompanying consolidated balance
sheets. These rebates result from performance-based offers that are
primarily based on attaining contractually specified sales volumes
and growth, Medicaid rebate programs for certain products,
administration fees of group purchasing organizations and certain
distributor related commissions. The calculation of the accrual for
these rebates and allowances is based on an estimate of the third
party’s buying patterns and the resulting applicable
contractual rebate or commission rate(s) to be earned over a
contractual period.
The accrual for rebates and allowances was approximately $2.3
million and $2.2 million at December 31, 2015 and 2014,
respectively. Rebate and allowance charges against gross revenues
totaled $5.9 million, $5.2 million and $4.8 million for the years
ended December 31, 2015, 2014 and 2013, respectively.
Income Taxes
The Company accounts for income taxes using an asset and liability
approach. The provision for income taxes represents income taxes
paid or payable for the current year plus the change in deferred
taxes during the year. Deferred taxes result from differences
between the financial and tax bases of the Company’s assets
and liabilities. Deferred tax assets and liabilities are measured
using the currently enacted tax rates that apply to taxable income
in effect for the years in which those tax attributes are expected
to be recovered or paid, and are adjusted for changes in tax rates
and tax laws when changes are enacted.
Valuation allowances are recorded to reduce deferred tax assets
when it is more likely than not that a tax benefit will not be
realized. The assessment of whether or not a valuation allowance is
required involves the weighing of both positive and negative
evidence concerning both historical and prospective information
with greater weight given to evidence that is objectively
verifiable. A history of recent losses is negative evidence that is
difficult to overcome with positive evidence. In evaluating
prospective information there are four sources of taxable income:
reversals of taxable temporary differences, items that can be
carried back to prior tax years (such as net operating losses),
pre-tax income, and tax planning strategies. Any tax planning
strategies that are considered must be prudent and feasible, and
would only be undertaken in order to avoid losing an operating loss
carryforward. Adjustments to the deferred tax valuation allowances
are made in the period when those assessments are made.
The Company accounts for uncertain tax positions using a
recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. Differences between tax
positions taken in a tax return and amounts recognized in the
financial statements are recorded as adjustments to other long-term
assets and liabilities, or adjustments to deferred taxes, or both.
The Company classifies interest and penalties within the provision
for income taxes.
Loss per Share
Basic earnings per share is computed by dividing net income by the
weighted average number of shares of common stock outstanding
during the period. Diluted earnings per common share is computed by
dividing net income by the weighted average number of shares of
common stock outstanding during the period, plus the potential
dilutive effect of other securities if those securities were
converted or exercise. During periods in which the Company incurs
net losses, both basic and diluted loss per share is calculated by
dividing the net loss by the weighted average shares outstanding
and potentially dilutive securities are excluded from the
calculation because their effect would be anti-dilutive.
Cash and Cash Equivalents
Cash and cash equivalents include savings deposits, certificates of
deposit and money market funds that have original maturities of
three months or less when purchased.
Accounts Receivable
Accounts receivable consist of amounts billed and currently due
from customers. The Company maintains an allowance for doubtful
accounts for estimated losses. In determining the allowance,
consideration includes the probability of recoverability based on
past experience and general economic factors. Certain accounts
receivable may be fully reserved when specific collection issues
are known to exist, such as pending bankruptcy. As of
December 31, 2015 and 2014, the Company had allowances for
doubtful accounts of approximately $0.9 million and $0.6 million,
respectively.
Also included in accounts receivable are miscellaneous receivables
of approximately $1.0 million and $2.0 million as of
December 31, 2015 and 2014, respectively.
Concentration of Risks and Limited Suppliers
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade accounts
receivable. The Company periodically reviews its accounts
receivable for collectability and provides for an allowance for
doubtful accounts to the extent that amounts are not expected to be
collected. The Company sells primarily to large national
distributors, which in turn, may resell the Company’s
products. There were three customers that represented greater than
10% of the total net accounts receivable balance at either
December 31, 2015 or 2014. The same three customers
contributed revenues of 12%, 11% and 10% during the year ended
December 31, 2015, which is included in the U.S. segment. No
other customers contributed more than 10% of revenue in any of the
years ended December 31, 2015, 2014 and 2013.
Accounts Revenue for the year
2015 2014 2015 2014 2013
Company A 5.8 % 16.5 % 11.3 % 18.0 % 18.8 %
Company B 12.9 % 13.4 % 11.9 % 11.1 % 10.2 %
Company C 10.3 % 9.8 % 9.7 % 8.8 % 9.8 %
The Company’s cash and cash equivalents are maintained with
various financial institutions.
The Company relies on certain materials used in its development and
manufacturing processes, some of which are procured from only one
or a few sources. The failure of one of these suppliers to deliver
on schedule could delay or interrupt the manufacturing or
commercialization process and thereby adversely affect the
Company’s operating results. In addition, a disruption in the
commercial supply of, or a significant increase in the cost of one
of the Company’s materials from these sources could have a
material adverse effect on the Company’s business, financial
position and results of operations. The Company has agreements with
Nordion and NTP/ANSTO, the Company’s Moly suppliers, with an
expiration dates of October 31, 2016 and December 31,
2017, respectively. In addition, because Xenon is a by-product of
the Moly production process and is currently captured only by
Nordion, the Company is currently reliant on Nordion as the sole
supplier of Xenon to meet customer demand. In March 2013, the
Company entered into an agreement with Institute for Radioelements,
or IRE, who had previously been supplying the Company with Moly
under the previous agreement with NTP, and this agreement expires
on December 31, 2017. In January 2015, the Company announced
entering into a new strategic agreement with IRE for the future
supply of Xenon. Under the terms of the agreement, IRE will provide
bulk Xenon to us for processing and finishing once development work
has been completed and all necessary regulatory approvals have been
obtained.
The Company currently relies on JHS as its sole source manufacturer
of DEFINITY, Neurolite and evacuation vials. The Company has
additional ongoing technology transfer activities at JHS for its
Cardiolite product supply. In the meantime, the Company has no
other currently active supplier of DEFINITY, Neurolite, and its
Cardiolite product supply is approved for manufacture by a single
manufacturer.
Based on current projections, the Company believes that it will
have sufficient supply of DEFINITY, Neurolite and evacuation vials
from JHS to meet expected demand and sufficient Cardiolite product
supply and saline from the Company’s current suppliers to
meet expected demand.
The Company is working to secure additional alternative suppliers
for its key products as part of its ongoing supply chain
diversification strategy. On November 12, 2013, the Company
entered into a Manufacturing and Supply Agreement with
Pharmalucence to manufacture and supply DEFINITY. However, the
Company is uncertain on the timing in which the Pharmalucence
arrangement or any other arrangements could provide meaningful
quantities of product.
The following table sets forth revenues for the Company’s
products that represented greater than 10% of total revenue for the
years ended December 31, 2015, 2014 and 2013.
Year Ended
2015 2014 2013
DEFINITY 38.1 % 31.8 % 27.5 %
TechneLite 24.7 % 31.0 % 32.5 %
Xenon 16.7 % 12.1 % 11.3 %
Inventory
Inventory includes material, direct labor and related manufacturing
overhead, and is stated at the lower of cost or market on a
first-in, first-out basis. The Company does have consignment
arrangements with certain customers where the Company retains title
and the risk of ownership of the inventory, which is included in
the Company’s inventory balance.
The Company assesses the recoverability of inventory to determine
whether adjustments for excess and obsolete inventory are required.
Inventory that is in excess of future requirements is written down
to its estimated net realizable value based upon forecasted demand
for its products. If actual demand is less favorable than what has
been forecasted by management, additional inventory write-downs may
be required.
Inventory costs associated with product that has not yet received
regulatory approval are capitalized if the Company believes there
is probable future commercial use of the product and future
economic benefits of the asset. If future commercial use of the
product is not probable, then inventory costs associated with such
product are expensed during the period the costs are incurred. For
the year ended December 31, 2015, the Company expensed $0.6
million of such product costs in cost of goods sold relating to
Cardiolite that was manufactured by JHS. For the year ended
December 31, 2014, the Company expensed $1.9 million of such
product costs in cost of goods sold relating to Neurolite that was
manufactured by JHS. At December 31, 2015 and 2014, the
Company had no capitalized inventories associated with product that
did not have regulatory approval.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Replacements of
major units of property are capitalized, and replaced properties
are retired. Replacements of minor components of property and
repair and maintenance costs are charged to expense as incurred.
Depreciation is computed on a straight-line method based on the
estimated useful lives of the related assets. The estimated useful
lives of the major classes of depreciable assets are as
follows:
Buildings 50 years
Land improvements 15 - 40 years
Machinery and equipment 3 - 20 years
Furniture and fixtures 15 years
Leasehold improvements
Lesser of lease term or 15 years
Upon retirement or other disposal of property, plant and equipment,
the cost and related amount of accumulated depreciation are removed
from the asset and accumulated depreciation accounts, respectively.
The difference, if any, between the net asset value and the
proceeds is included in operations.
Capitalized Software Development Costs
Certain costs to obtain internal use software for significant
systems projects are capitalized and amortized over the estimated
useful life of the software, which ranges from 3 to 5 years. Costs
to obtain software for projects that are not significant are
expensed as incurred. Capitalized software development costs, net
of accumulated amortization, were $9.1 million and $2.4 million at
December 31, 2015 and 2014, respectively. Amortization expense
related to the capitalized software was $1.1 million, $0.7 million
and $1.5 million for the years ended December 31, 2015, 2014
and 2013, respectively. Future amortization expense for all
capitalized software placed in service as of December 31, 2015
is estimated to be $2.2 million, $2.0 million, $2.0 million, $1.7
million and $1.2 million for the years ending December 31,
2016, 2017, 2018, 2019 and 2020, respectively.
Goodwill, Intangibles and Long-Lived Assets
Goodwill is not amortized, but is instead tested for impairment at
least annually and whenever events or circumstances indicate that
it is more likely than not that they may be impaired. The Company
has elected to perform the annual test for goodwill impairment as
of October 31 of each year.
In performing tests for goodwill impairment, the Company is first
permitted to perform a qualitative assessment about the likelihood
of the carrying value of a reporting unit exceeding its fair value.
If the Company determines that it is more likely than not that the
fair value of a reporting unit is less than its carrying amount
based on the qualitative assessment, it is required to perform the
two-step goodwill impairment test described below to identify the
potential goodwill impairment and measure the amount of the
goodwill impairment loss, if any, to be recognized for that
reporting unit. However, if the Company concludes otherwise based
on the qualitative assessment, the two-step goodwill impairment
test is not required. The option to perform the qualitative
assessment is not an accounting policy election and can be utilized
at the Company’s discretion. Further, the qualitative
assessment need not be applied to all reporting units in a given
goodwill impairment test. For an individual reporting unit, if the
Company elects not to perform the qualitative assessment, or if the
qualitative assessment indicates that it is more likely than not
that the fair value of a reporting unit is less than its carrying
amount, then the Company must perform the two-step goodwill
impairment test for the reporting unit. If the implied fair value
of goodwill is less than the carrying value, then an impairment
charge would be recorded.
In performing the annual goodwill impairment test in 2015 and 2014,
the Company bypassed the option to perform a qualitative assessment
and proceeded directly to performing the first step of the two-step
goodwill impairment test.
The Company calculates the fair value of its reporting units using
the income approach, which utilizes discounted forecasted future
cash flows, and the market approach which utilizes fair value
multiples of comparable publicly traded companies. The discounted
cash flows are based on our most recent long-term financial
projections and are discounted using a risk adjusted rate of
return, which is determined using estimates of market participant
risk-adjusted weighted average costs of capital and reflects the
risks associated with achieving future cash flows. The market
approach is calculated using the guideline company method, where
the Company uses market multiples derived from stock prices of
companies engaged in the same or similar lines of business. There
is not a quoted market price for the Company’s reporting
units or the company as a whole, therefore, a combination of the
two methods is utilized to derive the fair value of the business.
The Company evaluated and weighed the results of these approaches
as well as ensures it understands the basis of the results of these
two methodologies. The Company believes the use of these two
methodologies ensures a consistent and supportable method of
determining its fair value that is consistent with the objective of
measuring fair value. If the fair value were to decline, then the
Company may be required to incur material charges relating to the
impairment of those assets. The Company completed its required
annual impairment test for goodwill in the fourth quarter of 2015,
2014 and 2013 and determined that at each of those periods, the
Company’s fair value was substantially in excess of its
carrying value.
The Company tests intangible and long-lived assets for
recoverability whenever events or changes in circumstances suggest
that the carrying value of an asset or group of assets may not be
recoverable. The Company measures the recoverability of assets to
be held and used by comparing the carrying amount of the asset to
future undiscounted net cash flows expected to be generated by the
asset. If those assets are considered to be impaired, the
impairment equals the amount by which the carrying amount of the
assets exceeds the fair value of the assets. Any impairments are
recorded as permanent reductions in the carrying amount of the
assets. Long-lived assets, other than goodwill and other intangible
assets, that are held for sale are recorded at the lower of the
carrying value or the fair market value less the estimated cost to
sell.
As of December 31, 2013, the Company conducted, using its
revised sales forecast, an impairment analysis and concluded that
the estimate of future undiscounted cash flows associated with the
Cardiolite trademark intangible did not exceed the carrying amount
of the asset totaling $19.2 million and therefore, the asset was
written down to its fair value. Fair value was calculated by
utilizing Level 3 inputs in the relief-from-royalty method, an
income-based approach. As a result of this analysis, the Company
recorded an impairment charge of $15.4 million to adjust the
carrying value to its fair value of $3.8 million. This expense was
recorded within cost of goods sold in the accompanying consolidated
statement of operations in the fourth quarter of 2013.
In the third quarter of 2013, the Company was in negotiations with
a new distributor for the sale of certain products within certain
international markets. This agreement was signed in October 2013
and as a result the Company did not renew the agreements with its
former distributors in these international markets. The Company
determined the customer relationship intangible related to these
former distributors was no longer recoverable and recorded an
impairment charge of $1.0 million in the third quarter of 2013. In
the fourth quarter of 2013, the Company updated its strategic plan
to reflect the non-renewal of these agreements and the uncertainty
in the timing of product availability in this region. As a result,
the Company reviewed the recoverability of certain of its customer
relationship intangible assets in the International segment that
were impacted by the Company’s revised strategic plan. The
Company conducted an impairment analysis and concluded that the
estimate of future undiscounted cash flows associated with the
customer relationship intangible asset did not exceed the carrying
amount of the asset and therefore, the asset would need to be
written down to its fair value. In order to calculate the fair
value of the acquired customer relationship intangible assets, the
Company utilized Level 3 inputs to estimate the future discounted
cash flows associated with remaining customers and as a result of
this analysis, recorded an impairment charge of $0.7 million in the
fourth quarter of 2013. These impairment charges were recorded
within cost of goods sold in the accompanying consolidated
statement of operations.
During the third quarter of 2013, the Company committed to a plan
to sell certain of its excess land in the U.S. segment, which had a
carrying value of $7.5 million. This event qualified for held for
sale accounting and the excess land was written down to its fair
value, less estimated costs to sell. The fair value was estimated
utilizing Level 3 inputs and using a market approach, based on
available data for transactions in the region, discussions with
real estate brokers and the asking price of comparable properties
in its principal market. This resulted in a loss of $6.4 million,
which is included within operating loss as impairment of land in
the accompanying consolidated statement of operations. During the
fourth quarter of 2013, the Company sold the excess land for net
proceeds of $1.1 million.
During the first quarter of 2013, the strategic shift in how the
Company funds its R&D programs significantly altered the
expected future costs and revenues associated with our agents in
development. Fixed assets dedicated to R&D activities, which
were impacted by the March 2013 R&D strategic shift, have a
carrying value of $4.6 million as of December 31, 2015. The
Company believes these fixed assets will be utilized for either
internally funded ongoing R&D activities or R&D activities
funded by a strategic partner. If the Company is not successful in
finding a strategic partner, and there are no alternative uses for
those fixed assets, they could be subject to impairment in the
future.
Intangible assets, consisting of patents, trademarks and customer
relationships related to the Company’s products are amortized
in a method equivalent to the estimated utilization of the economic
benefit of the asset. Trademarks and patents are amortized on a
straight-line basis, and customer relationships are amortized on an
accelerated basis.
Deferred Financing Costs
During 2015, the Company early adopted ASU
No. 2015-03, Interest—Imputation
of Interest (Topic 835): Simplifying the Presentation of Debt
Issuance Costs,
Contingencies
In the normal course of business, the Company is subject to loss
contingencies, such as legal proceedings and claims arising out of
its business, that cover a wide range of matters, including, among
others, product and environmental liability. The Company records
accruals for those loss contingencies when it is probable that a
liability will be incurred and the amount of loss can be reasonably
estimated. The Company does not recognize gain contingencies |
