Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document Information [Line Items] | ||
Entity Registrant Name | ACELITY L.P. INC. | |
Entity Central Index Key | 1557939 | |
Current Fiscal Year End Date | -19 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Class A-1 Partnership Units [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 341,410,891.61 | |
Class A-2 Partnership Units [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 717,038.80 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $250,509 | $183,541 |
Accounts receivable, net | 365,124 | 370,483 |
Inventories, net | 182,457 | 178,222 |
Deferred income taxes | 70,515 | 63,025 |
Prepaid expenses and other | 28,337 | 27,563 |
Total current assets | 896,942 | 822,834 |
Net property, plant and equipment | 277,653 | 288,048 |
Debt issuance costs, net | 72,094 | 77,896 |
Deferred income taxes | 30,466 | 31,692 |
Goodwill | 3,378,298 | 3,378,298 |
Identifiable intangible assets, net | 2,352,814 | 2,397,251 |
Other non-current assets | 4,709 | 4,694 |
Total assets | 7,012,976 | 7,000,713 |
Current liabilities: | ||
Accounts payable | 55,946 | 51,827 |
Accrued expenses and other | 395,514 | 343,484 |
Current installments of long-term debt | 25,385 | 25,721 |
Income taxes payable | 9,981 | 1,305 |
Deferred income taxes | 103,135 | 113,658 |
Total current liabilities | 589,961 | 535,995 |
Long-term debt, net of current installments and discount | 4,774,787 | 4,815,290 |
Non-current tax liabilities | 33,845 | 33,300 |
Deferred income taxes | 799,334 | 792,157 |
Other non-current liabilities | 165,909 | 163,258 |
Total liabilities | 6,363,836 | 6,340,000 |
Equity: | ||
General partner’s capital | 0 | 0 |
Limited partners’ capital | 666,285 | 670,787 |
Accumulated other comprehensive loss, net | -17,145 | -10,074 |
Total equity | 649,140 | 660,713 |
Total liabilities and shareholders' equity | $7,012,976 | $7,000,713 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue: | ||
Rental | $172,839 | $164,977 |
Sales | 271,211 | 277,658 |
Total revenue | 444,050 | 442,635 |
Rental expenses | 78,178 | 84,649 |
Cost of sales | 73,414 | 81,390 |
Gross profit (loss) | 292,458 | 276,596 |
Selling, general and administrative expenses | 147,763 | 175,612 |
Research and development expenses | 14,678 | 17,490 |
Acquired intangible asset amortization | 45,877 | 50,689 |
Operating earnings (loss) | 84,140 | 32,805 |
Interest income and other | 147 | 95 |
Interest expense | -104,726 | -102,195 |
Foreign currency gain | 19,400 | 236 |
Derivative instruments loss | -3,348 | -3 |
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | -4,387 | -69,062 |
Income tax expense (benefit) | 144 | -22,002 |
Earnings (loss) from continuing operations | -4,531 | -47,060 |
Earnings from discontinued operations, net of tax | 0 | 677 |
Net earnings (loss) | ($4,531) | ($46,383) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net loss | ($4,531) | ($46,383) |
Unrealized investment gain, net of tax expense of $628 in 2014 | 0 | 1,003 |
Foreign currency translation adjustment, net of tax expense of $635 in 2015 and $62 in 2014 | -7,071 | 290 |
Total comprehensive income (loss) | ($11,602) | ($45,090) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Unrealized investment gain, net of tax expense of $628 in 2014 | $0 | ($628) |
Foreign currency translation adjustment, net of tax expense of $635 in 2015 and $62 in 2014 | $635 | $62 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net loss | ($4,531) | ($46,383) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Amortization of debt issuance costs and discount | 9,968 | 9,668 |
Depreciation and other amortization | 66,331 | 82,029 |
Amortization of fair value step-up in inventory | 0 | 6,680 |
Provision for bad debt | 1,827 | 4,101 |
Equity-based compensation expense | 535 | 941 |
Deferred income tax benefit | -11,971 | -44,674 |
Unrealized gain on derivative instruments | -315 | -4,076 |
Unrealized loss (gain) on revaluation of cross currency debt | -32,429 | 241 |
Change in assets and liabilities: | ||
Decrease in accounts receivable, net | 5,362 | 20,806 |
Increase in inventories, net | -3,666 | -7,302 |
Decrease (increase) in prepaid expenses and other | -774 | 17,546 |
Increase in accounts payable | 4,363 | 6,473 |
Increase in accrued expenses and other | 56,048 | 31,799 |
Increase in tax liabilities, net | 11,525 | 4,997 |
Net cash provided (used) by operating activities | 102,273 | 82,846 |
Cash flows from investing activities | ||
Additions to property, plant and equipment | -10,491 | -10,801 |
Increase in inventory to be converted into equipment for short-term rental | -3,356 | -2,240 |
Dispositions of property, plant and equipment | 678 | 377 |
Businesses acquired in purchase transactions, net of cash acquired | 0 | -4,613 |
Increase in identifiable intangible assets and other non-current assets | -1,821 | -1,281 |
Net cash provided (used) by investing activities | -14,990 | -18,558 |
Cash flows from financing activities: | ||
Distribution to limited partners | -55 | 0 |
Settlement of profits interest units | -517 | 0 |
Repayments of long-term debt and capital lease obligations | -6,415 | -6,635 |
Debt issuance costs | -6,256 | 0 |
Net cash provided (used) by financing activities | -13,243 | -6,635 |
Effect of exchange rate changes on cash and cash equivalents | -7,072 | 38 |
Net increase (decrease) in cash and cash equivalents | 66,968 | 57,691 |
Cash and cash equivalents, beginning of period | 183,541 | 206,949 |
Cash and cash equivalents, end of period | $250,509 | $264,640 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies |
(a) Basis of Presentation and Principles of Consolidation | |
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “the Codification”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, financial position and cash flows in conformity with GAAP. Operating results from interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of our results for the interim periods presented. Certain prior period amounts have been reclassified to conform to the 2015 presentation. | |
On October 29, 2014, LifeCell entered into an agreement with Novadaq® Technologies Inc. (“Novadaq”) to transfer all marketing and distribution rights to the SPY® Elite System from LifeCell to Novadaq, effective November 30, 2014. In connection with the transfer, the parties agreed to terminate various distribution agreements entered into between 2010 and 2011. The results of the operations subject to the agreement, excluding the allocation of general corporate overhead, are presented as discontinued operations in the condensed consolidated statements of operations for all periods presented. | |
The Company has two reportable operating segments: Advanced Wound Therapeutics and Regenerative Medicine. We have two primary geographic regions: the Americas, which is comprised principally of the United States and includes Canada, Puerto Rico and Latin America; and EMEA/APAC, which is comprised of Europe, the Middle East, Africa and the Asia Pacific region. | |
The condensed consolidated financial statements appearing in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | |
(b) Derivative Financial Instruments and Fair Value Measurements | |
We use derivative financial instruments to manage the economic impact of fluctuations in interest rates. We do not use financial instruments for speculative or trading purposes. Periodically, we enter into interest rate protection agreements to modify the interest characteristics of our outstanding debt. Our interest rate derivatives have not been designated as hedging instruments, and as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. | |
We also periodically use derivative financial instruments to manage the economic impact of fluctuations in currency exchange rates on our intercompany balances and corresponding cash flows and to manage our transactional currency exposures when our foreign subsidiaries enter into transactions denominated in currencies other than their local currency. We enter into foreign currency exchange contracts to manage these economic risks. These contracts are not designated as hedges; and as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. Although we use master netting agreements with our derivative counterparties, we do not offset derivative asset and liability positions in the condensed consolidated balance sheets. | |
All derivative instruments are recorded on the balance sheets at fair value. The fair values of our interest rate derivatives and foreign currency exchange contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly-quoted markets, which represent level 2 inputs as defined by the Codification. | |
(c) Concentration of Credit Risk | |
We have a concentration of credit risk with financial institutions related to our derivative instruments. As of March 31, 2015, Morgan Stanley, UBS and HSBC were the counterparties on our interest rate protection agreements consisting of interest rate swap agreements in notional amounts totaling $484.7 million each. We use master netting agreements with our derivative counterparties to reduce our risk and use multiple counterparties to reduce our concentration of credit risk. | |
We maintain cash and cash equivalents with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits bear minimal credit risk as they are maintained at financial institutions of reputable credit and generally may be redeemed upon demand. | |
(d) Recently Adopted Accounting Standards | |
In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU No. 2014-08 changes the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations - that is, a major effect on the organization’s operations and financial results should be presented as discontinued operations. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, the ASU requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The Company adopted this update effective January 1, 2015. We do not anticipate that it will have a material effect on our results of operations, financial position or disclosures. | |
(e) Recently Issued Accounting Standards | |
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition”, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts”. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, “Property, Plant, and Equipment”, and intangible assets within the scope of Topic 350, “Intangibles-Goodwill and Other”) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. In April 2015, the FASB voted to propose to defer the effective date of this ASU by one year. The Company is evaluating ASU No. 2014-09 to determine if it will have a material effect on our results of operations, financial position or disclosures. | |
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40).” The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating this update, however we do not anticipate that the adoption of this guidance will have a material impact on our results of operations, financial position or disclosures. | |
In January 2015, the FASB issued ASU No. 2015-01, "Income Statement -Extraordinary and Unusual Items (Subtopic 225-20)." The objective of this ASU is to simplify the income statement presentation requirements in Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early application is permitted. The Company is evaluating this update, however we do not anticipate that the adoption of this guidance will have a material impact on our results of operations, financial position or disclosures. | |
On February 18, 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." This update provides a revised consolidation model for all reporting entities to use in evaluating whether they should consolidate certain legal entities. All legal entities will be subject to reevaluation under this revised consolidation model. The revised consolidation model, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early application is permitted. The Company is evaluating this update, however we do not anticipate that the adoption of this guidance will have a material impact on our results of operations, financial position or disclosures. | |
In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30)" The objective of this ASU is to simplify the presentation of debt issuance costs in the balance sheet by requiring the presentation of debt issuance costs as a deduction from the carrying amount of the related debt liability instead of a deferred charge. The standard will be effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. As of March 31, 2015, the Company had $72.1 million of unamortized debt issuance costs recorded as a deferred charge. | |
(f) Other Significant Accounting Policies | |
For further information on our significant accounting policies, see Note 1 of the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014. |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures Acquisitions and Divestitures | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Business Combinations and Discontinued Operations [Abstract] | ||||
Acquisitions and Divestitures | Acquisitions and Divestitures | |||
Acquisitions | ||||
There were no significant acquisitions during the three months ended March 31, 2015. | ||||
Divestitures | ||||
SPY® Elite System | ||||
On October 29, 2014, LifeCell Corporation entered into an agreement with Novadaq® Technologies Inc. (“Novadaq”) to transfer all marketing and distribution rights to the SPY® Elite System from LifeCell to Novadaq, effective November 30, 2014. | ||||
The operating results of the SPY® Elite System product portfolio included in discontinued operations are as follows (in thousands): | ||||
Three months ended March 31, | ||||
2014 | ||||
Revenue | $ | 4,904 | ||
Earnings before income taxes | $ | 1,100 | ||
Income tax expense | $ | 423 | ||
Earnings from discontinued operations, net of tax | $ | 677 | ||
Supplemental_Balance_Sheet_Dat
Supplemental Balance Sheet Data | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||
Supplemental Balance Sheet Data | Supplemental Balance Sheet Data | |||||||
(a) Accounts Receivable, net | ||||||||
Accounts receivable consist of the following (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Gross trade accounts receivable: | ||||||||
Billed trade accounts receivable | $ | 394,896 | $ | 396,329 | ||||
Unbilled receivables | 32,408 | 39,293 | ||||||
Less: Allowance for revenue adjustments | (62,117 | ) | (61,460 | ) | ||||
Gross trade accounts receivable | 365,187 | 374,162 | ||||||
Less: Allowance for bad debt | (11,668 | ) | (13,087 | ) | ||||
Net trade accounts receivable | 353,519 | 361,075 | ||||||
Other receivables | 11,605 | 9,408 | ||||||
$ | 365,124 | $ | 370,483 | |||||
(b) Inventories, net | ||||||||
Inventories consist of the following (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Finished goods and tissue available for distribution | $ | 130,141 | $ | 127,253 | ||||
Goods and tissue in-process | 5,877 | 6,887 | ||||||
Raw materials, supplies, parts and unprocessed tissue | 72,855 | 67,567 | ||||||
208,873 | 201,707 | |||||||
Less: Amounts expected to be converted into equipment for short-term rental | (10,871 | ) | (7,515 | ) | ||||
Reserve for excess and obsolete inventory | (15,545 | ) | (15,970 | ) | ||||
$ | 182,457 | $ | 178,222 | |||||
LongTerm_Debt
Long-Term Debt | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Long-Term Debt | Long-Term Debt | |||||||
Long-term debt consists of the following (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Senior Dollar Term E-1 Credit Facility – due 2018 | $ | 1,922,374 | $ | 1,927,241 | ||||
Senior Euro Term E-1 Credit Facility – due 2018 | 259,847 | 293,746 | ||||||
Senior Term E-2 Credit Facility – due 2016 | 314,555 | 315,351 | ||||||
10.5% Second Lien Senior Secured Notes due 2018 | 1,750,000 | 1,750,000 | ||||||
12.5% Senior Unsecured Notes due 2019 | 612,000 | 612,000 | ||||||
3.25% Convertible Senior Notes due 2015 | 101 | 101 | ||||||
Notional amount of debt | 4,858,877 | 4,898,439 | ||||||
Senior Dollar Term E-1 Credit Facility Discount, net of accretion | (27,029 | ) | (24,241 | ) | ||||
Senior Euro Term E-1 Credit Facility Discount, net of accretion | (6,698 | ) | (7,376 | ) | ||||
Senior Term E-2 Credit Facility Discount, net of accretion | (3,297 | ) | (2,955 | ) | ||||
Second Lien Senior Secured Notes Discount, net of accretion | (19,131 | ) | (20,205 | ) | ||||
Senior Unsecured Notes Discount, net of accretion | (2,550 | ) | (2,651 | ) | ||||
Net discount on debt | (58,705 | ) | (57,428 | ) | ||||
Total debt, net of discount | 4,800,172 | 4,841,011 | ||||||
Less: Current installments | (25,385 | ) | (25,721 | ) | ||||
$ | 4,774,787 | $ | 4,815,290 | |||||
Senior Secured Credit Facility | ||||||||
Our senior secured credit facility (the “Senior Secured Credit Facility”) includes a $200 million revolving credit facility (the “Revolving Credit Facility”). Amounts available under the Revolving Credit Facility are available for borrowing and reborrowing until maturity. At March 31, 2015 and December 31, 2014, no revolving credit loans were outstanding and we had outstanding letters of credit issued by banks which are party to the Senior Secured Credit Facility of $40.6 million and $39.0 million, respectively. In addition, we had $9.7 million and $11.4 million of letters of credit issued by a bank not party to the Senior Secured Credit Facility as of March 31, 2015 and December 31, 2014, respectively. The capacity of the Revolving Credit Facility is reduced for the $40.6 million and $39.0 million of letters of credit issued by banks which are party to the Senior Secured Credit Facility as of March 31, 2015 and December 31, 2014, respectively. The resulting availability under the Revolving Credit Facility was $159.4 million and $161.0 million at March 31, 2015 and December 31, 2014, respectively. Commitment fees accrue at a rate of 0.50% on the amounts available under the Revolving Credit Facility. | ||||||||
Interest. On March 10, 2015, we entered into Amendment No. 6 to our Senior Secured Credit Facility (“Amendment No. 6”). In connection with Amendment No. 6, certain applicable rates were modified so that (i) Dollar Term E-1 Loans bear interest at a rate equal to, at KCI’s election, a Eurocurrency rate plus 3.50% or an adjusted base rate plus 2.50%, (ii) Euro Term E-1 Loans bear interest at a rate equal to, at KCI’s election, a Eurocurrency rate plus 3.75% or an adjusted base rate plus 2.75%, and (iii) Term E-2 Loans bear interest at a rate equal to, at KCI’s election, a Eurocurrency rate plus 3.00% or an adjusted base rate plus 2.00%. The Eurocurrency rate shall be subject to a floor of 1.00%, and the adjusted base rate shall be subject to a floor of 2.00%. | ||||||||
Covenants | ||||||||
As a result of Amendment No. 6, the financial covenants were amended to remove the interest coverage ratio in its entirety and to set the total leverage ratio for any test period to be no greater than 8.25:1.00. In addition, certain other covenants were amended, including with respect to the incurrence of incremental facilities and asset sales. As of March 31, 2015, we were in compliance with all covenants under our credit agreement and indentures. | ||||||||
For further information on our long-term debt, see Note 5 of the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. |
Derivative_Financial_Instrumen
Derivative Financial Instruments and Fair Value Measurements | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Derivative Financial Instruments and Fair Value Measurements Disclosure [Abstract] | ||||||||||||||||||||
Derivative Financial Instruments and Fair Value Measurements | Derivative Financial Instruments and Fair Value Measurements | |||||||||||||||||||
We are exposed to credit loss in the event of nonperformance by counterparties to the extent of the fair values of the outstanding interest rate swap agreements, interest rate cap agreements and foreign currency exchange contracts, but we do not anticipate nonperformance by any of the counterparties. All derivative instruments are recorded on the balance sheets at fair value. We do not use financial instruments for speculative or trading purposes. | ||||||||||||||||||||
Interest Rate Protection | ||||||||||||||||||||
At March 31, 2015 and December 31, 2014, we were party to three interest rate swap agreements which are used to convert a portion of our outstanding variable rate debt to a fixed rate basis. These agreements have not been designated as hedging instruments, and as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. The interest rate swap agreements have receive rates based on the higher of three-month USD LIBOR or 1.25% and pay rates based on fixed rates. Quarterly payments under the interest rate swap agreements are due on the last day of March, June, September and December. The aggregate notional amount decreases quarterly by amounts ranging from $1.7 million to $56.4 million until maturity. | ||||||||||||||||||||
The following table summarizes our interest rate swap agreements (dollars in thousands): | ||||||||||||||||||||
Effective Dates | Outstanding Notional Amount | Fixed Interest Rate | ||||||||||||||||||
12/31/13-12/31/16 | $484,667 | 2.26% | ||||||||||||||||||
12/31/13-12/31/16 | $484,667 | 2.25% | ||||||||||||||||||
12/31/13-12/31/16 | $484,667 | 2.25% | ||||||||||||||||||
Foreign Currency Exchange Rate Mitigation | ||||||||||||||||||||
At March 31, 2015 and December 31, 2014, we had no outstanding foreign currency exchange contracts. | ||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||
The Codification defines fair value as the exit price that would be received to sell an asset or paid to transfer a liability. The Fair Value Measurements and Disclosure topic of the Codification establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. | ||||||||||||||||||||
The carrying amount reported in the balance sheets for cash and cash equivalents, accounts receivable, accounts payable and long-term obligations, excluding our borrowings under our Senior Secured Credit Facility and fixed rate long-term debt, approximates fair value. The fair value of our borrowings under our Senior Secured Credit Facility and fixed rate long-term debt was $2.503 billion and $2.559 billion, respectively, at March 31, 2015. The fair value of our borrowings under our Senior Secured Credit Facility and fixed rate long-term debt was $2.501 billion and $2.584 billion, respectively, at December 31, 2014. The fair value of our long-term debt was estimated based upon open-market trades at or near year end. | ||||||||||||||||||||
All of our derivatives, as of the reporting date, use inputs considered as Level 2. The interest rate swap agreements are valued using a discounted cash flow model that takes into account the present value of the expected future cash flows under the terms of the agreements by using market information available as of the reporting date, including prevailing interest rates and related forward interest rate curves. | ||||||||||||||||||||
The following table sets forth the location and aggregate fair value amounts of all derivative instruments with credit-related contingent features (in thousands): | ||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
Balance | Fair Value | Balance | Fair Value | |||||||||||||||||
Sheet | Sheet | |||||||||||||||||||
Location | March 31, | December 31, | Location | March 31, | December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Interest rate swap agreements | Prepaid expenses and other | $ | — | $ | — | Accrued expenses and other | $ | 13,799 | $ | 13,936 | ||||||||||
Interest rate swap agreements | Other non-current assets | — | — | Other non-current liabilities | 7,889 | 8,067 | ||||||||||||||
Total derivatives | $ | — | $ | — | $ | 21,688 | $ | 22,003 | ||||||||||||
The following table summarizes the amount of gain (loss) on derivatives not designated as hedging instruments (dollars in thousands): | ||||||||||||||||||||
Three months ended March 31, | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
Interest rate swap agreements | $ | (3,348 | ) | $ | (75 | ) | ||||||||||||||
Foreign currency exchange contracts | — | 72 | ||||||||||||||||||
$ | (3,348 | ) | $ | (3 | ) | |||||||||||||||
Certain of our derivative instruments contain provisions that require compliance with the restrictive covenants of our Senior Secured Credit Facility. For further information regarding the restrictive covenants of credit facilities, see Note 5 of the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | ||||||||||||||||||||
If we default under our credit facilities, the lenders could require immediate repayment of the entire outstanding principal balance. If those lenders require immediate repayment, we may not be able to repay them which could result in the foreclosure of substantially all of our assets. In these circumstances, the counterparties to the derivative instruments could request immediate payment or full collateralization on derivative instruments in net liability positions. Certain of our derivative counterparties are also parties to our Senior Secured Credit Facility. | ||||||||||||||||||||
No collateral has been posted by us in the normal course of business. If the credit-related contingent features underlying these agreements were triggered on March 31, 2015, we could be required to settle or post the full amount as collateral to the respective agreement counterparties. | ||||||||||||||||||||
We did not have any measurements of financial assets or financial liabilities at fair value on a nonrecurring basis at March 31, 2015 or December 31, 2014. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||
Comprehensive Income (Loss) Note | Accumulated Other Comprehensive Loss | |||||||
The components of accumulated other comprehensive loss are as follows (in thousands): | ||||||||
Accumulated | Accumulated | |||||||
Foreign | Other | |||||||
Currency | Comprehensive | |||||||
Translation | Income (Loss) | |||||||
Adjustment | ||||||||
Balances at December 31, 2014 | $ | (10,074 | ) | $ | (10,074 | ) | ||
Foreign currency translation adjustment, net of taxes of $635 | (7,071 | ) | (7,071 | ) | ||||
Balances at March 31, 2015 | $ | (17,145 | ) | $ | (17,145 | ) | ||
During the three months ended March 31, 2015, there were no reclassification adjustments out of accumulated other comprehensive loss to net loss. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
Legal Proceedings | |
Intellectual Property Litigation | |
As the owner and exclusive licensee of patents, from time to time, we are a party to proceedings challenging these patents, including challenges in U.S. federal courts, foreign courts, foreign patent offices and the U.S. Patent and Trademark Office. Additionally, from time to time, we are a party to litigation we initiate against others we contend infringe these patents, which often results in counterclaims regarding the validity of such patents. At other times, we are party to litigation initiated by others who contend we infringe their patents. It is not possible to reliably predict the outcome of the proceedings described below. However, if we are unable to effectively enforce our intellectual property rights, third parties may become more aggressive in the marketing of competitive products around the world. | |
In August 2013, Vital Needs International, L.P. ("Vital Needs") filed a Demand for Arbitration with the American Arbitration Association seeking to recover in excess of $100 million in damages and legal fees against KCI entities based on a number of claims related to certain intellectual property rights sold by Vital Needs to KCI pursuant to a 2006 acquisition agreement. The arbitration hearing took place in January 2015, and the panel issued a favorable decision on April 10, 2015 ordering that Vital Needs take nothing by its claims. | |
In September 2013, LifeNet Health ("LifeNet") filed suit against LifeCell Corporation in the United States District Court for the Eastern District of Virginia, Norfolk Division. LifeNet alleges that two LifeCell products, Strattice and AlloDerm Ready to Use, infringe LifeNet’s U.S. Patent No. 6,569,200 ("the ‘200 Patent"). On November 18, 2014, a jury found that the ‘200 Patent was not invalid and was infringed and further awarded LifeNet a lump sum damages amount of $34.7 million. As a result of this decision, we recorded a liability of $34.7 million in the fourth quarter of 2014. We disagree with the result at this stage in the litigation and believe that LifeCell’s defenses to the claims are meritorious. LifeCell will continue to vigorously assert its defenses during the appeal stages of this litigation and intends to defend any further claims by LifeNet. LifeCell plans to appeal to the U.S. Federal Circuit Court of Appeals in Washington D.C. on multiple grounds. | |
Products Liability Litigation | |
LifeCell Corporation is a defendant in approximately 346 lawsuits filed by individuals alleging personal injury and seeking monetary damages for failed hernia repair procedures using LifeCell’s AlloDerm products. These cases have been consolidated for case management purposes in Middlesex County, New Jersey. The trial court has issued a pre-trial order incorporating the bellwether practice of trying the claims of some plaintiffs to determine the likelihood of settlement or to avoid relitigating common issues in every case. Following limited discovery, the parties have each selected two bellwether cases from which one case to be tried will be selected. Further discovery is proceeding on each of the four bellwether cases. Trial of the first bellwether case is currently scheduled for January 2016. Although it is not possible to reliably predict the outcome of the litigation, we believe that our defenses to these claims are meritorious and we will defend against these suits vigorously. Based on our existing insurance coverage and our defenses to these cases, we do not expect them to have a material impact on our results of operations or our financial position. Because discovery of damages has been limited to the four bellwether cases, we do not know the damages allegedly suffered by the remaining plaintiffs. As such, it is impossible to predict or estimate potential losses if our defenses to these cases are unsuccessful. | |
LifeCell Corporation has been named as a defendant in approximately 178 lawsuits in state and federal courts alleging personal injury and seeking monetary damages for failed gynecological procedures using a human tissue product processed by LifeCell and sold by one of LifeCell’s distributors, Boston Scientific, under the name Repliform. There are approximately 173 LifeCell cases filed in a consolidated docket in Middlesex County, Massachusetts. The cases are in the initial phase and no discovery has occurred. Three cases are pending in a multi-district federal case in West Virginia that is proceeding very slowly. The remaining cases are in Delaware and Minnesota. None of these cases are proceeding at this time. We intend to defend these suits vigorously, and do not expect them to have a material impact on our results of operations or our financial position. As these cases are in their early stages it is not possible to predict or estimate potential losses if our defenses to these cases are unsuccessful. | |
Other Litigation | |
In 2009, KCI received a subpoena from the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) seeking records regarding our billing practices under the local coverage policies of the four regional Durable Medical Equipment Medicare Administrative Contractors (“DME MACs”). KCI cooperated with the OIG's inquiry and provided substantial documentation to the OIG and the U.S. Attorneys' office in response to its request. The government's inquiry stemmed from the filing under seal of two 2008 qui tam actions against KCI by two former employees in the U.S. District Court, Central District of California, Western Division. These cases are captioned United States of America, ex rel. Steven J. Hartpence v. Kinetic Concepts, Inc. et al, and United States of America, ex rel. Geraldine Godecke v. Kinetic Concepts, Inc., et al. The complaints contend that KCI violated the Federal False Claims Act by billing in a manner that was not consistent with the Local Coverage Determinations issued by the DME MACs and seek recovery of monetary damages. Following the completion of the government's review and its decision declining to intervene in such suits, the live pleadings were ordered unsealed in 2011. After reviewing the allegations, KCI filed motions seeking the dismissal of the suits on multiple grounds. In 2012, the Court granted KCI's motions dismissing all of the claims under the False Claims Act. The cases are on appeal in the U.S. Court of Appeals for the Ninth Circuit and oral argument was in July 2014 before a 3 member panel. On January 16, 2015, the Ninth Circuit entered an order scheduling oral argument en banc before the U.S. Court of Appeals for the Ninth Circuit. Oral argument en banc proceeded before the Ninth Circuit in March 2015, and we are awaiting their opinion. We believe that our defenses to the claims in the Hartpence and Goedecke cases are meritorious and that we have no liability under the False Claims Act for their allegations. However, it is not possible to predict the outcome of this litigation nor is it possible to estimate any damages that may be awarded if we are unsuccessful in the litigation. | |
We are a party to several additional lawsuits arising in the ordinary course of our business. Additionally, the manufacturing and marketing of medical products necessarily entails an inherent risk of product liability claims. We maintain multiple layers of product liability insurance coverage and we believe these policies and the amounts of coverage are appropriate and adequate. | |
Other Commitments and Contingencies | |
As a healthcare supplier, we are subject to extensive government regulation, including laws and regulations directed at ascertaining the appropriateness of reimbursement, preventing fraud and abuse and otherwise regulating reimbursement under various government programs. The marketing, billing, documenting and other practices are all subject to government oversight and review. To ensure compliance with Medicare and other regulations, regional carriers often conduct audits and request patient records and other documents to support claims submitted by us for payment of services rendered to customers. | |
We also are subject to routine pre-payment and post-payment audits of durable medical equipment (“DME”) claims submitted to Medicare Part B. These audits typically involve a complex medical review, by Medicare or its designated contractors and representatives, of documentation supporting the therapy provided by us. While Medicare requires us to obtain a comprehensive physician order prior to providing products and services, we are not required to obtain the written medical record in advance of therapy as long as the underlying medical records reported to us support the coverage criteria and medical necessity information included in such claim. Following a Medicare request for supporting documentation, we are obligated to procure and submit the underlying medical records retained by various clinical providers, medical facilities and prescribers. Obtaining these medical records in connection with a claims audit may be challenging and, in any event, all of these records are subject to further examination, interpretation and dispute by an auditing authority. Under standard Medicare procedures, we are entitled to demonstrate the sufficiency of documentation and the establishment of medical necessity, and we have the right to appeal any adverse determinations. If a determination is made that our records or the patients’ medical records are insufficient to meet medical necessity or Medicare reimbursement requirements for the claims, we could be subject to denial or overpayment demands for claims submitted for Medicare reimbursement. In the rare event that an audit results in major discrepancies of claims records which lacked proof of medical necessity, Medicare may be entitled to take additional corrective measures, including: extrapolation of the results of the audit across a wider population of claims, submitting recoupment demands for claims other than those examined in the audit, or placing the organization on a full prepayment review. These audits have increased over the last two years from being negligible to approximately 10% of our claims. While eventually receiving payment on a high percent of the claims subject to these audits, payment timeliness may range from a few months up to a year resulting in increasing Medicare accounts receivable balances. | |
On June 30, 2014, KCI entered into a settlement agreement with Wake Forest University Health Sciences to fully and finally resolve the historical patent and royalty disputes between them relating to negative pressure wound therapy. As of March 31, 2015, the accompanying consolidated balance sheet included $83.8 million under the caption “accrued expenses and other” and $105.7 million under the caption “other non-current liabilities” representing the net present value of payments under the Settlement Agreement discounted using our incremental borrowing rate as the discount rate. |
Segment_Information
Segment Information | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Reporting [Abstract] | ||||||||
Segment Reporting Disclosure | Segment Information | |||||||
The Company is engaged in the rental and sale of advanced wound therapeutics and regenerative medicine products in over 75 countries worldwide through direct sales and indirect operations. We have two reportable operating segments which correspond to our two businesses: Advanced Wound Therapeutics and Regenerative Medicine. Our Advanced Wound Therapeutics business is conducted by KCI and its subsidiaries, including Systagenix, while our Regenerative Medicine business is conducted by LifeCell and its subsidiaries. In most countries where we operate, certain aspects of our two businesses are supported by the same administrative staff, systems and infrastructure and, as such, we have allocated these costs between the businesses based on allocation methods including headcount, revenue and other methods as deemed appropriate. We measure segment profit (loss) as operating earnings (loss), which is defined as income (loss) before interest and other income, interest expense, foreign currency gains and losses, derivative instruments gains and losses and income taxes. All intercompany transactions are eliminated in computing revenue and operating earnings (loss). | ||||||||
Information on segments and a reconciliation of consolidated totals are as follows (in thousands): | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Revenue: | ||||||||
Advanced Wound Therapeutics | $ | 337,259 | $ | 330,795 | ||||
Regenerative Medicine | 104,169 | 106,656 | ||||||
Other operations (1) | 2,622 | 5,184 | ||||||
Total revenue | $ | 444,050 | $ | 442,635 | ||||
Operating earnings (loss): | ||||||||
Advanced Wound Therapeutics | $ | 112,885 | $ | 85,669 | ||||
Regenerative Medicine | 34,019 | 29,908 | ||||||
Other operations (1) | 447 | 671 | ||||||
Non-allocated costs: | ||||||||
General headquarter expense | (1,423 | ) | (1,590 | ) | ||||
Equity-based compensation | (535 | ) | (941 | ) | ||||
Business optimization and transaction-related expenses (2) | (15,376 | ) | (30,223 | ) | ||||
Acquired intangible asset amortization (3) | (45,877 | ) | (50,689 | ) | ||||
Total non-allocated costs | (63,211 | ) | (83,443 | ) | ||||
Total operating earnings | $ | 84,140 | $ | 32,805 | ||||
-1 | Represents contract manufacturing operations conducted at our manufacturing facility in Gargrave, England. | |||||||
-2 | Represents restructuring-related expenses associated with our business optimization initiatives as well as management fees and costs associated with acquisition, disposition and financing activities. | |||||||
-3 | Represents amortization of acquired intangible assets related to our Merger in November 2011, our acquisition of Systagenix in October 2013 and other technology acquisitions. |
Guarantor_Condensed_Consolidat
Guarantor Condensed Consolidating Financial Statements | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Guarantor Condensed Consolidating Financial Statements [Abstract] | ||||||||||||||||||||||||
Guarantor Condensed Consolidating Financial Statements | Guarantor Condensed Consolidating Financial Statements | |||||||||||||||||||||||
Our 10.5% Second Lien Notes and 12.5% Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, by us and each of our material 100% owned subsidiaries, other than the subsidiaries that are co-issuers of the notes, foreign subsidiaries and subsidiaries whose only assets are investments in foreign subsidiaries. The non-guarantor subsidiaries do not have any payment obligations under the 10.5% Second Lien Notes or 12.5% Unsecured Notes. Subject to the terms of the10.5% Second Lien Notes and 12.5% Unsecured Notes indentures, the guarantee of a subsidiary guarantor will terminate upon: | ||||||||||||||||||||||||
-1 | a sale or other disposition (including by way of consolidation or merger) of the capital stock of such guarantor or the sale or disposition of all or substantially all the assets of such subsidiary guarantor (other than to the Company or a restricted subsidiary) otherwise permitted by the 10.5% Second Lien Notes or 12.5% Unsecured Notes indentures, | |||||||||||||||||||||||
-2 | the designation in accordance with the 10.5% Second Lien Notes or 12.5% Unsecured Notes indenture of the guarantor as an unrestricted subsidiary or the occurrence of any event after which the guarantor is no longer a restricted subsidiary, | |||||||||||||||||||||||
-3 | defeasance or discharge of the 10.5% Second Lien Notes or 12.5% Unsecured Notes, or | |||||||||||||||||||||||
-4 | upon the achievement of investment grade status by the 10.5% Second Lien Notes or 12.5% Unsecured Notes; provided that such guarantee shall be reinstated upon the reversion date. | |||||||||||||||||||||||
In the event of a bankruptcy, liquidation or reorganization of any non-guarantor subsidiary, such non-guarantor subsidiary will pay the holders of its debt and other liabilities, including its trade creditors, before it will be able to distribute any of its assets to us. In the future, any non-U.S. subsidiaries, immaterial subsidiaries and subsidiaries that we designate as unrestricted subsidiaries under the 10.5% Second Lien Notes and 12.5% Unsecured Notes indentures will not guarantee the 10.5% Second Lien Notes or 12.5% Unsecured Notes. As of March 31, 2015, there were no restrictions on the ability of subsidiary guarantors to transfer funds to the parent company. | ||||||||||||||||||||||||
As a result of the guarantee arrangements, we are presenting the following condensed consolidated balance sheets, statements of operations and comprehensive income (loss), and statements of cash flows of the issuer, the guarantor subsidiaries and the non-guarantor subsidiaries. | ||||||||||||||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | ||||||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 398 | $ | 50,055 | $ | — | $ | 200,056 | $ | — | $ | 250,509 | ||||||||||||
Accounts receivable, net | — | 181,254 | 66,017 | 117,853 | — | 365,124 | ||||||||||||||||||
Inventories, net | — | 106,137 | 116,069 | 93,585 | (133,334 | ) | 182,457 | |||||||||||||||||
Deferred income taxes | — | 58,059 | 10,594 | 1,862 | — | 70,515 | ||||||||||||||||||
Prepaid expenses and other | — | 14,178 | 2,902 | 246,711 | (235,454 | ) | 28,337 | |||||||||||||||||
Intercompany receivables | 166 | 2,000,335 | 2,448,575 | 72,599 | (4,521,675 | ) | — | |||||||||||||||||
Total current assets | 564 | 2,410,018 | 2,644,157 | 732,666 | (4,890,463 | ) | 896,942 | |||||||||||||||||
Net property, plant and equipment | — | 301,139 | 68,201 | 142,645 | (234,332 | ) | 277,653 | |||||||||||||||||
Debt issuance costs, net | — | 72,094 | — | — | — | 72,094 | ||||||||||||||||||
Deferred income taxes | — | — | — | 30,466 | — | 30,466 | ||||||||||||||||||
Goodwill | — | 2,483,240 | 732,138 | 162,920 | — | 3,378,298 | ||||||||||||||||||
Identifiable intangible assets, net | — | 285,726 | 1,770,658 | 296,430 | — | 2,352,814 | ||||||||||||||||||
Other non-current assets | — | 1,261 | 186 | 94,162 | (90,900 | ) | 4,709 | |||||||||||||||||
Intercompany loan receivables | — | 755,000 | 431,626 | — | (1,186,626 | ) | — | |||||||||||||||||
Intercompany investments | 656,463 | 409,245 | 319,910 | — | (1,385,618 | ) | — | |||||||||||||||||
$ | 657,027 | $ | 6,717,723 | $ | 5,966,876 | $ | 1,459,289 | $ | (7,787,939 | ) | $ | 7,012,976 | ||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | 17,307 | $ | 12,703 | $ | 25,936 | $ | — | $ | 55,946 | ||||||||||||
Accrued expenses and other | — | 286,332 | 233,481 | 67,683 | (191,982 | ) | 395,514 | |||||||||||||||||
Intercompany payables | 7,258 | 1,310,017 | 2,695,544 | 508,856 | (4,521,675 | ) | — | |||||||||||||||||
Current installments of long-term debt | — | 25,385 | — | — | — | 25,385 | ||||||||||||||||||
Income taxes payable | — | 555 | 4,123 | 5,303 | — | 9,981 | ||||||||||||||||||
Deferred income taxes | — | — | 103,135 | — | — | 103,135 | ||||||||||||||||||
Total current liabilities | 7,258 | 1,639,596 | 3,048,986 | 607,778 | (4,713,657 | ) | 589,961 | |||||||||||||||||
Long-term debt, net of current installments and discount | — | 4,774,787 | — | — | — | 4,774,787 | ||||||||||||||||||
Non-current tax liabilities | — | 9,852 | 6,276 | 17,717 | — | 33,845 | ||||||||||||||||||
Deferred income taxes | — | 111,338 | 641,696 | 46,300 | — | 799,334 | ||||||||||||||||||
Other non-current liabilities | 629 | 114,499 | 48,262 | 2,519 | — | 165,909 | ||||||||||||||||||
Intercompany loan payables | — | 423,357 | 755,000 | 8,269 | (1,186,626 | ) | — | |||||||||||||||||
Total liabilities | 7,887 | 7,073,429 | 4,500,220 | 682,583 | (5,900,283 | ) | 6,363,836 | |||||||||||||||||
Total equity | 649,140 | (355,706 | ) | 1,466,656 | 776,706 | (1,887,656 | ) | 649,140 | ||||||||||||||||
$ | 657,027 | $ | 6,717,723 | $ | 5,966,876 | $ | 1,459,289 | $ | (7,787,939 | ) | $ | 7,012,976 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | ||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 398 | $ | 41,027 | $ | 1,499 | $ | 140,617 | $ | — | $ | 183,541 | ||||||||||||
Accounts receivable, net | — | 179,872 | 67,355 | 123,256 | — | 370,483 | ||||||||||||||||||
Inventories, net | — | 73,904 | 110,355 | 93,765 | (99,802 | ) | 178,222 | |||||||||||||||||
Deferred income taxes | — | 52,868 | 10,157 | — | — | 63,025 | ||||||||||||||||||
Prepaid expenses and other | — | 11,106 | 6,851 | 247,606 | (238,000 | ) | 27,563 | |||||||||||||||||
Intercompany receivables | 166 | 1,854,033 | 2,432,299 | 48,267 | (4,334,765 | ) | — | |||||||||||||||||
Total current assets | 564 | 2,212,810 | 2,628,516 | 653,511 | (4,672,567 | ) | 822,834 | |||||||||||||||||
Net property, plant and equipment | — | 315,691 | 69,801 | 164,838 | (262,282 | ) | 288,048 | |||||||||||||||||
Debt issuance costs, net | — | 77,896 | — | — | — | 77,896 | ||||||||||||||||||
Deferred income taxes | — | — | — | 31,692 | — | 31,692 | ||||||||||||||||||
Goodwill | — | 2,483,240 | 732,138 | 162,920 | — | 3,378,298 | ||||||||||||||||||
Identifiable intangible assets, net | — | 299,575 | 1,788,661 | 309,015 | — | 2,397,251 | ||||||||||||||||||
Other non-current assets | — | 1,161 | 186 | 94,247 | (90,900 | ) | 4,694 | |||||||||||||||||
Intercompany loan receivables | — | 760,000 | 429,856 | — | (1,189,856 | ) | — | |||||||||||||||||
Intercompany investments | 667,530 | 360,292 | 223,581 | — | (1,251,403 | ) | — | |||||||||||||||||
$ | 668,094 | $ | 6,510,665 | $ | 5,872,739 | $ | 1,416,223 | $ | (7,467,008 | ) | $ | 7,000,713 | ||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 245 | $ | 16,298 | $ | 14,463 | $ | 20,821 | $ | — | $ | 51,827 | ||||||||||||
Accrued expenses and other | — | 218,793 | 244,829 | 74,380 | (194,518 | ) | 343,484 | |||||||||||||||||
Intercompany payables | 6,441 | 1,181,383 | 2,634,149 | 512,792 | (4,334,765 | ) | — | |||||||||||||||||
Current installments of long-term debt | — | 25,721 | — | — | — | 25,721 | ||||||||||||||||||
Income taxes payable | — | — | — | 1,305 | — | 1,305 | ||||||||||||||||||
Deferred income taxes | — | — | 113,658 | — | — | 113,658 | ||||||||||||||||||
Total current liabilities | 6,686 | 1,442,195 | 3,007,099 | 609,298 | (4,529,283 | ) | 535,995 | |||||||||||||||||
Long-term debt, net of current installments and discount | — | 4,815,290 | — | — | — | 4,815,290 | ||||||||||||||||||
Non-current tax liabilities | — | 9,404 | 6,203 | 17,693 | — | 33,300 | ||||||||||||||||||
Deferred income taxes | — | 106,440 | 637,777 | 47,940 | — | 792,157 | ||||||||||||||||||
Other non-current liabilities | 695 | 113,368 | 48,172 | 1,023 | — | 163,258 | ||||||||||||||||||
Intercompany loan payables | — | 420,294 | 760,000 | 9,562 | (1,189,856 | ) | — | |||||||||||||||||
Total liabilities | 7,381 | 6,906,991 | 4,459,251 | 685,516 | (5,719,139 | ) | 6,340,000 | |||||||||||||||||
Total equity | 660,713 | (396,326 | ) | 1,413,488 | 730,707 | (1,747,869 | ) | 660,713 | ||||||||||||||||
$ | 668,094 | $ | 6,510,665 | $ | 5,872,739 | $ | 1,416,223 | $ | (7,467,008 | ) | $ | 7,000,713 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
For the three months ended March 31, 2015 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 149,698 | $ | — | $ | 23,141 | $ | — | $ | 172,839 | ||||||||||||
Sales | — | 83,737 | 239,691 | 229,663 | (281,880 | ) | 271,211 | |||||||||||||||||
Total revenue | — | 233,435 | 239,691 | 252,804 | (281,880 | ) | 444,050 | |||||||||||||||||
Rental expenses | 21 | 75,873 | 3,467 | 41,365 | (42,548 | ) | 78,178 | |||||||||||||||||
Cost of sales | 43 | 89,496 | 159,253 | 87,974 | (263,352 | ) | 73,414 | |||||||||||||||||
Gross profit (loss) | (64 | ) | 68,066 | 76,971 | 123,465 | 24,020 | 292,458 | |||||||||||||||||
Selling, general and administrative expenses | 471 | 68,519 | 36,716 | 42,308 | (251 | ) | 147,763 | |||||||||||||||||
Research and development expenses | — | 5,617 | 4,896 | 4,165 | — | 14,678 | ||||||||||||||||||
Acquired intangible asset amortization | — | 13,880 | 19,456 | 12,541 | — | 45,877 | ||||||||||||||||||
Operating earnings (loss) | (535 | ) | (19,950 | ) | 15,903 | 64,451 | 24,271 | 84,140 | ||||||||||||||||
Non-operating intercompany transactions | — | (1,682 | ) | 30,849 | (29,190 | ) | 23 | — | ||||||||||||||||
Interest income and other | — | 16,762 | 3,063 | 103 | (19,781 | ) | 147 | |||||||||||||||||
Interest expense | — | (107,782 | ) | (16,718 | ) | (7 | ) | 19,781 | (104,726 | ) | ||||||||||||||
Foreign currency gain (loss) | — | 35,006 | (1,593 | ) | (14,013 | ) | — | 19,400 | ||||||||||||||||
Derivative instruments loss | — | (3,348 | ) | — | — | — | (3,348 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (535 | ) | (80,994 | ) | 31,504 | 21,344 | 24,294 | (4,387 | ) | |||||||||||||||
Income tax expense (benefit) | — | 415 | 141 | (412 | ) | — | 144 | |||||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (535 | ) | (81,409 | ) | 31,363 | 21,756 | 24,294 | (4,531 | ) | |||||||||||||||
Equity in earnings (loss) of subsidiaries | (3,996 | ) | 48,953 | 21,756 | — | (66,713 | ) | — | ||||||||||||||||
Earnings (loss) from continuing operations | (4,531 | ) | (32,456 | ) | 53,119 | 21,756 | (42,419 | ) | (4,531 | ) | ||||||||||||||
Earnings (loss) from discontinued operations, net of tax | — | — | — | — | — | — | ||||||||||||||||||
Net earnings (loss) | $ | (4,531 | ) | $ | (32,456 | ) | $ | 53,119 | $ | 21,756 | $ | (42,419 | ) | $ | (4,531 | ) | ||||||||
Total comprehensive income (loss) | $ | (11,602 | ) | $ | (39,527 | ) | $ | 46,048 | $ | 14,685 | $ | (21,206 | ) | $ | (11,602 | ) | ||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
For the three months ended March 31, 2014 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 135,764 | $ | — | $ | 29,213 | $ | — | $ | 164,977 | ||||||||||||
Sales | — | 65,869 | 202,032 | 208,466 | (198,709 | ) | 277,658 | |||||||||||||||||
Total revenue | — | 201,633 | 202,032 | 237,679 | (198,709 | ) | 442,635 | |||||||||||||||||
Rental expenses | 43 | 68,791 | 2,148 | 54,111 | (40,444 | ) | 84,649 | |||||||||||||||||
Cost of sales | 6 | 65,341 | 115,064 | 92,834 | (191,855 | ) | 81,390 | |||||||||||||||||
Gross profit (loss) | (49 | ) | 67,501 | 84,820 | 90,734 | 33,590 | 276,596 | |||||||||||||||||
Selling, general and administrative expenses | 893 | 79,282 | 46,653 | 48,887 | (103 | ) | 175,612 | |||||||||||||||||
Research and development expenses | — | 5,622 | 6,744 | 5,124 | — | 17,490 | ||||||||||||||||||
Acquired intangible asset amortization | — | 16,425 | 20,172 | 14,092 | — | 50,689 | ||||||||||||||||||
Operating earnings (loss) | (942 | ) | (33,828 | ) | 11,251 | 22,631 | 33,693 | 32,805 | ||||||||||||||||
Non-operating intercompany transactions | — | (6,626 | ) | (8,282 | ) | (8,007 | ) | 22,915 | — | |||||||||||||||
Interest income and other | — | 17,200 | 9,828 | 30 | (26,963 | ) | 95 | |||||||||||||||||
Interest expense | — | (112,016 | ) | (17,137 | ) | (5 | ) | 26,963 | (102,195 | ) | ||||||||||||||
Foreign currency gain (loss) | — | (460 | ) | (46 | ) | 742 | — | 236 | ||||||||||||||||
Derivative instruments loss | — | (3 | ) | — | — | — | (3 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (942 | ) | (135,733 | ) | (4,386 | ) | 15,391 | 56,608 | (69,062 | ) | ||||||||||||||
Income tax expense (benefit) | — | (79,988 | ) | 31,834 | 26,152 | — | (22,002 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (942 | ) | (55,745 | ) | (36,220 | ) | (10,761 | ) | 56,608 | (47,060 | ) | |||||||||||||
Equity in earnings (loss) of subsidiaries | (45,441 | ) | (50,750 | ) | (10,761 | ) | — | 106,952 | — | |||||||||||||||
Earnings (loss) from continuing operations | (46,383 | ) | (106,495 | ) | (46,981 | ) | (10,761 | ) | 163,560 | (47,060 | ) | |||||||||||||
Earnings (loss) from discontinued operations, net of tax | — | — | 677 | — | — | 677 | ||||||||||||||||||
Net earnings (loss) | $ | (46,383 | ) | $ | (106,495 | ) | $ | (46,304 | ) | $ | (10,761 | ) | $ | 163,560 | $ | (46,383 | ) | |||||||
Total comprehensive income (loss) | $ | (45,090 | ) | $ | (105,202 | ) | $ | (45,011 | ) | $ | (9,468 | ) | $ | 159,681 | $ | (45,090 | ) | |||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
For the three months ended March 31, 2015 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (4,531 | ) | $ | (32,456 | ) | $ | 53,119 | $ | 21,756 | $ | (42,419 | ) | $ | (4,531 | ) | ||||||||
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities | 1,107 | 45,550 | 52,538 | 13,987 | (6,378 | ) | 106,804 | |||||||||||||||||
Net cash provided (used) by operating activities | (3,424 | ) | 13,094 | 105,657 | 35,743 | (48,797 | ) | 102,273 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (23,421 | ) | (2,285 | ) | 588 | 11,949 | (13,169 | ) | |||||||||||||||
Decrease (increase) in identifiable intangible assets and other non-current assets | — | (130 | ) | (1,820 | ) | 129 | — | (1,821 | ) | |||||||||||||||
Net cash provided (used) by investing activities | — | (23,551 | ) | (4,105 | ) | 717 | 11,949 | (14,990 | ) | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Distribution to limited partners | (55 | ) | — | — | — | — | (55 | ) | ||||||||||||||||
Settlement of profits interest units | (517 | ) | — | — | — | — | (517 | ) | ||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (6,446 | ) | — | 31 | — | (6,415 | ) | ||||||||||||||||
Debt issuance costs | — | (6,256 | ) | — | — | — | (6,256 | ) | ||||||||||||||||
Proceeds (payments) on intercompany loans | — | 8,063 | (6,770 | ) | (1,293 | ) | — | — | ||||||||||||||||
Proceeds (payments) on intercompany investments | 3,996 | 24,124 | (96,281 | ) | 31,313 | 36,848 | — | |||||||||||||||||
Net cash provided (used) by financing activities | 3,424 | 19,485 | (103,051 | ) | 30,051 | 36,848 | (13,243 | ) | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | (7,072 | ) | — | (7,072 | ) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | 9,028 | (1,499 | ) | 59,439 | — | 66,968 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 398 | 41,027 | 1,499 | 140,617 | — | 183,541 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 50,055 | $ | — | $ | 200,056 | $ | — | $ | 250,509 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
For the three months ended March 31, 2014 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (46,383 | ) | $ | (106,495 | ) | $ | (46,304 | ) | $ | (10,761 | ) | $ | 163,560 | $ | (46,383 | ) | |||||||
Adjustments to reconcile net loss to net cash provided (used) by operating activities | 941 | 54,197 | 62,506 | 42,868 | (31,283 | ) | 129,229 | |||||||||||||||||
Net cash provided (used) by operating activities | (45,442 | ) | (52,298 | ) | 16,202 | 32,107 | 132,277 | 82,846 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (20,324 | ) | (2,031 | ) | (12,414 | ) | 22,105 | (12,664 | ) | ||||||||||||||
Businesses acquired in purchase transactions, net of cash acquired | — | — | (4,500 | ) | (113 | ) | — | (4,613 | ) | |||||||||||||||
Decrease (increase) in identifiable intangible assets and other non-current assets | — | (29 | ) | (1,187 | ) | (65 | ) | — | (1,281 | ) | ||||||||||||||
Net cash provided (used) by investing activities | — | (20,353 | ) | (7,718 | ) | (12,592 | ) | 22,105 | (18,558 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (6,619 | ) | — | (16 | ) | — | (6,635 | ) | |||||||||||||||
Proceeds (payments) on intercompany loans | — | 36,602 | (18,830 | ) | (17,772 | ) | — | — | ||||||||||||||||
Proceeds (payments) on intercompany investments | 45,442 | 50,744 | 10,228 | 47,968 | (154,382 | ) | — | |||||||||||||||||
Net cash provided (used) by financing activities | 45,442 | 80,727 | (8,602 | ) | 30,180 | (154,382 | ) | (6,635 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 38 | — | 38 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | 8,076 | (118 | ) | 49,733 | — | 57,691 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 398 | 87,771 | 118 | 118,662 | — | 206,949 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 95,847 | $ | — | $ | 168,395 | $ | — | $ | 264,640 | ||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation |
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “the Codification”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, financial position and cash flows in conformity with GAAP. Operating results from interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of our results for the interim periods presented. Certain prior period amounts have been reclassified to conform to the 2015 presentation. | |
On October 29, 2014, LifeCell entered into an agreement with Novadaq® Technologies Inc. (“Novadaq”) to transfer all marketing and distribution rights to the SPY® Elite System from LifeCell to Novadaq, effective November 30, 2014. In connection with the transfer, the parties agreed to terminate various distribution agreements entered into between 2010 and 2011. The results of the operations subject to the agreement, excluding the allocation of general corporate overhead, are presented as discontinued operations in the condensed consolidated statements of operations for all periods presented. | |
The Company has two reportable operating segments: Advanced Wound Therapeutics and Regenerative Medicine. We have two primary geographic regions: the Americas, which is comprised principally of the United States and includes Canada, Puerto Rico and Latin America; and EMEA/APAC, which is comprised of Europe, the Middle East, Africa and the Asia Pacific region. | |
The condensed consolidated financial statements appearing in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | |
Derivative Financial Instruments and Fair Value Measurements | Derivative Financial Instruments and Fair Value Measurements |
We use derivative financial instruments to manage the economic impact of fluctuations in interest rates. We do not use financial instruments for speculative or trading purposes. Periodically, we enter into interest rate protection agreements to modify the interest characteristics of our outstanding debt. Our interest rate derivatives have not been designated as hedging instruments, and as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. | |
We also periodically use derivative financial instruments to manage the economic impact of fluctuations in currency exchange rates on our intercompany balances and corresponding cash flows and to manage our transactional currency exposures when our foreign subsidiaries enter into transactions denominated in currencies other than their local currency. We enter into foreign currency exchange contracts to manage these economic risks. These contracts are not designated as hedges; and as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. Although we use master netting agreements with our derivative counterparties, we do not offset derivative asset and liability positions in the condensed consolidated balance sheets. | |
All derivative instruments are recorded on the balance sheets at fair value. The fair values of our interest rate derivatives and foreign currency exchange contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly-quoted markets, which represent level 2 inputs as defined by the Codification. | |
Concentration of Credit Risk | Concentration of Credit Risk |
We have a concentration of credit risk with financial institutions related to our derivative instruments. As of March 31, 2015, Morgan Stanley, UBS and HSBC were the counterparties on our interest rate protection agreements consisting of interest rate swap agreements in notional amounts totaling $484.7 million each. We use master netting agreements with our derivative counterparties to reduce our risk and use multiple counterparties to reduce our concentration of credit risk. | |
We maintain cash and cash equivalents with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits bear minimal credit risk as they are maintained at financial institutions of reputable credit and generally may be redeemed upon demand. | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards |
In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU No. 2014-08 changes the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations - that is, a major effect on the organization’s operations and financial results should be presented as discontinued operations. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, the ASU requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The Company adopted this update effective January 1, 2015. We do not anticipate that it will have a material effect on our results of operations, financial position or disclosures. | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards |
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition”, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts”. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, “Property, Plant, and Equipment”, and intangible assets within the scope of Topic 350, “Intangibles-Goodwill and Other”) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. In April 2015, the FASB voted to propose to defer the effective date of this ASU by one year. The Company is evaluating ASU No. 2014-09 to determine if it will have a material effect on our results of operations, financial position or disclosures. | |
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40).” The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating this update, however we do not anticipate that the adoption of this guidance will have a material impact on our results of operations, financial position or disclosures. | |
In January 2015, the FASB issued ASU No. 2015-01, "Income Statement -Extraordinary and Unusual Items (Subtopic 225-20)." The objective of this ASU is to simplify the income statement presentation requirements in Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early application is permitted. The Company is evaluating this update, however we do not anticipate that the adoption of this guidance will have a material impact on our results of operations, financial position or disclosures. | |
On February 18, 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." This update provides a revised consolidation model for all reporting entities to use in evaluating whether they should consolidate certain legal entities. All legal entities will be subject to reevaluation under this revised consolidation model. The revised consolidation model, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early application is permitted. The Company is evaluating this update, however we do not anticipate that the adoption of this guidance will have a material impact on our results of operations, financial position or disclosures. | |
In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30)" The objective of this ASU is to simplify the presentation of debt issuance costs in the balance sheet by requiring the presentation of debt issuance costs as a deduction from the carrying amount of the related debt liability instead of a deferred charge. The standard will be effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. As of March 31, 2015, the Company had $72.1 million of unamortized debt issuance costs recorded as a deferred charge. | |
Other Significant Accounting Policies | Other Significant Accounting Policies |
For further information on our significant accounting policies, see Note 1 of the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014. |
Acquisitions_and_Divestitures_1
Acquisitions and Divestitures (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Business Combinations and Discontinued Operations [Abstract] | ||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | The operating results of the SPY® Elite System product portfolio included in discontinued operations are as follows (in thousands): | |||
Three months ended March 31, | ||||
2014 | ||||
Revenue | $ | 4,904 | ||
Earnings before income taxes | $ | 1,100 | ||
Income tax expense | $ | 423 | ||
Earnings from discontinued operations, net of tax | $ | 677 | ||
Supplemental_Balance_Sheet_Dat1
Supplemental Balance Sheet Data (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||
Schedule of Accounts Receivable, Net | Accounts receivable consist of the following (in thousands): | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Gross trade accounts receivable: | ||||||||
Billed trade accounts receivable | $ | 394,896 | $ | 396,329 | ||||
Unbilled receivables | 32,408 | 39,293 | ||||||
Less: Allowance for revenue adjustments | (62,117 | ) | (61,460 | ) | ||||
Gross trade accounts receivable | 365,187 | 374,162 | ||||||
Less: Allowance for bad debt | (11,668 | ) | (13,087 | ) | ||||
Net trade accounts receivable | 353,519 | 361,075 | ||||||
Other receivables | 11,605 | 9,408 | ||||||
$ | 365,124 | $ | 370,483 | |||||
Schedule of Inventories, Net | Inventories consist of the following (in thousands): | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Finished goods and tissue available for distribution | $ | 130,141 | $ | 127,253 | ||||
Goods and tissue in-process | 5,877 | 6,887 | ||||||
Raw materials, supplies, parts and unprocessed tissue | 72,855 | 67,567 | ||||||
208,873 | 201,707 | |||||||
Less: Amounts expected to be converted into equipment for short-term rental | (10,871 | ) | (7,515 | ) | ||||
Reserve for excess and obsolete inventory | (15,545 | ) | (15,970 | ) | ||||
$ | 182,457 | $ | 178,222 | |||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Schedule of Long-term Debt Instruments | Long-term debt consists of the following (in thousands): | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Senior Dollar Term E-1 Credit Facility – due 2018 | $ | 1,922,374 | $ | 1,927,241 | ||||
Senior Euro Term E-1 Credit Facility – due 2018 | 259,847 | 293,746 | ||||||
Senior Term E-2 Credit Facility – due 2016 | 314,555 | 315,351 | ||||||
10.5% Second Lien Senior Secured Notes due 2018 | 1,750,000 | 1,750,000 | ||||||
12.5% Senior Unsecured Notes due 2019 | 612,000 | 612,000 | ||||||
3.25% Convertible Senior Notes due 2015 | 101 | 101 | ||||||
Notional amount of debt | 4,858,877 | 4,898,439 | ||||||
Senior Dollar Term E-1 Credit Facility Discount, net of accretion | (27,029 | ) | (24,241 | ) | ||||
Senior Euro Term E-1 Credit Facility Discount, net of accretion | (6,698 | ) | (7,376 | ) | ||||
Senior Term E-2 Credit Facility Discount, net of accretion | (3,297 | ) | (2,955 | ) | ||||
Second Lien Senior Secured Notes Discount, net of accretion | (19,131 | ) | (20,205 | ) | ||||
Senior Unsecured Notes Discount, net of accretion | (2,550 | ) | (2,651 | ) | ||||
Net discount on debt | (58,705 | ) | (57,428 | ) | ||||
Total debt, net of discount | 4,800,172 | 4,841,011 | ||||||
Less: Current installments | (25,385 | ) | (25,721 | ) | ||||
$ | 4,774,787 | $ | 4,815,290 | |||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table sets forth the location and aggregate fair value amounts of all derivative instruments with credit-related contingent features (in thousands): | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
Balance | Fair Value | Balance | Fair Value | |||||||||||||||||
Sheet | Sheet | |||||||||||||||||||
Location | March 31, | December 31, | Location | March 31, | December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Interest rate swap agreements | Prepaid expenses and other | $ | — | $ | — | Accrued expenses and other | $ | 13,799 | $ | 13,936 | ||||||||||
Interest rate swap agreements | Other non-current assets | — | — | Other non-current liabilities | 7,889 | 8,067 | ||||||||||||||
Total derivatives | $ | — | $ | — | $ | 21,688 | $ | 22,003 | ||||||||||||
Not Designated as Hedging Instrument [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table summarizes the amount of gain (loss) on derivatives not designated as hedging instruments (dollars in thousands): | |||||||||||||||||||
Three months ended March 31, | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
Interest rate swap agreements | $ | (3,348 | ) | $ | (75 | ) | ||||||||||||||
Foreign currency exchange contracts | — | 72 | ||||||||||||||||||
$ | (3,348 | ) | $ | (3 | ) | |||||||||||||||
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The following table summarizes our interest rate swap agreements (dollars in thousands): | |||||||||||||||||||
Effective Dates | Outstanding Notional Amount | Fixed Interest Rate | ||||||||||||||||||
12/31/13-12/31/16 | $484,667 | 2.26% | ||||||||||||||||||
12/31/13-12/31/16 | $484,667 | 2.25% | ||||||||||||||||||
12/31/13-12/31/16 | $484,667 | 2.25% |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive loss are as follows (in thousands): | |||||||
Accumulated | Accumulated | |||||||
Foreign | Other | |||||||
Currency | Comprehensive | |||||||
Translation | Income (Loss) | |||||||
Adjustment | ||||||||
Balances at December 31, 2014 | $ | (10,074 | ) | $ | (10,074 | ) | ||
Foreign currency translation adjustment, net of taxes of $635 | (7,071 | ) | (7,071 | ) | ||||
Balances at March 31, 2015 | $ | (17,145 | ) | $ | (17,145 | ) |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Reporting [Abstract] | ||||||||
Reconciliation of Revenue and Operating Earnings (Loss) from Segments to Consolidated | Information on segments and a reconciliation of consolidated totals are as follows (in thousands): | |||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Revenue: | ||||||||
Advanced Wound Therapeutics | $ | 337,259 | $ | 330,795 | ||||
Regenerative Medicine | 104,169 | 106,656 | ||||||
Other operations (1) | 2,622 | 5,184 | ||||||
Total revenue | $ | 444,050 | $ | 442,635 | ||||
Operating earnings (loss): | ||||||||
Advanced Wound Therapeutics | $ | 112,885 | $ | 85,669 | ||||
Regenerative Medicine | 34,019 | 29,908 | ||||||
Other operations (1) | 447 | 671 | ||||||
Non-allocated costs: | ||||||||
General headquarter expense | (1,423 | ) | (1,590 | ) | ||||
Equity-based compensation | (535 | ) | (941 | ) | ||||
Business optimization and transaction-related expenses (2) | (15,376 | ) | (30,223 | ) | ||||
Acquired intangible asset amortization (3) | (45,877 | ) | (50,689 | ) | ||||
Total non-allocated costs | (63,211 | ) | (83,443 | ) | ||||
Total operating earnings | $ | 84,140 | $ | 32,805 | ||||
-1 | Represents contract manufacturing operations conducted at our manufacturing facility in Gargrave, England. | |||||||
-2 | Represents restructuring-related expenses associated with our business optimization initiatives as well as management fees and costs associated with acquisition, disposition and financing activities. | |||||||
-3 | Represents amortization of acquired intangible assets related to our Merger in November 2011, our acquisition of Systagenix in October 2013 and other technology acquisitions. |
Guarantor_Condensed_Consolidat1
Guarantor Condensed Consolidating Financial Statements (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Guarantor Condensed Consolidating Financial Statements [Abstract] | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | Condensed Consolidating Parent Company, Co-Issuers, | |||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | ||||||||||||||||||||||||
March 31, 2015 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 398 | $ | 50,055 | $ | — | $ | 200,056 | $ | — | $ | 250,509 | ||||||||||||
Accounts receivable, net | — | 181,254 | 66,017 | 117,853 | — | 365,124 | ||||||||||||||||||
Inventories, net | — | 106,137 | 116,069 | 93,585 | (133,334 | ) | 182,457 | |||||||||||||||||
Deferred income taxes | — | 58,059 | 10,594 | 1,862 | — | 70,515 | ||||||||||||||||||
Prepaid expenses and other | — | 14,178 | 2,902 | 246,711 | (235,454 | ) | 28,337 | |||||||||||||||||
Intercompany receivables | 166 | 2,000,335 | 2,448,575 | 72,599 | (4,521,675 | ) | — | |||||||||||||||||
Total current assets | 564 | 2,410,018 | 2,644,157 | 732,666 | (4,890,463 | ) | 896,942 | |||||||||||||||||
Net property, plant and equipment | — | 301,139 | 68,201 | 142,645 | (234,332 | ) | 277,653 | |||||||||||||||||
Debt issuance costs, net | — | 72,094 | — | — | — | 72,094 | ||||||||||||||||||
Deferred income taxes | — | — | — | 30,466 | — | 30,466 | ||||||||||||||||||
Goodwill | — | 2,483,240 | 732,138 | 162,920 | — | 3,378,298 | ||||||||||||||||||
Identifiable intangible assets, net | — | 285,726 | 1,770,658 | 296,430 | — | 2,352,814 | ||||||||||||||||||
Other non-current assets | — | 1,261 | 186 | 94,162 | (90,900 | ) | 4,709 | |||||||||||||||||
Intercompany loan receivables | — | 755,000 | 431,626 | — | (1,186,626 | ) | — | |||||||||||||||||
Intercompany investments | 656,463 | 409,245 | 319,910 | — | (1,385,618 | ) | — | |||||||||||||||||
$ | 657,027 | $ | 6,717,723 | $ | 5,966,876 | $ | 1,459,289 | $ | (7,787,939 | ) | $ | 7,012,976 | ||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | 17,307 | $ | 12,703 | $ | 25,936 | $ | — | $ | 55,946 | ||||||||||||
Accrued expenses and other | — | 286,332 | 233,481 | 67,683 | (191,982 | ) | 395,514 | |||||||||||||||||
Intercompany payables | 7,258 | 1,310,017 | 2,695,544 | 508,856 | (4,521,675 | ) | — | |||||||||||||||||
Current installments of long-term debt | — | 25,385 | — | — | — | 25,385 | ||||||||||||||||||
Income taxes payable | — | 555 | 4,123 | 5,303 | — | 9,981 | ||||||||||||||||||
Deferred income taxes | — | — | 103,135 | — | — | 103,135 | ||||||||||||||||||
Total current liabilities | 7,258 | 1,639,596 | 3,048,986 | 607,778 | (4,713,657 | ) | 589,961 | |||||||||||||||||
Long-term debt, net of current installments and discount | — | 4,774,787 | — | — | — | 4,774,787 | ||||||||||||||||||
Non-current tax liabilities | — | 9,852 | 6,276 | 17,717 | — | 33,845 | ||||||||||||||||||
Deferred income taxes | — | 111,338 | 641,696 | 46,300 | — | 799,334 | ||||||||||||||||||
Other non-current liabilities | 629 | 114,499 | 48,262 | 2,519 | — | 165,909 | ||||||||||||||||||
Intercompany loan payables | — | 423,357 | 755,000 | 8,269 | (1,186,626 | ) | — | |||||||||||||||||
Total liabilities | 7,887 | 7,073,429 | 4,500,220 | 682,583 | (5,900,283 | ) | 6,363,836 | |||||||||||||||||
Total equity | 649,140 | (355,706 | ) | 1,466,656 | 776,706 | (1,887,656 | ) | 649,140 | ||||||||||||||||
$ | 657,027 | $ | 6,717,723 | $ | 5,966,876 | $ | 1,459,289 | $ | (7,787,939 | ) | $ | 7,012,976 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | ||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 398 | $ | 41,027 | $ | 1,499 | $ | 140,617 | $ | — | $ | 183,541 | ||||||||||||
Accounts receivable, net | — | 179,872 | 67,355 | 123,256 | — | 370,483 | ||||||||||||||||||
Inventories, net | — | 73,904 | 110,355 | 93,765 | (99,802 | ) | 178,222 | |||||||||||||||||
Deferred income taxes | — | 52,868 | 10,157 | — | — | 63,025 | ||||||||||||||||||
Prepaid expenses and other | — | 11,106 | 6,851 | 247,606 | (238,000 | ) | 27,563 | |||||||||||||||||
Intercompany receivables | 166 | 1,854,033 | 2,432,299 | 48,267 | (4,334,765 | ) | — | |||||||||||||||||
Total current assets | 564 | 2,212,810 | 2,628,516 | 653,511 | (4,672,567 | ) | 822,834 | |||||||||||||||||
Net property, plant and equipment | — | 315,691 | 69,801 | 164,838 | (262,282 | ) | 288,048 | |||||||||||||||||
Debt issuance costs, net | — | 77,896 | — | — | — | 77,896 | ||||||||||||||||||
Deferred income taxes | — | — | — | 31,692 | — | 31,692 | ||||||||||||||||||
Goodwill | — | 2,483,240 | 732,138 | 162,920 | — | 3,378,298 | ||||||||||||||||||
Identifiable intangible assets, net | — | 299,575 | 1,788,661 | 309,015 | — | 2,397,251 | ||||||||||||||||||
Other non-current assets | — | 1,161 | 186 | 94,247 | (90,900 | ) | 4,694 | |||||||||||||||||
Intercompany loan receivables | — | 760,000 | 429,856 | — | (1,189,856 | ) | — | |||||||||||||||||
Intercompany investments | 667,530 | 360,292 | 223,581 | — | (1,251,403 | ) | — | |||||||||||||||||
$ | 668,094 | $ | 6,510,665 | $ | 5,872,739 | $ | 1,416,223 | $ | (7,467,008 | ) | $ | 7,000,713 | ||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 245 | $ | 16,298 | $ | 14,463 | $ | 20,821 | $ | — | $ | 51,827 | ||||||||||||
Accrued expenses and other | — | 218,793 | 244,829 | 74,380 | (194,518 | ) | 343,484 | |||||||||||||||||
Intercompany payables | 6,441 | 1,181,383 | 2,634,149 | 512,792 | (4,334,765 | ) | — | |||||||||||||||||
Current installments of long-term debt | — | 25,721 | — | — | — | 25,721 | ||||||||||||||||||
Income taxes payable | — | — | — | 1,305 | — | 1,305 | ||||||||||||||||||
Deferred income taxes | — | — | 113,658 | — | — | 113,658 | ||||||||||||||||||
Total current liabilities | 6,686 | 1,442,195 | 3,007,099 | 609,298 | (4,529,283 | ) | 535,995 | |||||||||||||||||
Long-term debt, net of current installments and discount | — | 4,815,290 | — | — | — | 4,815,290 | ||||||||||||||||||
Non-current tax liabilities | — | 9,404 | 6,203 | 17,693 | — | 33,300 | ||||||||||||||||||
Deferred income taxes | — | 106,440 | 637,777 | 47,940 | — | 792,157 | ||||||||||||||||||
Other non-current liabilities | 695 | 113,368 | 48,172 | 1,023 | — | 163,258 | ||||||||||||||||||
Intercompany loan payables | — | 420,294 | 760,000 | 9,562 | (1,189,856 | ) | — | |||||||||||||||||
Total liabilities | 7,381 | 6,906,991 | 4,459,251 | 685,516 | (5,719,139 | ) | 6,340,000 | |||||||||||||||||
Total equity | 660,713 | (396,326 | ) | 1,413,488 | 730,707 | (1,747,869 | ) | 660,713 | ||||||||||||||||
$ | 668,094 | $ | 6,510,665 | $ | 5,872,739 | $ | 1,416,223 | $ | (7,467,008 | ) | $ | 7,000,713 | ||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | Condensed Consolidating Parent Company, Co-Issuers, | |||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
For the three months ended March 31, 2015 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 149,698 | $ | — | $ | 23,141 | $ | — | $ | 172,839 | ||||||||||||
Sales | — | 83,737 | 239,691 | 229,663 | (281,880 | ) | 271,211 | |||||||||||||||||
Total revenue | — | 233,435 | 239,691 | 252,804 | (281,880 | ) | 444,050 | |||||||||||||||||
Rental expenses | 21 | 75,873 | 3,467 | 41,365 | (42,548 | ) | 78,178 | |||||||||||||||||
Cost of sales | 43 | 89,496 | 159,253 | 87,974 | (263,352 | ) | 73,414 | |||||||||||||||||
Gross profit (loss) | (64 | ) | 68,066 | 76,971 | 123,465 | 24,020 | 292,458 | |||||||||||||||||
Selling, general and administrative expenses | 471 | 68,519 | 36,716 | 42,308 | (251 | ) | 147,763 | |||||||||||||||||
Research and development expenses | — | 5,617 | 4,896 | 4,165 | — | 14,678 | ||||||||||||||||||
Acquired intangible asset amortization | — | 13,880 | 19,456 | 12,541 | — | 45,877 | ||||||||||||||||||
Operating earnings (loss) | (535 | ) | (19,950 | ) | 15,903 | 64,451 | 24,271 | 84,140 | ||||||||||||||||
Non-operating intercompany transactions | — | (1,682 | ) | 30,849 | (29,190 | ) | 23 | — | ||||||||||||||||
Interest income and other | — | 16,762 | 3,063 | 103 | (19,781 | ) | 147 | |||||||||||||||||
Interest expense | — | (107,782 | ) | (16,718 | ) | (7 | ) | 19,781 | (104,726 | ) | ||||||||||||||
Foreign currency gain (loss) | — | 35,006 | (1,593 | ) | (14,013 | ) | — | 19,400 | ||||||||||||||||
Derivative instruments loss | — | (3,348 | ) | — | — | — | (3,348 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (535 | ) | (80,994 | ) | 31,504 | 21,344 | 24,294 | (4,387 | ) | |||||||||||||||
Income tax expense (benefit) | — | 415 | 141 | (412 | ) | — | 144 | |||||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (535 | ) | (81,409 | ) | 31,363 | 21,756 | 24,294 | (4,531 | ) | |||||||||||||||
Equity in earnings (loss) of subsidiaries | (3,996 | ) | 48,953 | 21,756 | — | (66,713 | ) | — | ||||||||||||||||
Earnings (loss) from continuing operations | (4,531 | ) | (32,456 | ) | 53,119 | 21,756 | (42,419 | ) | (4,531 | ) | ||||||||||||||
Earnings (loss) from discontinued operations, net of tax | — | — | — | — | — | — | ||||||||||||||||||
Net earnings (loss) | $ | (4,531 | ) | $ | (32,456 | ) | $ | 53,119 | $ | 21,756 | $ | (42,419 | ) | $ | (4,531 | ) | ||||||||
Total comprehensive income (loss) | $ | (11,602 | ) | $ | (39,527 | ) | $ | 46,048 | $ | 14,685 | $ | (21,206 | ) | $ | (11,602 | ) | ||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
For the three months ended March 31, 2014 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 135,764 | $ | — | $ | 29,213 | $ | — | $ | 164,977 | ||||||||||||
Sales | — | 65,869 | 202,032 | 208,466 | (198,709 | ) | 277,658 | |||||||||||||||||
Total revenue | — | 201,633 | 202,032 | 237,679 | (198,709 | ) | 442,635 | |||||||||||||||||
Rental expenses | 43 | 68,791 | 2,148 | 54,111 | (40,444 | ) | 84,649 | |||||||||||||||||
Cost of sales | 6 | 65,341 | 115,064 | 92,834 | (191,855 | ) | 81,390 | |||||||||||||||||
Gross profit (loss) | (49 | ) | 67,501 | 84,820 | 90,734 | 33,590 | 276,596 | |||||||||||||||||
Selling, general and administrative expenses | 893 | 79,282 | 46,653 | 48,887 | (103 | ) | 175,612 | |||||||||||||||||
Research and development expenses | — | 5,622 | 6,744 | 5,124 | — | 17,490 | ||||||||||||||||||
Acquired intangible asset amortization | — | 16,425 | 20,172 | 14,092 | — | 50,689 | ||||||||||||||||||
Operating earnings (loss) | (942 | ) | (33,828 | ) | 11,251 | 22,631 | 33,693 | 32,805 | ||||||||||||||||
Non-operating intercompany transactions | — | (6,626 | ) | (8,282 | ) | (8,007 | ) | 22,915 | — | |||||||||||||||
Interest income and other | — | 17,200 | 9,828 | 30 | (26,963 | ) | 95 | |||||||||||||||||
Interest expense | — | (112,016 | ) | (17,137 | ) | (5 | ) | 26,963 | (102,195 | ) | ||||||||||||||
Foreign currency gain (loss) | — | (460 | ) | (46 | ) | 742 | — | 236 | ||||||||||||||||
Derivative instruments loss | — | (3 | ) | — | — | — | (3 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (942 | ) | (135,733 | ) | (4,386 | ) | 15,391 | 56,608 | (69,062 | ) | ||||||||||||||
Income tax expense (benefit) | — | (79,988 | ) | 31,834 | 26,152 | — | (22,002 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (942 | ) | (55,745 | ) | (36,220 | ) | (10,761 | ) | 56,608 | (47,060 | ) | |||||||||||||
Equity in earnings (loss) of subsidiaries | (45,441 | ) | (50,750 | ) | (10,761 | ) | — | 106,952 | — | |||||||||||||||
Earnings (loss) from continuing operations | (46,383 | ) | (106,495 | ) | (46,981 | ) | (10,761 | ) | 163,560 | (47,060 | ) | |||||||||||||
Earnings (loss) from discontinued operations, net of tax | — | — | 677 | — | — | 677 | ||||||||||||||||||
Net earnings (loss) | $ | (46,383 | ) | $ | (106,495 | ) | $ | (46,304 | ) | $ | (10,761 | ) | $ | 163,560 | $ | (46,383 | ) | |||||||
Total comprehensive income (loss) | $ | (45,090 | ) | $ | (105,202 | ) | $ | (45,011 | ) | $ | (9,468 | ) | $ | 159,681 | $ | (45,090 | ) | |||||||
Guarantor and Non-Guarantor Statement of Cash Flows | Condensed Consolidating Parent Company, Co-Issuers, | |||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
For the three months ended March 31, 2015 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (4,531 | ) | $ | (32,456 | ) | $ | 53,119 | $ | 21,756 | $ | (42,419 | ) | $ | (4,531 | ) | ||||||||
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities | 1,107 | 45,550 | 52,538 | 13,987 | (6,378 | ) | 106,804 | |||||||||||||||||
Net cash provided (used) by operating activities | (3,424 | ) | 13,094 | 105,657 | 35,743 | (48,797 | ) | 102,273 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (23,421 | ) | (2,285 | ) | 588 | 11,949 | (13,169 | ) | |||||||||||||||
Decrease (increase) in identifiable intangible assets and other non-current assets | — | (130 | ) | (1,820 | ) | 129 | — | (1,821 | ) | |||||||||||||||
Net cash provided (used) by investing activities | — | (23,551 | ) | (4,105 | ) | 717 | 11,949 | (14,990 | ) | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Distribution to limited partners | (55 | ) | — | — | — | — | (55 | ) | ||||||||||||||||
Settlement of profits interest units | (517 | ) | — | — | — | — | (517 | ) | ||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (6,446 | ) | — | 31 | — | (6,415 | ) | ||||||||||||||||
Debt issuance costs | — | (6,256 | ) | — | — | — | (6,256 | ) | ||||||||||||||||
Proceeds (payments) on intercompany loans | — | 8,063 | (6,770 | ) | (1,293 | ) | — | — | ||||||||||||||||
Proceeds (payments) on intercompany investments | 3,996 | 24,124 | (96,281 | ) | 31,313 | 36,848 | — | |||||||||||||||||
Net cash provided (used) by financing activities | 3,424 | 19,485 | (103,051 | ) | 30,051 | 36,848 | (13,243 | ) | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | (7,072 | ) | — | (7,072 | ) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | 9,028 | (1,499 | ) | 59,439 | — | 66,968 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 398 | 41,027 | 1,499 | 140,617 | — | 183,541 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 50,055 | $ | — | $ | 200,056 | $ | — | $ | 250,509 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
For the three months ended March 31, 2014 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (46,383 | ) | $ | (106,495 | ) | $ | (46,304 | ) | $ | (10,761 | ) | $ | 163,560 | $ | (46,383 | ) | |||||||
Adjustments to reconcile net loss to net cash provided (used) by operating activities | 941 | 54,197 | 62,506 | 42,868 | (31,283 | ) | 129,229 | |||||||||||||||||
Net cash provided (used) by operating activities | (45,442 | ) | (52,298 | ) | 16,202 | 32,107 | 132,277 | 82,846 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (20,324 | ) | (2,031 | ) | (12,414 | ) | 22,105 | (12,664 | ) | ||||||||||||||
Businesses acquired in purchase transactions, net of cash acquired | — | — | (4,500 | ) | (113 | ) | — | (4,613 | ) | |||||||||||||||
Decrease (increase) in identifiable intangible assets and other non-current assets | — | (29 | ) | (1,187 | ) | (65 | ) | — | (1,281 | ) | ||||||||||||||
Net cash provided (used) by investing activities | — | (20,353 | ) | (7,718 | ) | (12,592 | ) | 22,105 | (18,558 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (6,619 | ) | — | (16 | ) | — | (6,635 | ) | |||||||||||||||
Proceeds (payments) on intercompany loans | — | 36,602 | (18,830 | ) | (17,772 | ) | — | — | ||||||||||||||||
Proceeds (payments) on intercompany investments | 45,442 | 50,744 | 10,228 | 47,968 | (154,382 | ) | — | |||||||||||||||||
Net cash provided (used) by financing activities | 45,442 | 80,727 | (8,602 | ) | 30,180 | (154,382 | ) | (6,635 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 38 | — | 38 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | 8,076 | (118 | ) | 49,733 | — | 57,691 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 398 | 87,771 | 118 | 118,662 | — | 206,949 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 95,847 | $ | — | $ | 168,395 | $ | — | $ | 264,640 | ||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | segment | |
Accounting Policies [Line Items] | ||
Debt issuance costs, net | $72,094 | $77,896 |
Basis of Presentation and Principles of Consolidation [Abstract] | ||
Number of reportable operating segments | 2 | |
Number of primary geographic regions | 2 | |
Credit Concentration Risk [Member] | Interest Rate Swap [Member] | ||
Accounting Policies [Line Items] | ||
Derivative, Notional Amount | $484,700 |
Acquisitions_and_Divestitures_2
Acquisitions and Divestitures (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Divestitures [Line Items] | ||
Earnings (loss) from discontinued operations, net of tax | $0 | $677 |
SPY Elite System [Member] | ||
Divestitures [Line Items] | ||
Disposal Group, Including Discontinued Operation, Revenue | 4,904 | |
Disposal Group, Including Discontinued Operation, Operating Income (Loss) | 1,100 | |
Discontinued Operation, Tax Effect of Discontinued Operation | 423 | |
Earnings (loss) from discontinued operations, net of tax | $677 |
Supplemental_Balance_Sheet_Dat2
Supplemental Balance Sheet Data - Accounts Receivable, Net (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed trade accounts receivable | $394,896 | $396,329 |
Unbilled receivables | 32,408 | 39,293 |
Less: Allowance for revenue adjustments | -62,117 | -61,460 |
Gross trade accounts receivable | 365,187 | 374,162 |
Less: Allowance for bad debt | -11,668 | -13,087 |
Net trade accounts receivable | 353,519 | 361,075 |
Other receivables | 11,605 | 9,408 |
Accounts receivable, net | $365,124 | $370,483 |
Supplemental_Balance_Sheet_Dat3
Supplemental Balance Sheet Data - Inventories, Net (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ||
Finished goods and tissue available for distribution | $130,141 | $127,253 |
Goods and tissue in-process | 5,877 | 6,887 |
Raw materials, supplies, parts and unprocessed tissue | 72,855 | 67,567 |
Inventories, gross | 208,873 | 201,707 |
Less: Amounts expected to be converted into equipment for short-term rental | -10,871 | -7,515 |
Reserve for excess and obsolete inventory | -15,545 | -15,970 |
Inventories, net | $182,457 | $178,222 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 3 Months Ended | 1 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $4,858,877,000 | 4,858,877,000 | $4,898,439,000 |
Less: Discount, net of accretion | -58,705,000 | -58,705,000 | -57,428,000 |
Long-term Debt | 4,800,172,000 | 4,800,172,000 | 4,841,011,000 |
Less: Current installments | -25,385,000 | -25,385,000 | -25,721,000 |
Long-term debt, net of current installments and discount | 4,774,787,000 | 4,774,787,000 | 4,815,290,000 |
Revolving Credit Facility [Member] | Senior Revolving Credit Facility - due 2016 [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Credit facility, maximum borrowing capacity | 200,000,000 | 200,000,000 | |
Line of Credit Facility, Amount Outstanding | 0 | 0 | 0 |
Letters of credit, amount outstanding | 40,600,000 | 40,600,000 | 39,000,000 |
Credit facility, remaining borrowing capacity | 159,400,000 | 159,400,000 | 161,000,000 |
Credit facility, unused capacity, commitment fee percentage | 0.50% | ||
Term Credit Facilities [Member] | Senior Dollar Term E-1 Credit Facility Due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 1,922,374,000 | 1,922,374,000 | 1,927,241,000 |
Less: Discount, net of accretion | -27,029,000 | -27,029,000 | -24,241,000 |
Term Credit Facilities [Member] | Senior Euro Term E-1 Credit Facility Due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 259,847,000 | 259,847,000 | 293,746,000 |
Less: Discount, net of accretion | -6,698,000 | -6,698,000 | -7,376,000 |
Term Credit Facilities [Member] | Senior Term E-2 Credit Facility Due 2016 [Member] [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 314,555,000 | 314,555,000 | 315,351,000 |
Less: Discount, net of accretion | -3,297,000 | -3,297,000 | -2,955,000 |
Senior Secured Notes [Member] | 10.5% Second Lien Senior Secured Notes due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 1,750,000,000 | 1,750,000,000 | 1,750,000,000 |
Less: Discount, net of accretion | -19,131,000 | -19,131,000 | -20,205,000 |
Senior Unsecured Notes [Member] | 12.5% Senior Unsecured Notes due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 612,000,000 | 612,000,000 | 612,000,000 |
Less: Discount, net of accretion | -2,550,000 | -2,550,000 | -2,651,000 |
Convertible Senior Notes [Member] | 3.25% Convertible Senior Notes due 2015 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 101,000 | 101,000 | 101,000 |
Banks Which Are Not Party To Senior Secured Credit Facility [Member] | Senior Revolving Credit Facility - due 2016 [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Letters of credit, amount outstanding | $9,700,000 | 9,700,000 | $11,400,000 |
Eurocurrency Rate [Member] | Dollar Term E-1 Facility, Euro Term E-1 Facility and Dollar Term E-2 Facility [Member] | Minimum [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||
Eurocurrency Rate [Member] | Dollar Term E-1 Facility [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | ||
Eurocurrency Rate [Member] | Euro Term E-1 Facility [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.75% | ||
Eurocurrency Rate [Member] | Dollar Term E-2 Facility [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.00% | ||
Base Rate [Member] | Dollar Term E-1 Facility, Euro Term E-1 Facility and Dollar Term E-2 Facility [Member] | Minimum [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | ||
Base Rate [Member] | Dollar Term E-1 Facility [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | ||
Base Rate [Member] | Euro Term E-1 Facility [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | ||
Base Rate [Member] | Dollar Term E-2 Facility [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | ||
First Effective Financial Statement Date [Member] | Senior Secured Credit Facility [Member] | |||
Senior Secured Credit Facilities [Abstract] | |||
Debt Instrument, Covenant Compliance, Debt to EBITDA Ratio, Maximum | 8.25 | 8.25 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments and Fair Value Measurements - Derivative Financial Instruments (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Interest Rate Protection [Abstract] | ||
Collateral posted | 0 | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | ||
Interest Rate Protection [Abstract] | ||
Number of interest rate agreements held | 3 | 3 |
Derivative, quarterly interest payments, receive rates, maximum | 1.25% | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Interest Rate Swap - 2.256%, effective December 31, 2013 [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 484,667,000 | |
Interest Rate Protection [Abstract] | ||
Fixed Interest Rate | 2.26% | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Interest Rate Swap - 2.249%, effective December 31, 2013 [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 484,667,000 | |
Interest Rate Protection [Abstract] | ||
Fixed Interest Rate | 2.25% | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Interest Rate Swap - 2.250%, effective December 31, 2013 [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 484,667,000 | |
Interest Rate Protection [Abstract] | ||
Fixed Interest Rate | 2.25% | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Minimum [Member] | ||
Interest Rate Protection [Abstract] | ||
Notional amount decreases by quarter | 1,700,000 | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Maximum [Member] | ||
Interest Rate Protection [Abstract] | ||
Notional amount decreases by quarter | 56,400,000 | |
Not Designated as Hedging Instrument [Member] | Foreign Currency Exchange Contracts [Member] | ||
Foreign Currency Exchange Risk Mitigation [Abstract] | ||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Notional Amount | 0 | 0 |
Senior Secured Credit Facility [Member] | ||
Derivative [Line Items] | ||
Long-term Debt, Fair Value | 2,503,000,000 | 2,501,000,000 |
Fixed Rate Long-Term Debt [Member] | ||
Derivative [Line Items] | ||
Long-term Debt, Fair Value | 2,559,000,000 | 2,584,000,000 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments and Fair Value Measurements - Fair Value and Balance Sheet Locations (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $0 | $0 |
Derivative liability, fair value | 21,688 | 22,003 |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Prepaid expenses and other [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 0 | 0 |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Other non-current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 0 | 0 |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Accrued expenses and other [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 13,799 | 13,936 |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Other non-current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $7,889 | $8,067 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments and Fair Value Measurements - Gain (Loss) on Derivatives (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative instruments gain (loss) | ($3,348) | ($3) |
Not Designated as Hedging Instrument [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative instruments gain (loss) | -3,348 | -3 |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative instruments gain (loss) | -3,348 | -75 |
Not Designated as Hedging Instrument [Member] | Foreign Currency Exchange Contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative instruments gain (loss) | $0 | $72 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Other Comprehenisve Income Loss, Net of Tax [Line Items] | |||
Other Comprehensive Income (Loss), Foreign Currency Translation Gain (Loss) Arising During Period, Tax | $635 | $62 | |
Accumulated other comprehensive income (loss), net | -17,145 | -10,074 | |
Foreign currency translation adjustment, net of taxes of $635 | -7,071 | 290 | |
Accumulated Translation Adjustment [Member] | |||
Other Comprehenisve Income Loss, Net of Tax [Line Items] | |||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | 0 | ||
Accumulated other comprehensive income (loss), net | -17,145 | -10,074 | |
Foreign currency translation adjustment, net of taxes of $635 | -7,071 | ||
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Other Comprehenisve Income Loss, Net of Tax [Line Items] | |||
Accumulated other comprehensive income (loss), net | -17,145 | -10,074 | |
Foreign currency translation adjustment, net of taxes of $635 | ($7,071) |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 31, 2015 | Aug. 01, 2013 | |
Loss Contingencies [Line Items] | |||
Demand for Arbitration, Requested Damages | $100,000,000 | ||
Other non-current liabilities | 163,258,000 | 165,909,000 | |
LifeNet [Member] | |||
Loss Contingencies [Line Items] | |||
Litigation Settlement, Expense | 34,700,000 | ||
Other non-current liabilities | 34,700,000 | ||
Wake Forest Settlement [Member] | |||
Loss Contingencies [Line Items] | |||
Other non-current liabilities | 105,700,000 | ||
Accrued Liabilities and Other Liabilities | $83,800,000 | ||
Alloderm [Member] | LifeCell Corporation [Member] | Damages from Product Defects [Member] | |||
Loss Contingencies [Line Items] | |||
Number of pending lawsuits | 346 | ||
Repliform [Member] | LifeCell Corporation [Member] | Damages from Product Defects [Member] | |||
Loss Contingencies [Line Items] | |||
Number of pending lawsuits | 178 | ||
Cases Filed in Consolidated Docket [Member] | Repliform [Member] | LifeCell Corporation [Member] | Damages from Product Defects [Member] | |||
Loss Contingencies [Line Items] | |||
Number of pending lawsuits | 173 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
segment | ||||
Segment Reporting Information [Line Items] | ||||
Number of reportable operating segments | 2 | |||
Number of Global Business Units | 2 | |||
Total revenue | $444,050 | $442,635 | ||
Operating earnings (loss) | 84,140 | 32,805 | ||
Non-allocated costs: | ||||
General headquarter expense | -1,423 | -1,590 | ||
Equity-based compensation | -535 | -941 | ||
Business optimization and transaction-related expenses | -15,376 | [1] | -30,223 | [1] |
Acquired intangible asset amortization | -45,877 | [2] | -50,689 | [2] |
Total non-allocated costs | -63,211 | -83,443 | ||
Advanced Wound Therapeutics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 337,259 | 330,795 | ||
Operating earnings (loss) | 112,885 | 85,669 | ||
Regenerative Medicine [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 104,169 | 106,656 | ||
Operating earnings (loss) | 34,019 | 29,908 | ||
Other Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 2,622 | [3] | 5,184 | [3] |
Operating earnings (loss) | $447 | [3] | $671 | [3] |
Minimum [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Minimum number of countries in which the entity has operations | 75 | |||
[1] | Represents restructuring-related expenses associated with our business optimization initiatives as well as management fees and costs associated with acquisition, disposition and financing activities. | |||
[2] | Represents amortization of acquired intangible assets related to our Merger in November 2011, our acquisition of Systagenix in October 2013 and other technology acquisitions. | |||
[3] | Represents contract manufacturing operations conducted at our manufacturing facility in Gargrave, England. |
Guarantor_Condensed_Consolidat2
Guarantor Condensed Consolidating Financial Statements - Condensed Consolidated Balance Sheet (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||||
Current assets: | ||||
Cash and cash equivalents | $250,509 | $183,541 | $264,640 | $206,949 |
Accounts receivable, net | 365,124 | 370,483 | ||
Inventories, net | 182,457 | 178,222 | ||
Deferred income taxes | 70,515 | 63,025 | ||
Prepaid expenses and other | 28,337 | 27,563 | ||
Intercompany receivables | 0 | 0 | ||
Total current assets | 896,942 | 822,834 | ||
Net property, plant and equipment | 277,653 | 288,048 | ||
Debt issuance costs, net | 72,094 | 77,896 | ||
Deferred income taxes | 30,466 | 31,692 | ||
Goodwill | 3,378,298 | 3,378,298 | ||
Identifiable intangible assets, net | 2,352,814 | 2,397,251 | ||
Other non-current assets | 4,709 | 4,694 | ||
Intercompany loan receivables | 0 | 0 | ||
Intercompany investments | 0 | 0 | ||
Total assets | 7,012,976 | 7,000,713 | ||
Current liabilities: | ||||
Accounts payable | 55,946 | 51,827 | ||
Accrued expenses and other | 395,514 | 343,484 | ||
Intercompany payables | 0 | 0 | ||
Current installments of long-term debt | 25,385 | 25,721 | ||
Income taxes payable | 9,981 | 1,305 | ||
Deferred income taxes | 103,135 | 113,658 | ||
Total current liabilities | 589,961 | 535,995 | ||
Long-term debt, net of current installments and discount | 4,774,787 | 4,815,290 | ||
Non-current tax liabilities | 33,845 | 33,300 | ||
Deferred income taxes | 799,334 | 792,157 | ||
Other non-current liabilities | 165,909 | 163,258 | ||
Intercompany loan payables | 0 | 0 | ||
Total liabilities | 6,363,836 | 6,340,000 | ||
Equity: | ||||
Total equity | 649,140 | 660,713 | ||
Total liabilities and shareholders' equity | 7,012,976 | 7,000,713 | ||
Parent Company [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 398 | 398 | 398 | 398 |
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Prepaid expenses and other | 0 | 0 | ||
Intercompany receivables | 166 | 166 | ||
Total current assets | 564 | 564 | ||
Net property, plant and equipment | 0 | 0 | ||
Debt issuance costs, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Identifiable intangible assets, net | 0 | 0 | ||
Other non-current assets | 0 | 0 | ||
Intercompany loan receivables | 0 | 0 | ||
Intercompany investments | 656,463 | 667,530 | ||
Total assets | 657,027 | 668,094 | ||
Current liabilities: | ||||
Accounts payable | 0 | 245 | ||
Accrued expenses and other | 0 | 0 | ||
Intercompany payables | 7,258 | 6,441 | ||
Current installments of long-term debt | 0 | 0 | ||
Income taxes payable | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Total current liabilities | 7,258 | 6,686 | ||
Long-term debt, net of current installments and discount | 0 | 0 | ||
Non-current tax liabilities | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 629 | 695 | ||
Intercompany loan payables | 0 | 0 | ||
Total liabilities | 7,887 | 7,381 | ||
Equity: | ||||
Total equity | 649,140 | 660,713 | ||
Total liabilities and shareholders' equity | 657,027 | 668,094 | ||
Kinetic Concepts, Inc. and KCI USA, Inc. Borrower [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 50,055 | 41,027 | 95,847 | 87,771 |
Accounts receivable, net | 181,254 | 179,872 | ||
Inventories, net | 106,137 | 73,904 | ||
Deferred income taxes | 58,059 | 52,868 | ||
Prepaid expenses and other | 14,178 | 11,106 | ||
Intercompany receivables | 2,000,335 | 1,854,033 | ||
Total current assets | 2,410,018 | 2,212,810 | ||
Net property, plant and equipment | 301,139 | 315,691 | ||
Debt issuance costs, net | 72,094 | 77,896 | ||
Deferred income taxes | 0 | 0 | ||
Goodwill | 2,483,240 | 2,483,240 | ||
Identifiable intangible assets, net | 285,726 | 299,575 | ||
Other non-current assets | 1,261 | 1,161 | ||
Intercompany loan receivables | 755,000 | 760,000 | ||
Intercompany investments | 409,245 | 360,292 | ||
Total assets | 6,717,723 | 6,510,665 | ||
Current liabilities: | ||||
Accounts payable | 17,307 | 16,298 | ||
Accrued expenses and other | 286,332 | 218,793 | ||
Intercompany payables | 1,310,017 | 1,181,383 | ||
Current installments of long-term debt | 25,385 | 25,721 | ||
Income taxes payable | 555 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Total current liabilities | 1,639,596 | 1,442,195 | ||
Long-term debt, net of current installments and discount | 4,774,787 | 4,815,290 | ||
Non-current tax liabilities | 9,852 | 9,404 | ||
Deferred income taxes | 111,338 | 106,440 | ||
Other non-current liabilities | 114,499 | 113,368 | ||
Intercompany loan payables | 423,357 | 420,294 | ||
Total liabilities | 7,073,429 | 6,906,991 | ||
Equity: | ||||
Total equity | -355,706 | -396,326 | ||
Total liabilities and shareholders' equity | 6,717,723 | 6,510,665 | ||
Guarantor Subsidiaries [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 1,499 | 0 | 118 |
Accounts receivable, net | 66,017 | 67,355 | ||
Inventories, net | 116,069 | 110,355 | ||
Deferred income taxes | 10,594 | 10,157 | ||
Prepaid expenses and other | 2,902 | 6,851 | ||
Intercompany receivables | 2,448,575 | 2,432,299 | ||
Total current assets | 2,644,157 | 2,628,516 | ||
Net property, plant and equipment | 68,201 | 69,801 | ||
Debt issuance costs, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Goodwill | 732,138 | 732,138 | ||
Identifiable intangible assets, net | 1,770,658 | 1,788,661 | ||
Other non-current assets | 186 | 186 | ||
Intercompany loan receivables | 431,626 | 429,856 | ||
Intercompany investments | 319,910 | 223,581 | ||
Total assets | 5,966,876 | 5,872,739 | ||
Current liabilities: | ||||
Accounts payable | 12,703 | 14,463 | ||
Accrued expenses and other | 233,481 | 244,829 | ||
Intercompany payables | 2,695,544 | 2,634,149 | ||
Current installments of long-term debt | 0 | 0 | ||
Income taxes payable | 4,123 | 0 | ||
Deferred income taxes | 103,135 | 113,658 | ||
Total current liabilities | 3,048,986 | 3,007,099 | ||
Long-term debt, net of current installments and discount | 0 | 0 | ||
Non-current tax liabilities | 6,276 | 6,203 | ||
Deferred income taxes | 641,696 | 637,777 | ||
Other non-current liabilities | 48,262 | 48,172 | ||
Intercompany loan payables | 755,000 | 760,000 | ||
Total liabilities | 4,500,220 | 4,459,251 | ||
Equity: | ||||
Total equity | 1,466,656 | 1,413,488 | ||
Total liabilities and shareholders' equity | 5,966,876 | 5,872,739 | ||
Non-Guarantor Subsidiaries [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 200,056 | 140,617 | 168,395 | 118,662 |
Accounts receivable, net | 117,853 | 123,256 | ||
Inventories, net | 93,585 | 93,765 | ||
Deferred income taxes | 1,862 | 0 | ||
Prepaid expenses and other | 246,711 | 247,606 | ||
Intercompany receivables | 72,599 | 48,267 | ||
Total current assets | 732,666 | 653,511 | ||
Net property, plant and equipment | 142,645 | 164,838 | ||
Debt issuance costs, net | 0 | 0 | ||
Deferred income taxes | 30,466 | 31,692 | ||
Goodwill | 162,920 | 162,920 | ||
Identifiable intangible assets, net | 296,430 | 309,015 | ||
Other non-current assets | 94,162 | 94,247 | ||
Intercompany loan receivables | 0 | 0 | ||
Intercompany investments | 0 | 0 | ||
Total assets | 1,459,289 | 1,416,223 | ||
Current liabilities: | ||||
Accounts payable | 25,936 | 20,821 | ||
Accrued expenses and other | 67,683 | 74,380 | ||
Intercompany payables | 508,856 | 512,792 | ||
Current installments of long-term debt | 0 | 0 | ||
Income taxes payable | 5,303 | 1,305 | ||
Deferred income taxes | 0 | 0 | ||
Total current liabilities | 607,778 | 609,298 | ||
Long-term debt, net of current installments and discount | 0 | 0 | ||
Non-current tax liabilities | 17,717 | 17,693 | ||
Deferred income taxes | 46,300 | 47,940 | ||
Other non-current liabilities | 2,519 | 1,023 | ||
Intercompany loan payables | 8,269 | 9,562 | ||
Total liabilities | 682,583 | 685,516 | ||
Equity: | ||||
Total equity | 776,706 | 730,707 | ||
Total liabilities and shareholders' equity | 1,459,289 | 1,416,223 | ||
Eliminations [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories, net | -133,334 | -99,802 | ||
Deferred income taxes | 0 | 0 | ||
Prepaid expenses and other | -235,454 | -238,000 | ||
Intercompany receivables | -4,521,675 | -4,334,765 | ||
Total current assets | -4,890,463 | -4,672,567 | ||
Net property, plant and equipment | -234,332 | -262,282 | ||
Debt issuance costs, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Identifiable intangible assets, net | 0 | 0 | ||
Other non-current assets | -90,900 | -90,900 | ||
Intercompany loan receivables | -1,186,626 | -1,189,856 | ||
Intercompany investments | -1,385,618 | -1,251,403 | ||
Total assets | -7,787,939 | -7,467,008 | ||
Current liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses and other | -191,982 | -194,518 | ||
Intercompany payables | -4,521,675 | -4,334,765 | ||
Current installments of long-term debt | 0 | 0 | ||
Income taxes payable | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Total current liabilities | -4,713,657 | -4,529,283 | ||
Long-term debt, net of current installments and discount | 0 | 0 | ||
Non-current tax liabilities | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Intercompany loan payables | -1,186,626 | -1,189,856 | ||
Total liabilities | -5,900,283 | -5,719,139 | ||
Equity: | ||||
Total equity | -1,887,656 | -1,747,869 | ||
Total liabilities and shareholders' equity | ($7,787,939) | ($7,467,008) |
Guarantor_Condensed_Consolidat3
Guarantor Condensed Consolidating Financial Statements - Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Condensed Income Statements, Captions [Line Items] | ||
Rental | $172,839 | $164,977 |
Sales | 271,211 | 277,658 |
Total revenue | 444,050 | 442,635 |
Rental expenses | 78,178 | 84,649 |
Cost of sales | 73,414 | 81,390 |
Gross profit (loss) | 292,458 | 276,596 |
Selling, general and administrative expenses | 147,763 | 175,612 |
Research and development expenses | 14,678 | 17,490 |
Acquired intangible asset amortization | 45,877 | 50,689 |
Operating earnings (loss) | 84,140 | 32,805 |
Non-operating intercompany transactions | 0 | 0 |
Interest income and other | 147 | 95 |
Interest expense | -104,726 | -102,195 |
Foreign currency gain (loss) | 19,400 | 236 |
Derivative instruments loss | -3,348 | -3 |
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | -4,387 | -69,062 |
Income tax expense (benefit) | 144 | -22,002 |
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | -4,531 | -47,060 |
Equity in earnings (loss) of subsidiaries | 0 | 0 |
Earnings (loss) from continuing operations | -4,531 | -47,060 |
Earnings (loss) from discontinued operations, net of tax | 0 | 677 |
Net earnings (loss) | -4,531 | -46,383 |
Total comprehensive income (loss) | -11,602 | -45,090 |
Parent Company [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Rental | 0 | 0 |
Sales | 0 | 0 |
Total revenue | 0 | 0 |
Rental expenses | 21 | 43 |
Cost of sales | 43 | 6 |
Gross profit (loss) | -64 | -49 |
Selling, general and administrative expenses | 471 | 893 |
Research and development expenses | 0 | 0 |
Acquired intangible asset amortization | 0 | 0 |
Operating earnings (loss) | -535 | -942 |
Non-operating intercompany transactions | 0 | 0 |
Interest income and other | 0 | 0 |
Interest expense | 0 | 0 |
Foreign currency gain (loss) | 0 | 0 |
Derivative instruments loss | 0 | 0 |
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | -535 | -942 |
Income tax expense (benefit) | 0 | 0 |
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | -535 | -942 |
Equity in earnings (loss) of subsidiaries | -3,996 | -45,441 |
Earnings (loss) from continuing operations | -4,531 | -46,383 |
Earnings (loss) from discontinued operations, net of tax | 0 | 0 |
Net earnings (loss) | -4,531 | -46,383 |
Total comprehensive income (loss) | -11,602 | -45,090 |
Kinetic Concepts, Inc. and KCI USA, Inc. Borrower [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Rental | 149,698 | 135,764 |
Sales | 83,737 | 65,869 |
Total revenue | 233,435 | 201,633 |
Rental expenses | 75,873 | 68,791 |
Cost of sales | 89,496 | 65,341 |
Gross profit (loss) | 68,066 | 67,501 |
Selling, general and administrative expenses | 68,519 | 79,282 |
Research and development expenses | 5,617 | 5,622 |
Acquired intangible asset amortization | 13,880 | 16,425 |
Operating earnings (loss) | -19,950 | -33,828 |
Non-operating intercompany transactions | -1,682 | -6,626 |
Interest income and other | 16,762 | 17,200 |
Interest expense | -107,782 | -112,016 |
Foreign currency gain (loss) | 35,006 | -460 |
Derivative instruments loss | -3,348 | -3 |
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | -80,994 | -135,733 |
Income tax expense (benefit) | 415 | -79,988 |
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | -81,409 | -55,745 |
Equity in earnings (loss) of subsidiaries | 48,953 | -50,750 |
Earnings (loss) from continuing operations | -32,456 | -106,495 |
Earnings (loss) from discontinued operations, net of tax | 0 | 0 |
Net earnings (loss) | -32,456 | -106,495 |
Total comprehensive income (loss) | -39,527 | -105,202 |
Guarantor Subsidiaries [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Rental | 0 | 0 |
Sales | 239,691 | 202,032 |
Total revenue | 239,691 | 202,032 |
Rental expenses | 3,467 | 2,148 |
Cost of sales | 159,253 | 115,064 |
Gross profit (loss) | 76,971 | 84,820 |
Selling, general and administrative expenses | 36,716 | 46,653 |
Research and development expenses | 4,896 | 6,744 |
Acquired intangible asset amortization | 19,456 | 20,172 |
Operating earnings (loss) | 15,903 | 11,251 |
Non-operating intercompany transactions | 30,849 | -8,282 |
Interest income and other | 3,063 | 9,828 |
Interest expense | -16,718 | -17,137 |
Foreign currency gain (loss) | -1,593 | -46 |
Derivative instruments loss | 0 | 0 |
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | 31,504 | -4,386 |
Income tax expense (benefit) | 141 | 31,834 |
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | 31,363 | -36,220 |
Equity in earnings (loss) of subsidiaries | 21,756 | -10,761 |
Earnings (loss) from continuing operations | 53,119 | -46,981 |
Earnings (loss) from discontinued operations, net of tax | 0 | 677 |
Net earnings (loss) | 53,119 | -46,304 |
Total comprehensive income (loss) | 46,048 | -45,011 |
Non-Guarantor Subsidiaries [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Rental | 23,141 | 29,213 |
Sales | 229,663 | 208,466 |
Total revenue | 252,804 | 237,679 |
Rental expenses | 41,365 | 54,111 |
Cost of sales | 87,974 | 92,834 |
Gross profit (loss) | 123,465 | 90,734 |
Selling, general and administrative expenses | 42,308 | 48,887 |
Research and development expenses | 4,165 | 5,124 |
Acquired intangible asset amortization | 12,541 | 14,092 |
Operating earnings (loss) | 64,451 | 22,631 |
Non-operating intercompany transactions | -29,190 | -8,007 |
Interest income and other | 103 | 30 |
Interest expense | -7 | -5 |
Foreign currency gain (loss) | -14,013 | 742 |
Derivative instruments loss | 0 | 0 |
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | 21,344 | 15,391 |
Income tax expense (benefit) | -412 | 26,152 |
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | 21,756 | -10,761 |
Equity in earnings (loss) of subsidiaries | 0 | 0 |
Earnings (loss) from continuing operations | 21,756 | -10,761 |
Earnings (loss) from discontinued operations, net of tax | 0 | 0 |
Net earnings (loss) | 21,756 | -10,761 |
Total comprehensive income (loss) | 14,685 | -9,468 |
Eliminations [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Rental | 0 | 0 |
Sales | -281,880 | -198,709 |
Total revenue | -281,880 | -198,709 |
Rental expenses | -42,548 | -40,444 |
Cost of sales | -263,352 | -191,855 |
Gross profit (loss) | 24,020 | 33,590 |
Selling, general and administrative expenses | -251 | -103 |
Research and development expenses | 0 | 0 |
Acquired intangible asset amortization | 0 | 0 |
Operating earnings (loss) | 24,271 | 33,693 |
Non-operating intercompany transactions | 23 | 22,915 |
Interest income and other | -19,781 | -26,963 |
Interest expense | 19,781 | 26,963 |
Foreign currency gain (loss) | 0 | 0 |
Derivative instruments loss | 0 | 0 |
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | 24,294 | 56,608 |
Income tax expense (benefit) | 0 | 0 |
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | 24,294 | 56,608 |
Equity in earnings (loss) of subsidiaries | -66,713 | 106,952 |
Earnings (loss) from continuing operations | -42,419 | 163,560 |
Earnings (loss) from discontinued operations, net of tax | 0 | 0 |
Net earnings (loss) | -42,419 | 163,560 |
Total comprehensive income (loss) | ($21,206) | $159,681 |
Guarantor_Condensed_Consolidat4
Guarantor Condensed Consolidating Financial Statements - Condensed Consolidated Cash Flow (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net earnings (loss) | ($4,531) | ($46,383) |
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities | 106,804 | 129,229 |
Net cash provided (used) by operating activities | 102,273 | 82,846 |
Cash flows from investing activities | ||
Net additions to property, plant and equipment | -13,169 | -12,664 |
Businesses acquired in purchase transaction, net of cash acquired | 0 | -4,613 |
Decrease (increase) in identifiable intangible assets and other non-current assets | -1,821 | -1,281 |
Net cash provided (used) by investing activities | -14,990 | -18,558 |
Cash flows from financing activities: | ||
Distribution to limited partners | -55 | 0 |
Settlement of profits interest units | -517 | 0 |
Repayments of long-term debt and capital lease obligations | -6,415 | -6,635 |
Debt issuance costs | -6,256 | 0 |
Proceeds (payments) on intercompany loans | 0 | 0 |
Proceeds (payments) on intercompany investments | 0 | 0 |
Net cash provided (used) by financing activities | -13,243 | -6,635 |
Effect of exchange rate changes on cash and cash equivalents | -7,072 | 38 |
Net increase (decrease) in cash and cash equivalents | 66,968 | 57,691 |
Cash and cash equivalents, beginning of period | 183,541 | 206,949 |
Cash and cash equivalents, end of period | 250,509 | 264,640 |
Parent Company [Member] | ||
Cash flows from operating activities: | ||
Net earnings (loss) | -4,531 | -46,383 |
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities | 1,107 | 941 |
Net cash provided (used) by operating activities | -3,424 | -45,442 |
Cash flows from investing activities | ||
Net additions to property, plant and equipment | 0 | 0 |
Businesses acquired in purchase transaction, net of cash acquired | 0 | |
Decrease (increase) in identifiable intangible assets and other non-current assets | 0 | 0 |
Net cash provided (used) by investing activities | 0 | 0 |
Cash flows from financing activities: | ||
Distribution to limited partners | -55 | |
Settlement of profits interest units | -517 | |
Repayments of long-term debt and capital lease obligations | 0 | 0 |
Debt issuance costs | 0 | |
Proceeds (payments) on intercompany loans | 0 | 0 |
Proceeds (payments) on intercompany investments | 3,996 | 45,442 |
Net cash provided (used) by financing activities | 3,424 | 45,442 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 398 | 398 |
Cash and cash equivalents, end of period | 398 | 398 |
Kinetic Concepts, Inc. and KCI USA, Inc. Borrower [Member] | ||
Cash flows from operating activities: | ||
Net earnings (loss) | -32,456 | -106,495 |
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities | 45,550 | 54,197 |
Net cash provided (used) by operating activities | 13,094 | -52,298 |
Cash flows from investing activities | ||
Net additions to property, plant and equipment | -23,421 | -20,324 |
Businesses acquired in purchase transaction, net of cash acquired | 0 | |
Decrease (increase) in identifiable intangible assets and other non-current assets | -130 | -29 |
Net cash provided (used) by investing activities | -23,551 | -20,353 |
Cash flows from financing activities: | ||
Distribution to limited partners | 0 | |
Settlement of profits interest units | 0 | |
Repayments of long-term debt and capital lease obligations | -6,446 | -6,619 |
Debt issuance costs | -6,256 | |
Proceeds (payments) on intercompany loans | 8,063 | 36,602 |
Proceeds (payments) on intercompany investments | 24,124 | 50,744 |
Net cash provided (used) by financing activities | 19,485 | 80,727 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 9,028 | 8,076 |
Cash and cash equivalents, beginning of period | 41,027 | 87,771 |
Cash and cash equivalents, end of period | 50,055 | 95,847 |
Guarantor Subsidiaries [Member] | ||
Cash flows from operating activities: | ||
Net earnings (loss) | 53,119 | -46,304 |
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities | 52,538 | 62,506 |
Net cash provided (used) by operating activities | 105,657 | 16,202 |
Cash flows from investing activities | ||
Net additions to property, plant and equipment | -2,285 | -2,031 |
Businesses acquired in purchase transaction, net of cash acquired | -4,500 | |
Decrease (increase) in identifiable intangible assets and other non-current assets | -1,820 | -1,187 |
Net cash provided (used) by investing activities | -4,105 | -7,718 |
Cash flows from financing activities: | ||
Distribution to limited partners | 0 | |
Settlement of profits interest units | 0 | |
Repayments of long-term debt and capital lease obligations | 0 | 0 |
Debt issuance costs | 0 | |
Proceeds (payments) on intercompany loans | -6,770 | -18,830 |
Proceeds (payments) on intercompany investments | -96,281 | 10,228 |
Net cash provided (used) by financing activities | -103,051 | -8,602 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | -1,499 | -118 |
Cash and cash equivalents, beginning of period | 1,499 | 118 |
Cash and cash equivalents, end of period | 0 | 0 |
Non-Guarantor Subsidiaries [Member] | ||
Cash flows from operating activities: | ||
Net earnings (loss) | 21,756 | -10,761 |
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities | 13,987 | 42,868 |
Net cash provided (used) by operating activities | 35,743 | 32,107 |
Cash flows from investing activities | ||
Net additions to property, plant and equipment | 588 | -12,414 |
Businesses acquired in purchase transaction, net of cash acquired | -113 | |
Decrease (increase) in identifiable intangible assets and other non-current assets | 129 | -65 |
Net cash provided (used) by investing activities | 717 | -12,592 |
Cash flows from financing activities: | ||
Distribution to limited partners | 0 | |
Settlement of profits interest units | 0 | |
Repayments of long-term debt and capital lease obligations | 31 | -16 |
Debt issuance costs | 0 | |
Proceeds (payments) on intercompany loans | -1,293 | -17,772 |
Proceeds (payments) on intercompany investments | 31,313 | 47,968 |
Net cash provided (used) by financing activities | 30,051 | 30,180 |
Effect of exchange rate changes on cash and cash equivalents | -7,072 | 38 |
Net increase (decrease) in cash and cash equivalents | 59,439 | 49,733 |
Cash and cash equivalents, beginning of period | 140,617 | 118,662 |
Cash and cash equivalents, end of period | 200,056 | 168,395 |
Eliminations [Member] | ||
Cash flows from operating activities: | ||
Net earnings (loss) | -42,419 | 163,560 |
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities | -6,378 | -31,283 |
Net cash provided (used) by operating activities | -48,797 | 132,277 |
Cash flows from investing activities | ||
Net additions to property, plant and equipment | 11,949 | 22,105 |
Businesses acquired in purchase transaction, net of cash acquired | 0 | |
Decrease (increase) in identifiable intangible assets and other non-current assets | 0 | 0 |
Net cash provided (used) by investing activities | 11,949 | 22,105 |
Cash flows from financing activities: | ||
Distribution to limited partners | 0 | |
Settlement of profits interest units | 0 | |
Repayments of long-term debt and capital lease obligations | 0 | 0 |
Debt issuance costs | 0 | |
Proceeds (payments) on intercompany loans | 0 | 0 |
Proceeds (payments) on intercompany investments | 36,848 | -154,382 |
Net cash provided (used) by financing activities | 36,848 | -154,382 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | $0 | $0 |