Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 22, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | LIVANOVA PLC | ||
Entity Central Index Key | 1,639,691 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2.9 | ||
Entity Common Stock, Shares Outstanding | 48,296,202 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Trading Symbol | LIVN |
Consolidated Statements of (Los
Consolidated Statements of (Loss) Income - USD ($) shares in Thousands | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 363,237,000 | $ 1,012,277,000 | $ 964,858,000 | $ 291,558,000 |
Cost of sales | 113,404,000 | 353,403,000 | 367,818,000 | 27,311,000 |
Product remediation | 0 | 7,254,000 | 37,534,000 | 0 |
Gross profit | 249,833,000 | 651,620,000 | 559,506,000 | 264,247,000 |
Operating expenses: | ||||
Selling, general and administrative | 147,025,000 | 380,560,000 | 356,807,000 | 123,619,000 |
Research and development | 41,916,000 | 109,662,000 | 82,467,000 | 42,245,000 |
Merger and integration expenses | 55,776,000 | 15,528,000 | 20,377,000 | 8,692,000 |
Restructuring expenses | 10,494,000 | 17,056,000 | 37,377,000 | 0 |
Amortization of intangibles | 7,030,000 | 33,144,000 | 31,035,000 | 1,039,000 |
Total operating expenses | 262,241,000 | 555,950,000 | 528,063,000 | 175,595,000 |
Operating income (loss) from continuing operations | (12,408,000) | 95,670,000 | 31,443,000 | 88,652,000 |
Interest income | 392,000 | 1,318,000 | 1,698,000 | 184,000 |
Interest expense | (1,509,000) | (7,797,000) | (10,616,000) | (21,000) |
Gain on acquisition of Caisson Interventional, LLC | 0 | 39,428,000 | 0 | 0 |
Impairment of cost-method investments | (5,062,000) | (8,565,000) | 0 | 0 |
Foreign exchange and other gains (losses) | (7,411,000) | 1,084,000 | 3,141,000 | 479,000 |
Income (loss) from continuing operations before tax | (25,998,000) | 121,138,000 | 25,666,000 | 89,294,000 |
Income tax expense (benefit) | (13,501,000) | 49,954,000 | 5,113,000 | 31,446,000 |
Losses from equity method investments | (2,223,000) | (16,719,000) | (18,679,000) | 0 |
Net income (loss) from continuing operations | (14,720,000) | 54,465,000 | 1,874,000 | 57,848,000 |
Loss from discontinued operations, net of tax | (14,893,000) | (1,271,000) | (64,663,000) | 0 |
Impairment of discontinued operations, net of tax | 0 | (78,283,000) | 0 | 0 |
Net loss from discontinued operations | (14,893,000) | (79,554,000) | (64,663,000) | 0 |
Net (loss) income | $ (29,613,000) | $ (25,089,000) | $ (62,789,000) | $ 57,848,000 |
Basic income (loss) per common share: | ||||
Income (Loss) from continuing operations, per basic share (in Dollars per Share) | $ (0.45) | $ 1.13 | $ 0.04 | $ 2.19 |
Discontinued operation, income (loss) from discontinued operation, net of tax, per basic share (in Dollars per share) | (0.45) | (1.65) | (1.33) | 0 |
Basic (loss) income per share (in Dollars per Share) | (0.90) | (0.52) | (1.29) | 2.19 |
Diluted income (loss) per common share: | ||||
Income (loss) from continuing operations, per diluted share (in Dollars per share) | (0.45) | 1.12 | 0.04 | 2.17 |
Discontinued operations, per diluted share (in Dollars per share) | (0.45) | (1.64) | (1.32) | 0 |
Diluted (loss) income per share (in Dollars per Share) | $ (0.90) | $ (0.52) | $ (1.28) | $ 2.17 |
Shares used in computing basic (loss) income per share (in Shares) | 32,741 | 48,157 | 48,860 | 26,391 |
Shares used in computing diluted (loss) income per share (in Shares) | 32,741 | 48,501 | 49,014 | 26,626 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (29,613) | $ (25,089) | $ (62,789) | $ 57,848 |
Other comprehensive (loss) income: | ||||
Net change in unrealized gain on derivatives | 1,274 | (6,413) | 3,930 | 0 |
Tax effect | (386) | 1,875 | (1,199) | 0 |
Net of tax | 888 | (4,538) | 2,731 | 0 |
Foreign currency translation adjustment, net of tax | (51,715) | 118,338 | (16,990) | (3,856) |
Total other comprehensive income (loss) | (50,827) | 113,800 | (14,259) | (3,856) |
Total comprehensive income (loss) | $ (80,440) | $ 88,711 | $ (77,048) | $ 53,992 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 93,615 | $ 39,789 |
Accounts receivable, net | 282,145 | 213,256 |
Inventories | 144,470 | 133,017 |
Prepaid and refundable taxes | 46,274 | 50,577 |
Assets held for sale | 13,628 | 4,477 |
Assets of discontinued operations | 250,689 | 319,922 |
Prepaid expenses and other current assets | 39,037 | 51,652 |
Total Current Assets | 869,858 | 812,690 |
Property, plant and equipment, net | 192,359 | 203,708 |
Goodwill | 784,242 | 691,712 |
Intangible assets, net | 535,397 | 441,608 |
Investments | 34,492 | 56,226 |
Deferred tax assets, net | 11,559 | 6,017 |
Other assets | 75,984 | 130,670 |
Total Assets | 2,503,891 | 2,342,631 |
Current Liabilities: | ||
Current debt obligations | 84,034 | 47,650 |
Accounts payable | 85,915 | 71,934 |
Accrued liabilities and other | 78,942 | 71,047 |
Taxes payable | 12,826 | 18,381 |
Accrued employee compensation and related benefits | 66,224 | 57,635 |
Liabilities of discontinued operations | 78,075 | 83,243 |
Total Current Liabilities | 406,016 | 349,890 |
Long-term debt obligations | 61,958 | 75,215 |
Deferred income taxes liability | 123,342 | 152,532 |
Long-term employee compensation and related benefits | 28,177 | 23,014 |
Other long-term liabilities | 69,084 | 35,071 |
Total Liabilities | 688,577 | 635,722 |
Commitments and contingencies (Note 12) | 0 | 0 |
Stockholders’ Equity: | ||
Ordinary Shares, £1.00 par value: unlimited shares authorized; 48,290,276 shares issued and 48,287,346 outstanding at December 31, 2017; 48,156,690 shares issued and 48,028,413 outstanding at December 31, 2016 | 74,750 | 74,578 |
Additional paid-in capital | 1,735,048 | 1,719,893 |
Accumulated other comprehensive income (loss) | 45,313 | (68,487) |
Accumulated loss | (39,664) | (14,575) |
Treasury stock at cost, 2,930 shares at December 31, 2017; 128,277 shares at December 31, 2016 | (133) | (4,500) |
Total Stockholders’ Equity | 1,815,314 | 1,706,909 |
Total Liabilities and Stockholders’ Equity | $ 2,503,891 | $ 2,342,631 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - £ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars/GBP per Share) | £ 1 | £ 1 |
Common stock, shares issued (shares) | 48,156,690,000 | |
Common stock, shares outstanding (shares) | 48,287,346 | 48,028,413,000 |
Treasury stock (shares) | 2,930 | 128,277 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common / Ordinary Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Earnings (Loss) [Member] |
Balance (shares) at Dec. 31, 2015 | 48,868,000 | |||||
Balance, start at Dec. 31, 2015 | $ 1,811,462 | $ 75,444 | $ 1,742,032 | $ 0 | $ (54,228) | $ 48,214 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation plans (shares) | 282,000 | (4,500,000) | ||||
Stock-based compensation plans | $ 22,482 | $ 391 | 26,591 | |||
Stock repurchases (shares) | (993,339) | (993,000) | ||||
Share repurchases | $ (49,987) | $ (1,257) | (48,730) | |||
Net (loss) income | (62,789) | (62,789) | ||||
Other comprehensive income (loss) | $ (14,259) | (14,259) | ||||
Balance (shares) at Dec. 31, 2016 | 48,156,690,000 | 48,157,000 | ||||
Balance, end at Dec. 31, 2016 | $ 1,706,909 | $ 74,578 | 1,719,893 | $ (4,500) | (68,487) | (14,575) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation plans (shares) | 133,000 | 4,367,000 | ||||
Stock-based compensation plans | 19,694 | $ 172 | 15,155 | |||
Net (loss) income | (25,089) | (25,089) | ||||
Other comprehensive income (loss) | 113,800 | 113,800 | ||||
Balance (shares) at Dec. 31, 2017 | 48,290,276 | |||||
Balance, end at Dec. 31, 2017 | $ 1,815,314 | $ 74,750 | $ 1,735,048 | $ (133) | $ 45,313 | $ (39,664) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | 20 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Dec. 31, 2015 | |
Operating Activities: | ||||
Net (loss) income | $ (25,089) | $ (62,789) | $ 57,848 | $ (29,613) |
Non-cash items included in net (loss) income: | ||||
Depreciation | 37,054 | 39,852 | 5,768 | 10,766 |
Amortization | 45,881 | 45,511 | 1,039 | 9,734 |
Stock-based compensation | 19,062 | 19,569 | 11,940 | 31,030 |
Deferred income tax (benefit) expense | (9,272) | (26,711) | 9,400 | (39,766) |
Losses from equity method investments | 21,606 | 22,612 | 0 | 3,308 |
Gain on acquisition of Caisson Interventional, LLC | (39,428) | 0 | 0 | 0 |
Impairment of discontinued operations | 93,574 | 0 | 0 | 0 |
Impairment of goodwill | 0 | 18,348 | 0 | 0 |
Impairment of cost-method investments | 8,565 | 0 | 0 | 5,127 |
Impairment of property, plant and equipment | 5,979 | 5,971 | 0 | 0 |
Amortization of income taxes payable on inter-company transfers of property | 31,784 | 25,952 | 0 | 12,719 |
Other | 5,240 | 10,217 | 14 | 10,492 |
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | (48,934) | (16,448) | (2,654) | (15,850) |
Inventories | 7,187 | 26,703 | (7,113) | 36,326 |
Other current and non-current assets | (6,180) | (32,686) | (2,112) | (10,390) |
Restructuring reserve | (14,557) | 12,405 | 0 | (4,720) |
Accounts payable and accrued current and non-current liabilities | (41,133) | 1,645 | 5,546 | (28,451) |
Net cash provided by (used in) operating activities | 91,339 | 90,151 | 79,676 | (9,288) |
Investing Activities: | ||||
Purchases of property, plant, equipment and other | (34,107) | (38,362) | (6,687) | (17,286) |
Acquisition of Caisson Interventional, LLC, net of cash acquired | (14,194) | 0 | 0 | 0 |
Proceeds from sale of cost-method investment | 3,192 | 0 | 0 | 0 |
Proceeds from asset sales | 5,935 | 1,145 | 0 | 948 |
Purchases of cost and equity method investments | (6,255) | (8,026) | (1,182) | 0 |
Loans to cost and equity method investees | (7,426) | (6,270) | 0 | 0 |
Purchases of short-term investments | 0 | (7,054) | (31,985) | (13,990) |
Maturities of short-term investments | 0 | 14,051 | 30,089 | 34,013 |
Cash obtained in the Merger | 0 | 0 | 0 | 12,497 |
Net cash (used in) provided by investing activities | (52,855) | (44,516) | (9,765) | 16,182 |
Financing Activities: | ||||
Change in short-term borrowing, net | 12,396 | (33,708) | 0 | 11,112 |
Proceeds from short-term borrowing (maturities greater than 90 days) | 20,000 | 0 | 0 | 0 |
Proceeds from long-term debt obligations | 2,048 | 7,231 | 0 | 0 |
Repayment of long-term debt obligations | (22,755) | (21,109) | 0 | (31,968) |
Proceeds from exercise of stock options | 4,973 | 8,332 | 3,184 | 6,480 |
Repayment of trade receivable advances | 0 | (23,779) | 0 | 0 |
Share repurchases | 0 | (54,487) | (55,015) | (7,350) |
Other | (5,368) | (519) | 3,575 | 3,599 |
Net cash provided by (used) in financing activities | 11,294 | (118,039) | (48,256) | (18,127) |
Effect of exchange rate changes on cash and cash equivalents | 4,048 | (420) | (767) | (341) |
Net increase (decrease) in cash and cash equivalents | 53,826 | (72,824) | 20,888 | (11,574) |
Cash and cash equivalents at beginning of period | 39,789 | 112,613 | 124,187 | 124,187 |
Cash and cash equivalents at end of period | 93,615 | 39,789 | 112,613 | |
Supplementary Disclosures of Cash Flow Information: | ||||
Cash paid for interest | 7,510 | 7,371 | 1 | 515 |
Cash paid for income taxes | 38,974 | 47,808 | 15,577 | 22,738 |
Supplementary Disclosure of Non-Cash Operating Transactions: | ||||
Acquisition financed by ordinary shares of LivaNova | $ 0 | $ 0 | $ 0 | $ 1,589,083 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Background LivaNova PLC (collectively with its subsidiaries, the “Company”, “LivaNova”, “we” or “our”) was organized under the laws of England and Wales on February 20, 2015 for the purpose of facilitating the business combination (the “Merger”) of Cyberonics, Inc., a Delaware corporation (“Cyberonics”) and Sorin S.p.A., a joint stock company organized under the laws of Italy (“Sorin”). As a result of the business combination, LivaNova, headquartered in London, became the holding company of the combined businesses of Cyberonics and Sorin. This business combination became effective on October 19, 2015, at which time LivaNova’s ordinary shares were listed for trading on the NASDAQ Global Market (“NASDAQ”) and on the London Stock Exchange (the “LSE”) as a standard listing under the trading symbol “LIVN.” Upon the consummation of the Mergers, the historical financial statements of Cyberonics became the Company’s historical financial statements. Accordingly, the historical financial statements of Cyberonics are included in the comparative prior periods. For further information regarding the acquisition, refer to “Item 1. Business” and “Note 3. Business Combinations” to the consolidated financial statements included in this Annual Report on Form 10-K. On February 23, 2017, we announced our voluntary cancellation of our standard listing of our shares with the London Stock Exchange due to the low trading volume of our shares and trading ceased at the close of business on April 4, 2017. We continue to serve our shareholders through our listing on the NASDAQ Stock Market. Description of the Business LivaNova is a global medical device company focused on the development and delivery of important therapeutic solutions for the benefit of patients, healthcare professionals and healthcare systems throughout the world. Working closely with medical professionals in the fields of Cardiac Surgery and Neuromodulation, we design, develop, manufacture and sell innovative therapeutic solutions that are consistent with our mission to improve our patients’ quality of life, increase the skills and capabilities of healthcare professionals and minimize healthcare costs. On November 20, 2017, we entered into a Letter of Intent (“LOI”) to sell our Cardiac Rhythm Management Business Franchise (“CRM”) to MicroPort Scientific Corporation for $190 million in cash. We expect to enter into the definitive acquisition agreement contemplated by the LOI following completion of the notification and consultation process with CRM’s employee works councils as required by local laws. Completion of the transaction is subject to entry into the definitive acquisition agreement, receipt of relevant regulatory approvals, including fulfilling the requirements of the Hong Kong Stock Exchange’s Major Transaction requirements, and other customary closing conditions. We expect the transaction to close in the second quarter of 2018. Accordingly, the results of operations of the CRM Business Franchise are reflected as discontinued operations for all periods presented in this Annual Report on Form 10-K and related assets and liabilities are presented as held for sale. Business Franchises LivaNova is comprised of two principal Business Franchises, which are also our reportable segments: Cardiac Surgery and Neuromodulation, corresponding to our primary therapeutic areas. Other corporate activities include corporate business development and New Ventures, focused on new growth platforms and identification of other opportunities for expansion. |
Basis of Presentation, Use of A
Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies | Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies The Mergers On October 19, 2015 , as further described herein, LivaNova became the holding company of the combined businesses of Cyberonics and Sorin. Based on the structure of the Mergers, management determined that Cyberonics was considered to be the accounting acquirer and predecessor for accounting purposes. Sale of our Cardiac Rhythm Management Business Franchise On November 20, 2017, we entered into a letter of intent (“LOI”) to sell the CRM Business Franchise to MicroPort Scientific Corporation for $190.0 million in cash. We expect to enter into the definitive acquisition agreement contemplated by the LOI in the second quarter of 2018. As a result of the commitment to undertake the proposed transaction, we recognized an impairment of $78.3 million , net of a $15.3 million tax benefit, related to the intangible and tangible assets of the CRM Business Franchise. The impairment is included in impairment of discontinued operations, net of tax within the consolidated statements of (loss) income. We concluded that the sale of the CRM Business Franchise represents a strategic shift in our business that will have a major effect on future operations and financial results and therefore qualifies as a discontinued operation under U.S. GAAP. The results of operations of the CRM Business Franchise are reflected as discontinued operations for all periods presented in the Annual Report on Form 10-K and the assets and liabilities of the CRM Business Franchise are classified as held for sale and presented as assets and liabilities of discontinued operations on the consolidated balance sheets dated December 31, 2017 and December 31, 2016 . Basis of Presentation The accompanying consolidated financial statements of LivaNova at December 31, 2017 have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.” and such principles, “U.S. GAAP”) and the instructions to Form 10-K and Article 3 and Article 5 of Regulation S-X. Reporting Periods In this Annual Report on Form 10-K, LivaNova, as the successor company to Cyberonics, is reporting the results for: • LivaNova and its consolidated subsidiaries for the years ended December 31, 2017 and December 31, 2016. • A transitional period, April 25, 2015 to December 31, 2015 , filed on Form 10-K/T. This transitional report is the result of the change from Cyberonics’ fiscal year ending the last Friday in April before the Mergers to a calendar year ending December 31st after the Mergers. The transitional period included the business activities of Cyberonics and its consolidated subsidiaries for the period April 25, 2015 to October 18, 2015 , and the consolidated results of the combined businesses of LivaNova (Cyberonics and Sorin) for the period October 19, 2015 through December 31, 2015 . • LivaNova is also reporting the historical results of Cyberonics and its consolidated subsidiaries, our predecessor, for the fiscal year ended April 24, 2015 . Consolidation The accompanying consolidated financial statements for LivaNova include LivaNova’s wholly owned subsidiaries and the LivaNova PLC Employee Benefit Trust (“the Trust”). The accompanying consolidated financial statements for Cyberonics include Cyberonics’ wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in such financial statements and accompanying notes. These estimates are based on management’s best knowledge of current events and actions we may undertake in the future. Estimates are used in accounting for, among other items, valuation and amortization of intangible assets, goodwill, measurement of deferred tax assets and liabilities, uncertain income tax positions, stock-based compensation, obsolete and slow-moving inventories, models, such as an impairment analysis, and in general, allocations to provisions and the fair value of assets and liabilities recorded in a business combination. Actual results could differ materially from those estimates. Reclassifications The following reclassifications have been made to conform the prior year consolidated statements of (loss) income, consolidated balance sheets and consolidated statements of cash flows with current year presentation: • Having entered into a letter of intent (“LOI”) to sell our CRM Business Franchise to MicroPort Scientific Corporation on November 20, 2017, we have classified CRM’s assets and liabilities as held for sale in the consolidated balance sheets as assets and liabilities of discontinued operations and CRM’s operating results in the consolidated statement of net (loss) income into discontinued operations for all prior periods presented. In addition, to conform the consolidated statement of net (loss) income and “Note 18. Geographic and Segment Information” for the year ended December 31, 2016 to the current period presentation, we reclassified operating expense of $6.0 million from the CRM segment to the Neuromodulation segment. In addition, we reclassified operating expense of $1.0 million from the CRM segment to the Neuromodulation segment for the transitional period ended December 31, 2015 . • To conform the consolidated balance sheet as of December 31, 2016 to the current period presentation, we reclassified $4.5 million of assets held for sale, related to our plan to exit the Costa Rica manufacturing operation, to a separate line item in the consolidated balance sheet from ‘Prepaid expenses and other current assets’. We received $4.9 million in proceeds from the sale of our Costa Rica manufacturing operation during the year ended December 31, 2017 . • For the year ended December 31, 2017 , Loans to Equity and Cost Method Investees of $7.4 million was presented as an Investing Activities and to conform the presentation for the prior year ended December 31, 2016 , Loans to Equity and Cost Method Investees of $6.3 million was reclassified to Investing Activities from Financing Activities. For the year ended December 31, 2017 ‘Intangible asset purchases’ were reported as ‘Purchases of property, plant and equipment and other’ and we conformed the presentation for the prior year and the transitional period ended December 31, 2016 and December 31, 2015 , respectively. Certain financing activities were reported as Other for the year ended December 31, 2017 and we conformed the presentation for the prior year and the transitional period ended December 31, 2016 and December 31, 2015 , respectively. Merger, Integration and Restructuring Charges As a result of the Mergers and acquisitions, we incurred merger, integration and restructuring charges and reported them separately as operating expenses in the consolidated statements of (loss) income. • Merger expenses consisted of expenses directly related to the Mergers, such as professional fees for legal services, accounting services, due diligence, a fairness opinion and the preparation of registration and regulatory filings in the United States and Europe, as well as investment banking fees. • Integration expenses consisted of consultancy fees with regard to: our systems integration, organization structure integration, finance, synergy and tax planning, the transition to U.S. GAAP for Sorin, our London Stock Exchange listing and certain re-branding efforts. • After the consummation of the Mergers between Cyberonics and Sorin in October 2015, we initiated several restructuring plans (the “Restructuring Plans”) to combine our business operations. We identified costs incurred and liabilities assumed for the Restructuring Plans. The Restructuring Plans are intended to leverage economies of scale, eliminate duplicate corporate expenses, streamline distributions and logistics and office functions in order to reduce overall costs. Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less, consisting of demand deposit accounts and money market mutual funds, to be cash equivalents and are carried in the balance sheet at cost, which approximated their fair value. Accounts Receivable Our accounts receivable consisted of trade receivables from direct customers and distributors. We maintain an allowance for doubtful accounts for potential credit losses based on our estimates of the ability of customers to make required payments, historical credit experience, existing economic conditions and expected future trends. We write off uncollectible accounts against the allowance when all reasonable collection efforts have been exhausted. Inventories We state our inventories at the lower of cost, using the first-in first-out (“FIFO”) method, or market. Our calculation of cost includes the acquisition cost of raw materials and components, direct labor and overhead. We reduce the carrying value of inventories for those items that are potentially excess, obsolete or slow moving based on changes in customer demand, technology developments or other economic factors. Property, Plant and Equipment (“PP&E”) Assets held and used PP&E is carried at cost, less accumulated depreciation. Maintenance, repairs and minor replacements are charged to expense as incurred, while significant renewals and improvements are capitalized. We compute depreciation using the straight-line method over estimated useful lives. Leasehold improvements are depreciated over the shorter of the following terms: the useful life of the asset or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date the leasehold improvements are purchased. Capital improvements to the building are added as building components and depreciated over the useful life of the improvement or the building, whichever is less. Assets held for sale We classify long-lived assets as held for sale in the period in which we commit to a plan to sell the asset, the asset is available for immediate sale, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and the sale of the asset is probable within the next twelve months and when actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell and depreciation is discontinued. We recognize a loss for any excess of carrying value over the fair value less cost to sell. Business Combinations and Goodwill We allocate the amounts we pay for an acquisition to the assets we acquire and liabilities we assume based on their fair values at the date of acquisition, including property, plant and equipment, inventories, accounts receivable, long-term debt, and identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including in-process research and development, on valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. Transaction costs associated with these acquisitions are expensed as incurred and are reported as operating expenses. We recognize adjustments to the provisional amounts identified during the measurement period with a corresponding adjustment to goodwill in the reporting period in which the adjustment amounts are determined. The effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts are recorded in the same period’s financial statements, calculated as if the accounting had been completed at the acquisition date. Intangible Assets, Other than Goodwill Intangible assets shown on the consolidated balance sheets consist of finite-lived and indefinite-lived assets. Developed technology rights consist primarily of existing technology and technical capabilities acquired from Sorin in the Mergers that were recorded at their respective fair values as of the acquisition date which includes patents, related know-how and licensed patent rights that represent assets expected to generate future economic benefits. Trademarks and trade names include the Sorin trade name acquired as part of the Mergers. In-process R&D was recognized as part of the acquisition of Caisson Interventional, LLC (“Caisson”). Customer relationships consist of relationships with hospitals and cardiac surgeons in the countries where we operate. Other intangible assets consist of favorable leases acquired from Sorin in the Mergers. We amortize our finite-lived intangible assets over their useful lives using the straight-line method. Amortization expense is disclosed separately in the consolidated statement of net (loss) income. We evaluate our intangible assets each reporting period to determine whether events and circumstances indicate either a different useful life or impairment. If we change our estimate of the useful life of an asset, we amortize the carrying amount over the revised remaining useful life. Impairments of Long-Lived Assets, Investments and Goodwill PP&E, intangible assets and investments We evaluate the carrying value of our long-lived assets and investments when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Such changes in circumstance may include, among other items, (i) an expectation of a sale or disposal of a long-lived asset or asset group, (ii) adverse changes in market or competitive conditions, (iii) an adverse change in legal factors or business climate in the markets in which we operate and (iv) operating or cash flow losses. For PP&E and intangible assets used in our operations, recoverability generally is determined by comparing the carrying value of an asset, or group of assets to their expected undiscounted future cash flows. If the carrying value of an asset (asset group) is not recoverable, the amount of impairment loss is measured as the difference between the carrying value of the asset (asset group) and its estimated fair value. The asset grouping as well as the determination of expected undiscounted cash flow amounts requires significant judgments, estimates, and assumptions, including cash flows generated upon disposition. We generally measure fair value by considering sale prices for similar assets. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. Goodwill We conduct impairment testing of our goodwill on October 1st each year. We test goodwill for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Testing is performed at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly viewed by management. Neuromodulation and Cardiac Surgery are deemed to be our reporting units for purposes of goodwill impairment testing. If we determine that goodwill is more-likely-than-not impaired we perform the first step of a two-step goodwill impairment test. We first identify potential impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. Fair value refers to the price that would be received if we were to sell the unit as a whole in an orderly transaction. If the carrying amount of our reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying value of the reporting unit exceeds its fair value, we perform step 2 of the goodwill impairment test and determine if the carrying amount of the reporting unit exceeds the implied fair value of the goodwill. An impairment loss is recognized, when the carrying amount of the reporting unit’s net assets exceeds the implied fair value of the reporting unit, up to and including the carrying amount of the goodwill. If the aggregate fair value of our reporting units exceeds our market capitalization, we evaluate the reasonableness of the implied control premium which includes a comparison to implied control premiums from recent market transactions within our industry or other relevant benchmark data. Goodwill impairment evaluations are highly subjective. In most instances, they involve expectations of future cash flows that reflect our judgments and assumptions regarding future industry conditions and operations. The estimates, judgments and assumptions used in the application of our goodwill impairment policies reflect both historical experience and an assessment of current operational, industry, market, economic and political environments. The use of different estimates, judgments, assumptions and expectations regarding future industry and market conditions and operations would likely result in materially different asset carrying values and operating results. Quantitative factors used to determine the fair value of the reporting units reflect our best estimates, and we believe they are reasonable. Future declines in the reporting unit's operating performance or our anticipated business outlook may reduce the estimated fair value of our reporting unit and result in additional impairments. Factors that could have a negative impact on the fair value of the reporting units include, but are not limited to: • Decreases in revenue as a result of the inability of our sales force to effectively market and promote our products; • Increased competition, patent expirations or new technologies or treatments; • Declines in anticipated growth rates; • The outcome of litigation, legal proceedings, investigations or other claims resulting in significant cash outflows; • Increases in the market-participant risk-adjusted Weighted Average Cost of Capital (“WACC”). Derivatives and Risk Management U.S. GAAP requires companies to recognize all derivatives as assets and liabilities on the balance sheet and to measure the instruments at fair value through earnings unless the derivative qualifies for hedge accounting. If the derivative qualifies for hedge accounting, depending on the nature of the hedge and hedge effectiveness, changes in the fair value of the derivative will either be recognized immediately in earnings or recorded in other comprehensive income (loss) until the hedged item is recognized in earnings upon settlement/termination. The changes in the fair value of the derivative are intended to offset the change in fair value of the hedged asset, liability or probable commitment. We evaluate hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be highly effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings. Cash flows from derivative contracts are reported as operating activities in the consolidated statements of cash flows. We use currency exchange rate derivative contracts and interest rate derivative instruments to manage the impact of currency exchange and interest rate changes on earnings and cash flows. In order to minimize earnings and cash flow volatility resulting from currency exchange rate changes, we enter into derivative instruments, principally forward currency exchange rate contracts. These contracts are designed to hedge anticipated foreign currency transactions and changes in the value of specific assets and liabilities. At inception of the forward contract, the derivative is designated as either a freestanding derivative or a cash flow hedge. We do not enter into currency exchange rate derivative contracts for speculative purposes. All derivative instruments that qualify for hedge accounting are recorded at fair value on the consolidated balance sheets, as financial assets or liabilities (current or non-current) depending upon the gain or loss position of the contract and contract maturity date. Forward contracts designated as cash flow hedges are designed to hedge the variability of cash flows associated with forecasted transactions denominated in a foreign currency that will take place in the future. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings to offset exchange differences originated by the hedged item or to adjust the value of operating income (expense). We use freestanding derivative forward contracts to offset exposure to the variability of the value associated with assets and liabilities denominated in a foreign currency. These derivatives are not designated as hedges, and therefore changes in the value of these forward contracts are recognized in earnings, thereby offsetting the current earnings effect of the related change in value of foreign currency denominated assets and liabilities. We use interest rate derivative instruments designated as cash flow hedges to manage the exposure to interest rate movements and to reduce the risk of increased borrowing costs by converting floating-rate debt into fixed-rate debt. Under these agreements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to agreed-upon notional principal amounts. The interest rate swaps are structured to mirror the payment terms of the underlying loan. The fair value of the interest rate swaps is reported in the consolidated balance sheets as financial assets or liabilities (current or non-current) depending upon the gain or loss position of the contract and the maturity of the future cash flows of the fair value of each contract. The effective portion of the gain or loss on these derivatives is reported as a component of accumulated other comprehensive income. The non-effective portion is reported in interest expense in consolidated statements of income (loss). Fair Value Measurements We follow the authoritative guidance on fair value measurements and disclosures with respect to assets and liabilities that are measured at fair value on both a recurring and nonrecurring basis. Under this guidance, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability, based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels defined as follows: • Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. • Level 3 - Inputs are unobservable for the asset or liability. Financial assets and liabilities that are classified as Level 2 include derivative instruments, primarily forward and option currency contracts and interest rate swaps contracts, which are valued using standard calculations and models that use readily observable market data as their basis. Financial liabilities that are classified as Level 3 include contingent consideration arrangements resulting from acquisitions that involve potential future payment of consideration that is contingent upon the achievement of performance milestones. Contingent consideration is recognized at the acquisition date based on the consideration expected to be transferred and estimated as the probability of future cash flows discounted to present value in accordance with accepted valuation methodologies. Contingent consideration is remeasured each reporting period with the change in fair value, including accretion for the passage of time, recorded in earnings. Investments Cost and Equity Method Investments Our investments in equity instruments, and related loans, are strategic investments in companies that are in varied stages of development and not publicly traded. Our equity investments are reported under Investments, and related loans under Prepaid Expenses and Other Current Assets and Other Assets, on the consolidated balance sheets. We account for our equity investments and related loans under the cost or the equity method, as appropriate, depending on our level of control over the investee. We use the equity method if we exercise significant influence over the investee but do not control the investee, and we use the cost method if we exercise less than significant influence, which is generally under 20% ownership. Cost Method Investments We initially record the amount of our cost method investments at cost and regularly review our investments for changes in circumstance or the occurrence of events that suggest our investment may not be recoverable. This evaluation considers all available financial information related to the investee, including valuations based on recent third-party equity investments in the investees. If an impairment is considered to be other-than-temporary, the loss is recognized in the consolidated statements of income in the period the determination is made. Impairments are reported as Impairment of cost-method investments in the consolidated statement of (loss) income. Equity Method Investments The cost of our investments accounted for under the equity method may give rise to a difference between the cost of the investment and our share of the investee’s net book value, or a basis difference. A basis difference is assigned to assets and liabilities of the investee with remaining unassigned basis assigned to goodwill. We amortize finite lived basis differences over the life of the asset or liability. We adjust our investment carrying value each period for our share of the investee’s income or loss. We report our share of the investee’s losses and the amortization of basis differences in the consolidated statements of income (loss) as Income (Loss) from Equity Method Investments. We regularly review our investments for changes in circumstance or the occurrence of events that suggest our investment may not be recoverable, and if an impairment is considered to be other-than-temporary, the loss is recognized in the consolidated statements of income in the period the determination is made and reported as Losses from Equity Method Investments. Warranty Obligation We offer a warranty on various products. We estimate the costs that may be incurred under warranties and record a liability in the amount of such costs at the time the product is sold. The amount of the reserve recorded is equal to the net costs to repair or otherwise satisfy the claim. We include the warranty obligation in accrued liabilities and other on the consolidated balance sheets. Warranty expense is recorded to cost of goods sold in our consolidated statements of income (loss). Retirement Benefit Plan Assumptions We sponsor various retirement benefit plans, including defined benefit pension plans (pension benefits), defined contribution savings plans and termination indemnity plans, covering substantially all U.S. employees and employees outside the United States. Pension benefit costs include assumptions for the discount rate, retirement age, compensation rate increases and the expected return on plan assets. Revenue Recognition Product Revenue We sell our products through a direct sales force and independent distributors. We recognize revenue when persuasive evidence of a sales arrangement exists, title to the goods and risk of loss transfers to customers or to independent distributors, the selling price is fixed or determinable and collectability is reasonably assured. We estimate expected sales returns based on historical data and record a reduction of sales with a return reserve. We record state and local sales taxes net; that is, we exclude sales tax from revenue. Service Revenue Services largely consist of technical assistance services provided to hospitals for the installation, maintenance and support in the operation of heart-lung machines and autotransfusion systems. Service related revenue is recognized on the basis of progress of the services, when services are rendered, when collectability is reasonably assured and when the amount is fixed and determinable. Research and Development (“R&D”) All R&D costs are expensed as incurred. R&D includes costs of basic research activities as well as engineering and technical effort required to develop a new product or make significant improvement to an existing product or manufacturing process. R&D costs also include regulatory and clinical study expenses, including post-market clinical studies. Leases We account for leases that transfer substantially all benefits and risks incidental to the ownership of property as an acquisition of an asset and the incurrence of an obligation, and we account for all other leases as operating leases. Certain of our leases provide for tenant improvement allowances that have been recorded as deferred rent and amortized, using the straight-line method, over the life of the lease as a reduction to rent expense. In addition, scheduled rent increases and rent holidays are recognized on a straight-line basis over the term of the lease. Stock-Based Compensation Stock-Based Incentive Awards We may grant stock-based incentive awards to directors, officers, key employees and consultants. We measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair market value of the award. We recognize equity-based compensation expense ratably over the period that an employee is required to provide service in exchange for the entire award (all vesting periods). We issue new shares upon stock option exercises, otherwise issuance of stock for vesting of restricted stock, restricted stock units or stock appreciation rights are issued from treasury shares. We have the right to elect to pay the cash value of vested restricted stock units in lieu of the issuance of new shares. Stock Appreciation Rights A stock appreciation right (“SAR”) confers upon an employee the contractual right to receive an amount of cash, stock, or a combination of both that equals the appreciation in the company’s stock from an award’s grant date to the exercise date. SARs may be exercised at the employee’s discretion during the exercise period and do not give the employee an ownership right in the underlying stock. SARs do not involve payment of an exercise price. We use the Black-Scholes option pricing methodology to calculate the grant date fair market value of SARs. We determine the expected volatility of the awards based on historical volatility. Calculation of compensation for stock awards requires estimation of employee turnover and forfeiture rates. Restricted Stock and Restricted Stock Units We may grant restricted stock and restricted stock units at no purchase cost to the grantee. The grantees of unvested restricted stock units have no voting rights nor rights to dividends. Sale or |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations The Mergers On October 19, 2015 , and pursuant to the terms of the Merger Agreement, Sorin merged with and into LivaNova, with LivaNova continuing as the surviving company, immediately followed by the merger of Merger Sub with and into Cyberonics, with Cyberonics continuing as the surviving company and as a wholly owned subsidiary of LivaNova. Following the completion of the Mergers, LivaNova became the holding company of the combined businesses of Cyberonics and Sorin, and LivaNova’s ordinary shares were listed, under the ticker symbol “LIVN”, on NASDAQ and admitted for listing on the standard segment of the U.K. Financial Authority’s Official List and to trading on the LSE. As a result of the Mergers, on October 19, 2015 , LivaNova issued approximately 48.8 million ordinary shares. On October 19, 2015, each share of Sorin was converted into the right to receive 0.0472 shares of LivaNova, (“Sorin Exchange Ratio”), and each share of common stock of Cyberonics was converted into the right to receive one share of LivaNova. The fair value of the shares issued as total consideration of the Mergers is based on Cyberonics' closing stock price of $69.95 per share on October 16, 2015, the last business day prior to the close of the Mergers. Based on the number of outstanding shares of Sorin and Cyberonics as of October 19, 2015 , former Sorin and Cyberonics shareholders held approximately 46 percent and 54 percent , respectively, of LivaNova's shares after giving effect to the Mergers. Based on the relative voting rights of Cyberonics and Sorin shareholders immediately following completion of the Mergers and the premium paid by Cyberonics for Sorin shares, and after taking into consideration all relevant facts, Cyberonics was considered to be the acquirer for accounting purposes. LivaNova accounted for the acquisition of Sorin as a business combination using the acquisition method of accounting. Under the acquisition method of accounting, the assets acquired and liabilities assumed are recorded at their estimated fair values as of the date of the Mergers. The excess of the consideration transferred over the estimated fair values of the net assets acquired was recorded as goodwill. Total fair value of consideration transferred in the Mergers (in thousands except for shares and per share data and the Sorin Exchange Ratio): Total Sorin shares outstanding as of October 16, 2015 477,824,000 Sorin exchange ratio 0.0472 Shares of LivaNova issued 22,553,293 Value per share of Cyberonics as of October 16, 2015 $ 69.95 Fair value of ordinary shares transferred to Sorin shareholders $ 1,577,603 Fair value of ordinary shares issued to Sorin share award holders (1) $ 9,231 Fair value of LivaNova stock appreciation rights issued to Sorin stock appreciation rights holders (2) $ 2,249 Fair value of ordinary shares transferred to Sorin shareholders $ 1,589,083 (1) Each Sorin share award (other than a Sorin stock appreciation right) granted prior to the Sorin merger effective time accelerated, vested and was converted into the right to receive LivaNova shares based on the Sorin Exchange Ratio. The total fair value of the replacement awards is $25.2 million , including $9.2 million attributable to pre-combination services and allocated to consideration transferred to acquire Sorin. Of the remaining $16.0 million , $8.3 million was recognized immediately in the post-combination period and $7.7 million was recognized over the post-combination service period to February 28, 2017 due to the service period requirements of the awards. Refer to “Note 14. Stock-Based Incentive Plans” for further discussion of treatment of equity awards. The consideration transferred in the Mergers was measured using the fair-value-based measure of the share awards as of the closing date. For purposes of calculating the consideration transferred, the fair-value-based measure of the Sorin share awards was determined to be the opening market price of LivaNova’s shares of $69.39 on October 19, 2015. (2) As of October 16, 2015 there were 3,815,824 Sorin stock appreciation rights. Each Sorin stock appreciation right granted prior to the Sorin merger effective time accelerated, vested and was converted into the right to receive 0.0472 LivaNova stock appreciation right based on the Sorin Exchange Ratio. The total fair value of the replacement stock appreciation rights is $3.8 million , including $2.2 million attributable to pre-combination services and allocated to consideration transferred to acquire Sorin. The remaining $1.6 million was recognized immediately in the post-combination period. Refer to “Note 14. Stock-Based Incentive Plans” for further discussion of treatment of equity awards. The following table summarizes the fair value of the assets acquired and liabilities assumed in the Mergers on October 19, 2015 , including the measurement period adjustments recognized since the fair values were presented in our report on Form 10-K/T for the transitional period ended December 31, 2015 (in thousands): October 19, 2015 Adjustments October 19, 2015 (As Adjusted) Total fair value of consideration transferred $ 1,589,083 $ — $ 1,589,083 Estimated fair value of assets acquired and liabilities assumed: Cash and cash equivalents 12,495 — 12,495 Accounts receivable 224,466 — 224,466 Inventories 233,832 — 233,832 Other current assets 60,674 (84 ) 60,590 Property, plant and equipment 207,639 (1,121 ) 206,518 Intangible assets 688,729 — 688,729 Equity investments 67,059 (72 ) 66,987 Other assets 7,483 (1,328 ) 6,155 Deferred tax assets 135,370 (121,234 ) 14,136 Total assets acquired 1,637,747 (123,839 ) 1,513,908 Current portion of debt and other obligations 110,601 — 110,601 Other current liabilities 237,855 830 238,685 Long-term debt 128,458 — 128,458 Deferred tax liabilities 279,328 (148,640 ) 130,688 Other long-term liabilities 55,567 — 55,567 Total liabilities assumed 811,809 (147,810 ) 663,999 Goodwill $ 763,145 $ (23,971 ) $ 739,174 The valuation of the intangible assets acquired in the Mergers and related amortization periods are as follows (in thousands, except years): Valuation as of October 19, 2015 Amortization Period in Years Customer relationships $ 464,019 16-18 Developed technology 211,091 9-15 Sorin trade-name 13,619 4 $ 688,729 The valuation of Other long-term liabilities acquired in the Mergers included $2.7 million of unfavorable leases with weighted average remaining lives of 5 years. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents growth opportunities and expected cost synergies of the combined company. The Mergers were expected to provide both short-term and long-term revenue enhancements and cost savings and synergy opportunities, increase the diversity of our business mix, and accelerate the entry into three emerging market opportunities in the areas of heart failure, sleep apnea and less invasive mitral valves. The Mergers were also expected to allow us to utilize and integrate certain Sorin technologies into its existing and future product lines for epilepsy and we expected our reporting units to benefit, directly or indirectly, from the synergies arising from the business combination, and as a result, we assigned the goodwill arising from the Sorin acquisition to CS, Neuromodulation and CRM. This assignment was made by taking into consideration market participant rates of return for each acquired reporting unit, CS and CRM, in order to assess the respective fair values. The remaining goodwill, allocated to Neuromodulation, which is the accounting acquirer’s existing business unit, was supported by the synergies deriving from the Mergers. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. Refer to “Note 7. Goodwill and Intangible Assets” for further discussion and details of the balance of goodwill. Contingent liabilities assumed includes $9.2 million related to uncertain tax positions. Contingent liabilities also included $3.4 million for contingent payments at fair value related to two acquisitions completed by Sorin prior to the closing of the Mergers. The contingent payments for one acquisition are based on achievement of sales targets by the acquiree through June 30, 2018 and the contingent payments for the second acquisition are based on sales of cardiopulmonary disposable products and heart-lung machines through 2019 of the acquiree. The measurement period adjustments shown in the table above were recorded prior to September 30, 2016, and reflect changes in the estimated fair values of certain assets and liabilities, primarily related to deferred income taxes, as a result of new information on facts and circumstances that existed at the time of acquisition. Adjustments were made to deferred income taxes as a result of the allocation of fair value to the legal entities. As a consequence of such push-down, deferred income taxes were presented on a net basis by jurisdiction. We recorded reductions or (increases) to the following expenses due to the measurement period adjustments (in thousands): Year Ended December 31, 2016 Amortization of intangible assets $ 1,844 Depreciation 2,790 Other costs (40 ) Total before income tax effect 4,594 Income tax (3,756 ) Net $ 838 LivaNova’s consolidated financial statements for the transitional period April 25, 2015 to December 31, 2015 , include Sorin’s results of operations from the acquisition date through December 31, 2015 . Net sales and operating loss attributable to Sorin during this period were $200.1 million and $6.0 million , respectively. In relation to the Mergers, we incurred $42.1 million of transaction costs and $13.7 million of integration costs during the transitional period April 25, 2015 to December 31, 2015 . The transaction costs primarily related to advisory, legal, and accounting fees are included in the merger and integration expenses line item in the consolidated statement of (loss) income. The integration costs are also included in the merger and integration expenses line on the consolidated statement of (loss) income. Caisson Interventional, LLC Acquisition On May 2, 2017, we acquired the remaining 51% equity interests in Caisson for a purchase price of up to $72.0 million , net of $6.3 million of debt forgiveness, consisting of $18.0 million paid at closing, $14.4 million to be paid after 12 months, and contingent consideration of up to $39.6 million to be paid on a schedule driven primarily by regulatory approvals and a sales-based earnout. Caisson is focused on the design, development and clinical evaluation of a novel transcatheter mitral valve replacement (“TMVR”) implant device with a fully transvenous delivery system. The following table presents the acquisition date fair-value of the consideration transferred and the fair value of our interest in Caisson prior to the acquisition (in thousands): Cash (1) $ 15,660 Debt forgiven (2) 6,309 Deferred consideration (1) 12,994 Contingent consideration (1) 29,303 Fair value of consideration transferred 64,266 Fair value of our interest prior to the acquisition (2) 52,505 Fair value of total consideration $ 116,771 (1) Concurrent with the acquisition, we recognized $5.8 million of post-combination compensation expense. Of this amount, $2.4 million is reflected as a reduction of $18.0 million in cash paid at closing of the acquisition, while $3.4 million increased the deferred consideration and contingent consideration liabilities recognized at the date of the acquisition to a total of $14.1 million and $31.7 million , respectively. (2) On the acquisition date, we remeasured the notes receivable from Caisson and our existing investment in Caisson at fair value and recognized a pre-tax non-cash gain of $1.3 million and $38.1 million , respectively, which are included in ‘Gain on acquisition of Caisson Interventional, LLC’ in the consolidated statements of income (loss). We have recorded no adjustments to the preliminary purchase price allocation at fair value for the Caisson acquisition, as presented in the following table (in thousands): Cash and cash equivalents $ 1,468 In-process research and development 89,000 Goodwill 42,417 Other assets 918 Current liabilities 1,023 Deferred income tax liabilities, net 16,009 Net assets acquired $ 116,771 Acquired goodwill of $9.6 million is expected to be deductible for tax purposes. Additionally, $3.0 million of the initial cash payment was deposited in escrow for future claims indemnification. Of this amount, $2.0 million is included in ‘Prepaid expenses and other current assets’ and the remaining $1.0 million is included in ‘Other long-term assets’ in the consolidated balance sheet as of December 31, 2017. We recognized acquisition-related expenses of approximately $1.3 million for legal and valuation expenses during the year ended December 31, 2017. Additionally, the results of Caisson for the period of May 2, 2017 through December 31, 2017 added no revenue and $20.1 million in expenses in our consolidated statement of (loss) income. The contingent consideration arrangements are composed of potential cash payments upon the achievement of certain regulatory milestones and a sales-based earnout associated with sales of products covered by the purchase agreement. The sales-based earnout was valued using projected sales from our internal strategic plans. Both arrangements are Level 3 fair value measurements and include the following significant unobservable inputs (in thousands): Caisson Acquisition Fair value at May 2, 2017 Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments $ 14,883 Discounted cash flow Discount rate 2.6% - 3.4% Probability of payment 90-95% Projected payment years 2018-2023 Sales-based earnout 16,805 Monte Carlo simulation Discount rate 11.5-12.7% Sales volatility 36.9% Projected years of sales 2019-2033 $ 31,688 The following table provides a reconciliation of the beginning and ending balance of the contingent consideration liability, which consisted of arrangements that arose from the Caisson acquisition and other previous acquisitions that also included contingent consideration (in thousands): Balance at December 31, 2016 $ 3,890 Purchase price - Caisson contingent consideration 31,688 Payments (1,803 ) Changes in fair value 56 Effect of changes in foreign currency exchange rates 142 Balance at December 31, 2017 (1) $ 33,973 (1) The contingent consideration liability represents contingent payments related to three acquisitions: the first and second acquisitions, in September 2015, were Cellplex PTY Ltd. in Australia and the commercial activities of a local distributor in Colombia. The contingent payments for the first acquisition are based on achievement of sales targets by the acquiree through June 30, 2018 and the contingent payments for the second acquisition are based on sales of cardiopulmonary disposable products and heart lung machines of the acquiree through December 2019. The third acquisition, Caisson, occurred in May 2017 and is discussed above. Refer to “Note 9. Fair Value Measurements.” |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On November 20, 2017, we entered into a letter of intent (“LOI”) to sell CRM to MicroPort Scientific Corporation for $190.0 million in cash. We expect to enter into the definitive acquisition agreement contemplated by the LOI following completion of the notification and consultation process with CRM’s employee works councils as required by local laws. Completion of the transaction is subject to entry into the definitive acquisition agreement, receipt of relevant regulatory approvals, including fulfilling the requirements of the Hong Kong Stock Exchange’s Major Transactions requirements, and other customary closing conditions. We expect the transaction to close in the second quarter of 2018. CRM develops, manufactures and markets products for the diagnosis, treatment and management of heart rhythm disorders and heart failures. CRM products include high-voltage defibrillators, cardiac resynchronization therapy devices and low-voltage pacemakers. CRM has approximately 900 employees, with operations in Clamart, France; Saluggia, Italy; and Santo Domingo, Dominican Republic. We concluded that the sale of CRM represents a strategic shift in our business that will have a major effect on future operations and financial results. As a result, we classified the operating results of CRM as discontinued operations in our consolidated statements of operations. Additionally we tested the long-lived assets of CRM for impairment and recognized an impairment of tangible and intangible assets of $78.3 million , net of a $15.3 million tax benefit. The impairment is presented separately as Impairment of discontinued operations, net of tax on the consolidated statements of (loss) income since the impairment is significant and resulted from the agreement to sell CRM. The assets and liabilities of CRM are classified as held for sale and presented as assets (or liabilities) of discontinued operations on the consolidated balance sheets at December 31, 2017 and December 31, 2016 . The following table represents assets and liabilities of CRM are classified as held for sale and presented as assets and liabilities of discontinued operations in the consolidated balance sheets: December 31, 2017 December 31, 2016 Accounts receivable, net $ 64,684 $ 62,474 Inventories 54,097 50,472 Prepaid taxes 14,725 10,038 Prepaid and other assets 3,498 4,349 Property, plant and equipment, net 12,104 20,134 Deferred tax assets, net 2,517 — Investments 6,098 4,866 Intangible assets, net 92,966 167,589 Assets of discontinued operations $ 250,689 $ 319,922 Accounts payable 26,501 21,018 Accrued liabilities and other 7,669 8,936 Income taxes payable 5,084 3,959 Accrued employee compensation and benefits 30,753 29,321 Deferred income taxes liability 8,068 20,009 Liabilities of discontinued operations $ 78,075 $ 83,243 The following table represents the financial results of CRM presented as net loss from discontinued operations in the consolidated statements of (loss) income: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Revenues $ 245,171 $ 249,067 $ 52,470 Cost of sales 92,609 104,168 30,439 Gross profit 152,562 144,899 22,031 Selling, general and administrative expenses 105,831 112,427 22,155 Research and development 37,936 39,987 9,504 Merger and integration expenses 22 160 11 Restructuring expenses (1,617 ) 18,566 829 Amortization of intangibles 12,737 14,476 2,704 Impairment of tangible and intangible assets 93,574 — — Goodwill impairment — 18,348 — Total operating expenses 248,483 203,964 35,203 Operating loss from discontinued operations (95,921 ) (59,065 ) (13,172 ) Foreign exchange and other (losses) gains (381 ) 350 (111 ) Loss from discontinued operations, before income tax (96,302 ) (58,715 ) (13,283 ) Income tax (benefit) expense (21,635 ) 2,015 525 Losses from equity method investments (4,887 ) (3,933 ) (1,085 ) Net loss from discontinued operations $ (79,554 ) $ (64,663 ) $ (14,893 ) Cash flows attributable to our discontinued operations are included in our consolidated statements of cash flows. For the years ended December 31, 2017 and December 31, 2016 and for the transitional period April 25, 2015 to December 31, 2015, CRM’s depreciation and amortization was $18.3 million , $21.8 million and $4.3 million , capital expenditures were $6.1 million , $3.8 million and $5.0 million and stock-based compensation expense was $1.4 million , $2.1 million and $0.3 million , respectively. Fiscal year 2017 income tax benefit includes $15.3 million of benefit recognized on the impairment of CRM. During the year ended December 31, 2017 we invested $4.5 million in MicroPort Sorin CRM (Shanghai) Co. Ltd. which is held in ‘Assets of discontinued operations’ on the consolidated balance sheets. The future minimum lease payments for operating leases of CRM as of December 31, 2017 are (in thousands): 2018 $ 6,107 2019 5,545 2020 4,523 2021 4,089 2022 4,077 Thereafter 20,388 Total $ 44,729 |
Restructuring Plans
Restructuring Plans | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Plans | Restructuring Plans We initiate restructuring plans to leverage economies of scale, streamline distribution and logistics and strengthen operational and administrative effectiveness in order to reduce overall costs. Costs associated with these Plans were reported as restructuring expenses in the operating results of our consolidated statement of (loss) income. Our 2015 and 2016 Reorganization Plans (the “Plans”) were initiated October 2015 and March 2016, respectively, in conjunction with the completion of the Mergers. The Plans include the closure of the R&D facility in Meylan, France and consolidation of its research and development (“R&D”) capabilities into the Clamart, France facility. In addition, during the year ended December 31, 2016 , we initiated a plan to exit the Costa Rica manufacturing operation and transfer its operations to Houston, Texas. We completed the exit of Costa Rica in the first half of 2017 and we plan to complete the 2015 and 2016 Reorganization Plans in the first half of 2018. In March 2017, we committed to a plan to sell our Suzhou Industrial Park facility in Shanghai, China. As a result of this exit plan we recorded an impairment of the building and equipment of $5.4 million and accrued $0.5 million of additional costs, primarily related to employee severance, during the year ended December 31, 2017 . In addition, the remaining carrying value of the land, building and equipment was reclassified to ‘Assets held for sale’ in March 2017, with a balance of $13.6 million as of December 31, 2017 in the consolidated balance sheet. In December, 2017, we executed a letter of intent for the sale of the Suzhou facility. We estimate that these Plans will result in a net reduction of approximately 324 personnel of which 314 have occurred as of December 31, 2017 . The following table presents the Reorganization Plans’ accruals, inventory obsolescence and other reserves, recorded in connection with the Reorganization Plans including the balances and activity related to the CRM Business Franchise, (in thousands): Employee Severance and Other Termination Costs Other Total Balance at April 24, 2015 $ — $ — $ — Charges 11,323 — 11,323 Cash payments (4,404 ) — (4,404 ) Balance at December 31, 2015 6,919 — 6,919 Charges 46,678 9,265 55,943 Cash payments / write-downs (32,505 ) (6,209 ) (38,714 ) Balance at December 31, 2016 $ 21,092 $ 3,056 $ 24,148 Charges 10,076 5,363 15,439 Cash payments / write-downs (27,279 ) (5,794 ) (33,073 ) Balance at December 31, 2017 $ 3,889 $ 2,625 $ 6,514 The following table presents restructuring expense by reportable segment, with discontinued operations included (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Cardiac Surgery (1) $ 8,819 $ 11,042 $ 1,211 Neuromodulation (2) 561 14,769 1,079 Other 7,676 11,566 8,204 Restructuring expense from continuing operations 17,056 37,377 10,494 Discontinued operations (1,617 ) 18,566 829 Total $ 15,439 $ 55,943 $ 11,323 (1) Cardiac Surgery restructuring expense for the year ended December 31, 2017 included building and equipment impairment of $5.4 million related to the Suzhou, China facility exit plan. (2) Neuromodulation restructuring expense for the year ended December 31, 2016 included building and equipment impairment of $5.7 million related to the Costa Rica exit plan. |
Product Remediation Liability
Product Remediation Liability | 12 Months Ended |
Dec. 31, 2017 | |
Environmental Remediation Obligations [Abstract] | |
Product Remediation Liability | Product Remediation Liability In December 2015, we received an FDA Warning Letter (the “Warning Letter”) alleging certain violations of FDA regulations applicable to medical device manufacturing at our Munich, Germany and Arvada, Colorado facilities. On October 13, 2016 the Centers for Disease Control and Prevention (“CDC”) and FDA separately released safety notifications regarding the 3T Heater Cooler devices in response to which the Company issued a Field Safety Notice Update for U.S. users of 3T Heater Cooler devices to proactively and voluntarily contact facilities to facilitate implementation of the CDC and FDA recommendations. At December 31, 2016, we recognized a liability for a product remediation plan related to our 3T Heater-Cooler device (“3T device”). The remediation plan we developed consists primarily of a modification of the 3T device design to include internal sealing and the addition of a vacuum system to new and existing devices. These changes are intended to address regulatory actions and to reduce further the risk of possible dispersion of aerosols from 3T devices in the operating room. We concluded that it was probable that a liability had been incurred upon management’s approval of the plan and the commitments made by management to various regulatory authorities globally in November and December 2016, and furthermore, the cost associated with the plan was reasonably estimable. The deployment of this solution for commercially distributed devices has been dependent upon final validation and verification of the design changes and approval or clearance by regulatory authorities worldwide, including FDA clearance in the U.S. It is reasonably possible that our estimate of the remediation liability could materially change in future periods due to the various significant assumptions involved such as customer behavior, market reaction and the timing of approvals or clearance by regulatory authorities worldwide. In April 2017, we obtained CE Mark in Europe for the design change of the 3T device and in May 2017 we completed our first vacuum and sealing upgrade on a customer-owned device. We are currently implementing the vacuum and sealing upgrade program in as many countries as possible throughout 2018 and beyond until all devices are upgraded. As part of the remediation plan, we also intend to perform a no-charge deep disinfection service for 3T device users who have reported confirmed M. chimaera mycobacterium contamination. Although the deep disinfection service is not yet available in the U.S., it is currently offered in many countries around the world and will be expanded to additional geographies as we receive the required regulatory approvals. Finally, we are continuing to offer the loaner program for 3T devices, initiated in the fourth quarter of 2016, to provide existing 3T device users with a new loaner 3T device at no charge pending regulatory approval and implementation of the vacuum system addition and deep disinfection service worldwide. This loaner program began in the U.S. and is being made available progressively on a global basis, prioritizing and allocating devices to 3T device users based on pre-established criteria. Changes in the carrying amount of the product remediation liability are as follows (in thousands): Balance at December 31, 2016 $ 33,487 Adjustments 2,452 Remediation activity (11,283 ) Effect of changes in foreign currency exchange rates 2,890 Balance at December 31, 2017 (1) $ 27,546 (1) At December 31, 2017 , the product remediation liability is included in ‘Accrued liabilities and other’ at $16.8 million and ‘Other long-term liabilities’ at $10.7 million , in the consolidated balance sheet. For further information, please refer to “Note 12. Commitments and Contingencies.” At this stage, we have recognized no liability with respect to any lawsuits related to the 3T Heater Cooler and our related legal costs are expensed as incurred. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Detail of finite-lived and indefinite-lived intangible assets (in thousands): December 31, 2017 December 31, 2016 Finite-lived intangible assets: Customer relationships $ 327,496 $ 304,056 Developed technology 179,234 160,775 Trademarks and trade names 14,391 12,649 Other intangible assets 181 1,177 Total 521,302 478,657 Accumulated amortization 74,905 37,049 Net $ 446,397 $ 441,608 Indefinite-lived intangible assets: In-process R&D $ 89,000 $ — Goodwill 784,242 691,712 Total $ 873,242 $ 691,712 During the year ended December 31, 2017 , we recognized $89.0 million of in-process R&D related to the acquisition of Caisson. The amortization periods for our finite-lived intangible assets as of December 31, 2017 : Minimum Life in years Maximum Life in years Customer relationships 16 18 Developed technology 9 15 Trademarks and trade names 4 4 Other intangible assets 5 5 The estimated future amortization expense based on our finite-lived intangible assets at December 31, 2017 (in thousands): 2018 $ 34,720 2019 34,739 2020 34,761 2021 35,019 2022 35,019 Thereafter 272,139 Total $ 446,397 Goodwill and Goodwill Impairment Our business consists of two operating Segments (which are our reporting units for goodwill testing): Neuromodulation and Cardiac Surgery. The carrying amount of goodwill by Segment (in thousands): Cardiac Surgery Neuromodulation Other Total December 31, 2016 $ 375,769 $ 315,943 $ — $ 691,712 Goodwill as a result of acquisitions (1) — — 42,417 42,417 Foreign currency adjustments 50,113 — — 50,113 December 31, 2017 $ 425,882 $ 315,943 $ 42,417 $ 784,242 (1) Goodwill recognized during the year ended 2017 was the result of the Caisson acquisition. Refer to “Note 3. Business Combinations.” We performed a quantitative assessment for our Neuromodulation and Cardiac Surgery reporting units as of October 1, 2017. We concluded that the fair value of Neuromodulation and Cardiac Surgery was substantially in excess of the carrying value of the respective reporting units, as evidenced by the estimated fair value of the Neuromodulation and Cardiac Surgery reporting units calculated for the purpose of reconciling the fair value of our reporting units to our market capitalization. Therefore, we concluded that it remains more-likely than not that the Neuromodulation and Cardiac Surgery reporting units goodwill was not impaired. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments [Abstract] | |
Investments | Investments Cost Method Investments Our cost method investments are included in Investments in the consolidated balance sheets and consist of our equity positions in the following privately-held companies (in thousands): December 31, 2017 December 31, 2016 Respicardia Inc. (1) $ 17,422 $ 17,518 ImThera Medical, Inc. (2) 12,900 12,000 Rainbow Medical Ltd. (3) 1,172 3,733 MD Start II 1,199 526 $ 32,693 $ 33,777 (1) Respicardia is a privately funded U.S. company developing an implantable device designed to restore a more natural breathing pattern during sleep in patients with central sleep apnea by transvenously stimulating the phrenic nerve. We have a loan outstanding to Respicardia with a carrying amount of $0.4 million , as of December 31, 2017 , which is included in ‘Prepaid expenses and other current assets’ on the consolidated balance sheet. During the year ended December 31, 2017 , we converted a loan to Respicardia of $1.5 million to equity, we recorded an impairment of $5.5 million and we recorded an FX gain of $3.9 million , Refer to the paragraph below for further details regarding the impairment. (2) ImThera Medical, Inc. (“ImThera”) is a privately funded U.S. company developing a neurostimulation device system for the treatment of obstructive sleep apnea. We have a loan outstanding to ImThera as of December 31, 2017 with a carrying amount of $1.0 million , which is included in ‘Other assets’ in the consolidated balance sheet. On January 16, 2018 we acquired the remaining outstanding interests in ImThera. Refer to “Note 22. Subsequent Events” for a discussion of our acquisition of ImThera. (3) Rainbow Medical (“Rainbow Medical”) is a private Israeli venture capital company that seeds and grows companies developing medical devices in a diverse range of medical fields. During the fourth quarter of 2017, we impaired our investment in Rainbow Medical. Refer to the paragraph below for further details. Respicardia Impairment We recognized an impairment of our cost-method investment in Respicardia during the year ended December 31, 2017 . Terms of an additional round of financing with a new strategic investor indicated that the carrying value of our aggregate investment might not be recoverable and that the decrease in value of our aggregate investment was other than temporary. We, therefore, estimated the fair value of our investment using the income approach. The estimated fair value of our investment was below our carrying value by $5.5 million . This impairment was included in ‘Impairment of cost-method investments’ in the consolidated statement of (loss) income. Rainbow Medical Impairment We recognized an impairment of our cost-method investment in Rainbow Medical during the year ended December 31, 2017 . An additional round of financing, which included a new investor, indicated that the carrying value of our aggregate investment might not be recoverable and that the decrease in value of our aggregate investment was other than temporary. We, therefore, estimated the fair value of our investment using the income approach. The estimated fair value of our aggregate investment was below our carrying value by $3.0 million . This aggregate impairment was included in ‘Impairment of investments’ in the consolidated statement of (loss) income. Istituto Europeo di Oncologia S.R.L Sale During the year ended December 31, 2017 , we sold our investment in Istituto Europeo di Oncologia S.R.L, for a gain of $3.2 million . This gain is included in ‘Foreign exchange and other gains (losses)’ in the consolidated statement of (loss) income. Equity Method Investments Our equity method investments are included in Investments in the consolidated balance sheets and consist of our equity position in the following entities (in thousands, except for percent ownership): % Ownership (1) December 31, 2017 December 31, 2016 Highlife S.A.S. (2) 25 % $ 1,782 $ 6,009 Caisson Interventional LLC (3) — 16,424 Other 17 16 Total $ 1,799 $ 22,449 (1) Ownership percentage as of December 31, 2017 . (2) Highlife S.A.S is a privately held clinical-stage medical device company located in France and is focused on the development of a unique transcatheter mitral valve replacement system to treat patients with mitral regurgitation. During the year ended December 31, 2017 , we recognized an impairment of our investment in, and notes receivable from, Highlife. Refer to the paragraph below for further details. In addition, due to additional investments by third parties and the conversion of our note receivable to equity our equity interest fell to 25% from 38% during the year ended December 31, 2017 . (3) On May 2, 2017 , we acquired the remaining 51% equity interests in Caisson Interventional LLC (“Caisson”), and we began consolidating the results of Caisson as of the acquisition date. Refer to “Note 3. Business Combinations” for further information. Highlife Impairment We recognized an impairment of our equity-method investment in, and notes receivable from, Highlife S.A.S. (“Highlife”) during the year ended December 31, 2017 . Certain factors, including a revision in our investment strategy and a new strategic investor, indicated that the carrying value of our aggregate investment might not be recoverable and that the decrease in value of our aggregate investment was other than temporary. We, therefore, estimated the fair value of our investment and notes receivable using the market approach. The estimated fair value of our aggregate investment was below our carrying value by $13.0 million . This aggregate impairment was included in ‘Losses from equity method investments’ in the consolidated statements of income (loss). |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no transfers between Level 1, Level 2, or Level 3 during the year ended December 31, 2017 or December 31, 2016 . Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table provides information by level for assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Inputs Considered as: Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Assets: Derivative assets - freestanding instruments (foreign currency exchange rate "FX") $ 519 $ — $ 519 $ — Total assets $ 519 $ — $ 519 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 460 $ — $ 460 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 1,585 — 1,585 — Contingent consideration 33,973 — — 33,973 Total liabilities $ 36,018 $ — $ 2,045 $ 33,973 Fair Value Measurements Using Inputs Considered as: Fair Value as of December 31, 2016 Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (FX) $ 4,911 $ — $ 4,911 $ — Derivative assets - freestanding instruments (FX) 3,358 — 3,358 — Total assets $ 8,269 $ — $ 8,269 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (interest rate swaps) $ 2,334 $ — $ 2,334 $ — Contingent consideration 3,890 — — 3,890 Total liabilities $ 6,224 $ — $ 2,334 $ 3,890 Our recurring fair value measurements, using significant unobservable inputs (level 3), relate solely to our contingent consideration liability. Refer to “Note 3. Business Combinations” for a discussion of the changes in the fair value of our contingent consideration liability. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis Our investment in entities accounted for under the cost-method and the equity method have no quoted market prices. These investments and our non-financial assets such as: goodwill, intangible assets, and PP&E, are measured at fair value if there is an indication of impairment and recorded at fair value only when an impairment is recognized. We classify the measurement input for these assets as Level 3 inputs within the fair value hierarchy. Refer to “Note 8. Investments” for further information. Other The carrying values of our cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these items. The carrying value of our long-term debt including the short-term portion, as of December 31, 2017 , was $87.8 million which we believe approximates fair value. |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Financing Arrangements The outstanding principal amount of long-term debt (in thousands, except interest rates): Principal Amount at December 31, 2017 Principal Amount at December 31, 2016 Maturity Effective Interest Rate European Investment Bank (1) $ 69,893 $ 78,987 June 2021 0.95 % Mediocredito Italiano (2) 9,118 7,276 December 2023 0.50% - 3.10% Banca del Mezzogiorno (3) 5,499 6,747 December 2019 0.50% - 3.15% Bpifrance (ex-Oséo) 1,450 1,909 October 2019 2.58 % Region Wallonne 845 798 December 2023 and June 2033 0.00% - 2.45% Mediocredito Italiano - mortgages and other 997 799 September 2021 and September 2026 0.80% -1.30% Total long-term facilities 87,802 96,516 Less current portion of long-term debt 25,844 21,301 Total long-term debt $ 61,958 $ 75,215 (1) The European Investment Bank (“EIB”) loan was obtained in July 2014 to support product development projects. The interest rate for the EIB loan is reset by the lender each quarter based on the Euribor. Interest payments are paid quarterly and principal payments are paid semi-annually. (2) We obtained the Mediocredito Italiano Bank loan in July 2016 as part of the Fondo Innovazione Teconologica program implemented by the Italian Ministry of Education. (3) The Banca del Mezzogiorno loan was obtained in January 2015 to support R&D projects as a part of the Large Strategic Project program of the Italian Ministry of Education. Revolving Credit The outstanding principal amount of our short-term unsecured revolving credit agreements and other agreements with various banks was $58.2 million and $26.3 million , at December 31, 2017 and December 31, 2016 , respectively, with interest rates ranging from 0.1% to 9.3% and loan terms ranging from one day to 180 days . European Investment Bank Financing Agreement On June 29, 2017 , we entered into a new finance contract (the “Finance Contract”) with the EIB to support financing of certain R&D projects. The Finance Contract has a borrowing base of €100.0 million (approximately $119.9 million ) and can be drawn in up to two tranches, each in a minimum amount of €50.0 million (approximately $60.0 million ). The fixed rate tranche accrues interest at an annual interest rate determined by the EIB at the time of the borrowing while the variable rate tranche accrues EUR or USD denominated borrowings at the Euro Interbank Offered Rate or London Interbank Offered Rate, respectively, plus 0.68% . Drawdowns must occur by December 30, 2018 , and the last repayment date of any tranche will be no earlier than four years and no later than eight years after the disbursement of the relevant tranche. Loans under the Finance Contract are subject to certain covenants and other terms and conditions. No loan drawdowns have occurred as of December 31, 2017 . |
Derivatives and Risk Management
Derivatives and Risk Management | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Risk Management | Derivatives and Risk Management Due to the global nature of our operations, we are exposed to foreign currency exchange rate fluctuations. In addition, due to certain loans with floating interest rates, we are also subject to the impact of changes in interest rates on our interest payments. We enter into foreign currency exchange rate (“FX”) derivative contracts and interest rate swap contracts to reduce the impact of foreign currency rate and interest rate fluctuations on earnings and cash flow. We measure all outstanding derivatives each period end at fair value and report the fair value as either financial assets or liabilities in the consolidated balance sheets. We do not enter into derivative contracts for speculative purposes. At inception of the contract, the derivative is designated as either a freestanding derivative or a hedge. Derivatives that are not designated as hedging instruments are referred to as freestanding derivatives with changes in fair value included in earnings. If the derivative qualifies for hedge accounting, depending on the nature of the hedge and hedge effectiveness, changes in the fair value of the derivative will either be recognized immediately in earnings or recorded in other ‘Accumulated other comprehensive income’ (“AOCI”) until the hedged item is recognized in earnings upon settlement/termination. FX derivative gains and losses in AOCI are reclassified to the consolidated statement of (loss) income as shown in the tables below and interest rate swap gains and losses in AOCI are reclassified to interest expense in the consolidated statement of (loss) income. We evaluate hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be highly effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings. Cash flows from derivative contracts are reported as operating activities in the consolidated statements of cash flows. Freestanding Derivative FX Contracts The gross notional amount of FX derivative contracts, not designated as hedging instruments, outstanding at December 31, 2017 and December 31, 2016 was $231.9 million and $489.1 million , respectively. These derivative contracts are designed to offset the FX effects in earnings of various intercompany loans, our European Investment Bank loan, and trade receivables. We recorded net gains (losses) for these freestanding derivatives of $(11.7) million and $11.0 million for the years ended December 31, 2017 and December 31, 2016 , respectively. These gains and losses are included in ‘Foreign exchange and other gains (losses)’ in the consolidated statements of income (loss). Cash Flow Hedges Foreign Currency Risk We utilize FX derivative contracts, designed as cash flow hedges, to hedge the variability of cash flows associated with our 12 month USD forecasts of revenues denominated in British Pound, Japanese Yen and Canadian Dollars. We transfer to earnings from accumulated other comprehensive income (loss), the gain or loss realized on the FX derivative contracts at the time of invoicing. There was no hedge ineffectiveness and there were no components of the FX derivative contracts excluded in the measurement of hedge effectiveness during the years ended December 31, 2017 and December 31, 2016 . During the year ended December 31, 2016 , we discontinued and settled certain of our FX derivative contracts due to changes in our foreign currency revenue forecast that resulted in a gain of $0.2 million reclassified to earnings from accumulated other comprehensive (loss). Interest Rate Risk In July 2014 , Sorin entered into a European Investment Bank (“EIB”) long-term loan agreement that matures in June 2021 with variable interest payments due quarterly based on the Euribor 3 month floating interest rate. To minimize the impact of changes in the interest rate we entered into an interest rate swap agreement program to swap the EIB floating-rate interest payments for fixed-rate interest payments. The interest rate swap contracts qualify for, and are designated as, cash flow hedges. There was no interest rate swap hedge ineffectiveness or component of the swap contract excluded in the measurement of hedge effectiveness during the years ended December 31, 2017 and December 31, 2016 . Notional amounts of open derivative contracts designated as cash flow hedges (in thousands): Description of derivative contract: December 31, 2017 December 31, 2016 FX derivative contracts to be exchanged for British Pounds $ 16,847 $ 6,663 FX derivative contracts to be exchanged for Japanese Yen 32,302 57,840 FX derivative contracts to be exchanged for Canadian Dollars 16,494 — Interest rate swap contracts 55,965 63,246 $ 121,608 $ 127,749 After-tax net loss associated with derivatives designated as cash flow hedges recorded in the ending balance of AOCI and the amount expected to be reclassified to earnings in the next 12 months (in thousands): December 31, 2017 Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ (712 ) $ (712 ) Interest rate swap contracts (207 ) (59 ) $ (919 ) $ (771 ) Pre-tax gains (losses) for derivative contracts designated as cash flow hedges recognized in ‘Other comprehensive income (loss)’ (“OCI”) and the amount reclassified to earnings from AOCI (in thousands): Year Ended December 31, 2017 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Losses Recognized in OCI Gains (Losses) Reclassified from OCI to Earnings: FX derivative contracts Foreign Exchange and Other $ (9,861 ) $ (6,471 ) FX derivative contracts SG&A — 2,084 Interest rate swap contracts Interest expense — 939 $ (9,861 ) $ (3,448 ) Year Ended December 31, 2016 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from OCI to Earnings: FX derivative contracts Foreign Exchange and Other $ 2,874 $ 3,705 FX derivative contracts SG&A — (4,218 ) Interest rate swap contracts Interest expense 85 (458 ) $ 2,959 $ (971 ) The following tables present the fair value, and the location of, derivative contracts reported in the consolidated balance sheets (in thousands): December 31, 2017 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) Interest rate swap contracts Prepaid expenses and other current assets $ — Accrued liabilities $ 834 Interest rate swap contracts Other assets — Other long-term liabilities 751 FX derivative contracts Prepaid expenses and other current assets — Accrued liabilities 460 Total derivatives designated as hedging instruments — 2,045 Derivatives Not Designated as Hedging Instruments FX derivative contracts Prepaid expenses and other current assets 519 Accrued liabilities — Total derivatives not designated as hedging instruments 519 — Total derivatives $ 519 $ 2,045 December 31, 2016 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) Interest rate swap contracts Prepaid expenses and other current assets $ — Accrued liabilities $ 942 Interest rate swap contracts Other assets — Other long-term liabilities 1,392 FX derivative contracts Prepaid expenses and other current assets 4,911 Accrued liabilities — Total derivatives designated as hedging instruments 4,911 2,334 Derivatives Not Designated as Hedging Instruments FX derivative contracts Prepaid expenses and other current assets 3,358 Accrued liabilities — Total derivatives not designated as hedging instruments 3,358 — Total derivatives $ 8,269 $ 2,334 (1) For the classification of input used to evaluate the fair value of our derivatives, refer to “Note 9. Fair Value Measurements.” |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies FDA Warning Letter On December 29, 2015, the FDA issued a Warning Letter (the “Warning Letter”) alleging certain violations of FDA regulations applicable to medical device manufacturers at our Munich, Germany and Arvada, Colorado facilities. The FDA inspected the Munich facility from August 24, 2015 to August 27, 2015 and the Arvada facility from August 24, 2015 to September 1, 2015. On August 27, 2015, the FDA issued a Form 483 identifying two observed non-conformities with certain regulatory requirements at the Munich facility. We did not receive a Form 483 in connection with the FDA’s inspection of the Arvada facility. Following the receipt of the Form 483, we provided written responses to the FDA describing corrective and preventive actions that were underway or to be taken to address the FDA’s observations at the Munich facility. The Warning Letter responded in part to our responses and identified other alleged violations related to the manufacture of our 3T Heater-Cooler device that were not previously included in the Form 483. The Warning Letter further stated that our 3T devices and other devices we manufactured at our Munich facility are subject to refusal of admission into the U.S. until resolution of the issues set forth by the FDA in the Warning Letter. The FDA has informed us that the import alert is limited to the 3T devices, but that the agency reserves the right to expand the scope of the import alert if future circumstances warrant such action. The Warning Letter did not request that existing users cease using the 3T device, and manufacturing and shipment of all of our products other than the 3T device remain unaffected by the import limitation. To help clarify these issues for current customers, we issued an informational Customer Letter in January 2016 and that same month agreed with the FDA on a process for shipping 3T devices to existing U.S. users pursuant to a certificate of medical necessity program. Finally, the Warning Letter stated that premarket approval applications for Class III devices to which certain Quality System regulation deviations identified in the Warning Letter are reasonably related will not be approved until the violations have been corrected; however, this restriction applies only to the Munich and Arvada facilities, which do not manufacture or design devices subject to Class III premarket approval. We continue to work diligently to remediate the FDA’s inspectional observations for the Munich facility, as well as the additional issues identified in the Warning Letter. We take these matters seriously and intend to respond timely and fully to the FDA’s requests. CDC and FDA Safety Communications and Company Field Safety Notice Update On October 13, 2016, the Centers for Disease Control and Prevention (“CDC”) and FDA separately released safety notifications regarding the 3T devices. The CDC’s Morbidity and Mortality Weekly Report (“MMWR”) and Health Advisory Notice (“HAN”) reported that tests conducted by CDC and its affiliates indicate that there appears to be genetic similarity between both patient and 3T device strains of the non-tuberculous mycobacterium (“NTM”) bacteria M. chimaera isolated in hospitals in Iowa and Pennsylvania. Citing the geographic separation between the two hospitals referenced in the investigation, the report asserts that 3T devices manufactured prior to August 18, 2014 could have been contaminated during the manufacturing process. The CDC’s HAN and FDA’s Safety Communication, issued contemporaneously with the MMWR report, each assess certain risks associated with 3T devices and provide guidance for providers and patients. The CDC notification states that the decision to use the 3T device during a surgical operation is to be taken by the surgeon based on a risk approach and on patient need. Both the CDC’s and FDA’s communications confirm that 3T devices are critical medical devices and enable doctors to perform life-saving cardiac surgery procedures. Also on October 13, 2016, in response to the Warning Letter and CDC’s HAN and FDA’s Safety Commission, we issued a Field Safety Notice Update for U.S. users of 3T devices to proactively and voluntarily contact facilities to aid in implementation of the CDC and FDA recommendations. In the fourth quarter of 2016, we initiated a program to provide existing 3T device users with a new loaner 3T device at no charge pending regulatory approval and implementation of additional risk mitigation strategies worldwide. This loaner program began in the U.S. and is being made available progressively on a global basis, prioritizing and allocating devices to 3T device users based on pre-established criteria. We anticipate that this program will continue until we are able to address customer needs through a broader solution that includes implementation of one or more of the risk mitigation strategies currently under review with regulatory agencies. We are also currently implementing a vacuum and sealing upgrade program in as many countries as possible throughout 2018 and beyond until all devices are upgraded. Furthermore, we intend to perform a no-charge deep disinfection service for 3T device users who have reported confirmed M. chimaera mycobacterium contamination. Although the deep disinfection service is not yet available in the U.S., it is currently offered in many countries around the world and will be expanded to additional geographies as we receive the required regulatory approvals. On December 31, 2016, we recognized a liability for our product remediation plan related to our 3T device. We concluded that it was probable that a liability had been incurred upon management’s approval of the plan and the commitments made by management to various regulatory authorities globally in November and December 2016, and furthermore, the cost associated with the plan was reasonably estimable. At December 31, 2017 , the product remediation liability was $27.5 million . Refer to “Note 6. Product Remediation Liability” for additional information. Litigation The Company is currently involved in litigation involving our 3T heater-cooler product. The litigation includes a class action complaint in the U.S. District Court for the Middle District of Pennsylvania, federal multi-district litigation in the U.S. District Court for the Middle District of Pennsylvania and cases in various state courts and jurisdictions outside the U.S. As of February 27, 2017, we are involved in approximately 110 claims worldwide, with the majority of the claims in various federal or state courts throughout the United States. The complaints generally seek damages and other relief based on theories of strict liability, negligence, breach of express and implied warranties, failure to warn, design and manufacturing defect, fraudulent and negligent misrepresentation/concealment, unjust enrichment, and violations of various state consumer protection statutes. The class action consists of all Pennsylvania residents who underwent open heart surgery at WellSpan York Hospital and Penn State Milton S. Hershey Medical Center between 2011 and 2015 and who currently are asymptomatic for NTM infection. Members of the class seek declaratory relief that the 3T devices are defective and unsafe for intended uses, medical monitoring, damages, and attorneys’ fees. LivaNova has filed a petition for permission to appeal the class certification order with the U.S. Court of Appeals for the Third Circuit. We have not recognized an expense related to damages in connection with these matters because any potential loss is not currently probable or reasonably estimable. In addition we cannot reasonably estimate a range of potential loss, if any, that may result from these matters. Civil Investigative Demand On May 31, 2017, the Company received a Civil Investigative Demand (CID) from the US Attorney’s Office for the Northern District of Georgia. The CID requested certain documents relating to sales and marketing of VNS devices and related products in the State of Georgia. We have not recognized an expense related to this matter because any potential loss is not currently probable or reasonably estimable. In addition we cannot reasonably estimate a range of potential loss, if any, that may result from this matter. Other Legacy Sorin Matters SNIA Litigation Our subsidiary, Sorin S.p.A. was created as a result of a spin-off (the “Sorin spin-off”) from SNIA S.p.A. (“SNIA”) in January, 2004. SNIA subsequently became insolvent and the Italian Ministry of the Environment and the Protection of Land and Sea (the “Italian Ministry of the Environment”), sought compensation from SNIA in an aggregate amount of approximately $4 billion for remediation costs relating to the environmental damage at chemical sites previously operated by SNIA’s other subsidiaries. In September 2011 and July 2014, the Bankruptcy Court of Udine and the Bankruptcy Court of Milan held (in proceedings to which we are not parties) that the Italian Ministry of the Environment and other Italian government agencies (the “Public Administrations”) were not creditors of either SNIA or its subsidiaries in connection with their claims in the Italian insolvency proceedings. The Public Administrations appealed and in January 2016, the Court of Udine rejected the appeal. The Public Administrations have also appealed that decision. In January 2012, SNIA filed a civil action against Sorin in the Civil Court of Milan asserting joint liability of a parent and a spun-off company. On April 1, 2016, the Court of Milan dismissed all legal actions of SNIA and of the Public Administrations further requiring the Public Administrations to pay Sorin approximately $360,000 for legal fees. The Public Administrations appealed the 2016 Decision to the Court of Appeal of Milan and a final hearing on the matter has been scheduled for March 21, 2018. We have not recognized an expense in connection with this matter because any potential loss is not currently probable or reasonably estimable. In addition, we cannot reasonably estimate a range of potential loss, if any, that may result from this matter. Environmental Remediation Order On July 28, 2015, Sorin received an administrative order (the “Remediation Order”) from the Italian Ministry of the Environment directing prompt commencement of environmental remediation at the chemical sites previously operated by SNIA’s other subsidiaries. We challenged the Remediation Order before the Administrative Court of Lazio in Rome (the “TAR”), and the TAR annulled the Remediation Order. The Italian Ministry of the Environment appealed. We have not recognized an expense in connection with this matter because any potential loss is not currently probable or reasonably estimable. In addition, we cannot reasonably estimate a range of potential loss, if any, that may result from this matter. Opposition to Merger Proceedings On July 28, 2015, the Public Administrations filed an opposition proceeding to the merger between Sorin and Cyberonics (the “Merger”), before the Commercial Courts of Milan. The Court authorized the Merger and the Public Administrations did not appeal this decision. The proceeding then continued as a civil case, with the Public Administration seeking damages. The Commercial Court of Milan delivered a decision in October 2016, fully rejecting the Public Administration’s request and awarding us approximately $480 thousand in damages for frivolous litigation and legal fees. The Public Administrations appealed to the Court of Appeal of Milan. Tax Litigation In a tax audit report received October 30, 2009, the Regional Internal Revenue Office of Lombardy (the “Internal Revenue Office”) informed Sorin Group Italia S.r.l. that, among several issues, it was disallowing in part (for a total of €102.6 million (approximately $123.0 million ), related to tax years 2002 through 2006) a tax-deductible write down of the investment in the U.S. company, Cobe Cardiovascular Inc., which Sorin Group Italia S.r.l. recognized in 2002 and deducted in five equal installments, beginning in 2002. In December 2009, the Internal Revenue Office issued notices of assessment for 2002, 2003 and 2004. The assessments for 2002 and 2003 were automatically voided for lack of merit. In December 2010 and October 2011, the Internal Revenue Office issued notices of assessment for 2005 and 2006, respectively. We challenged all three notices of assessment (for 2004, 2005 and 2006) before the relevant Provincial Tax Courts. The preliminary challenges filed for 2004, 2005 and 2006 were denied at the first jurisdictional level. We appealed these decisions. The appeal submitted against the first-level decision for 2004 was successful. The Internal Revenue Office appealed this second-level decision to the Italian Supreme Court (Corte di Cassazione) on February 3, 2017. The Italian Supreme Court’s decision is pending. The appeals submitted against the first-level decisions for 2005 and 2006 were rejected. We appealed these adverse decisions to the Italian Supreme Court, where the matters are still pending. In November 2012, the Internal Revenue Office served a notice of assessment for 2007, and in July 2013, served a notice of assessment for 2008. In these matters the Internal Revenue Office claims an increase in taxable income due to a reduction (similar to the previous notices of assessment for 2004, 2005 and 2006) of the losses reported by Sorin Group Italia S.r.l. for the 2002, 2003 and 2004 tax periods, and subsequently utilized in 2007 and 2008. We challenged both notices of assessment. The Provincial Tax Court of Milan has stayed its decision for years 2007 and 2008 pending resolution of the litigation regarding years 2004, 2005, and 2006. The total amount of losses in dispute is €62.6 million (approximately $75.1 million ). We have continuously reassessed our potential exposure in these matters, taking into account the recent, and generally adverse, trend to Italian taxpayers in this type of litigation. Although we believe that our defensive arguments are strong, noting the adverse trend in some of the court decisions, we have recognized a reserve for an uncertain tax position of €17.0 million (approximately $20.4 million ). Other Matters Additionally, we are the subject of various pending or threatened legal actions and proceedings that arise in the ordinary course of our business. These matters are subject to many uncertainties and outcomes that are not predictable and that may not be known for extended periods of time. Since the outcome of these matters cannot be predicted with certainty, the costs associated with them could have a material adverse effect on our consolidated net (loss) income, financial position or liquidity. Lease Agreements We have operating leases for facilities and equipment. Rent expense from all operating leases amounted to approximately $18.8 million , $15.6 million , $3.1 million and $0.8 million for the years ended December 31, 2017 and December 31, 2016 , for the transitional period from April 25, 2015 to December 31, 2015 and for the fiscal year ended April 24, 2015 , respectively. The future minimum lease payments for operating leases related to continuing operations as of December 31, 2017 are (in thousands): 2018 $ 13,584 2019 11,633 2020 9,565 2021 7,053 2022 5,864 Thereafter 24,632 Total $ 72,331 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred stock LivaNova is not authorized to issue preferred stock and no Cyberonics’ preferred stock was outstanding at the consummation of the Mergers on October 19, 2015 . Common stock of Cyberonics and ordinary shares of LivaNova Prior to the Mergers, shares of Cyberonics common stock were registered pursuant to Section 12(b) of the Exchange Act and listed on NASDAQ under the ticker symbol “CYBX,” and Sorin Ordinary Shares were listed on the Mercato Telematico Azionario organized and managed by Borsa Italiana S.p.A. (the “Italian Stock Exchange”). Shares of Cyberonics common stock and the Sorin shares were suspended from trading on NASDAQ and the Italian Stock Exchange, respectively, prior to the open of trading on October 19, 2015 . Following the completion of the Mergers, LivaNova became the holding company of the combined businesses of Cyberonics and Sorin, and LivaNova’s shares were listed on NASDAQ and listed on the Official List of the U.K.’s Financial Conduct Authority and admitted to trading on the Main Market of the London Stock Exchange under the ticker symbol “LIVN.” We announced on February 23, 2017 our voluntary cancellation of our standard listing of our shares with the London Stock Exchange (“LSE”). We took this action due to the low volume of our share trading on the LSE and trading ceased at the close of business on April 4, 2017. We continue to serve our shareholders through our listing on the NASDAQ Stock Market. Share repurchase plans On August 1, 2016, the Board of Directors authorized a share repurchase plan pursuant to an authority granted by shareholders at the 2016 annual general meeting held on June 15, 2016. The repurchase program was structured to enable us to buy back up to $30 million of ordinary shares on NASDAQ in the period ended December 31, 2016 and an aggregate of $150 million of ordinary shares (inclusive of the $30 million of ordinary shares set out above) also on NASDAQ up to and including December 31, 2018. In November 2016, the share repurchase plan was amended to authorize the repurchase up to $50 million of ordinary shares through December 31, 2016 (instead of the originally authorized $30 million ). Ordinary shares repurchased under the repurchase plan are canceled. As of December 31, 2016 , we repurchased 993,339 shares under this plan at a cost of $50.0 million at an average price per share of $50.32 . All repurchased shares were canceled and are no longer considered issued or outstanding. We did not repurchase any additional shares during the year ended December 31, 2017 . Share repurchase plans prior to the Mergers Common shares were repurchased on the open market pursuant to the Cyberonics’ Board of Directors-approved repurchase plans during the fiscal year ended April 24, 2015. Cyberonics repurchased 875,121 common shares on the open market at an average price of $55.94 . Accumulated other comprehensive income The table below presents the change in each component of accumulated other comprehensive income (loss), net of tax and the reclassifications out of accumulated other comprehensive income into net (loss) earnings for the years ended December 31, 2017 and December 31, 2016 (in thousands): Change in Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Adjustments (1) Total As of December 31, 2015 $ 888 $ (55,116 ) $ (54,228 ) Other comprehensive income (loss) before reclassifications, before tax 2,959 (16,990 ) (14,031 ) Tax benefit (expense) (795 ) — (795 ) Other comprehensive income (loss) before reclassifications, net of tax 2,164 (16,990 ) (14,826 ) Reclassification of loss from accumulated other comprehensive income, before tax 971 — 971 Tax effect (404 ) — (404 ) Reclassification of loss from accumulated other comprehensive income, after tax 567 — 567 Net current-period other comprehensive income (loss), net of tax 2,731 (16,990 ) (14,259 ) As of December 31, 2016 3,619 (72,106 ) (68,487 ) Other comprehensive income (loss) before reclassifications, before tax (9,861 ) 118,338 108,477 Tax benefit (expense) 2,653 — 2,653 Other comprehensive income (loss) before reclassifications, net of tax (7,208 ) 118,338 111,130 Reclassification of loss from accumulated other comprehensive income, before tax 3,448 — 3,448 Tax effect (778 ) — (778 ) Reclassification of loss from accumulated other comprehensive income, after tax 2,670 — 2,670 Net current-period other comprehensive income (loss), net of tax (4,538 ) 118,338 113,800 As of December 31, 2017 $ (919 ) $ 46,232 $ 45,313 (1) Taxes were not provided for foreign currency translation adjustments as translation adjustments are related to earnings that are intended to be reinvested in the countries where earned. |
Stock-Based Incentive Plans
Stock-Based Incentive Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Incentive Plans | Stock-Based Incentive Plans Pre-Merger and the Mergers Sorin awards exchanged for LivaNova awards Prior to the Mergers, the Sorin Board of Directors adopted the Long-Term Incentive 2012-2014 (the “2012-2014 Plan), 2013-2015 (the “2013-2015 Plan”) and 2014-2016 (the “2014-2016 Plan”) stock grant plans in April 2012, April 2013 and April 2014, respectively. The stock grant plans authorized the issuance of stock appreciation rights (2014-2016 Plan only), performance share units and restricted stock units. The awards under these stock grant plans were converted into LivaNova awards pursuant to the terms of the Transaction Agreement as described below. Refer to “Note 3. Business Combinations” for additional details related to the Mergers. Pursuant to the Transaction Agreement, 3,815,824 stock appreciation rights outstanding (2014-2016 Plan) and 3,365,931 restricted stock units (2013-2015 and 2014-2016 Plans) and performance stock units (2012-2014 Plan) that were unvested immediately prior to the Mergers were accelerated and vested upon the close of the Mergers and were converted into 180,076 LivaNova stock appreciation rights and 158,716 LivaNova ordinary shares, respectively, in a manner designed to preserve the intrinsic value of such awards. The accelerated vesting and share conversion constituted a modification under the authoritative guidance for accounting for stock-based compensation. The modification resulted in $8.8 million of incremental costs on the date of acquisition. In addition, pursuant to the Transaction Agreement, 2,617,490 unvested performance share units granted under the 2014-2016 Plan and 2013-2015 Plan that were held by Sorin employees upon close of the Mergers were converted into 123,456 LivaNova ordinary shares in a manner designed to preserve the intrinsic value of such awards. For awards not yet earned based on performance achieved as of the date of the Mergers, a service requirement was added to the remaining awards and the performance conditions were removed, resulting in a modification to the award (see below for further details). A portion of the service awards vested on the date of the Mergers and of the remaining awards, 50% vested on February 26, 2016 and 50% vested on February 26, 2017, in each case subject to continued employment. The awards will continue to be governed in accordance with the terms and conditions as were applicable immediately prior to the completion of the Mergers, with the exception of the modified terms pursuant to the Transaction Agreement. The modifications made to the performance share units granted under the 2014-2016 Plan and 2013-2015 Plan constituted modifications under the authoritative guidance for accounting for stock-based compensation. The modification resulted in $8.6 million incremental costs of which $0.9 million was recognized on the acquisition date and the remaining $7.7 million will be recognized over the remaining service period of the awards. We recognized $4.9 million and $1.4 million stock-based compensation expense related to these modifications from the date of the acquisition for the year ended December 31, 2016 and through the transitional period ended December 31, 2015, respectively. We recognized $0.3 million stock-based compensation expense related to these modifications during the year ended December 31, 2017. Further, pursuant to the Transaction Agreement, 1,721,530 deferred bonus shares held by Sorin employees that were outstanding immediately prior to the Mergers were accelerated and became vested upon the close of the Mergers, and were converted to 81,251 LivaNova ordinary shares in a manner designed to preserve the intrinsic value of such awards. The accelerated vesting and share conversion constituted a modification under the authoritative guidance for accounting for stock-based compensation. This guidance requires the Company to revalue the award upon the transaction close and allocate the revised fair value between consideration paid and post-combination expense based on the ratio of service performed through the transaction date over the total service period of the award. The revised fair value allocated to post-combination services resulted in $0.3 million of incremental costs which was recognized on the acquisition date. Cyberonics awards exchanged for LivaNova awards Prior to the Mergers, Cyberonics issued stock options and restricted stock awards under its Amended and Restated New Employee Equity Inducement Plan and 2009 Stock Plan. All of the awards under these plans accelerated and vested as a result of the Mergers. Cyberonics stock options (except as described below) and restricted shares were converted into 813,794 LivaNova share options and 209,043 LivaNova ordinary shares, respectively, in a manner designed to preserve the intrinsic value of such awards. The stock options will continue to become exercisable in accordance with the terms and conditions as were applicable immediately prior to the completion of the Mergers. Additionally, 146,105 Cyberonics stock options held by executive officers that were outstanding immediately prior to the Mergers were settled in cash in the amount of $5.0 million . LivaNova Stock Plans On October 16, 2015, the sole shareholder of LivaNova approved the adoption of the Company’s 2015 Incentive Award Plan (the “2015 Plan”). The Plan became effective as of October 19, 2015 . Incentive awards may be granted under the 2015 Plan in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based and cash-based awards and dividend equivalents. As of December 31, 2017 , there were approximately 6,115,000 shares available for future grants under the 2015 Plan. The stock-based compensation tables below include expense and share activity related to discontinued operations. Stock-Based Compensation Amounts of stock-based compensation recognized in the consolidated statements of income (loss), by expense category are as follows (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Cost of goods sold $ 450 $ 709 $ 452 $ 559 Selling, general and administrative 16,118 15,570 15,588 8,357 Research and development 1,119 912 1,664 3,024 Merger-related expense — 271 13,010 — Stock-based compensation from continuing operations 17,687 17,462 30,714 11,940 Stock-based compensation from discontinued operations 1,375 2,107 316 — Total stock-based compensation expense 19,062 19,569 31,030 11,940 Income tax benefit, related to awards, recognized in the consolidated statements of income 4,236 4,645 7,776 3,944 Total expense, net of income tax benefit $ 14,826 $ 14,924 $ 23,254 $ 7,996 Amounts of stock-based compensation expense recognized in the consolidated statements of income (loss) by type of arrangement are as follows (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Service-based stock appreciation rights ("SARs") $ 6,916 $ 7,953 $ 10,652 $ 4,317 Service-based restricted stock units ("RSUs") 8,223 9,388 8,204 6,119 Market performance-based restricted stock units 732 31 — — Operating performance-based restricted stock units 1,816 90 11,858 1,504 Total stock-based compensation expense from continuing operations $ 17,687 $ 17,462 $ 30,714 $ 11,940 Unrecognized Stock-Based Compensation Amounts of stock-based compensation cost not yet recognized related to non-vested awards, including awards assumed or issued, as a result of the Mergers (in thousands): December 31, 2017 Unrecognized Compensation Cost Weighted Average Remaining Vesting Period (in years) Service-based stock appreciation rights $ 14,628 3.00 Service-based restricted and restricted stock unit awards 20,754 2.67 Performance-based restricted stock and restricted stock unit awards 7,926 3.17 Total stock-based compensation cost unrecognized $ 43,308 2.92 Stock Options and Stock Appreciation Rights We use the Black-Scholes option pricing methodology to calculate the grant date fair market value of service-based stock option awards and stock appreciation rights. The following table lists the assumptions we utilized as inputs to the Black-Scholes model: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Dividend yield (1) — — — — Risk-free interest rate - based on grant date (2) 1.7% - 2.2% 1.0% - 1.8% 1.2% - 1.4% 1.6% - 2.0% Expected option term - in years per group of employees/consultants (3) 4.6 - 5.2 4.0 - 5.0 4.0 - 5.0 4.9 - 6.6 Expected volatility at grant date (4) 29.6% - 30.4% 30.8% - 32.4% 34.1% 31.7% - 41.1% (1) We have not paid dividends and no future dividends have been approved. (2) We use yield rates on U.S. Treasury securities for a period that approximated the expected term of the award to estimate the risk-free interest rate. (3) We estimated the expected term of the awards granted using historic data of actual time elapsed between the date of grant and the exercise or forfeiture of options or SARs for employees. For consultants, the expected term is the remaining time until expiration of the option or SAR. (4) We determine the expected volatility of the awards based on historical volatility. The following tables detail the activity for service-based stock option awards and stock appreciation rights, including awards assumed or issued as a result of the Mergers: Options and SARs Number of Optioned Shares Wtd. Avg. Exercise Price per Share Wtd. Avg. Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) (1) Outstanding — at December 31, 2016 1,949,328 $ 57.07 Granted 654,478 56.84 Exercised (345,513 ) 56.60 Forfeited (154,381 ) 59.52 Expired (78,790 ) 58.90 Outstanding — at December 31, 2017 2,025,122 56.82 6.8 $ 46,796 Fully vested and exercisable — end of year 944,051 58.37 4.2 $ 20,342 Fully vested and expected to vest — end of year (2) 1,990,317 $ 56.82 6.7 $ 45,989 (1) The aggregate intrinsic value of options and SARs is based on the difference between the fair market value of the underlying stock at December 31, 2017 , using the market closing stock price, and exercise price for in-the-money awards. (2) Factors in expected future forfeitures. Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Weighted average grant date fair value of stock option awards and SARs granted during the year / period (per share) (1) $ 17.19 $ 15.03 $ 21.05 $ 18.64 Aggregate intrinsic value of stock option and SARs exercised during the year / period (in thousands) $ 5,462 $ 5,033 $ 5,464 $ 3,973 (1) Including weighted average Mergers date fair value of SARs assumed in the Mergers. Restricted Stock and Restricted Stock Units Awards The following tables detail the activity for service-based restricted stock and restricted stock unit awards, including activity from restricted stock units assumed or issued as a result of the Mergers: Number of Shares Wtd. Avg. Grant Date Fair Value Non-vested shares at December 31, 2016 506,219 $ 56.56 Granted 131,442 61.37 Vested (169,580 ) 59.09 Forfeited (87,973 ) 56.68 Non-vested shares at December 31, 2017 380,108 $ 57.07 Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Weighted average grant date fair value of service-based share grants issued during the year / period (per share) $ 61.37 $ 55.53 $ 57.55 $ 56.85 Aggregate fair value of service-based share grants that vested during the year / period (in thousands) $ 9,966 $ 4,810 $ 24,384 $ 9,194 The following tables detail the activity for performance-based and market-based restricted stock and restricted stock unit awards: Number of Shares Wtd. Avg. Grant Date Fair Value Non-vested shares at December 31, 2016 52,083 $ 42.01 Granted 346,584 $ 42.11 Vested (2,171 ) $ 57.60 Forfeited (55,109 ) $ 42.73 Non-vested shares at December 31, 2017 341,387 Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Weighted average grant date fair value of performance-based share grants issued during the year / period (per share) $ 42.11 $ 42.01 $ — $ 57.39 Aggregate fair value of performance-based share grants that vested during the year / period (in thousands) $ 110 $ — $ 9,648 $ 10,519 |
Employee Retirement Plans
Employee Retirement Plans | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Plan [Abstract] | |
Employee Retirement Plans | Employee Retirement Plans Prior to the Mergers, Cyberonics did not sponsor any defined benefit pension plans. As a result of the Mergers, we assumed several defined benefit pension plans which include plans in the U.S., Italy, Germany, Japan and France. We maintain a frozen cash balance retirement plan in the U.S., that is a contributory, defined benefit plan designed to provide the benefit in terms of a stated account balance dependent on the employer's promised interest-crediting rate. In Italy and France we maintain a severance pay defined benefit plan that obligates the employer to pay a severance payment in case of resignation, dismissal or retirement. In other jurisdictions we sponsor non-contributory, defined benefit plans designated to provide a guaranteed minimum retirement benefits to eligible employees. We carried forward Cyberonics’s defined contribution plans after the Mergers, including the Cyberonics, Inc. Employee Retirement Savings Plan, which qualifies under Section 401(k) of the IRC, covering U.S. employees, the Cyberonics, Inc. Non-Qualified Deferred Compensation Plan (the “Deferred Compensation”), covering certain U.S. middle and senior management and the Belgium Defined Contribution Pension Plan for Cyberonics’s Belgium employees. The expense related to these plans was $10.2 million and $11.6 million for the years ended December 31, 2017 and December 31, 2016 , respectively, $2.9 million for the transitional period from April 25, 2015 to December 31, 2015 and $1.8 million for the fiscal year ended April 24, 2015 . The change in benefit obligations and funded status of our U.S. pension benefits (in thousands): U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Accumulated benefit obligations at year end: $ 11,191 $ 10,615 $ 10,218 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 10,425 $ 10,218 $ — Interest cost 361 367 86 Benefits obligations assumed in the Mergers — — 10,378 Plan curtailments and settlements — (609 ) (59 ) Actuarial (gain) loss 770 698 (40 ) Benefits paid (555 ) (249 ) (147 ) Projected benefit obligation at end of year $ 11,001 $ 10,425 $ 10,218 Change in plan assets: Fair value of plan assets at beginning of year $ 5,925 $ 5,858 $ — Actual return on plan assets 444 277 (33 ) Plan assets acquired in the Mergers — — 6,097 Employer contributions 870 648 — Plan settlements — (609 ) (59 ) Benefits paid (360 ) (249 ) (147 ) Fair value of plan assets at end of year $ 6,879 $ 5,925 $ 5,858 Funded status at end of year: Fair value of plan assets $ 6,879 $ 5,925 $ 5,858 Projected Benefit obligations 11,001 10,425 10,218 Underfunded status of the plans 4,122 4,500 4,360 Recognized liability $ 4,122 $ 4,500 $ 4,360 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 4,122 $ 4,500 $ 4,360 Recognized liability $ 4,122 $ 4,500 $ 4,360 The change in benefit obligations and funded status of our non-U.S. pension benefits (in thousands): Non-U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Accumulated benefit obligations at year end: $ 23,785 $ 27,845 $ 21,116 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 20,402 $ 21,116 $ — Service cost 503 397 92 Interest cost 291 376 83 Benefits obligations assumed in the Mergers — — 20,626 Employee contributions — — — Plan curtailments and settlements (1) — (20 ) — Actuarial (gain) loss (27 ) 889 152 Benefits paid (2,222 ) (1,911 ) (201 ) Foreign currency exchange rate changes and other 2,601 (445 ) 364 Projected benefit obligation at end of year $ 21,548 $ 20,402 $ 21,116 Change in plan assets: Fair value of plan assets at beginning of year $ 2,898 $ 2,689 $ — Actual return on plan assets 54 28 6 Plan assets acquired in the Mergers — — 2,607 Employer contributions 369 — 81 Employee contributions — 358 — Plan settlements — — — Benefits paid (393 ) (238 ) (5 ) Foreign currency exchange rate changes 147 61 — Fair value of plan assets at end of year $ 3,075 $ 2,898 $ 2,689 Reclassification of net obligation to Current liabilities of discontinued operations — — — Funded status at end of year: Fair value of plan assets $ 3,075 $ 2,898 $ 2,689 Projected Benefit obligations 21,548 20,402 21,116 Underfunded status of the plans (2) 18,473 17,504 18,427 Recognized liability $ 18,473 $ 17,504 $ 18,427 Amounts recognized on the consolidated balance sheets consist of: Non-current assets $ — $ — $ — Current liabilities — — — Non-current liabilities 18,473 17,504 18,427 Recognized liability $ 18,473 $ 17,504 $ 18,427 (1) Benefits to be accumulated in future periods in our French defined benefit plan were curtailed due to our Meylan, French facility restructuring. (2) In certain non-U.S. countries fully funding pension plans is not a common practice. Consequently, certain pension plans have been partially funded. Defined Benefit Plan Net Periodic Benefit Cost The net periodic benefit cost of the defined benefit pension plans includes the following components (in thousands): U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Interest cost $ 361 $ 367 $ 86 Expected return on plan assets (282 ) (277 ) (77 ) Settlement and curtailment loss (gains) — 259 282 Amortization of net actuarial loss 527 439 96 Net periodic benefit cost $ 606 $ 788 $ 387 Non-U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Service cost $ 503 $ 397 $ 92 Interest cost 291 376 83 Expected return on plan assets (54 ) (28 ) — Settlement and curtailment loss (gains) — (20 ) — Amortization of net actuarial loss (27 ) 889 — Net periodic benefit cost $ 713 $ 1,614 $ 175 To determine the discount rate for our U.S. benefit plan, we used the Citigroup Above-median yield curve. For the discount rate used for the other non-U.S. benefit plans we consider local market expectations of long-term returns. The resulting discount rates are consistent with the duration of plan liabilities. The expected long-term rate of return on plan assets assumptions are determined using a building block approach, considering historical averages and real returns of each asset class. In certain countries, where historical returns are not meaningful, consideration is given to local market expectations of long-term returns. Major actuarial assumptions used in determining the benefit obligations and net periodic benefit cost for our significant U.S. benefit plans are presented in the following table: U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Actuarial assumptions used to determine benefit obligation and net periodic benefit cost: Discount rate 3.28% 3.63% 3.79% Actuarial assumptions used to determine net periodic benefit cost: Discount rate 3.63% 3.04% - 3.79% 3.64% Expected return on plan assets 5.00% 5.00% 5.00% Major actuarial assumptions used in determining the benefit obligations and net periodic benefit cost for our significant non-U.S. benefit plans are presented in the following table: Non-U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Actuarial assumptions used to determine benefit obligation and net periodic benefit cost: Discount rate 0.27% - 2.73% 0.27% - 1.50% 0.48% - 2.00% Rate of compensation increase 2.50% - 3.00% 2.50% - 3.89% 2.50% - 3.89% Retirement Benefit Plan Investment Strategy In the U.S., we have an account that holds the defined benefit frozen balance pension plan assets. The Qualified Plan Committee (the “Plan Committee”) sets investment guidelines for U.S. pension plans. The plan assets in the U.S. are invested in accordance with sound investment practices that emphasize long-term fundamentals. The investment objectives for the plan assets in the U.S. are to achieve a positive rate of return that would be expected to close the current funding deficit and so enable us to terminate the frozen pension plan at a reasonable cost. The Plan Committee also oversees the investment allocation process, selects the investment managers, and monitors asset performance. The investment portfolio contains a diversified portfolio of fixed income and equity index funds. Securities are also diversified in terms of domestic and international securities, short- and long-term securities, growth and value styles, large cap and small cap stocks. Outside the U.S., pension plan assets are typically managed by decentralized fiduciary committees. There is a significant variation in policy asset allocation from country to country. Local regulations, local funding rules, and local financial and tax considerations are part of the funding and investment allocation process in each country. Our U.S. pension plan target allocations by asset category: U.S. Pension Benefits as of December 31, 2017 Equity securities 27% Debt securities 63% Other 10% Retirement Benefit Fair Values The following is a description of the valuation methodologies used for retirement benefit plan assets measured at fair value: Equity Mutual Funds: Valued based on the year-end net asset values of the investment vehicles. The net asset values of the investment vehicles are based on the fair values of the underlying investments of the partnerships valued at the closing price reported in the active markets in which the individual security is traded. Equity mutual funds have a daily reported net asset value. Fixed Income Mutual Funds: Valued based on the year-end net asset values of the investment vehicles. The net asset values of the investment vehicles are based on the fair values of the underlying investments of the partnerships valued based on inputs other than quoted prices that are observable. Money Markets: Valued based on quoted prices in active markets for identical assets. The following tables provide information by level for the retirement benefit plan assets that are measured at fair value, as defined by U.S. GAAP (in thousands): Fair Value as of December 31, 2017 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 1,879 $ — $ 1,879 $ — Fixed income mutual funds 4,334 — 4,334 — Money market funds 666 666 — — $ 6,879 $ 666 $ 6,213 $ — Fair Value as of December 31, 2016 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 1,660 $ — $ 1,660 $ — Fixed income mutual funds 4,041 — 4,041 — Money market funds 224 224 — — $ 5,925 $ 224 $ 5,701 $ — Refer to “Note 2. Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies” for discussion of the fair value measurement terms of Levels 1, 2, and 3. Defined Benefit Retirement Funding We make the minimum required contribution to fund the U.S. pension plan as determined by MAP - 21 and the Highway and Transportation Funding Act of 2014 (“HAFTA”). We contributed $1.2 million and $0.6 million to the pension plans (U.S. and non-U.S.) during the years ended December 31, 2017 and December 31, 2016 , respectively. During the transitional period April 25, 2015 to December 31, 2015 , we did not make a material contribution to the U.S. or non-U.S. pension plans. We anticipate that we will make contributions to the U.S. pension plan of approximately $0.9 million during the year ended December 31, 2018. Benefit payments, including amounts to be paid from our assets, and reflecting expected future service, as appropriate, are expected to be paid as follows (in thousands): U.S. Plans Non-U.S. Plans 2018 $ 1,965 $ 1,670 2019 622 801 2020 1,034 1,019 2021 780 911 2022 1,033 1,085 Thereafter $ 5,757 $ 16,062 Severance Indemnity In Italy, upon termination of employment for any reason, employers are required to pay a termination indemnity ( Trattamento di fine Rapporto or “TFR”) to all employees as required by Italian Civil Code. In Italy, the TFR serves as a backup in the event of redundancy or as an additional pension benefit after retirement. The TFR is considered a defined contribution plan with respect to amounts vesting as of January 1, 2007 for employees who have opted for supplementary pensions or who have chosen to maintain the TFR at the company, for companies with more than 50 employees. We have incurred expenses related to the Italian TFR of approximately $0.4 million and $1.1 million for the years ended December 31, 2017 and December 31, 2016 , respectively, and $1.3 million for the transitional period April 25, 2015 to December 31, 2015 . Defined Contribution Plans We incurred expenses for our defined contribution plans of $7.8 million and $10.0 million for the years ended December 31, 2017 and December 31, 2016 , respectively, and $2.9 million for the transitional period April 25, 2015 to December 31, 2015 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Earnings Before Income Taxes and Components of Income Tax Expense The U.S. and non-U.S. components of income (loss) from continuing operations before income taxes and our income tax provision (benefit) from continuing operations are as follows (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Income (loss) from continuing operations before income taxes: UK and Non-United States $ 71,980 $ (36,997 ) $ (27,491 ) $ 2,020 United States 49,158 62,663 1,493 87,274 $ 121,138 $ 25,666 $ (25,998 ) $ 89,294 Total income tax provision (benefit) from continuing operations consisted of the following: Current: UK and Non-United States $ 12,771 $ 13,876 $ 2,454 $ 1,065 United States 26,743 19,706 23,544 21,104 $ 39,514 $ 33,582 $ 25,998 $ 22,169 Deferred: UK and Non-United States $ (4,140 ) $ (28,607 ) $ (18,690 ) $ 834 United States 14,580 138 (20,809 ) 8,443 $ 10,440 $ (28,469 ) $ (39,499 ) $ 9,277 Total provision for income tax expense (benefit) from continuing operations $ 49,954 $ 5,113 $ (13,501 ) $ 31,446 Effective Income Tax Rate Reconciliation The following is a reconciliation of the statutory income tax rate to our effective income tax rate expressed as a percentage of income from continuing operations before income taxes: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Statutory tax rate at U.S. Rate — % — % — % 35.0 % Statutory tax rate at U.K. Rate 19.0 20.0 19.1 — Effect of changes in tax rate (19.9 ) (0.2 ) (12.9 ) — Deferred tax valuation allowance 10.6 5.1 12.6 — Transaction costs (1) 2.0 10.2 (20.9 ) — Sale of Intellectual Property 44.3 17.6 — — U.S. state and local tax provision, net of federal benefit 1.2 7.9 — 2.7 Foreign tax rate differential 10.7 101.5 37.5 1.5 Notional interest deduction (13.5 ) (68.4 ) 12.0 — U.S. Subpart F 1.5 7.9 (7.6 ) Research and development tax credits (1.6 ) (4.0 ) 6.0 (2.1 ) Distribution of subsidiary earnings (0.3 ) (55.1 ) — — Reserve for uncertain tax positions 1.2 8.4 — — Domestic manufacturing deduction (1.8 ) (2.8 ) 3.0 — Tax on UK CFC interest pick-up — 1.3 — — Write-off/impairment of investments (14.8 ) (30.3 ) (0.9 ) — Other, net 2.6 0.8 4.0 (1.9 ) Effective tax rate 41.2 % 19.9 % 51.9 % 35.2 % (1) Included in transitional period April 25, 2015 to December 31, 2015 is the reversal of the deferred tax asset established during the fiscal year ended April 24, 2015 based on the assumption that these otherwise non-deductible transaction costs would be deductible if the business combination was not consummated. Because the transaction was ultimately consummated, the deferred tax asset was reversed as a non-deductible transaction cost in the amount of $2.3 million . U.S. Tax Reform On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”). The Act, which is also commonly referred to as “U.S. tax reform”, significantly changes U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate to 21% commencing in 2018. In addition, the Act created a one-time mandatory tax, a toll charge, on previously deferred foreign earnings of non-U.S. subsidiaries controlled by a U.S. corporation, or in our case, a non-U.S. subsidiary controlled by one of our U.S. subsidiaries. We recorded no toll charge for the year ended December 31, 2017 as we had no previously deferred foreign earnings of U.S. controlled foreign subsidiaries as of the measurement dates. As a result of the Act, we recorded a non-cash net charge of $27.5 million during the fourth quarter of 2017, which is included in “Income tax expense (benefit)” in the consolidated statement of (loss) income. This amount primarily consists of two components: (i) $12.8 million relating to the impairment of foreign tax credits, and (ii) a net $14.7 million charge resulting from the remeasurement of our deferred tax assets and liabilities in the U.S. based on a change in the corporate income tax rate. Further regulations and notices and state conformity could be issued as a result of U.S. tax reform covering various issues that may affect our tax position including, but not limited to, an increase in the corporate state tax rate and elimination of the interest deduction. The content of any future legislation, the timing for regulations, notices, and state conformity, and the reporting periods that would be impacted cannot be determined at this time. Although we believe the net charge of $27.5 million is a reasonable estimate of the impact of the income tax effects of the Act on us as of December 31, 2017 , the estimate is provisional. Once we finalize certain tax positions for our 2017 U.S. consolidated tax return, we will be able to conclude whether any further adjustments to our tax positions are required. Deferred Income Tax Assets and Liabilities Significant components of our deferred tax assets and liabilities, including amounts related to discontinued operations, are as follows, (in thousands): December 31, 2017 December 31, 2016 Deferred tax assets: Net operating loss carryforwards $ 132,615 $ 131,904 Tax credit carryforwards 18,585 17,242 Deferred compensation 4,697 6,521 Accruals and reserves 27,146 28,520 Inventory 2,759 4,441 Investments 3,858 — Other 3,310 10,306 Gross deferred tax assets 192,970 198,934 Valuation allowance (93,333 ) (36,277 ) Total deferred tax assets 99,637 162,657 Deferred tax liabilities: Gain on sale of intellectual property (75,624 ) (136,117 ) Investments (3,135 ) (12,553 ) Property, equipment & intangible assets (137,031 ) (164,090 ) Other (1,181 ) (16,421 ) Gross deferred tax liabilities: (216,971 ) (329,181 ) Total deferred tax (liabilities) assets, net $ (117,334 ) $ (166,524 ) Reported in the consolidated balance sheet as (after valuation allowance and jurisdictional netting): Net deferred tax asset $ 14,076 $ 6,017 Deferred tax liability (131,410 ) (172,541 ) Net deferred tax (liabilities) assets $ (117,334 ) $ (166,524 ) Refer to “Note 4. Discontinued Operations” for the amounts of deferred tax assets and liabilities included in the above schedule related to discontinued operations. Valuation allowance related to discontinued operations included in the schedule above was $48.7 million and $26.8 million for the years ended December 31, 2017 and December 31, 2016 , respectively. We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. We utilized $2.5 million and $5.3 million of U.S. capital loss carryforward for the years ended December 31, 2017 and December 31, 2016 , respectively. We have $12.8 million of foreign tax credits in the U.S., $3.4 million of U.S. State tax credits and $2.4 million of other credits. Net Operating Loss Carryforwards We had the following net operating loss (“NOL”) carryforwards as of December 31, 2017 , which can be used to reduce our income tax payable in future years (in thousands): Region Gross Amount Gross Amount With Expiration Starting Expiration Europe $ 153,350 $ 141,774 $ 11,576 2022 South America 14,815 14,815 — n/a U.S. Federal 134,415 — 134,415 2021 U.S. State 106,555 — 106,555 2018 Far East 12,174 — 12,174 2018 As of December 31, 2017 , we had a valuation allowance of $93.3 million , which includes $48.7 million related to discontinued operations and $44.6 million primarily related to net operating losses in certain jurisdictions and U.S. foreign tax credits. As of December 31, 2016 , we had a valuation allowance of $51.5 million , primarily related to net operating losses acquired in the Merger. As a result of the business combination during the transitional period April 25, 2015 to December 31, 2015 , the historic NOL’s of Sorin U.S. are limited by IRC section 382. The annual limitation is approximately $14.2 million , which is sufficient to absorb the U.S. net operating losses prior to their expiration. Thus no additional valuation allowance has been recorded. In 2016, we consolidated certain of our intangible assets into an entity organized under the laws of England and Wales. Because the intangible assets were sold and purchased inter-company, the tax expense on the inter-company gain was deferred, and will be amortized to current income tax expense in the consolidated statement of net (loss) income over an eight year period, which represents the estimated useful life of the intangible assets that were consolidated into the U.K. entity. Approximately $19.4 million and $11.6 million were amortized to current income tax expense during the year ended December 31, 2017 and December 31, 2016 , respectively. The amount of tax to be paid over the eight years is not fixed and we remeasured the unamortized balance on December 22, 2017 as a result of U.S. tax reform. The tax asset is included in ‘Prepaid expenses and other current assets’ and ‘Other assets’ in the consolidated balance sheet as of December 31, 2017, in the amount of $12.6 million and $68.1 million , respectively. The cash taxes expected to be paid on the inter-company gain were remeasured on December 22, 2017 as a result of U.S. tax reform and is recorded as a deferred tax liability and reclassified to income taxes payable as cash taxes become payable. As of December 31, 2017 , the current income tax payable and the deferred income tax liability associated with the intercompany gain was $19.4 million and $75.6 million , respectively. A significant portion of the net deferred tax liability worldwide included above relates to the tax effect of the step-up in value of the assets acquired in the combination with Sorin. Refer to “Note 3. Business Combinations” for additional information. No provision has been made for income taxes on undistributed earnings of foreign subsidiaries as of December 31, 2017 because it is our intention to indefinitely reinvest undistributed earnings of our foreign subsidiaries. In the event of the distribution of those earnings in the form of dividends, a sale of the subsidiaries, or certain other transactions, we may be liable for income taxes. There should be no material tax liability on future distributions as most jurisdictions with undistributed earnings have various participation exemptions / no withholding tax. As of December 31, 2017 , it was not practicable to determine the amount of the deferred income tax liability related to those investments. Uncertain Income Tax Positions The following is a roll-forward of our total gross unrecognized tax benefit (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Balance at beginning of year $ 22,374 $ 20,224 Tax positions related to current year 324 — Tax positions related to prior year 1,153 2,548 Impact of foreign currency exchange rates 2,286 (398 ) Balance at end of year $ 26,137 $ 22,374 Unrecognized tax benefits of $12.2 million and $10.7 million at December 31, 2017 and 2016, respectively, included in the table above are presented in the balance sheet as a reduction to the related deferred tax assets for net operating loss carryforwards. Accrued interest and penalties totaled $8.0 million and $6.3 million as of December 31, 2017 and 2016, respectively, and were included in Other long-term liabilities on our consolidated balance sheets. During the fiscal year ended April 24, 2015, based upon our review and rework of certain prior-year R&D tax credits, we believe that the credits are more likely than not to be sustained upon examination and as a result we released the reserve against these R&D tax credits. Tax authorities may disagree with certain positions we have taken and assess additional taxes. We regularly assess the likely outcomes of our tax positions in order to determine the appropriateness of our reserves for uncertain tax positions. However, there can be no assurance that we will accurately predict the outcome of these audits and the actual outcome of an audit could have a material impact on our consolidated results of income, financial position or cash flows. If all of our unrecognized tax benefits as of December 31, 2017 were recognized, $22.8 million would impact our effective tax rate. We are unable to estimate the amount of change in the majority of our unrecognized tax benefits over the next 12 months. Refer to “Note 12. Commitments and Contingencies” for additional information regarding the status of current tax litigation. We record accrued interest and penalties related to unrecognized tax benefits in ‘Interest expense’ and ‘Foreign exchange and other gains (losses)’, respectively, in the consolidated statements of income (loss). On October 26, 2017, the European Commission (“EC”) announced that an investigation will be opened with respect to the UK’s controlled foreign company (“CFC”) rules. The CFC rules under investigation provide certain tax exceptions to entities controlled by UK parent companies that are subject to lower tax rates if the activities being undertaken by the CFC relate to financing. The EC is investigating whether the exemption is a breach of EU State Aid rules. The investigation is in its early stages and is unlikely to be completed within the next twelve months with an appeal process likely to follow. It is unclear as to whether the UK will be part of the EU once a decision has been finalized due to Brexit and what impact, if any, Brexit will have on the outcome of the investigation or the enforceability of a decision. Due to the many uncertainties related to this matter, including the preliminary state of the investigation, the pending Brexit negotiations and political environment and the unknown outcome of the investigation and resulting appeals, no uncertain tax position reserve has been recognized related to this matter and we are unable to reasonably estimate the potential liability for this matter. LivaNova PLC is domiciled and resident in the UK. Our subsidiaries conduct operations and earn income in numerous countries and are subject to the laws of taxing jurisdictions within those countries, and the income tax rates imposed in the tax jurisdictions in which our subsidiaries conduct operations vary. As a result of the changes in the overall level of our income, the deployment of various tax strategies and the changes in tax laws, our consolidated effective income tax rate may vary from one reporting period to another. The major jurisdictions where we are subject to income tax examinations are as follows: Jurisdiction Earliest Year Open U.S. - federal and state 1992 Italy 2012 Germany 2010 England and Wales 2013 Canada 2013 In April 2016, the U.S. Internal Revenue Service (“IRS”) and U.S. Treasury Department issued new rules that materially change the manner in which the determination is made as to whether the U.S. anti-inversion rules under Section 7874 will apply. The new rules have the effect of linking with the Mergers certain future acquisitions of U.S. businesses made in exchange for LivaNova equity, and such linkage may impact LivaNova’s ability to engage in particular acquisition strategies. For example, the new temporary regulations would impact certain acquisitions of U.S. companies in an exchange for stock in LivaNova during the 36 month period beginning October 19, 2015 by excluding from the Section 7874 calculations the portion of shares of LivaNova that are allocable to the legacy Cyberonics shareholders. This new rule would generally have the effect of increasing the otherwise applicable Section 7874 fraction with respect to future acquisitions of a U.S. business, thereby increasing the risk that such acquisition could cause LivaNova to be treated as a U.S. corporation for U.S. federal income tax purposes. On October 13, 2016, the U.S. IRS and U.S. Treasury Department released final and temporary regulations under section 385. In response to comments, the final regulations significantly narrow the scope of the proposed regulations previously issued on April 4, 2016. Like the proposed regulations, the final regulations establish extensive documentation requirements that must be satisfied for a debt instrument to constitute debt for U.S. federal tax purposes and re-characterizes a debt instrument as stock if the instrument is issued in one of a number of specified transactions. Moreover, while these new rules are not retroactive, they will impact our future intercompany transactions and our ability to engage in future restructuring. Executive Order 13789, issued in April 2017, ordered the US Treasury to examine tax regulations for excessive cost, complexity or whether such regulation exceeded IRS’s statutory authority, which included IRC Sec. 385. |
Income (Loss) Per Share
Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Income (Loss) Per Share The following table sets forth the computation of basic and diluted net (loss) income per share or share of common stock, (in thousands except per share data): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Numerator: Net income (loss) from continuing operations $ 54,465 $ 1,874 $ (14,720 ) $ 57,848 Net loss from discontinued operations (79,554 ) (64,663 ) (14,893 ) — Net (loss) income $ (25,089 ) $ (62,789 ) $ (29,613 ) $ 57,848 Denominator: Basic weighted average shares outstanding 48,157 48,860 32,741 26,391 Add effects of stock-based compensation instruments (1) 344 154 — 235 Diluted weighted average shares outstanding 48,501 49,014 32,741 26,626 Basic income (loss) per share: Continuing operations $ 1.13 $ 0.04 $ (0.45 ) $ 2.19 Discontinued operations (1.65 ) (1.33 ) (0.45 ) — $ (0.52 ) $ (1.29 ) $ (0.90 ) $ 2.19 Diluted income (loss) per share: Continuing operations $ 1.12 $ 0.04 $ (0.45 ) $ 2.17 Discontinued operations (1.64 ) (1.32 ) (0.45 ) — $ (0.52 ) $ (1.28 ) $ (0.90 ) $ 2.17 (1) Excluded from the computation of diluted earnings per share for the year ended December 31, 2017 were stock options, SARs and restricted share units outstanding at December 31, 2017 to purchase 24 thousand shares because to include them would have been anti-dilutive. Excluded from the computation of diluted earnings per share for the year ended December 31, 2016 were stock options, SARs and restricted share units outstanding at December 31, 2016 to purchase 1.6 million shares because to include them would have been anti-dilutive. Excluded from the computation of diluted earnings per share for the transitional period April 25, 2015 to December 31, 2015 , were stock options, SARs and restricted share units outstanding at December 31, 2015 to purchase 1.6 million shares because to include them would have been anti-dilutive due to the net loss. Excluded from the computation of diluted earnings per share for the fiscal year ended April 24, 2015 were stock options, SARs and restricted shares and restricted share units outstanding at April 24, 2015 to purchase 281 thousand common shares of Cyberonics because to include them would have been anti-dilutive. |
Geographic and Segment Informat
Geographic and Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Geographic and Segment Information | Geographic and Segment Information Segment Information We identify operating segments based on the way we manage, evaluate and internally report our business activities for purposes of allocating resources and assessing performance. We have two reportable segments: Cardiac Surgery and Neuromodulation. The Cardiac Surgery segment generates its revenue from the development, production and sale of cardiovascular surgery products. Cardiac Surgery products include oxygenators, heart-lung machines, autotransfusion systems, mechanical heart valves and tissue heart valves. The Neuromodulation segment generates its revenue from the design, development and marketing of neuromodulation therapy for the treatment of drug-resistant epilepsy and treatment resistant depression. Neuromodulation products include the VNS Therapy System, which consists of an implantable pulse generator, a lead that connects the generator to the vagus nerve, surgical equipment to assist with the implant procedure, equipment to enable the treating physician to set the pulse generator stimulation parameters for the patient, instruction manuals and magnets to suspend or induce stimulation manually. “Other” includes corporate shared service expenses for finance, legal, human resources and information technology and corporate business development (“New Ventures”). New Ventures is focused on new growth platforms and identification of other opportunities for expansion. Net sales of our reportable segments include revenues from the sale of products they each develop and manufacture or distribute. We define segment income as operating income before merger and integration, restructuring, amortization and litigation settlement. Net sales and operating income (loss) by segment are as follows (in thousands): Net Sales Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 April 24, 2015 Cardiac Surgery $ 635,517 $ 611,715 $ 147,635 $ — Neuromodulation 374,976 351,406 214,761 291,558 Other 1,784 1,737 841 — Total Net Sales $ 1,012,277 $ 964,858 $ 363,237 $ 291,558 Operating Income (Loss) From Continuing Operations: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Cardiac Surgery (including product remediation) $ 81,001 $ 16,578 $ 13,091 $ — Neuromodulation 188,352 174,579 87,616 97,344 Other (107,955 ) (70,925 ) (39,815 ) — Total reportable segment income from continuing operations 161,398 120,232 60,892 97,344 Merger and integration expenses 15,528 20,377 55,776 8,692 Restructuring expenses 17,056 37,377 10,494 — Amortization of intangibles 33,144 31,035 7,030 — Operating income (loss) from continuing operations $ 95,670 $ 31,443 $ (12,408 ) $ 88,652 Assets by reportable segment (in thousands): Assets: December 31, 2017 December 31, 2016 Cardiac Surgery $ 1,386,032 $ 1,277,799 Neuromodulation 533,067 611,085 Other 334,103 133,825 Discontinued operations 250,689 319,922 Total Assets $ 2,503,891 $ 2,342,631 Capital expenditures by segment (in thousands): Capital Expenditures: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Cardiac Surgery $ 18,985 $ 21,190 $ 10,402 $ — Neuromodulation 2,504 8,098 1,418 6,687 Other 7,010 5,265 512 — Discontinued operations 5,608 3,809 4,954 — Total $ 34,107 $ 38,362 $ 17,286 $ 6,687 Geographic Information We operate under three geographic regions: United States, Europe, and Rest of world. Net sales to external customers by geography are determined based on the country the products are shipped to and are as follows: (in thousands): Net sales: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 United States $ 494,724 $ 480,558 $ 229,724 $ 235,712 Europe (1) (2) 210,470 204,846 61,595 41,484 Rest of world 307,083 279,454 71,918 14,362 Total (3) $ 1,012,277 $ 964,858 $ 363,237 $ 291,558 (1) Net sales to external customers includes $30.8 million , $37.3 million and $14.3 million in the United Kingdom, our country of domicile, for the years ended December 31, 2017 , December 31, 2016 and the transitional period April 25, 2015 to December 31, 2015 , respectively. Prior to the Mergers, we were domiciled in the United States. (2) Europe sales include those countries in which we have a direct sales presence, whereas European countries in which we sell through distributors are included in ‘Rest of world’. (3) No single customer represented over 10% of our consolidated net sales and no country’s net sales exceeded 10% of our consolidated sales except for the U.S. Property, plant, and equipment, net by geography are as follows (in thousands): PP&E December 31, 2017 December 31, 2016 United States $ 62,154 $ 61,071 Europe 119,133 111,735 Rest of world 11,072 30,902 Total $ 192,359 $ 203,708 |
Supplemental Finanical Informat
Supplemental Finanical Information | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information Accounts receivable, net consisted of the following (in thousands): December 31, 2017 December 31, 2016 Trade receivables from third parties $ 288,127 $ 216,993 Allowance for bad debt (5,982 ) (3,737 ) $ 282,145 $ 213,256 Our customers consist of hospitals, other healthcare institutions, distributors, organized purchase groups and government and private entities. Actual collection periods for trade receivables vary significantly as a function of the nature of the customer (e.g., government or private) and its geographic location. Inventories consisted of the following (in thousands): December 31, 2017 December 31, 2016 Raw materials $ 39,810 $ 37,243 Work-in-process 18,206 17,474 Finished goods 86,454 78,300 $ 144,470 $ 133,017 Inventories are reported net of the provision for obsolescence. The provisions, which reflects normal obsolescence and includes components that are phased out or expired, totaled $10.5 million and $7.2 million , at December 31, 2017 and December 31, 2016 , respectively. Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2017 December 31, 2016 Prepaid expenses $ 13,905 $ 8,657 Income taxes payable on inter-company transfers of property (1) 12,604 19,445 Earthquake grant receivable 4,064 4,748 Deposits and advances to suppliers 4,551 3,440 Escrow deposit - Caisson 2,000 — Current loans and notes receivable 1,395 7,093 Derivative contract assets 518 8,269 $ 39,037 $ 51,652 (1) The income taxes payable on intercompany transfers of property asset is the asset account created to defer the income tax effect of an intercompany intellectual property sale pursuant to ASC 810-10-45-8. PP&E detail (in thousands): December 31, 2017 December 31, 2016 Lives in Years Land $ 16,293 $ 14,420 Building and building improvements 80,280 92,092 3 to 50 Equipment, software, furniture and fixtures 182,968 152,864 3 to 20 Other 6,082 1,296 3 to 10 Capital investment in process 9,944 15,009 Total 295,567 275,681 Accumulated depreciation (103,208 ) (71,973 ) Net $ 192,359 $ 203,708 During 2017, we initiated a plan to sell our Suzhou Industrial Park facility in Shanghai, China and as a result of this exit plan we recorded impairments of the building and equipment of $5.4 million , which were recorded in ‘Restructuring expenses’ in the consolidated statement of net (loss) income. In addition, we classified the remaining carrying value of the land, building and equipment of our Suzhou facility, of $13.6 million , to ‘Assets held for sale’ in the consolidated balance sheet for the year ended December 31, 2017 . Detail of Other assets (in thousands): December 31, 2017 December 31, 2016 Taxes payable on inter-company transfers of property (1) $ 68,127 $ 124,551 Investments (2) 2,943 2,537 Loans and notes receivable 1,276 2,029 Escrow deposit - Caisson 1,000 — Guaranteed deposits 725 940 Other 1,913 613 $ 75,984 $ 130,670 (1) The ‘taxes payable on intercompany transfers of property’ is an asset account created to defer the income tax effect of an intercompany intellectual property sale pursuant to ASC 810-10-45-8. (2) Primarily cash surrender value of company owned life insurance policies. Accrued liabilities consisted of the following (in thousands): December 31, 2017 December 31, 2016 Product remediation (1) $ 16,811 $ 23,464 Deferred compensation - Caisson acquisition 14,300 — Restructuring related liabilities 3,560 16,859 Provisions for agents, returns and other 8,134 7,271 Legal and other administrative costs 6,082 6,184 Royalty costs 3,615 2,503 Deferred income 2,900 — Uncertain tax positions 2,536 — Escrow indemnity liability - Caisson 2,000 — Product warranty obligations 1,476 2,360 Derivative contract liabilities (2) 1,294 942 Government grants 1,174 1,708 Research and development costs 797 839 Other accrued expenses 14,263 8,917 $ 78,942 $ 71,047 (1) Refer to “Note 6. Product Remediation Liability.” (2) Refer to “Note 11. Derivatives and Risk Management.” de warranty obligations within ‘Accrued liabilities and other’ in the consolidated balance sheets. Changes in the carrying amount of our warranty obligation consisted of the following (in thousands): Balance at December 31, 2015 $ 1,828 Product warranty accrual 1,172 Settlements (657 ) Effect of changes in currency exchange rates 17 Balance at December 31, 2016 2,360 Product warranty accrual 707 Settlements (1,897 ) Effect of changes in currency exchange rates and other 306 As of December 31, 2017 $ 1,476 Other long-term liabilities consisted of the following (in thousands): December 31, 2017 December 31, 2016 Contingent consideration (1) $ 33,973 $ 3,890 Product remediation liability (2) 10,735 10,023 Uncertain tax positions (inclusive of penalties and interest) 18,306 12,086 Escrow indemnity liability - Caisson 1,000 — Government grants 918 3,631 Financial derivatives (3) 751 1,392 Unfavorable operating leases (4) 252 1,672 Other 3,149 2,377 $ 69,084 $ 35,071 (1) The contingent consideration liability represents contingent payments related to three acquisitions: the first and second acquisitions, in September 2015, were Cellplex PTY Ltd. in Australia and the commercial activities of a local distributor in Colombia. The contingent payments for the first acquisition are based on achievement of sales targets by the acquiree through June 30, 2018 and the contingent payments for the second acquisition are based on sales of cardiopulmonary disposable products and heart lung machines of the acquiree through December 2019. Refer to “Note 9. Fair Value Measurements.” The third acquisition, Caisson, occurred in May 2017. Refer to “Note 3. Business Combinations.” (2) Refer to “Note 6. Product Remediation Liability.” (3) Refer to “Note 11. Derivatives and Risk Management.” (4) Unfavorable operating leases represent the adjustment to recognize future lease obligations at their estimated fair value in conjunction with the Mergers. Quarterly Financial Information (unaudited) (in thousands except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year Ended December 31, 2017 (1) Net sales $ 226,825 $ 255,843 $ 251,253 $ 278,356 $ 1,012,277 Gross profit 147,640 170,042 161,869 172,069 651,620 Operating income from continuing operations 19,718 27,573 30,045 18,334 95,670 Net income (loss) from continuing operations 13,227 45,694 27,000 (31,456 ) 54,465 Discontinued Operations: (Loss) Income from discontinued operations, net of tax (1,956 ) 1,804 830 (1,949 ) (1,271 ) Impairment of discontinued operations, net of tax — — — (78,283 ) (78,283 ) Net loss from discontinued operations (1,956 ) 1,804 830 (80,232 ) (79,554 ) Net income (loss) $ 11,271 $ 47,498 $ 27,830 $ (111,688 ) $ (25,089 ) Diluted earnings (loss) per share: Continuing operations $ 0.27 $ 0.95 $ 0.56 $ (0.65 ) $ 1.12 Discontinued operations (0.04 ) 0.03 0.01 (1.67 ) (1.64 ) $ 0.23 $ 0.98 $ 0.57 $ (2.32 ) $ (0.52 ) Year Ended December 31, 2016 (1) Net sales $ 225,238 $ 251,489 $ 238,500 $ 249,631 $ 964,858 Gross profit 131,734 148,452 153,901 125,419 559,506 Operating (loss) income from continuing operations (9,074 ) 25,019 30,373 (14,875 ) 31,443 Net (loss) income from continuing operations (10,988 ) 12,737 6,431 (6,306 ) 1,874 Net loss from discontinued operations (29,390 ) (3,780 ) (8,000 ) (23,493 ) (64,663 ) Net (loss) income $ (40,378 ) $ 8,957 $ (1,569 ) $ (29,799 ) (62,789 ) Diluted (loss) earnings per share: Continuing operations $ (0.22 ) $ 0.26 $ 0.13 $ (0.13 ) $ 0.04 Discontinued operations (0.61 ) (0.08 ) (0.16 ) (0.48 ) (1.32 ) $ (0.83 ) $ 0.18 $ (0.03 ) $ (0.61 ) $ (1.28 ) (1) Sales, cost of sales and operating expenses associated with our discontinued operation, the Cardiac Rhythm Management segment, for the first three quarters of the current year and all quarters of the previous year have been reclassified to ‘Discontinued operations’. Refer to ‘Note 4. Discontinued Operations’. |
Quarterly Financial Information
Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (unaudited) | Supplemental Financial Information Accounts receivable, net consisted of the following (in thousands): December 31, 2017 December 31, 2016 Trade receivables from third parties $ 288,127 $ 216,993 Allowance for bad debt (5,982 ) (3,737 ) $ 282,145 $ 213,256 Our customers consist of hospitals, other healthcare institutions, distributors, organized purchase groups and government and private entities. Actual collection periods for trade receivables vary significantly as a function of the nature of the customer (e.g., government or private) and its geographic location. Inventories consisted of the following (in thousands): December 31, 2017 December 31, 2016 Raw materials $ 39,810 $ 37,243 Work-in-process 18,206 17,474 Finished goods 86,454 78,300 $ 144,470 $ 133,017 Inventories are reported net of the provision for obsolescence. The provisions, which reflects normal obsolescence and includes components that are phased out or expired, totaled $10.5 million and $7.2 million , at December 31, 2017 and December 31, 2016 , respectively. Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2017 December 31, 2016 Prepaid expenses $ 13,905 $ 8,657 Income taxes payable on inter-company transfers of property (1) 12,604 19,445 Earthquake grant receivable 4,064 4,748 Deposits and advances to suppliers 4,551 3,440 Escrow deposit - Caisson 2,000 — Current loans and notes receivable 1,395 7,093 Derivative contract assets 518 8,269 $ 39,037 $ 51,652 (1) The income taxes payable on intercompany transfers of property asset is the asset account created to defer the income tax effect of an intercompany intellectual property sale pursuant to ASC 810-10-45-8. PP&E detail (in thousands): December 31, 2017 December 31, 2016 Lives in Years Land $ 16,293 $ 14,420 Building and building improvements 80,280 92,092 3 to 50 Equipment, software, furniture and fixtures 182,968 152,864 3 to 20 Other 6,082 1,296 3 to 10 Capital investment in process 9,944 15,009 Total 295,567 275,681 Accumulated depreciation (103,208 ) (71,973 ) Net $ 192,359 $ 203,708 During 2017, we initiated a plan to sell our Suzhou Industrial Park facility in Shanghai, China and as a result of this exit plan we recorded impairments of the building and equipment of $5.4 million , which were recorded in ‘Restructuring expenses’ in the consolidated statement of net (loss) income. In addition, we classified the remaining carrying value of the land, building and equipment of our Suzhou facility, of $13.6 million , to ‘Assets held for sale’ in the consolidated balance sheet for the year ended December 31, 2017 . Detail of Other assets (in thousands): December 31, 2017 December 31, 2016 Taxes payable on inter-company transfers of property (1) $ 68,127 $ 124,551 Investments (2) 2,943 2,537 Loans and notes receivable 1,276 2,029 Escrow deposit - Caisson 1,000 — Guaranteed deposits 725 940 Other 1,913 613 $ 75,984 $ 130,670 (1) The ‘taxes payable on intercompany transfers of property’ is an asset account created to defer the income tax effect of an intercompany intellectual property sale pursuant to ASC 810-10-45-8. (2) Primarily cash surrender value of company owned life insurance policies. Accrued liabilities consisted of the following (in thousands): December 31, 2017 December 31, 2016 Product remediation (1) $ 16,811 $ 23,464 Deferred compensation - Caisson acquisition 14,300 — Restructuring related liabilities 3,560 16,859 Provisions for agents, returns and other 8,134 7,271 Legal and other administrative costs 6,082 6,184 Royalty costs 3,615 2,503 Deferred income 2,900 — Uncertain tax positions 2,536 — Escrow indemnity liability - Caisson 2,000 — Product warranty obligations 1,476 2,360 Derivative contract liabilities (2) 1,294 942 Government grants 1,174 1,708 Research and development costs 797 839 Other accrued expenses 14,263 8,917 $ 78,942 $ 71,047 (1) Refer to “Note 6. Product Remediation Liability.” (2) Refer to “Note 11. Derivatives and Risk Management.” de warranty obligations within ‘Accrued liabilities and other’ in the consolidated balance sheets. Changes in the carrying amount of our warranty obligation consisted of the following (in thousands): Balance at December 31, 2015 $ 1,828 Product warranty accrual 1,172 Settlements (657 ) Effect of changes in currency exchange rates 17 Balance at December 31, 2016 2,360 Product warranty accrual 707 Settlements (1,897 ) Effect of changes in currency exchange rates and other 306 As of December 31, 2017 $ 1,476 Other long-term liabilities consisted of the following (in thousands): December 31, 2017 December 31, 2016 Contingent consideration (1) $ 33,973 $ 3,890 Product remediation liability (2) 10,735 10,023 Uncertain tax positions (inclusive of penalties and interest) 18,306 12,086 Escrow indemnity liability - Caisson 1,000 — Government grants 918 3,631 Financial derivatives (3) 751 1,392 Unfavorable operating leases (4) 252 1,672 Other 3,149 2,377 $ 69,084 $ 35,071 (1) The contingent consideration liability represents contingent payments related to three acquisitions: the first and second acquisitions, in September 2015, were Cellplex PTY Ltd. in Australia and the commercial activities of a local distributor in Colombia. The contingent payments for the first acquisition are based on achievement of sales targets by the acquiree through June 30, 2018 and the contingent payments for the second acquisition are based on sales of cardiopulmonary disposable products and heart lung machines of the acquiree through December 2019. Refer to “Note 9. Fair Value Measurements.” The third acquisition, Caisson, occurred in May 2017. Refer to “Note 3. Business Combinations.” (2) Refer to “Note 6. Product Remediation Liability.” (3) Refer to “Note 11. Derivatives and Risk Management.” (4) Unfavorable operating leases represent the adjustment to recognize future lease obligations at their estimated fair value in conjunction with the Mergers. Quarterly Financial Information (unaudited) (in thousands except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year Ended December 31, 2017 (1) Net sales $ 226,825 $ 255,843 $ 251,253 $ 278,356 $ 1,012,277 Gross profit 147,640 170,042 161,869 172,069 651,620 Operating income from continuing operations 19,718 27,573 30,045 18,334 95,670 Net income (loss) from continuing operations 13,227 45,694 27,000 (31,456 ) 54,465 Discontinued Operations: (Loss) Income from discontinued operations, net of tax (1,956 ) 1,804 830 (1,949 ) (1,271 ) Impairment of discontinued operations, net of tax — — — (78,283 ) (78,283 ) Net loss from discontinued operations (1,956 ) 1,804 830 (80,232 ) (79,554 ) Net income (loss) $ 11,271 $ 47,498 $ 27,830 $ (111,688 ) $ (25,089 ) Diluted earnings (loss) per share: Continuing operations $ 0.27 $ 0.95 $ 0.56 $ (0.65 ) $ 1.12 Discontinued operations (0.04 ) 0.03 0.01 (1.67 ) (1.64 ) $ 0.23 $ 0.98 $ 0.57 $ (2.32 ) $ (0.52 ) Year Ended December 31, 2016 (1) Net sales $ 225,238 $ 251,489 $ 238,500 $ 249,631 $ 964,858 Gross profit 131,734 148,452 153,901 125,419 559,506 Operating (loss) income from continuing operations (9,074 ) 25,019 30,373 (14,875 ) 31,443 Net (loss) income from continuing operations (10,988 ) 12,737 6,431 (6,306 ) 1,874 Net loss from discontinued operations (29,390 ) (3,780 ) (8,000 ) (23,493 ) (64,663 ) Net (loss) income $ (40,378 ) $ 8,957 $ (1,569 ) $ (29,799 ) (62,789 ) Diluted (loss) earnings per share: Continuing operations $ (0.22 ) $ 0.26 $ 0.13 $ (0.13 ) $ 0.04 Discontinued operations (0.61 ) (0.08 ) (0.16 ) (0.48 ) (1.32 ) $ (0.83 ) $ 0.18 $ (0.03 ) $ (0.61 ) $ (1.28 ) (1) Sales, cost of sales and operating expenses associated with our discontinued operation, the Cardiac Rhythm Management segment, for the first three quarters of the current year and all quarters of the previous year have been reclassified to ‘Discontinued operations’. Refer to ‘Note 4. Discontinued Operations’. |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASC Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Update No. 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and replaces most existing revenue recognition guidance. We adopted the new revenue guidance on January 1, 2018. We elected the cumulative effect transition method, however, we recognized no cumulative effect to the opening balance of retained earnings because the impact on the timing of when revenue is recognized within our Cardiac Surgery segment, specifically related to heart-lung machines and preventative maintenance contracts on cardiopulmonary equipment was insignificant. The timing of revenue recognition for products and related revenue streams within our Neuromodulation segment and discontinued operations will not change. Upon adoption of the new standard, we implemented new internal controls related to our accounting policies and procedures, including review controls to ensure contractual terms and conditions that may require consideration under the standard are properly identified and analyzed. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . Update 2016-01 requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value with changes recognized in net income. However, an entity may elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The amendments, in addition, reduce complexity of the impairment assessment of equity investments without readily determinable fair values with regard to the other-than-temporary impairment guidance. The amendments also require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and liability. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application of certain provisions is permitted. We are currently evaluating the effect this standard will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases. This guidance requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. While many aspects of lessor accounting remain the same, the new standard makes some changes, such as eliminating the current real estate-specific guidance. The new standard requires lessees and lessors to classify most leases using a principle generally consistent with that of “IAS 17 - Leases,” which is similar to U.S. GAAP but without the use of bright lines. The standard also changes what is considered initial direct costs. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within that year. Early adoption is permitted. We are currently evaluating the effect this standard will have on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation : Improvements to Employee Share-Based Payment Accounting . This simplified the accounting for certain aspects of share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. We adopted the amendments of ASU 2016-09 (each “an Amendment”) effective January 1, 2017, using the following methods: We adopted the Amendment that requires all of the tax effects related to the settlement of share based compensation awards to be recorded through the income statement on a prospective basis. The adoption of this Amendment did not have a material effect on income tax expense for the year ended December 31, 2017. We adopted the Amendment related to cash flow presentation of tax-related cash flows resulting from share based payments on a prospective basis. The Amendment stipulates that all tax-related cash flows resulting from share based payments are to be reported as operating activities in the statement of cash flows, rather than, under past requirements, to present gross windfall tax benefits as an inflow from financing activities and an outflow from operating activities. Under the Amendment related to forfeitures, entities are permitted to make a company-wide accounting policy election to either estimate forfeitures each period, as required prior to this Amendment’s effective date, or to account for forfeitures as they occur. We elected to continue to account for forfeitures using the estimation method. We adopted the Amendment related to the timing of when excess tax benefits are recognized, which requires that all windfalls and shortfalls be recognized when they arise. There were no unrecognized excess tax benefits prior to the adoption of the Amendment. In June 2016, the FASB issued ASC Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The initial allowance for credit losses is added to the purchase price rather than being reported as a credit loss expense. Only subsequent changes in the allowance for credit losses are recorded as a credit loss expense for these assets. In addition, credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. The amendments limit the amount of the allowance for credit losses to the amount by which fair value is below amortized cost, require that credit losses be presented as an allowance rather than as a write-down and will allow an entity to record reversals of credit losses in current period earnings in situations in which the estimate of credit losses declines in current period. Current GAAP prohibits reflecting those improvements in current period earnings. The amendments in this update are effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The modified-retrospective approach is generally applicable through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We are currently evaluating the effect this standard will have on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230 -Statement of Cash Flows) . Update 2016-15 provides guidance on the presentation and classification of certain cash receipts and cash payments in the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The amendments should be applied using a retrospective transition method to each period presented. We are currently evaluating the effect this standard will have on our consolidated financial statements and related disclosures. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory (Topic 740) . This update simplifies the accounting for the income tax consequences of transfers of assets from one unit of a corporation to another unit or subsidiary by eliminating an accounting exception that prevents the recognition of current and deferred income tax consequences for such “intra-entity transfers” until the assets have been sold to an outside party. The amendment should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment directly to retained earnings as of the beginning of the period in which the guidance is adopted. The rule is effective for annual periods after December 15, 2017, including interim periods within those annual reporting periods. We currently estimate the cumulative-effect reduction to retained earnings to be approximately $21.4 million upon adoption at January 1, 2018. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other - Simplifying the Test for Goodwill Impairment (Topic 350) . This update removes step 2 of the goodwill impairment test that compares the implied fair value of goodwill with its carrying amount. Instead, an impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be recorded by the amount a reporting unit’s carrying amount exceeds its fair value. The rule is effective for annual periods after December 15, 2019, including interim periods within those annual reporting periods. We are currently evaluating the impact of adopting this update on our consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805)—Clarifying the Definition of a Business . This update clarifies when a set of assets and activities is a business. The amendments provide a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amendments in this Update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. This update is effective for annual periods after December 15, 2017, including interim periods within those annual reporting periods. We are currently evaluating the impact of adopting this update on our consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost . This update requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in this Update also allow only the service cost component to be eligible for capitalization when applicable. This Update is effective for annual periods after December 15, 2017, including interim periods within those annual reporting periods. We are currently evaluating the impact of adopting this update on our consolidated financial statements. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events ImThera Acquisition On January 16, 2018, we acquired the remaining 86% outstanding interests in ImThera for up to approximately $225 million . Up-front costs are approximately $78 million with the balance paid based on achieving regulatory and sales milestones. Headquartered in San Diego, California, ImThera manufactures an implantable device for the treatment of obstructive sleep apnea that stimulates multiple tongue muscles via the hypoglossal nerve, which opens the airway while a patient is sleeping. The ImThera device is aligned with our Neuromodulation Business Franchise. ImThera has a commercial presence in the European market, and we will be advancing ImThera’s enrollment in an FDA pivotal study. TandemLife Acquisition On February 14, 2018, we entered into an agreement to pay up to $250 million to acquire CardiacAssist, Inc. dba TandemLife, a privately-held Delaware corporation (“TandemLife”), focused on advanced cardiopulmonary temporary support solutions. Upfront costs are approximately $200 million with up to $50 million in contingent consideration based on achieving regulatory milestones. The transaction is expected to close in the first half of 2018, subject to approvals and other customary closing conditions. Bridge Facility Agreement In connection with the TandemLife acquisition, on February 14, 2018, LivaNova entered into a bridge facility agreement (the “Bridge Facility Agreement”) providing a term loan facility with the aggregate principal amount of $170 million . The Bridge Facility Agreement will terminate on August 14, 2018, but may be extended to February 13, 2019, subject to delivery of prior notice and satisfaction of other conditions. Borrowings under the Bridge Facility Agreement will bear interest at a variable annual rate based on LIBOR plus an applicable margin. In addition, a facility fee is assessed on the commitment amount. The Bridge Facility Agreement contains financial covenants that require LivaNova to maintain a maximum semi-annual leverage ratio and a minimum semi-annual interest coverage ratio. The Bridge Facility Agreement also contains customary representations and warranties, covenants, and events of default. The proceeds of the Bridge Facility are intended to be used to fund the acquisition and pay related expenses, refinance certain indebtedness and for general corporate and working capital purposes. |
Transition Period Financial Inf
Transition Period Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Transitional Period Financial Information | Transition Period Financial Information Prior to the Mergers, Cyberonics’ fiscal year ended on the last Friday in April of each year. The fiscal year of LivaNova, which became the successor issuer to Cyberonics on October 19, 2015 , begins on January 1st and ends on December 31st of each year. The change of fiscal year, effective as of October 19, 2015 , resulted in a transitional period which began April 25, 2015 and ended December 31, 2015 . On November, 20 2017, we announced that we entered into a LOI to sell our CRM Business Franchise to MicroPort Scientific Corporation, and as a result, the operating activity for the CRM Business Franchise for the transitional period ended December 31, 2015 . as shown in the table below, was reclassified to discontinued operations. Refer to “Note 4. Discontinued Operations” for further information. The comparable amounts for the equivalent prior period, April 26, 2014 to December 26, 2014 (unaudited), are as follows (in thousands, except per share data): Transitional Period April 25, 2015 to December 31, 2015 Equivalent Prior Period April 26, 2014 to December 26, 2014 (unaudited) Net sales $ 363,237 $ 181,641 Cost of sales 113,404 16,835 Gross profit 249,833 164,806 Operating expenses: Selling, general and administrative 147,025 83,045 Research and development 41,916 28,125 Merger and integration expenses 55,776 — Restructuring expenses 10,494 — Amortization of intangibles 7,030 — Total operating expenses 262,241 111,170 Operating (loss) income from continuing operations (12,408 ) 53,636 Interest income 392 125 Interest expense (1,509 ) (8 ) Impairment of cost-method investments (5,062 ) — Foreign exchange and other (losses) gains (7,411 ) 109 (Loss) income from continuing operations before tax (25,998 ) 53,862 Income tax (benefit) expense (13,501 ) 18,791 Losses from equity method investments (2,223 ) — Net (loss) income from continuing operations (14,720 ) 35,071 Net loss from discontinued operations (14,893 ) — Net (loss) income $ (29,613 ) $ 35,071 Basic income (loss) per common share: Continuing operations $ (0.45 ) $ 1.32 Discontinued operations (0.45 ) — $ (0.90 ) $ 1.32 Diluted income (loss) per common share: Continuing operations $ (0.45 ) $ 1.31 Discontinued operations (0.45 ) — $ (0.90 ) $ 1.31 Shares used in computing basic (loss) income per share 32,741 26,552 Shares used in computing diluted (loss) income per share 32,741 26,775 |
Basis of Presentation, Use of31
Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of LivaNova at December 31, 2017 have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.” and such principles, “U.S. GAAP”) and the instructions to Form 10-K and Article 3 and Article 5 of Regulation S-X. | |
Reporting Periods | Reporting Periods In this Annual Report on Form 10-K, LivaNova, as the successor company to Cyberonics, is reporting the results for: • LivaNova and its consolidated subsidiaries for the years ended December 31, 2017 and December 31, 2016. • A transitional period, April 25, 2015 to December 31, 2015 , filed on Form 10-K/T. This transitional report is the result of the change from Cyberonics’ fiscal year ending the last Friday in April before the Mergers to a calendar year ending December 31st after the Mergers. The transitional period included the business activities of Cyberonics and its consolidated subsidiaries for the period April 25, 2015 to October 18, 2015 , and the consolidated results of the combined businesses of LivaNova (Cyberonics and Sorin) for the period October 19, 2015 through December 31, 2015 . • LivaNova is also reporting the historical results of Cyberonics and its consolidated subsidiaries, our predecessor, for the fiscal year ended April 24, 2015 . | |
Consolidation | Consolidation The accompanying consolidated financial statements for LivaNova include LivaNova’s wholly owned subsidiaries and the LivaNova PLC Employee Benefit Trust (“the Trust”). The accompanying consolidated financial statements for Cyberonics include Cyberonics’ wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. | |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in such financial statements and accompanying notes. These estimates are based on management’s best knowledge of current events and actions we may undertake in the future. Estimates are used in accounting for, among other items, valuation and amortization of intangible assets, goodwill, measurement of deferred tax assets and liabilities, uncertain income tax positions, stock-based compensation, obsolete and slow-moving inventories, models, such as an impairment analysis, and in general, allocations to provisions and the fair value of assets and liabilities recorded in a business combination. Actual results could differ materially from those estimates. | |
Merger, Integration and Restructuring Charges | Merger, Integration and Restructuring Charges As a result of the Mergers and acquisitions, we incurred merger, integration and restructuring charges and reported them separately as operating expenses in the consolidated statements of (loss) income. • Merger expenses consisted of expenses directly related to the Mergers, such as professional fees for legal services, accounting services, due diligence, a fairness opinion and the preparation of registration and regulatory filings in the United States and Europe, as well as investment banking fees. • Integration expenses consisted of consultancy fees with regard to: our systems integration, organization structure integration, finance, synergy and tax planning, the transition to U.S. GAAP for Sorin, our London Stock Exchange listing and certain re-branding efforts. • After the consummation of the Mergers between Cyberonics and Sorin in October 2015, we initiated several restructuring plans (the “Restructuring Plans”) to combine our business operations. We identified costs incurred and liabilities assumed for the Restructuring Plans. The Restructuring Plans are intended to leverage economies of scale, eliminate duplicate corporate expenses, streamline distributions and logistics and office functions in order to reduce overall costs. | |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less, consisting of demand deposit accounts and money market mutual funds, to be cash equivalents and are carried in the balance sheet at cost, which approximated their fair value. | |
Accounts Receivable | Accounts Receivable Our accounts receivable consisted of trade receivables from direct customers and distributors. We maintain an allowance for doubtful accounts for potential credit losses based on our estimates of the ability of customers to make required payments, historical credit experience, existing economic conditions and expected future trends. We write off uncollectible accounts against the allowance when all reasonable collection efforts have been exhausted. | |
Inventories | Inventories We state our inventories at the lower of cost, using the first-in first-out (“FIFO”) method, or market. Our calculation of cost includes the acquisition cost of raw materials and components, direct labor and overhead. We reduce the carrying value of inventories for those items that are potentially excess, obsolete or slow moving based on changes in customer demand, technology developments or other economic factors. | |
Property, Plant and Equipment (PP&E) | Property, Plant and Equipment (“PP&E”) Assets held and used PP&E is carried at cost, less accumulated depreciation. Maintenance, repairs and minor replacements are charged to expense as incurred, while significant renewals and improvements are capitalized. We compute depreciation using the straight-line method over estimated useful lives. Leasehold improvements are depreciated over the shorter of the following terms: the useful life of the asset or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date the leasehold improvements are purchased. Capital improvements to the building are added as building components and depreciated over the useful life of the improvement or the building, whichever is less. Assets held for sale We classify long-lived assets as held for sale in the period in which we commit to a plan to sell the asset, the asset is available for immediate sale, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and the sale of the asset is probable within the next twelve months and when actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell and depreciation is discontinued. We recognize a loss for any excess of carrying value over the fair value less cost to sell. | |
Business Combinations and Goodwill | Business Combinations and Goodwill We allocate the amounts we pay for an acquisition to the assets we acquire and liabilities we assume based on their fair values at the date of acquisition, including property, plant and equipment, inventories, accounts receivable, long-term debt, and identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination, including in-process research and development, on valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. Transaction costs associated with these acquisitions are expensed as incurred and are reported as operating expenses. We recognize adjustments to the provisional amounts identified during the measurement period with a corresponding adjustment to goodwill in the reporting period in which the adjustment amounts are determined. The effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts are recorded in the same period’s financial statements, calculated as if the accounting had been completed at the acquisition date. | |
Intangible Assets, Other than Goodwill | Intangible Assets, Other than Goodwill Intangible assets shown on the consolidated balance sheets consist of finite-lived and indefinite-lived assets. Developed technology rights consist primarily of existing technology and technical capabilities acquired from Sorin in the Mergers that were recorded at their respective fair values as of the acquisition date which includes patents, related know-how and licensed patent rights that represent assets expected to generate future economic benefits. Trademarks and trade names include the Sorin trade name acquired as part of the Mergers. In-process R&D was recognized as part of the acquisition of Caisson Interventional, LLC (“Caisson”). Customer relationships consist of relationships with hospitals and cardiac surgeons in the countries where we operate. Other intangible assets consist of favorable leases acquired from Sorin in the Mergers. We amortize our finite-lived intangible assets over their useful lives using the straight-line method. Amortization expense is disclosed separately in the consolidated statement of net (loss) income. We evaluate our intangible assets each reporting period to determine whether events and circumstances indicate either a different useful life or impairment. If we change our estimate of the useful life of an asset, we amortize the carrying amount over the revised remaining useful life. | |
Impairments of Long-Lived Assets, Investments and Goodwill | Impairments of Long-Lived Assets, Investments and Goodwill PP&E, intangible assets and investments We evaluate the carrying value of our long-lived assets and investments when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Such changes in circumstance may include, among other items, (i) an expectation of a sale or disposal of a long-lived asset or asset group, (ii) adverse changes in market or competitive conditions, (iii) an adverse change in legal factors or business climate in the markets in which we operate and (iv) operating or cash flow losses. For PP&E and intangible assets used in our operations, recoverability generally is determined by comparing the carrying value of an asset, or group of assets to their expected undiscounted future cash flows. If the carrying value of an asset (asset group) is not recoverable, the amount of impairment loss is measured as the difference between the carrying value of the asset (asset group) and its estimated fair value. The asset grouping as well as the determination of expected undiscounted cash flow amounts requires significant judgments, estimates, and assumptions, including cash flows generated upon disposition. We generally measure fair value by considering sale prices for similar assets. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. Goodwill We conduct impairment testing of our goodwill on October 1st each year. We test goodwill for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Testing is performed at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly viewed by management. Neuromodulation and Cardiac Surgery are deemed to be our reporting units for purposes of goodwill impairment testing. If we determine that goodwill is more-likely-than-not impaired we perform the first step of a two-step goodwill impairment test. We first identify potential impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. Fair value refers to the price that would be received if we were to sell the unit as a whole in an orderly transaction. If the carrying amount of our reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying value of the reporting unit exceeds its fair value, we perform step 2 of the goodwill impairment test and determine if the carrying amount of the reporting unit exceeds the implied fair value of the goodwill. An impairment loss is recognized, when the carrying amount of the reporting unit’s net assets exceeds the implied fair value of the reporting unit, up to and including the carrying amount of the goodwill. If the aggregate fair value of our reporting units exceeds our market capitalization, we evaluate the reasonableness of the implied control premium which includes a comparison to implied control premiums from recent market transactions within our industry or other relevant benchmark data. Goodwill impairment evaluations are highly subjective. In most instances, they involve expectations of future cash flows that reflect our judgments and assumptions regarding future industry conditions and operations. The estimates, judgments and assumptions used in the application of our goodwill impairment policies reflect both historical experience and an assessment of current operational, industry, market, economic and political environments. The use of different estimates, judgments, assumptions and expectations regarding future industry and market conditions and operations would likely result in materially different asset carrying values and operating results. Quantitative factors used to determine the fair value of the reporting units reflect our best estimates, and we believe they are reasonable. Future declines in the reporting unit's operating performance or our anticipated business outlook may reduce the estimated fair value of our reporting unit and result in additional impairments. Factors that could have a negative impact on the fair value of the reporting units include, but are not limited to: • Decreases in revenue as a result of the inability of our sales force to effectively market and promote our products; • Increased competition, patent expirations or new technologies or treatments; • Declines in anticipated growth rates; • The outcome of litigation, legal proceedings, investigations or other claims resulting in significant cash outflows; • Increases in the market-participant risk-adjusted Weighted Average Cost of Capital (“WACC”). | |
Derivatives | Derivatives and Risk Management U.S. GAAP requires companies to recognize all derivatives as assets and liabilities on the balance sheet and to measure the instruments at fair value through earnings unless the derivative qualifies for hedge accounting. If the derivative qualifies for hedge accounting, depending on the nature of the hedge and hedge effectiveness, changes in the fair value of the derivative will either be recognized immediately in earnings or recorded in other comprehensive income (loss) until the hedged item is recognized in earnings upon settlement/termination. The changes in the fair value of the derivative are intended to offset the change in fair value of the hedged asset, liability or probable commitment. We evaluate hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be highly effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings. Cash flows from derivative contracts are reported as operating activities in the consolidated statements of cash flows. We use currency exchange rate derivative contracts and interest rate derivative instruments to manage the impact of currency exchange and interest rate changes on earnings and cash flows. In order to minimize earnings and cash flow volatility resulting from currency exchange rate changes, we enter into derivative instruments, principally forward currency exchange rate contracts. These contracts are designed to hedge anticipated foreign currency transactions and changes in the value of specific assets and liabilities. At inception of the forward contract, the derivative is designated as either a freestanding derivative or a cash flow hedge. We do not enter into currency exchange rate derivative contracts for speculative purposes. All derivative instruments that qualify for hedge accounting are recorded at fair value on the consolidated balance sheets, as financial assets or liabilities (current or non-current) depending upon the gain or loss position of the contract and contract maturity date. Forward contracts designated as cash flow hedges are designed to hedge the variability of cash flows associated with forecasted transactions denominated in a foreign currency that will take place in the future. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings to offset exchange differences originated by the hedged item or to adjust the value of operating income (expense). We use freestanding derivative forward contracts to offset exposure to the variability of the value associated with assets and liabilities denominated in a foreign currency. These derivatives are not designated as hedges, and therefore changes in the value of these forward contracts are recognized in earnings, thereby offsetting the current earnings effect of the related change in value of foreign currency denominated assets and liabilities. We use interest rate derivative instruments designated as cash flow hedges to manage the exposure to interest rate movements and to reduce the risk of increased borrowing costs by converting floating-rate debt into fixed-rate debt. Under these agreements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to agreed-upon notional principal amounts. The interest rate swaps are structured to mirror the payment terms of the underlying loan. The fair value of the interest rate swaps is reported in the consolidated balance sheets as financial assets or liabilities (current or non-current) depending upon the gain or loss position of the contract and the maturity of the future cash flows of the fair value of each contract. The effective portion of the gain or loss on these derivatives is reported as a component of accumulated other comprehensive income. The non-effective portion is reported in interest expense in consolidated statements of income (loss). | |
Fair Value Measurements | Fair Value Measurements We follow the authoritative guidance on fair value measurements and disclosures with respect to assets and liabilities that are measured at fair value on both a recurring and nonrecurring basis. Under this guidance, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability, based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels defined as follows: • Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. • Level 3 - Inputs are unobservable for the asset or liability. Financial assets and liabilities that are classified as Level 2 include derivative instruments, primarily forward and option currency contracts and interest rate swaps contracts, which are valued using standard calculations and models that use readily observable market data as their basis. Financial liabilities that are classified as Level 3 include contingent consideration arrangements resulting from acquisitions that involve potential future payment of consideration that is contingent upon the achievement of performance milestones. Contingent consideration is recognized at the acquisition date based on the consideration expected to be transferred and estimated as the probability of future cash flows discounted to present value in accordance with accepted valuation methodologies. Contingent consideration is remeasured each reporting period with the change in fair value, including accretion for the passage of time, recorded in earnings. | |
Investments | Investments Cost and Equity Method Investments Our investments in equity instruments, and related loans, are strategic investments in companies that are in varied stages of development and not publicly traded. Our equity investments are reported under Investments, and related loans under Prepaid Expenses and Other Current Assets and Other Assets, on the consolidated balance sheets. We account for our equity investments and related loans under the cost or the equity method, as appropriate, depending on our level of control over the investee. We use the equity method if we exercise significant influence over the investee but do not control the investee, and we use the cost method if we exercise less than significant influence, which is generally under 20% ownership. Cost Method Investments We initially record the amount of our cost method investments at cost and regularly review our investments for changes in circumstance or the occurrence of events that suggest our investment may not be recoverable. This evaluation considers all available financial information related to the investee, including valuations based on recent third-party equity investments in the investees. If an impairment is considered to be other-than-temporary, the loss is recognized in the consolidated statements of income in the period the determination is made. Impairments are reported as Impairment of cost-method investments in the consolidated statement of (loss) income. Equity Method Investments The cost of our investments accounted for under the equity method may give rise to a difference between the cost of the investment and our share of the investee’s net book value, or a basis difference. A basis difference is assigned to assets and liabilities of the investee with remaining unassigned basis assigned to goodwill. We amortize finite lived basis differences over the life of the asset or liability. We adjust our investment carrying value each period for our share of the investee’s income or loss. We report our share of the investee’s losses and the amortization of basis differences in the consolidated statements of income (loss) as Income (Loss) from Equity Method Investments. We regularly review our investments for changes in circumstance or the occurrence of events that suggest our investment may not be recoverable, and if an impairment is considered to be other-than-temporary, the loss is recognized in the consolidated statements of income in the period the determination is made and reported as Losses from Equity Method Investments. | |
Warranty Obligation and Product Liabilities | Warranty Obligation We offer a warranty on various products. We estimate the costs that may be incurred under warranties and record a liability in the amount of such costs at the time the product is sold. The amount of the reserve recorded is equal to the net costs to repair or otherwise satisfy the claim. We include the warranty obligation in accrued liabilities and other on the consolidated balance sheets. Warranty expense is recorded to cost of goods sold in our consolidated statements of income (loss). | |
Retirement Benefit Plan Assumptions | Retirement Benefit Plan Assumptions We sponsor various retirement benefit plans, including defined benefit pension plans (pension benefits), defined contribution savings plans and termination indemnity plans, covering substantially all U.S. employees and employees outside the United States. Pension benefit costs include assumptions for the discount rate, retirement age, compensation rate increases and the expected return on plan assets. | |
Revenue Recognition | Revenue Recognition Product Revenue We sell our products through a direct sales force and independent distributors. We recognize revenue when persuasive evidence of a sales arrangement exists, title to the goods and risk of loss transfers to customers or to independent distributors, the selling price is fixed or determinable and collectability is reasonably assured. We estimate expected sales returns based on historical data and record a reduction of sales with a return reserve. We record state and local sales taxes net; that is, we exclude sales tax from revenue. Service Revenue Services largely consist of technical assistance services provided to hospitals for the installation, maintenance and support in the operation of heart-lung machines and autotransfusion systems. Service related revenue is recognized on the basis of progress of the services, when services are rendered, when collectability is reasonably assured and when the amount is fixed and determinable. | |
Research and Development (R&D) | Research and Development (“R&D”) All R&D costs are expensed as incurred. R&D includes costs of basic research activities as well as engineering and technical effort required to develop a new product or make significant improvement to an existing product or manufacturing process. R&D costs also include regulatory and clinical study expenses, including post-market clinical studies. | |
Lessee | Leases We account for leases that transfer substantially all benefits and risks incidental to the ownership of property as an acquisition of an asset and the incurrence of an obligation, and we account for all other leases as operating leases. Certain of our leases provide for tenant improvement allowances that have been recorded as deferred rent and amortized, using the straight-line method, over the life of the lease as a reduction to rent expense. In addition, scheduled rent increases and rent holidays are recognized on a straight-line basis over the term of the lease. | |
Stock-Based Compensation | Stock-Based Compensation Stock-Based Incentive Awards We may grant stock-based incentive awards to directors, officers, key employees and consultants. We measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair market value of the award. We recognize equity-based compensation expense ratably over the period that an employee is required to provide service in exchange for the entire award (all vesting periods). We issue new shares upon stock option exercises, otherwise issuance of stock for vesting of restricted stock, restricted stock units or stock appreciation rights are issued from treasury shares. We have the right to elect to pay the cash value of vested restricted stock units in lieu of the issuance of new shares. Stock Appreciation Rights A stock appreciation right (“SAR”) confers upon an employee the contractual right to receive an amount of cash, stock, or a combination of both that equals the appreciation in the company’s stock from an award’s grant date to the exercise date. SARs may be exercised at the employee’s discretion during the exercise period and do not give the employee an ownership right in the underlying stock. SARs do not involve payment of an exercise price. We use the Black-Scholes option pricing methodology to calculate the grant date fair market value of SARs. We determine the expected volatility of the awards based on historical volatility. Calculation of compensation for stock awards requires estimation of employee turnover and forfeiture rates. Restricted Stock and Restricted Stock Units We may grant restricted stock and restricted stock units at no purchase cost to the grantee. The grantees of unvested restricted stock units have no voting rights nor rights to dividends. Sale or transfer of the stock and stock units are restricted until they are vested. The fair market value of service-based restricted stock and restricted stock units are determined using the market closing price on the grant date, and compensation is expensed ratably over the vesting period. Calculation of compensation for stock awards requires estimation of employee turnover and forfeiture rates. | |
Income Taxes | Income Taxes We are a U.K. corporation, and we operate through our various subsidiaries in a number of countries throughout the world. Our provision for income taxes is based on the tax laws and rates applicable in the jurisdictions in which we operate and earn income. We use significant judgment and estimates in accounting for our income taxes. We recognize deferred tax assets and liabilities for the anticipated future tax effects of temporary differences between the financial statements basis and the tax basis of our assets and liabilities, which are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Income tax expense compared to pre-tax income yields an effective tax rate. We file federal and local tax returns in many jurisdictions throughout the world and are subject to income tax examinations for our fiscal year 1992 and subsequent years, with certain exceptions. While we believe that our tax return positions are fully supported, tax authorities may disagree with certain positions we have taken and assess additional taxes. Therefore, we regularly assess our tax positions in previously filed tax returns and positions we expect to take in future tax returns. Out tax positions are evaluated for recognition using a more-likely-than-not threshold. Those tax positions requiring recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon effective settlement with a taxing authority that has full knowledge of all relevant information. We regularly monitor our tax positions and tax liabilities, and we reevaluate the technical merits of our tax positions. Some of the reasons a reserve for an uncertain tax benefit may be reversed are: (i) completion of a tax audit, (ii) a change in applicable tax law including a tax case or legislative guidance, or (iii) an expiration of the statute of limitations. We recognize interest and penalties associated with unrecognized tax benefits and record interest in interest expense, and penalties in selling, general and administrative expense, in the consolidated statements of income (loss). We periodically assess the recoverability of our deferred tax assets by considering whether it is more likely than not that some or all of the actual benefit of those assets will be realized. To the extent that realization does not meet the “more-likely-than-not” criterion, we establish a valuation allowance. We periodically review the adequacy and necessity of the valuation allowance by considering significant positive and negative evidence relative to our ability to recover deferred tax assets and to determine the timing and amount of valuation allowance that should be released. This evidence includes: (i) profitability in the most recent quarters, (ii) internal forecasts for the current and next two future years, (iii) size of deferred tax asset relative to estimated profitability, (iv) the potential effects on future profitability from increasing competition, healthcare reforms and overall economic conditions, (v) limitations and potential limitations on the use of our net operating losses due to ownership changes, pursuant to IRC Section 382, and (vi) the implementation of prudent and feasible tax planning strategies, if any. | |
Comprehensive Income and Foreign Currency Translations | Foreign Currency Our functional currency is the U.S. dollar, however, a portion of the revenues earned and expenses incurred by certain of our subsidiaries are denominated in currencies other than the U.S. dollar. We determine the functional currency of our subsidiaries that exist and operate in different economic and currency environments based on the primary economic environment in which the subsidiary operates, that is, the currency of the environment in which an entity primarily generates and expends cash. Our significant foreign subsidiaries are located in Europe and the U.S. The functional currency of our significant European subsidiaries is the Euro and the functional currency of our significant U.S. subsidiaries is the U.S. dollar. Assets and liabilities for subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars based on a combination of both current and historical exchange rates, while their revenues earned and expenses incurred are translated into U.S. dollars at average period exchange rates. Translation adjustments are included as ‘Accumulated other comprehensive income (loss)’ (“AOCI”) in the consolidated balance sheets. Gains and losses arising from transactions denominated in a currency different from an entity’s functional currency are included in Foreign exchange and other gains (losses) in our consolidated statements of income (loss). Taxes are not provided on cumulative translation adjustments, as substantially all translation adjustments are related to earnings which are intended to be indefinitely reinvested in the countries where earned. | |
Segments | Segments Prior to the Mergers we had one operating and reportable segment. Upon completion of the Mergers, we reorganized our reporting structure and aligned the segments of Sorin and Cyberonics and the underlying divisions and businesses. We currently have two operating and reportable segments, Neuromodulation and Cardiac Surgery. | |
Contingencies | Contingencies The Company is subject to product liability claims, government investigations and other legal proceedings in the ordinary course of business. Legal fees and other expenses related to litigation are expensed as incurred and included in Selling, general and administrative expenses in the Consolidated Statements of Income. Contingent accruals are recorded when the Company determines that a loss is both probable and reasonably estimable. Due to the fact that legal proceedings and other contingencies are inherently unpredictable, our assessments involve significant judgment regarding future events. | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASC Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Update No. 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and replaces most existing revenue recognition guidance. We adopted the new revenue guidance on January 1, 2018. We elected the cumulative effect transition method, however, we recognized no cumulative effect to the opening balance of retained earnings because the impact on the timing of when revenue is recognized within our Cardiac Surgery segment, specifically related to heart-lung machines and preventative maintenance contracts on cardiopulmonary equipment was insignificant. The timing of revenue recognition for products and related revenue streams within our Neuromodulation segment and discontinued operations will not change. Upon adoption of the new standard, we implemented new internal controls related to our accounting policies and procedures, including review controls to ensure contractual terms and conditions that may require consideration under the standard are properly identified and analyzed. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . Update 2016-01 requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value with changes recognized in net income. However, an entity may elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The amendments, in addition, reduce complexity of the impairment assessment of equity investments without readily determinable fair values with regard to the other-than-temporary impairment guidance. The amendments also require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and liability. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application of certain provisions is permitted. We are currently evaluating the effect this standard will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases. This guidance requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. While many aspects of lessor accounting remain the same, the new standard makes some changes, such as eliminating the current real estate-specific guidance. The new standard requires lessees and lessors to classify most leases using a principle generally consistent with that of “IAS 17 - Leases,” which is similar to U.S. GAAP but without the use of bright lines. The standard also changes what is considered initial direct costs. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The standard is effective for annual periods beginning after December 15, 2018 and interim periods within that year. Early adoption is permitted. We are currently evaluating the effect this standard will have on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation : Improvements to Employee Share-Based Payment Accounting . This simplified the accounting for certain aspects of share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. We adopted the amendments of ASU 2016-09 (each “an Amendment”) effective January 1, 2017, using the following methods: We adopted the Amendment that requires all of the tax effects related to the settlement of share based compensation awards to be recorded through the income statement on a prospective basis. The adoption of this Amendment did not have a material effect on income tax expense for the year ended December 31, 2017. We adopted the Amendment related to cash flow presentation of tax-related cash flows resulting from share based payments on a prospective basis. The Amendment stipulates that all tax-related cash flows resulting from share based payments are to be reported as operating activities in the statement of cash flows, rather than, under past requirements, to present gross windfall tax benefits as an inflow from financing activities and an outflow from operating activities. Under the Amendment related to forfeitures, entities are permitted to make a company-wide accounting policy election to either estimate forfeitures each period, as required prior to this Amendment’s effective date, or to account for forfeitures as they occur. We elected to continue to account for forfeitures using the estimation method. We adopted the Amendment related to the timing of when excess tax benefits are recognized, which requires that all windfalls and shortfalls be recognized when they arise. There were no unrecognized excess tax benefits prior to the adoption of the Amendment. In June 2016, the FASB issued ASC Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The initial allowance for credit losses is added to the purchase price rather than being reported as a credit loss expense. Only subsequent changes in the allowance for credit losses are recorded as a credit loss expense for these assets. In addition, credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. The amendments limit the amount of the allowance for credit losses to the amount by which fair value is below amortized cost, require that credit losses be presented as an allowance rather than as a write-down and will allow an entity to record reversals of credit losses in current period earnings in situations in which the estimate of credit losses declines in current period. Current GAAP prohibits reflecting those improvements in current period earnings. The amendments in this update are effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The modified-retrospective approach is generally applicable through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We are currently evaluating the effect this standard will have on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230 -Statement of Cash Flows) . Update 2016-15 provides guidance on the presentation and classification of certain cash receipts and cash payments in the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The amendments should be applied using a retrospective transition method to each period presented. We are currently evaluating the effect this standard will have on our consolidated financial statements and related disclosures. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory (Topic 740) . This update simplifies the accounting for the income tax consequences of transfers of assets from one unit of a corporation to another unit or subsidiary by eliminating an accounting exception that prevents the recognition of current and deferred income tax consequences for such “intra-entity transfers” until the assets have been sold to an outside party. The amendment should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment directly to retained earnings as of the beginning of the period in which the guidance is adopted. The rule is effective for annual periods after December 15, 2017, including interim periods within those annual reporting periods. We currently estimate the cumulative-effect reduction to retained earnings to be approximately $21.4 million upon adoption at January 1, 2018. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other - Simplifying the Test for Goodwill Impairment (Topic 350) . This update removes step 2 of the goodwill impairment test that compares the implied fair value of goodwill with its carrying amount. Instead, an impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge will be recorded by the amount a reporting unit’s carrying amount exceeds its fair value. The rule is effective for annual periods after December 15, 2019, including interim periods within those annual reporting periods. We are currently evaluating the impact of adopting this update on our consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805)—Clarifying the Definition of a Business . This update clarifies when a set of assets and activities is a business. The amendments provide a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the amendments in this Update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. This update is effective for annual periods after December 15, 2017, including interim periods within those annual reporting periods. We are currently evaluating the impact of adopting this update on our consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost . This update requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in this Update also allow only the service cost component to be eligible for capitalization when applicable. This Update is effective for annual periods after December 15, 2017, including interim periods within those annual reporting periods. We are currently evaluating the impact of adopting this update on our consolidated financial statements. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable | Total fair value of consideration transferred in the Mergers (in thousands except for shares and per share data and the Sorin Exchange Ratio): Total Sorin shares outstanding as of October 16, 2015 477,824,000 Sorin exchange ratio 0.0472 Shares of LivaNova issued 22,553,293 Value per share of Cyberonics as of October 16, 2015 $ 69.95 Fair value of ordinary shares transferred to Sorin shareholders $ 1,577,603 Fair value of ordinary shares issued to Sorin share award holders (1) $ 9,231 Fair value of LivaNova stock appreciation rights issued to Sorin stock appreciation rights holders (2) $ 2,249 Fair value of ordinary shares transferred to Sorin shareholders $ 1,589,083 (1) Each Sorin share award (other than a Sorin stock appreciation right) granted prior to the Sorin merger effective time accelerated, vested and was converted into the right to receive LivaNova shares based on the Sorin Exchange Ratio. The total fair value of the replacement awards is $25.2 million , including $9.2 million attributable to pre-combination services and allocated to consideration transferred to acquire Sorin. Of the remaining $16.0 million , $8.3 million was recognized immediately in the post-combination period and $7.7 million was recognized over the post-combination service period to February 28, 2017 due to the service period requirements of the awards. Refer to “Note 14. Stock-Based Incentive Plans” for further discussion of treatment of equity awards. The consideration transferred in the Mergers was measured using the fair-value-based measure of the share awards as of the closing date. For purposes of calculating the consideration transferred, the fair-value-based measure of the Sorin share awards was determined to be the opening market price of LivaNova’s shares of $69.39 on October 19, 2015. (2) As of October 16, 2015 there were 3,815,824 Sorin stock appreciation rights. Each Sorin stock appreciation right granted prior to the Sorin merger effective time accelerated, vested and was converted into the right to receive 0.0472 LivaNova stock appreciation right based on the Sorin Exchange Ratio. The total fair value of the replacement stock appreciation rights is $3.8 million , including $2.2 million attributable to pre-combination services and allocated to consideration transferred to acquire Sorin. The remaining $1.6 million was recognized immediately in the post-combination period. Refer to “Note 14. Stock-Based Incentive Plans” for further discussion of treatment of equity awards. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | We have recorded no adjustments to the preliminary purchase price allocation at fair value for the Caisson acquisition, as presented in the following table (in thousands): Cash and cash equivalents $ 1,468 In-process research and development 89,000 Goodwill 42,417 Other assets 918 Current liabilities 1,023 Deferred income tax liabilities, net 16,009 Net assets acquired $ 116,771 Total fair value of consideration transferred in the Mergers (in thousands except for shares and per share data and the Sorin Exchange Ratio): Total Sorin shares outstanding as of October 16, 2015 477,824,000 Sorin exchange ratio 0.0472 Shares of LivaNova issued 22,553,293 Value per share of Cyberonics as of October 16, 2015 $ 69.95 Fair value of ordinary shares transferred to Sorin shareholders $ 1,577,603 Fair value of ordinary shares issued to Sorin share award holders (1) $ 9,231 Fair value of LivaNova stock appreciation rights issued to Sorin stock appreciation rights holders (2) $ 2,249 Fair value of ordinary shares transferred to Sorin shareholders $ 1,589,083 (1) Each Sorin share award (other than a Sorin stock appreciation right) granted prior to the Sorin merger effective time accelerated, vested and was converted into the right to receive LivaNova shares based on the Sorin Exchange Ratio. The total fair value of the replacement awards is $25.2 million , including $9.2 million attributable to pre-combination services and allocated to consideration transferred to acquire Sorin. Of the remaining $16.0 million , $8.3 million was recognized immediately in the post-combination period and $7.7 million was recognized over the post-combination service period to February 28, 2017 due to the service period requirements of the awards. Refer to “Note 14. Stock-Based Incentive Plans” for further discussion of treatment of equity awards. The consideration transferred in the Mergers was measured using the fair-value-based measure of the share awards as of the closing date. For purposes of calculating the consideration transferred, the fair-value-based measure of the Sorin share awards was determined to be the opening market price of LivaNova’s shares of $69.39 on October 19, 2015. (2) As of October 16, 2015 there were 3,815,824 Sorin stock appreciation rights. Each Sorin stock appreciation right granted prior to the Sorin merger effective time accelerated, vested and was converted into the right to receive 0.0472 LivaNova stock appreciation right based on the Sorin Exchange Ratio. The total fair value of the replacement stock appreciation rights is $3.8 million , including $2.2 million attributable to pre-combination services and allocated to consideration transferred to acquire Sorin. The remaining $1.6 million was recognized immediately in the post-combination period. Refer to “Note 14. Stock-Based Incentive Plans” for further discussion of treatment of equity awards. |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The valuation of the intangible assets acquired in the Mergers and related amortization periods are as follows (in thousands, except years): Valuation as of October 19, 2015 Amortization Period in Years Customer relationships $ 464,019 16-18 Developed technology 211,091 9-15 Sorin trade-name 13,619 4 $ 688,729 |
Schedule of Movement in Measurement Period Adjustments | We recorded reductions or (increases) to the following expenses due to the measurement period adjustments (in thousands): Year Ended December 31, 2016 Amortization of intangible assets $ 1,844 Depreciation 2,790 Other costs (40 ) Total before income tax effect 4,594 Income tax (3,756 ) Net $ 838 |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table presents the acquisition date fair-value of the consideration transferred and the fair value of our interest in Caisson prior to the acquisition (in thousands): Cash (1) $ 15,660 Debt forgiven (2) 6,309 Deferred consideration (1) 12,994 Contingent consideration (1) 29,303 Fair value of consideration transferred 64,266 Fair value of our interest prior to the acquisition (2) 52,505 Fair value of total consideration $ 116,771 (1) Concurrent with the acquisition, we recognized $5.8 million of post-combination compensation expense. Of this amount, $2.4 million is reflected as a reduction of $18.0 million in cash paid at closing of the acquisition, while $3.4 million increased the deferred consideration and contingent consideration liabilities recognized at the date of the acquisition to a total of $14.1 million and $31.7 million , respectively. (2) On the acquisition date, we remeasured the notes receivable from Caisson and our existing investment in Caisson at fair value and recognized a pre-tax non-cash gain of $1.3 million and $38.1 million , respectively, which are included in ‘Gain on acquisition of Caisson Interventional, LLC’ in the consolidated statements of income (loss). |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | The contingent consideration arrangements are composed of potential cash payments upon the achievement of certain regulatory milestones and a sales-based earnout associated with sales of products covered by the purchase agreement. The sales-based earnout was valued using projected sales from our internal strategic plans. Both arrangements are Level 3 fair value measurements and include the following significant unobservable inputs (in thousands): Caisson Acquisition Fair value at May 2, 2017 Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments $ 14,883 Discounted cash flow Discount rate 2.6% - 3.4% Probability of payment 90-95% Projected payment years 2018-2023 Sales-based earnout 16,805 Monte Carlo simulation Discount rate 11.5-12.7% Sales volatility 36.9% Projected years of sales 2019-2033 $ 31,688 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table provides a reconciliation of the beginning and ending balance of the contingent consideration liability, which consisted of arrangements that arose from the Caisson acquisition and other previous acquisitions that also included contingent consideration (in thousands): Balance at December 31, 2016 $ 3,890 Purchase price - Caisson contingent consideration 31,688 Payments (1,803 ) Changes in fair value 56 Effect of changes in foreign currency exchange rates 142 Balance at December 31, 2017 (1) $ 33,973 (1) The contingent consideration liability represents contingent payments related to three acquisitions: the first and second acquisitions, in September 2015, were Cellplex PTY Ltd. in Australia and the commercial activities of a local distributor in Colombia. The contingent payments for the first acquisition are based on achievement of sales targets by the acquiree through June 30, 2018 and the contingent payments for the second acquisition are based on sales of cardiopulmonary disposable products and heart lung machines of the acquiree through December 2019. The third acquisition, Caisson, occurred in May 2017 and is discussed above. Refer to “Note 9. Fair Value Measurements.” |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of discontinued operations | The following table represents assets and liabilities of CRM are classified as held for sale and presented as assets and liabilities of discontinued operations in the consolidated balance sheets: December 31, 2017 December 31, 2016 Accounts receivable, net $ 64,684 $ 62,474 Inventories 54,097 50,472 Prepaid taxes 14,725 10,038 Prepaid and other assets 3,498 4,349 Property, plant and equipment, net 12,104 20,134 Deferred tax assets, net 2,517 — Investments 6,098 4,866 Intangible assets, net 92,966 167,589 Assets of discontinued operations $ 250,689 $ 319,922 Accounts payable 26,501 21,018 Accrued liabilities and other 7,669 8,936 Income taxes payable 5,084 3,959 Accrued employee compensation and benefits 30,753 29,321 Deferred income taxes liability 8,068 20,009 Liabilities of discontinued operations $ 78,075 $ 83,243 The following table represents the financial results of CRM presented as net loss from discontinued operations in the consolidated statements of (loss) income: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Revenues $ 245,171 $ 249,067 $ 52,470 Cost of sales 92,609 104,168 30,439 Gross profit 152,562 144,899 22,031 Selling, general and administrative expenses 105,831 112,427 22,155 Research and development 37,936 39,987 9,504 Merger and integration expenses 22 160 11 Restructuring expenses (1,617 ) 18,566 829 Amortization of intangibles 12,737 14,476 2,704 Impairment of tangible and intangible assets 93,574 — — Goodwill impairment — 18,348 — Total operating expenses 248,483 203,964 35,203 Operating loss from discontinued operations (95,921 ) (59,065 ) (13,172 ) Foreign exchange and other (losses) gains (381 ) 350 (111 ) Loss from discontinued operations, before income tax (96,302 ) (58,715 ) (13,283 ) Income tax (benefit) expense (21,635 ) 2,015 525 Losses from equity method investments (4,887 ) (3,933 ) (1,085 ) Net loss from discontinued operations $ (79,554 ) $ (64,663 ) $ (14,893 ) |
Schedule of future minimum rental payments for operating leases | The future minimum lease payments for operating leases of CRM as of December 31, 2017 are (in thousands): 2018 $ 6,107 2019 5,545 2020 4,523 2021 4,089 2022 4,077 Thereafter 20,388 Total $ 44,729 uture minimum lease payments for operating leases related to continuing operations as of December 31, 2017 are (in thousands): 2018 $ 13,584 2019 11,633 2020 9,565 2021 7,053 2022 5,864 Thereafter 24,632 Total $ 72,331 |
Restructuring Plans (Tables)
Restructuring Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table presents the Reorganization Plans’ accruals, inventory obsolescence and other reserves, recorded in connection with the Reorganization Plans including the balances and activity related to the CRM Business Franchise, (in thousands): Employee Severance and Other Termination Costs Other Total Balance at April 24, 2015 $ — $ — $ — Charges 11,323 — 11,323 Cash payments (4,404 ) — (4,404 ) Balance at December 31, 2015 6,919 — 6,919 Charges 46,678 9,265 55,943 Cash payments / write-downs (32,505 ) (6,209 ) (38,714 ) Balance at December 31, 2016 $ 21,092 $ 3,056 $ 24,148 Charges 10,076 5,363 15,439 Cash payments / write-downs (27,279 ) (5,794 ) (33,073 ) Balance at December 31, 2017 $ 3,889 $ 2,625 $ 6,514 |
Schedule of Restructuring Reserve by Type of Cost | The following table presents restructuring expense by reportable segment, with discontinued operations included (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Cardiac Surgery (1) $ 8,819 $ 11,042 $ 1,211 Neuromodulation (2) 561 14,769 1,079 Other 7,676 11,566 8,204 Restructuring expense from continuing operations 17,056 37,377 10,494 Discontinued operations (1,617 ) 18,566 829 Total $ 15,439 $ 55,943 $ 11,323 (1) Cardiac Surgery restructuring expense for the year ended December 31, 2017 included building and equipment impairment of $5.4 million related to the Suzhou, China facility exit plan. (2) Neuromodulation restructuring expense for the year ended December 31, 2016 included building and equipment impairment of $5.7 million related to the Costa Rica exit plan. |
Product Remediation Liability (
Product Remediation Liability (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Environmental Remediation Obligations [Abstract] | |
Schedule of Environmental Loss Contingencies by Site [Table Text Block] | Changes in the carrying amount of the product remediation liability are as follows (in thousands): Balance at December 31, 2016 $ 33,487 Adjustments 2,452 Remediation activity (11,283 ) Effect of changes in foreign currency exchange rates 2,890 Balance at December 31, 2017 (1) $ 27,546 (1) At December 31, 2017 , the product remediation liability is included in ‘Accrued liabilities and other’ at $16.8 million and ‘Other long-term liabilities’ at $10.7 million , in the consolidated balance sheet. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | Detail of finite-lived and indefinite-lived intangible assets (in thousands): December 31, 2017 December 31, 2016 Finite-lived intangible assets: Customer relationships $ 327,496 $ 304,056 Developed technology 179,234 160,775 Trademarks and trade names 14,391 12,649 Other intangible assets 181 1,177 Total 521,302 478,657 Accumulated amortization 74,905 37,049 Net $ 446,397 $ 441,608 Indefinite-lived intangible assets: In-process R&D $ 89,000 $ — Goodwill 784,242 691,712 Total $ 873,242 $ 691,712 |
Schedule of Finite-Lived Intangible Assets | Detail of finite-lived and indefinite-lived intangible assets (in thousands): December 31, 2017 December 31, 2016 Finite-lived intangible assets: Customer relationships $ 327,496 $ 304,056 Developed technology 179,234 160,775 Trademarks and trade names 14,391 12,649 Other intangible assets 181 1,177 Total 521,302 478,657 Accumulated amortization 74,905 37,049 Net $ 446,397 $ 441,608 Indefinite-lived intangible assets: In-process R&D $ 89,000 $ — Goodwill 784,242 691,712 Total $ 873,242 $ 691,712 |
Schedule of Weighted Average Amortization Period | The amortization periods for our finite-lived intangible assets as of December 31, 2017 : Minimum Life in years Maximum Life in years Customer relationships 16 18 Developed technology 9 15 Trademarks and trade names 4 4 Other intangible assets 5 5 |
Schedule of Finite-lived Intangible Assets Amortization Expense | The estimated future amortization expense based on our finite-lived intangible assets at December 31, 2017 (in thousands): 2018 $ 34,720 2019 34,739 2020 34,761 2021 35,019 2022 35,019 Thereafter 272,139 Total $ 446,397 |
Schedule of Indefinite-Lived Assets | The carrying amount of goodwill by Segment (in thousands): Cardiac Surgery Neuromodulation Other Total December 31, 2016 $ 375,769 $ 315,943 $ — $ 691,712 Goodwill as a result of acquisitions (1) — — 42,417 42,417 Foreign currency adjustments 50,113 — — 50,113 December 31, 2017 $ 425,882 $ 315,943 $ 42,417 $ 784,242 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments [Abstract] | |
Schedule of Long-Term Investments | Our cost method investments are included in Investments in the consolidated balance sheets and consist of our equity positions in the following privately-held companies (in thousands): December 31, 2017 December 31, 2016 Respicardia Inc. (1) $ 17,422 $ 17,518 ImThera Medical, Inc. (2) 12,900 12,000 Rainbow Medical Ltd. (3) 1,172 3,733 MD Start II 1,199 526 $ 32,693 $ 33,777 (1) Respicardia is a privately funded U.S. company developing an implantable device designed to restore a more natural breathing pattern during sleep in patients with central sleep apnea by transvenously stimulating the phrenic nerve. We have a loan outstanding to Respicardia with a carrying amount of $0.4 million , as of December 31, 2017 , which is included in ‘Prepaid expenses and other current assets’ on the consolidated balance sheet. During the year ended December 31, 2017 , we converted a loan to Respicardia of $1.5 million to equity, we recorded an impairment of $5.5 million and we recorded an FX gain of $3.9 million , Refer to the paragraph below for further details regarding the impairment. (2) ImThera Medical, Inc. (“ImThera”) is a privately funded U.S. company developing a neurostimulation device system for the treatment of obstructive sleep apnea. We have a loan outstanding to ImThera as of December 31, 2017 with a carrying amount of $1.0 million , which is included in ‘Other assets’ in the consolidated balance sheet. On January 16, 2018 we acquired the remaining outstanding interests in ImThera. Refer to “Note 22. Subsequent Events” for a discussion of our acquisition of ImThera. (3) Rainbow Medical (“Rainbow Medical”) is a private Israeli venture capital company that seeds and grows companies developing medical devices in a diverse range of medical fields. During the fourth quarter of 2017, we impaired our investment in Rainbow Medical. Refer to the paragraph below for further details. |
Schedule of Equity Method Investments | Our equity method investments are included in Investments in the consolidated balance sheets and consist of our equity position in the following entities (in thousands, except for percent ownership): % Ownership (1) December 31, 2017 December 31, 2016 Highlife S.A.S. (2) 25 % $ 1,782 $ 6,009 Caisson Interventional LLC (3) — 16,424 Other 17 16 Total $ 1,799 $ 22,449 (1) Ownership percentage as of December 31, 2017 . (2) Highlife S.A.S is a privately held clinical-stage medical device company located in France and is focused on the development of a unique transcatheter mitral valve replacement system to treat patients with mitral regurgitation. During the year ended December 31, 2017 , we recognized an impairment of our investment in, and notes receivable from, Highlife. Refer to the paragraph below for further details. In addition, due to additional investments by third parties and the conversion of our note receivable to equity our equity interest fell to 25% from 38% during the year ended December 31, 2017 . (3) On May 2, 2017 , we acquired the remaining 51% equity interests in Caisson Interventional LLC (“Caisson”), and we began consolidating the results of Caisson as of the acquisition date. Refer to “Note 3. Business Combinations” for further information. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements on a Recurring Basis | The following table provides information by level for assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Inputs Considered as: Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Assets: Derivative assets - freestanding instruments (foreign currency exchange rate "FX") $ 519 $ — $ 519 $ — Total assets $ 519 $ — $ 519 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 460 $ — $ 460 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 1,585 — 1,585 — Contingent consideration 33,973 — — 33,973 Total liabilities $ 36,018 $ — $ 2,045 $ 33,973 Fair Value Measurements Using Inputs Considered as: Fair Value as of December 31, 2016 Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (FX) $ 4,911 $ — $ 4,911 $ — Derivative assets - freestanding instruments (FX) 3,358 — 3,358 — Total assets $ 8,269 $ — $ 8,269 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (interest rate swaps) $ 2,334 $ — $ 2,334 $ — Contingent consideration 3,890 — — 3,890 Total liabilities $ 6,224 $ — $ 2,334 $ 3,890 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The outstanding principal amount of long-term debt (in thousands, except interest rates): Principal Amount at December 31, 2017 Principal Amount at December 31, 2016 Maturity Effective Interest Rate European Investment Bank (1) $ 69,893 $ 78,987 June 2021 0.95 % Mediocredito Italiano (2) 9,118 7,276 December 2023 0.50% - 3.10% Banca del Mezzogiorno (3) 5,499 6,747 December 2019 0.50% - 3.15% Bpifrance (ex-Oséo) 1,450 1,909 October 2019 2.58 % Region Wallonne 845 798 December 2023 and June 2033 0.00% - 2.45% Mediocredito Italiano - mortgages and other 997 799 September 2021 and September 2026 0.80% -1.30% Total long-term facilities 87,802 96,516 Less current portion of long-term debt 25,844 21,301 Total long-term debt $ 61,958 $ 75,215 (1) The European Investment Bank (“EIB”) loan was obtained in July 2014 to support product development projects. The interest rate for the EIB loan is reset by the lender each quarter based on the Euribor. Interest payments are paid quarterly and principal payments are paid semi-annually. (2) We obtained the Mediocredito Italiano Bank loan in July 2016 as part of the Fondo Innovazione Teconologica program implemented by the Italian Ministry of Education. (3) The Banca del Mezzogiorno loan was obtained in January 2015 to support R&D projects as a part of the Large Strategic Project program of the Italian Ministry of Education. |
Derivatives and Risk Manageme40
Derivatives and Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | Notional amounts of open derivative contracts designated as cash flow hedges (in thousands): Description of derivative contract: December 31, 2017 December 31, 2016 FX derivative contracts to be exchanged for British Pounds $ 16,847 $ 6,663 FX derivative contracts to be exchanged for Japanese Yen 32,302 57,840 FX derivative contracts to be exchanged for Canadian Dollars 16,494 — Interest rate swap contracts 55,965 63,246 $ 121,608 $ 127,749 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | After-tax net loss associated with derivatives designated as cash flow hedges recorded in the ending balance of AOCI and the amount expected to be reclassified to earnings in the next 12 months (in thousands): December 31, 2017 Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ (712 ) $ (712 ) Interest rate swap contracts (207 ) (59 ) $ (919 ) $ (771 ) |
Schedule of Cash Flow Hedges Included in AOCI | Pre-tax gains (losses) for derivative contracts designated as cash flow hedges recognized in ‘Other comprehensive income (loss)’ (“OCI”) and the amount reclassified to earnings from AOCI (in thousands): Year Ended December 31, 2017 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Losses Recognized in OCI Gains (Losses) Reclassified from OCI to Earnings: FX derivative contracts Foreign Exchange and Other $ (9,861 ) $ (6,471 ) FX derivative contracts SG&A — 2,084 Interest rate swap contracts Interest expense — 939 $ (9,861 ) $ (3,448 ) Year Ended December 31, 2016 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from OCI to Earnings: FX derivative contracts Foreign Exchange and Other $ 2,874 $ 3,705 FX derivative contracts SG&A — (4,218 ) Interest rate swap contracts Interest expense 85 (458 ) $ 2,959 $ (971 ) |
Schedule of Fair Value of Derivative Instruments in Statement of Financial Position | The following tables present the fair value, and the location of, derivative contracts reported in the consolidated balance sheets (in thousands): December 31, 2017 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) Interest rate swap contracts Prepaid expenses and other current assets $ — Accrued liabilities $ 834 Interest rate swap contracts Other assets — Other long-term liabilities 751 FX derivative contracts Prepaid expenses and other current assets — Accrued liabilities 460 Total derivatives designated as hedging instruments — 2,045 Derivatives Not Designated as Hedging Instruments FX derivative contracts Prepaid expenses and other current assets 519 Accrued liabilities — Total derivatives not designated as hedging instruments 519 — Total derivatives $ 519 $ 2,045 December 31, 2016 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) Interest rate swap contracts Prepaid expenses and other current assets $ — Accrued liabilities $ 942 Interest rate swap contracts Other assets — Other long-term liabilities 1,392 FX derivative contracts Prepaid expenses and other current assets 4,911 Accrued liabilities — Total derivatives designated as hedging instruments 4,911 2,334 Derivatives Not Designated as Hedging Instruments FX derivative contracts Prepaid expenses and other current assets 3,358 Accrued liabilities — Total derivatives not designated as hedging instruments 3,358 — Total derivatives $ 8,269 $ 2,334 (1) For the classification of input used to evaluate the fair value of our derivatives, refer to “Note 9. Fair Value Measurements.” |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | The future minimum lease payments for operating leases of CRM as of December 31, 2017 are (in thousands): 2018 $ 6,107 2019 5,545 2020 4,523 2021 4,089 2022 4,077 Thereafter 20,388 Total $ 44,729 uture minimum lease payments for operating leases related to continuing operations as of December 31, 2017 are (in thousands): 2018 $ 13,584 2019 11,633 2020 9,565 2021 7,053 2022 5,864 Thereafter 24,632 Total $ 72,331 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below presents the change in each component of accumulated other comprehensive income (loss), net of tax and the reclassifications out of accumulated other comprehensive income into net (loss) earnings for the years ended December 31, 2017 and December 31, 2016 (in thousands): Change in Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Adjustments (1) Total As of December 31, 2015 $ 888 $ (55,116 ) $ (54,228 ) Other comprehensive income (loss) before reclassifications, before tax 2,959 (16,990 ) (14,031 ) Tax benefit (expense) (795 ) — (795 ) Other comprehensive income (loss) before reclassifications, net of tax 2,164 (16,990 ) (14,826 ) Reclassification of loss from accumulated other comprehensive income, before tax 971 — 971 Tax effect (404 ) — (404 ) Reclassification of loss from accumulated other comprehensive income, after tax 567 — 567 Net current-period other comprehensive income (loss), net of tax 2,731 (16,990 ) (14,259 ) As of December 31, 2016 3,619 (72,106 ) (68,487 ) Other comprehensive income (loss) before reclassifications, before tax (9,861 ) 118,338 108,477 Tax benefit (expense) 2,653 — 2,653 Other comprehensive income (loss) before reclassifications, net of tax (7,208 ) 118,338 111,130 Reclassification of loss from accumulated other comprehensive income, before tax 3,448 — 3,448 Tax effect (778 ) — (778 ) Reclassification of loss from accumulated other comprehensive income, after tax 2,670 — 2,670 Net current-period other comprehensive income (loss), net of tax (4,538 ) 118,338 113,800 As of December 31, 2017 $ (919 ) $ 46,232 $ 45,313 (1) Taxes were not provided for foreign currency translation adjustments as translation adjustments are related to earnings that are intended to be reinvested in the countries where earned. |
Stock-Based Incentive Plans (Ta
Stock-Based Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Allocation of Share Based Compensation Costs by Expense Category | Amounts of stock-based compensation recognized in the consolidated statements of income (loss), by expense category are as follows (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Cost of goods sold $ 450 $ 709 $ 452 $ 559 Selling, general and administrative 16,118 15,570 15,588 8,357 Research and development 1,119 912 1,664 3,024 Merger-related expense — 271 13,010 — Stock-based compensation from continuing operations 17,687 17,462 30,714 11,940 Stock-based compensation from discontinued operations 1,375 2,107 316 — Total stock-based compensation expense 19,062 19,569 31,030 11,940 Income tax benefit, related to awards, recognized in the consolidated statements of income 4,236 4,645 7,776 3,944 Total expense, net of income tax benefit $ 14,826 $ 14,924 $ 23,254 $ 7,996 |
Schedule of Allocation of Share-Based Compensation Costs by Type of Arrangement | Amounts of stock-based compensation expense recognized in the consolidated statements of income (loss) by type of arrangement are as follows (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Service-based stock appreciation rights ("SARs") $ 6,916 $ 7,953 $ 10,652 $ 4,317 Service-based restricted stock units ("RSUs") 8,223 9,388 8,204 6,119 Market performance-based restricted stock units 732 31 — — Operating performance-based restricted stock units 1,816 90 11,858 1,504 Total stock-based compensation expense from continuing operations $ 17,687 $ 17,462 $ 30,714 $ 11,940 |
Schedule of Unrecognized Compensation Cost, Nonvested Awards | mounts of stock-based compensation cost not yet recognized related to non-vested awards, including awards assumed or issued, as a result of the Mergers (in thousands): December 31, 2017 Unrecognized Compensation Cost Weighted Average Remaining Vesting Period (in years) Service-based stock appreciation rights $ 14,628 3.00 Service-based restricted and restricted stock unit awards 20,754 2.67 Performance-based restricted stock and restricted stock unit awards 7,926 3.17 Total stock-based compensation cost unrecognized $ 43,308 2.92 |
Schedule of Stock Options Valuation Assumptions | The following table lists the assumptions we utilized as inputs to the Black-Scholes model: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Dividend yield (1) — — — — Risk-free interest rate - based on grant date (2) 1.7% - 2.2% 1.0% - 1.8% 1.2% - 1.4% 1.6% - 2.0% Expected option term - in years per group of employees/consultants (3) 4.6 - 5.2 4.0 - 5.0 4.0 - 5.0 4.9 - 6.6 Expected volatility at grant date (4) 29.6% - 30.4% 30.8% - 32.4% 34.1% 31.7% - 41.1% (1) We have not paid dividends and no future dividends have been approved. (2) We use yield rates on U.S. Treasury securities for a period that approximated the expected term of the award to estimate the risk-free interest rate. (3) We estimated the expected term of the awards granted using historic data of actual time elapsed between the date of grant and the exercise or forfeiture of options or SARs for employees. For consultants, the expected term is the remaining time until expiration of the option or SAR. (4) We determine the expected volatility of the awards based on historical volatility. |
Schedule of Stock Option Activity | The following tables detail the activity for service-based stock option awards and stock appreciation rights, including awards assumed or issued as a result of the Mergers: Options and SARs Number of Optioned Shares Wtd. Avg. Exercise Price per Share Wtd. Avg. Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) (1) Outstanding — at December 31, 2016 1,949,328 $ 57.07 Granted 654,478 56.84 Exercised (345,513 ) 56.60 Forfeited (154,381 ) 59.52 Expired (78,790 ) 58.90 Outstanding — at December 31, 2017 2,025,122 56.82 6.8 $ 46,796 Fully vested and exercisable — end of year 944,051 58.37 4.2 $ 20,342 Fully vested and expected to vest — end of year (2) 1,990,317 $ 56.82 6.7 $ 45,989 (1) The aggregate intrinsic value of options and SARs is based on the difference between the fair market value of the underlying stock at December 31, 2017 , using the market closing stock price, and exercise price for in-the-money awards. (2) Factors in expected future forfeitures. Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Weighted average grant date fair value of stock option awards and SARs granted during the year / period (per share) (1) $ 17.19 $ 15.03 $ 21.05 $ 18.64 Aggregate intrinsic value of stock option and SARs exercised during the year / period (in thousands) $ 5,462 $ 5,033 $ 5,464 $ 3,973 (1) Including weighted average Mergers date fair value of SARs assumed in the Mergers. |
Summary of Restricted Stock Service-Based Activity | The following tables detail the activity for service-based restricted stock and restricted stock unit awards, including activity from restricted stock units assumed or issued as a result of the Mergers: Number of Shares Wtd. Avg. Grant Date Fair Value Non-vested shares at December 31, 2016 506,219 $ 56.56 Granted 131,442 61.37 Vested (169,580 ) 59.09 Forfeited (87,973 ) 56.68 Non-vested shares at December 31, 2017 380,108 $ 57.07 Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Weighted average grant date fair value of service-based share grants issued during the year / period (per share) $ 61.37 $ 55.53 $ 57.55 $ 56.85 Aggregate fair value of service-based share grants that vested during the year / period (in thousands) $ 9,966 $ 4,810 $ 24,384 $ 9,194 |
Summary of Performance-Based Restricted Stock and Restricted Stock Unit Activity | The following tables detail the activity for performance-based and market-based restricted stock and restricted stock unit awards: Number of Shares Wtd. Avg. Grant Date Fair Value Non-vested shares at December 31, 2016 52,083 $ 42.01 Granted 346,584 $ 42.11 Vested (2,171 ) $ 57.60 Forfeited (55,109 ) $ 42.73 Non-vested shares at December 31, 2017 341,387 Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Weighted average grant date fair value of performance-based share grants issued during the year / period (per share) $ 42.11 $ 42.01 $ — $ 57.39 Aggregate fair value of performance-based share grants that vested during the year / period (in thousands) $ 110 $ — $ 9,648 $ 10,519 |
Employee Retirement Plans (Tabl
Employee Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Plan [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | The change in benefit obligations and funded status of our U.S. pension benefits (in thousands): U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Accumulated benefit obligations at year end: $ 11,191 $ 10,615 $ 10,218 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 10,425 $ 10,218 $ — Interest cost 361 367 86 Benefits obligations assumed in the Mergers — — 10,378 Plan curtailments and settlements — (609 ) (59 ) Actuarial (gain) loss 770 698 (40 ) Benefits paid (555 ) (249 ) (147 ) Projected benefit obligation at end of year $ 11,001 $ 10,425 $ 10,218 Change in plan assets: Fair value of plan assets at beginning of year $ 5,925 $ 5,858 $ — Actual return on plan assets 444 277 (33 ) Plan assets acquired in the Mergers — — 6,097 Employer contributions 870 648 — Plan settlements — (609 ) (59 ) Benefits paid (360 ) (249 ) (147 ) Fair value of plan assets at end of year $ 6,879 $ 5,925 $ 5,858 Funded status at end of year: Fair value of plan assets $ 6,879 $ 5,925 $ 5,858 Projected Benefit obligations 11,001 10,425 10,218 Underfunded status of the plans 4,122 4,500 4,360 Recognized liability $ 4,122 $ 4,500 $ 4,360 Amounts recognized on the consolidated balance sheets consist of: Non-current liabilities $ 4,122 $ 4,500 $ 4,360 Recognized liability $ 4,122 $ 4,500 $ 4,360 The change in benefit obligations and funded status of our non-U.S. pension benefits (in thousands): Non-U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Accumulated benefit obligations at year end: $ 23,785 $ 27,845 $ 21,116 Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 20,402 $ 21,116 $ — Service cost 503 397 92 Interest cost 291 376 83 Benefits obligations assumed in the Mergers — — 20,626 Employee contributions — — — Plan curtailments and settlements (1) — (20 ) — Actuarial (gain) loss (27 ) 889 152 Benefits paid (2,222 ) (1,911 ) (201 ) Foreign currency exchange rate changes and other 2,601 (445 ) 364 Projected benefit obligation at end of year $ 21,548 $ 20,402 $ 21,116 Change in plan assets: Fair value of plan assets at beginning of year $ 2,898 $ 2,689 $ — Actual return on plan assets 54 28 6 Plan assets acquired in the Mergers — — 2,607 Employer contributions 369 — 81 Employee contributions — 358 — Plan settlements — — — Benefits paid (393 ) (238 ) (5 ) Foreign currency exchange rate changes 147 61 — Fair value of plan assets at end of year $ 3,075 $ 2,898 $ 2,689 Reclassification of net obligation to Current liabilities of discontinued operations — — — Funded status at end of year: Fair value of plan assets $ 3,075 $ 2,898 $ 2,689 Projected Benefit obligations 21,548 20,402 21,116 Underfunded status of the plans (2) 18,473 17,504 18,427 Recognized liability $ 18,473 $ 17,504 $ 18,427 Amounts recognized on the consolidated balance sheets consist of: Non-current assets $ — $ — $ — Current liabilities — — — Non-current liabilities 18,473 17,504 18,427 Recognized liability $ 18,473 $ 17,504 $ 18,427 (1) Benefits to be accumulated in future periods in our French defined benefit plan were curtailed due to our Meylan, French facility restructuring. (2) In certain non-U.S. countries fully funding pension plans is not a common practice. Consequently, certain pension plans have been partially funded. |
Schedule of Net Benefit Costs | The net periodic benefit cost of the defined benefit pension plans includes the following components (in thousands): U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Interest cost $ 361 $ 367 $ 86 Expected return on plan assets (282 ) (277 ) (77 ) Settlement and curtailment loss (gains) — 259 282 Amortization of net actuarial loss 527 439 96 Net periodic benefit cost $ 606 $ 788 $ 387 Non-U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Service cost $ 503 $ 397 $ 92 Interest cost 291 376 83 Expected return on plan assets (54 ) (28 ) — Settlement and curtailment loss (gains) — (20 ) — Amortization of net actuarial loss (27 ) 889 — Net periodic benefit cost $ 713 $ 1,614 $ 175 |
Schedule of Assumptions Used | Major actuarial assumptions used in determining the benefit obligations and net periodic benefit cost for our significant U.S. benefit plans are presented in the following table: U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Actuarial assumptions used to determine benefit obligation and net periodic benefit cost: Discount rate 3.28% 3.63% 3.79% Actuarial assumptions used to determine net periodic benefit cost: Discount rate 3.63% 3.04% - 3.79% 3.64% Expected return on plan assets 5.00% 5.00% 5.00% Major actuarial assumptions used in determining the benefit obligations and net periodic benefit cost for our significant non-U.S. benefit plans are presented in the following table: Non-U.S. Pension Benefits Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period Ended December 31, 2015 Actuarial assumptions used to determine benefit obligation and net periodic benefit cost: Discount rate 0.27% - 2.73% 0.27% - 1.50% 0.48% - 2.00% Rate of compensation increase 2.50% - 3.00% 2.50% - 3.89% 2.50% - 3.89% |
Schedule of Allocation of Plan Assets | Our U.S. pension plan target allocations by asset category: U.S. Pension Benefits as of December 31, 2017 Equity securities 27% Debt securities 63% Other 10% |
Schedule of Fair Value of Plan Assets | The following tables provide information by level for the retirement benefit plan assets that are measured at fair value, as defined by U.S. GAAP (in thousands): Fair Value as of December 31, 2017 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 1,879 $ — $ 1,879 $ — Fixed income mutual funds 4,334 — 4,334 — Money market funds 666 666 — — $ 6,879 $ 666 $ 6,213 $ — Fair Value as of December 31, 2016 Fair Value Measurement Using Inputs Considered as: Level 1 Level 2 Level 3 Equity mutual funds $ 1,660 $ — $ 1,660 $ — Fixed income mutual funds 4,041 — 4,041 — Money market funds 224 224 — — $ 5,925 $ 224 $ 5,701 $ — |
Schedule of Expected Benefit Payments | Benefit payments, including amounts to be paid from our assets, and reflecting expected future service, as appropriate, are expected to be paid as follows (in thousands): U.S. Plans Non-U.S. Plans 2018 $ 1,965 $ 1,670 2019 622 801 2020 1,034 1,019 2021 780 911 2022 1,033 1,085 Thereafter $ 5,757 $ 16,062 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The U.S. and non-U.S. components of income (loss) from continuing operations before income taxes and our income tax provision (benefit) from continuing operations are as follows (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Income (loss) from continuing operations before income taxes: UK and Non-United States $ 71,980 $ (36,997 ) $ (27,491 ) $ 2,020 United States 49,158 62,663 1,493 87,274 $ 121,138 $ 25,666 $ (25,998 ) $ 89,294 Total income tax provision (benefit) from continuing operations consisted of the following: Current: UK and Non-United States $ 12,771 $ 13,876 $ 2,454 $ 1,065 United States 26,743 19,706 23,544 21,104 $ 39,514 $ 33,582 $ 25,998 $ 22,169 Deferred: UK and Non-United States $ (4,140 ) $ (28,607 ) $ (18,690 ) $ 834 United States 14,580 138 (20,809 ) 8,443 $ 10,440 $ (28,469 ) $ (39,499 ) $ 9,277 Total provision for income tax expense (benefit) from continuing operations $ 49,954 $ 5,113 $ (13,501 ) $ 31,446 |
Schedule of Effective Income Tax Rate Reconciliation | The following is a reconciliation of the statutory income tax rate to our effective income tax rate expressed as a percentage of income from continuing operations before income taxes: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Statutory tax rate at U.S. Rate — % — % — % 35.0 % Statutory tax rate at U.K. Rate 19.0 20.0 19.1 — Effect of changes in tax rate (19.9 ) (0.2 ) (12.9 ) — Deferred tax valuation allowance 10.6 5.1 12.6 — Transaction costs (1) 2.0 10.2 (20.9 ) — Sale of Intellectual Property 44.3 17.6 — — U.S. state and local tax provision, net of federal benefit 1.2 7.9 — 2.7 Foreign tax rate differential 10.7 101.5 37.5 1.5 Notional interest deduction (13.5 ) (68.4 ) 12.0 — U.S. Subpart F 1.5 7.9 (7.6 ) Research and development tax credits (1.6 ) (4.0 ) 6.0 (2.1 ) Distribution of subsidiary earnings (0.3 ) (55.1 ) — — Reserve for uncertain tax positions 1.2 8.4 — — Domestic manufacturing deduction (1.8 ) (2.8 ) 3.0 — Tax on UK CFC interest pick-up — 1.3 — — Write-off/impairment of investments (14.8 ) (30.3 ) (0.9 ) — Other, net 2.6 0.8 4.0 (1.9 ) Effective tax rate 41.2 % 19.9 % 51.9 % 35.2 % (1) Included in transitional period April 25, 2015 to December 31, 2015 is the reversal of the deferred tax asset established during the fiscal year ended April 24, 2015 based on the assumption that these otherwise non-deductible transaction costs would be deductible if the business combination was not consummated. Because the transaction was ultimately consummated, the deferred tax asset was reversed as a non-deductible transaction cost in the amount of $2.3 million |
Schedule of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities, including amounts related to discontinued operations, are as follows, (in thousands): December 31, 2017 December 31, 2016 Deferred tax assets: Net operating loss carryforwards $ 132,615 $ 131,904 Tax credit carryforwards 18,585 17,242 Deferred compensation 4,697 6,521 Accruals and reserves 27,146 28,520 Inventory 2,759 4,441 Investments 3,858 — Other 3,310 10,306 Gross deferred tax assets 192,970 198,934 Valuation allowance (93,333 ) (36,277 ) Total deferred tax assets 99,637 162,657 Deferred tax liabilities: Gain on sale of intellectual property (75,624 ) (136,117 ) Investments (3,135 ) (12,553 ) Property, equipment & intangible assets (137,031 ) (164,090 ) Other (1,181 ) (16,421 ) Gross deferred tax liabilities: (216,971 ) (329,181 ) Total deferred tax (liabilities) assets, net $ (117,334 ) $ (166,524 ) Reported in the consolidated balance sheet as (after valuation allowance and jurisdictional netting): Net deferred tax asset $ 14,076 $ 6,017 Deferred tax liability (131,410 ) (172,541 ) Net deferred tax (liabilities) assets $ (117,334 ) $ (166,524 ) |
Summary of Operating Loss Carryforwards | We had the following net operating loss (“NOL”) carryforwards as of December 31, 2017 , which can be used to reduce our income tax payable in future years (in thousands): Region Gross Amount Gross Amount With Expiration Starting Expiration Europe $ 153,350 $ 141,774 $ 11,576 2022 South America 14,815 14,815 — n/a U.S. Federal 134,415 — 134,415 2021 U.S. State 106,555 — 106,555 2018 Far East 12,174 — 12,174 2018 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following is a roll-forward of our total gross unrecognized tax benefit (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 Balance at beginning of year $ 22,374 $ 20,224 Tax positions related to current year 324 — Tax positions related to prior year 1,153 2,548 Impact of foreign currency exchange rates 2,286 (398 ) Balance at end of year $ 26,137 $ 22,374 |
Schedule of Income Tax Examinations of Major Jurisdictions | The major jurisdictions where we are subject to income tax examinations are as follows: Jurisdiction Earliest Year Open U.S. - federal and state 1992 Italy 2012 Germany 2010 England and Wales 2013 Canada 2013 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule Of Earnings Per Share, Basic And Diluted | The following table sets forth the computation of basic and diluted net (loss) income per share or share of common stock, (in thousands except per share data): Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Numerator: Net income (loss) from continuing operations $ 54,465 $ 1,874 $ (14,720 ) $ 57,848 Net loss from discontinued operations (79,554 ) (64,663 ) (14,893 ) — Net (loss) income $ (25,089 ) $ (62,789 ) $ (29,613 ) $ 57,848 Denominator: Basic weighted average shares outstanding 48,157 48,860 32,741 26,391 Add effects of stock-based compensation instruments (1) 344 154 — 235 Diluted weighted average shares outstanding 48,501 49,014 32,741 26,626 Basic income (loss) per share: Continuing operations $ 1.13 $ 0.04 $ (0.45 ) $ 2.19 Discontinued operations (1.65 ) (1.33 ) (0.45 ) — $ (0.52 ) $ (1.29 ) $ (0.90 ) $ 2.19 Diluted income (loss) per share: Continuing operations $ 1.12 $ 0.04 $ (0.45 ) $ 2.17 Discontinued operations (1.64 ) (1.32 ) (0.45 ) — $ (0.52 ) $ (1.28 ) $ (0.90 ) $ 2.17 (1) Excluded from the computation of diluted earnings per share for the year ended December 31, 2017 were stock options, SARs and restricted share units outstanding at December 31, 2017 to purchase 24 thousand shares because to include them would have been anti-dilutive. Excluded from the computation of diluted earnings per share for the year ended December 31, 2016 were stock options, SARs and restricted share units outstanding at December 31, 2016 to purchase 1.6 million shares because to include them would have been anti-dilutive. Excluded from the computation of diluted earnings per share for the transitional period April 25, 2015 to December 31, 2015 , were stock options, SARs and restricted share units outstanding at December 31, 2015 to purchase 1.6 million shares because to include them would have been anti-dilutive due to the net loss. Excluded from the computation of diluted earnings per share for the fiscal year ended April 24, 2015 were stock options, SARs and restricted shares and restricted share units outstanding at April 24, 2015 to purchase 281 thousand common shares of Cyberonics because to include them would have been anti-dilutive. |
Geographic and Segment Inform47
Geographic and Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Net sales and operating income (loss) by segment are as follows (in thousands): Net Sales Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 April 24, 2015 Cardiac Surgery $ 635,517 $ 611,715 $ 147,635 $ — Neuromodulation 374,976 351,406 214,761 291,558 Other 1,784 1,737 841 — Total Net Sales $ 1,012,277 $ 964,858 $ 363,237 $ 291,558 Operating Income (Loss) From Continuing Operations: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Cardiac Surgery (including product remediation) $ 81,001 $ 16,578 $ 13,091 $ — Neuromodulation 188,352 174,579 87,616 97,344 Other (107,955 ) (70,925 ) (39,815 ) — Total reportable segment income from continuing operations 161,398 120,232 60,892 97,344 Merger and integration expenses 15,528 20,377 55,776 8,692 Restructuring expenses 17,056 37,377 10,494 — Amortization of intangibles 33,144 31,035 7,030 — Operating income (loss) from continuing operations $ 95,670 $ 31,443 $ (12,408 ) $ 88,652 Assets by reportable segment (in thousands): Assets: December 31, 2017 December 31, 2016 Cardiac Surgery $ 1,386,032 $ 1,277,799 Neuromodulation 533,067 611,085 Other 334,103 133,825 Discontinued operations 250,689 319,922 Total Assets $ 2,503,891 $ 2,342,631 Capital expenditures by segment (in thousands): Capital Expenditures: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 Cardiac Surgery $ 18,985 $ 21,190 $ 10,402 $ — Neuromodulation 2,504 8,098 1,418 6,687 Other 7,010 5,265 512 — Discontinued operations 5,608 3,809 4,954 — Total $ 34,107 $ 38,362 $ 17,286 $ 6,687 |
Schedule of Revenue from External Customers by Geographic Areas | Net sales to external customers by geography are determined based on the country the products are shipped to and are as follows: (in thousands): Net sales: Year Ended December 31, 2017 Year Ended December 31, 2016 Transitional Period April 25, 2015 to December 31, 2015 Fiscal Year Ended April 24, 2015 United States $ 494,724 $ 480,558 $ 229,724 $ 235,712 Europe (1) (2) 210,470 204,846 61,595 41,484 Rest of world 307,083 279,454 71,918 14,362 Total (3) $ 1,012,277 $ 964,858 $ 363,237 $ 291,558 (1) Net sales to external customers includes $30.8 million , $37.3 million and $14.3 million in the United Kingdom, our country of domicile, for the years ended December 31, 2017 , December 31, 2016 and the transitional period April 25, 2015 to December 31, 2015 , respectively. Prior to the Mergers, we were domiciled in the United States. (2) Europe sales include those countries in which we have a direct sales presence, whereas European countries in which we sell through distributors are included in ‘Rest of world’. (3) No single customer represented over 10% of our consolidated net sales and no country’s net sales exceeded 10% of our consolidated sales except for the U.S. |
Schedule of Long-lived Assets by Geographic Areas | Property, plant, and equipment, net by geography are as follows (in thousands): PP&E December 31, 2017 December 31, 2016 United States $ 62,154 $ 61,071 Europe 119,133 111,735 Rest of world 11,072 30,902 Total $ 192,359 $ 203,708 |
Supplemental Financial Informat
Supplemental Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivables, Net | Accounts receivable, net consisted of the following (in thousands): December 31, 2017 December 31, 2016 Trade receivables from third parties $ 288,127 $ 216,993 Allowance for bad debt (5,982 ) (3,737 ) $ 282,145 $ 213,256 |
Schedule of Inventories | Inventories consisted of the following (in thousands): December 31, 2017 December 31, 2016 Raw materials $ 39,810 $ 37,243 Work-in-process 18,206 17,474 Finished goods 86,454 78,300 $ 144,470 $ 133,017 |
Schedule of Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2017 December 31, 2016 Prepaid expenses $ 13,905 $ 8,657 Income taxes payable on inter-company transfers of property (1) 12,604 19,445 Earthquake grant receivable 4,064 4,748 Deposits and advances to suppliers 4,551 3,440 Escrow deposit - Caisson 2,000 — Current loans and notes receivable 1,395 7,093 Derivative contract assets 518 8,269 $ 39,037 $ 51,652 (1) The income taxes payable on intercompany transfers of property asset is the asset account created to defer the income tax effect of an intercompany intellectual property sale pursuant to ASC 810-10-45-8. |
Schedule of Property, Plant and Equipment | PP&E detail (in thousands): December 31, 2017 December 31, 2016 Lives in Years Land $ 16,293 $ 14,420 Building and building improvements 80,280 92,092 3 to 50 Equipment, software, furniture and fixtures 182,968 152,864 3 to 20 Other 6,082 1,296 3 to 10 Capital investment in process 9,944 15,009 Total 295,567 275,681 Accumulated depreciation (103,208 ) (71,973 ) Net $ 192,359 $ 203,708 |
Schedule other Long-term Assets | Detail of Other assets (in thousands): December 31, 2017 December 31, 2016 Taxes payable on inter-company transfers of property (1) $ 68,127 $ 124,551 Investments (2) 2,943 2,537 Loans and notes receivable 1,276 2,029 Escrow deposit - Caisson 1,000 — Guaranteed deposits 725 940 Other 1,913 613 $ 75,984 $ 130,670 (1) The ‘taxes payable on intercompany transfers of property’ is an asset account created to defer the income tax effect of an intercompany intellectual property sale pursuant to ASC 810-10-45-8. (2) Primarily cash surrender value of company owned life insurance policies. |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): December 31, 2017 December 31, 2016 Product remediation (1) $ 16,811 $ 23,464 Deferred compensation - Caisson acquisition 14,300 — Restructuring related liabilities 3,560 16,859 Provisions for agents, returns and other 8,134 7,271 Legal and other administrative costs 6,082 6,184 Royalty costs 3,615 2,503 Deferred income 2,900 — Uncertain tax positions 2,536 — Escrow indemnity liability - Caisson 2,000 — Product warranty obligations 1,476 2,360 Derivative contract liabilities (2) 1,294 942 Government grants 1,174 1,708 Research and development costs 797 839 Other accrued expenses 14,263 8,917 $ 78,942 $ 71,047 (1) Refer to “Note 6. Product Remediation Liability.” (2) Refer to “Note 11. Derivatives and Risk Management.” |
Schedule of Warranty Obligations | We include warranty obligations within ‘Accrued liabilities and other’ in the consolidated balance sheets. Changes in the carrying amount of our warranty obligation consisted of the following (in thousands): Balance at December 31, 2015 $ 1,828 Product warranty accrual 1,172 Settlements (657 ) Effect of changes in currency exchange rates 17 Balance at December 31, 2016 2,360 Product warranty accrual 707 Settlements (1,897 ) Effect of changes in currency exchange rates and other 306 As of December 31, 2017 $ 1,476 |
Schedule of Long Term Liabilities | Other long-term liabilities consisted of the following (in thousands): December 31, 2017 December 31, 2016 Contingent consideration (1) $ 33,973 $ 3,890 Product remediation liability (2) 10,735 10,023 Uncertain tax positions (inclusive of penalties and interest) 18,306 12,086 Escrow indemnity liability - Caisson 1,000 — Government grants 918 3,631 Financial derivatives (3) 751 1,392 Unfavorable operating leases (4) 252 1,672 Other 3,149 2,377 $ 69,084 $ 35,071 (1) The contingent consideration liability represents contingent payments related to three acquisitions: the first and second acquisitions, in September 2015, were Cellplex PTY Ltd. in Australia and the commercial activities of a local distributor in Colombia. The contingent payments for the first acquisition are based on achievement of sales targets by the acquiree through June 30, 2018 and the contingent payments for the second acquisition are based on sales of cardiopulmonary disposable products and heart lung machines of the acquiree through December 2019. Refer to “Note 9. Fair Value Measurements.” The third acquisition, Caisson, occurred in May 2017. Refer to “Note 3. Business Combinations.” (2) Refer to “Note 6. Product Remediation Liability.” (3) Refer to “Note 11. Derivatives and Risk Management.” (4) Unfavorable operating leases represent the adjustment to recognize future lease obligations at their estimated fair value in conjunction with the Mergers |
Quarterly Financial Informati49
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | (in thousands except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year Ended December 31, 2017 (1) Net sales $ 226,825 $ 255,843 $ 251,253 $ 278,356 $ 1,012,277 Gross profit 147,640 170,042 161,869 172,069 651,620 Operating income from continuing operations 19,718 27,573 30,045 18,334 95,670 Net income (loss) from continuing operations 13,227 45,694 27,000 (31,456 ) 54,465 Discontinued Operations: (Loss) Income from discontinued operations, net of tax (1,956 ) 1,804 830 (1,949 ) (1,271 ) Impairment of discontinued operations, net of tax — — — (78,283 ) (78,283 ) Net loss from discontinued operations (1,956 ) 1,804 830 (80,232 ) (79,554 ) Net income (loss) $ 11,271 $ 47,498 $ 27,830 $ (111,688 ) $ (25,089 ) Diluted earnings (loss) per share: Continuing operations $ 0.27 $ 0.95 $ 0.56 $ (0.65 ) $ 1.12 Discontinued operations (0.04 ) 0.03 0.01 (1.67 ) (1.64 ) $ 0.23 $ 0.98 $ 0.57 $ (2.32 ) $ (0.52 ) Year Ended December 31, 2016 (1) Net sales $ 225,238 $ 251,489 $ 238,500 $ 249,631 $ 964,858 Gross profit 131,734 148,452 153,901 125,419 559,506 Operating (loss) income from continuing operations (9,074 ) 25,019 30,373 (14,875 ) 31,443 Net (loss) income from continuing operations (10,988 ) 12,737 6,431 (6,306 ) 1,874 Net loss from discontinued operations (29,390 ) (3,780 ) (8,000 ) (23,493 ) (64,663 ) Net (loss) income $ (40,378 ) $ 8,957 $ (1,569 ) $ (29,799 ) (62,789 ) Diluted (loss) earnings per share: Continuing operations $ (0.22 ) $ 0.26 $ 0.13 $ (0.13 ) $ 0.04 Discontinued operations (0.61 ) (0.08 ) (0.16 ) (0.48 ) (1.32 ) $ (0.83 ) $ 0.18 $ (0.03 ) $ (0.61 ) $ (1.28 ) (1) Sales, cost of sales and operating expenses associated with our discontinued operation, the Cardiac Rhythm Management segment, for the first three quarters of the current year and all quarters of the previous year have been reclassified to ‘Discontinued operations’. Refer to ‘Note 4. Discontinued Operations’. |
Transition Period Financial I50
Transition Period Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Transitional Period Financial Information | The comparable amounts for the equivalent prior period, April 26, 2014 to December 26, 2014 (unaudited), are as follows (in thousands, except per share data): Transitional Period April 25, 2015 to December 31, 2015 Equivalent Prior Period April 26, 2014 to December 26, 2014 (unaudited) Net sales $ 363,237 $ 181,641 Cost of sales 113,404 16,835 Gross profit 249,833 164,806 Operating expenses: Selling, general and administrative 147,025 83,045 Research and development 41,916 28,125 Merger and integration expenses 55,776 — Restructuring expenses 10,494 — Amortization of intangibles 7,030 — Total operating expenses 262,241 111,170 Operating (loss) income from continuing operations (12,408 ) 53,636 Interest income 392 125 Interest expense (1,509 ) (8 ) Impairment of cost-method investments (5,062 ) — Foreign exchange and other (losses) gains (7,411 ) 109 (Loss) income from continuing operations before tax (25,998 ) 53,862 Income tax (benefit) expense (13,501 ) 18,791 Losses from equity method investments (2,223 ) — Net (loss) income from continuing operations (14,720 ) 35,071 Net loss from discontinued operations (14,893 ) — Net (loss) income $ (29,613 ) $ 35,071 Basic income (loss) per common share: Continuing operations $ (0.45 ) $ 1.32 Discontinued operations (0.45 ) — $ (0.90 ) $ 1.32 Diluted income (loss) per common share: Continuing operations $ (0.45 ) $ 1.31 Discontinued operations (0.45 ) — $ (0.90 ) $ 1.31 Shares used in computing basic (loss) income per share 32,741 26,552 Shares used in computing diluted (loss) income per share 32,741 26,775 |
Nature of Operations Textual (D
Nature of Operations Textual (Details) $ in Millions | Nov. 20, 2017USD ($) |
CRM Business Franchise [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal group, including discontinued operation, consideration | $ 190 |
Basis of Presentation, Use of52
Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies (Narrative) (Details) | Nov. 20, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2015USD ($) | Dec. 26, 2014USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Apr. 24, 2015USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2017USD ($) |
Reclassifications [Line Items] | ||||||||||||
Impairment of discontinued operations, net of tax | $ 78,283,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 78,283,000 | $ 0 | $ 0 | ||||
Operating expenses | (262,241,000) | $ (111,170,000) | (555,950,000) | (528,063,000) | (175,595,000) | |||||||
Assets held for sale | $ 13,628,000 | 13,628,000 | 4,477,000 | $ 13,628,000 | ||||||||
Proceeds from divestiture of businesses | 4,900,000 | |||||||||||
Loans to cost and equity method investees | $ (7,426,000) | (6,270,000) | $ 0 | $ 0 | ||||||||
Number of operating segments | segment | 1 | |||||||||||
Number of reportable Segments | segment | 2 | |||||||||||
CRM Business Franchise [Member] | ||||||||||||
Reclassifications [Line Items] | ||||||||||||
Disposal group, including discontinued operation, consideration | $ 190,000,000 | |||||||||||
CRM Business Franchise [Member] | Discontinued Operations, Held-for-sale [Member] | ||||||||||||
Reclassifications [Line Items] | ||||||||||||
Impairment of discontinued operations, net of tax | 78,300,000 | |||||||||||
Impairment of discontinued operations, tax benefit | $ 15,300,000 | |||||||||||
Adjustments [Member] | Neuromodulation [Member] | ||||||||||||
Reclassifications [Line Items] | ||||||||||||
Operating expenses | (1,000,000) | $ (6,000,000) | ||||||||||
Adjustments [Member] | CRM Business Franchise [Member] | ||||||||||||
Reclassifications [Line Items] | ||||||||||||
Operating expenses | $ 1,000,000 | $ 6,000,000 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) | May 02, 2018USD ($) | May 02, 2017USD ($) | Oct. 19, 2015USD ($)$ / sharesshares | Oct. 16, 2015$ / sharesshares | Oct. 19, 2015USD ($)company$ / shares | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($) | Dec. 26, 2014USD ($) | Sep. 30, 2017company | Dec. 31, 2017USD ($)company | Dec. 31, 2016USD ($) | Apr. 24, 2015USD ($) |
Business Acquisition [Line Items] | ||||||||||||
Number of businesses acquired | company | 2 | 3 | 3 | |||||||||
Merger and integration expenses | $ 55,776,000 | $ 0 | $ 15,528,000 | $ 20,377,000 | $ 8,692,000 | |||||||
Merger Agreement - Sorin [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of shares issued in merger (in shares) | shares | 48,800,000 | |||||||||||
Conversion ratio of shares | 0.0472 | |||||||||||
Share price (in dollars per share) | $ / shares | $ 69.39 | $ 69.95 | $ 69.39 | |||||||||
Percentage of voting interests acquired (percent) | 54.00% | 54.00% | ||||||||||
Intangible assets | $ 688,729,000 | $ 688,729,000 | ||||||||||
Revenue of Sorin since acquisition | 200,100,000 | |||||||||||
Operating loss since acquisition | 6,000,000 | |||||||||||
Merger and integration expenses | 42,100,000 | |||||||||||
Integration expenses | $ 13,700,000 | |||||||||||
Merger Agreement - Sorin [Member] | Leases, Acquired-in-Place, Market Adjustment [Member] | Other Noncurrent Liabilities [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Intangible assets | $ 2,700,000 | 2,700,000 | ||||||||||
Weighted average useful life | 5 years | |||||||||||
Merger Agreement - Sorin [Member] | Uncertain Tax Positions [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Contingent consideration liability | $ 9,200,000 | 9,200,000 | ||||||||||
Merger Agreement - Sorin [Member] | Contingent Payments [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Contingent consideration liability | $ 3,400,000 | $ 3,400,000 | ||||||||||
Merger Agreement - Sorin [Member] | LivaNova PLC [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Conversion ratio of shares | 1 | |||||||||||
Merger Agreement - Sorin [Member] | Sorin S.p.A. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of shares issued in merger (in shares) | shares | 22,553,293 | |||||||||||
Conversion ratio of shares | 0.0472 | |||||||||||
Share price (in dollars per share) | $ / shares | $ 69.95 | |||||||||||
Percentage of voting interests acquired (percent) | 46.00% | 46.00% | ||||||||||
Caisson Interventional LLC [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Percentage of voting interests acquired (percent) | 51.00% | |||||||||||
Contingent consideration liability | $ 31,688,000 | |||||||||||
Revenue of Sorin since acquisition | $ 0 | |||||||||||
Operating loss since acquisition | 20,100,000 | |||||||||||
Merger and integration expenses | 1,300,000 | |||||||||||
Consideration transferred gross | 72,000,000 | |||||||||||
Debt forgiveness | 6,309,000 | |||||||||||
Payments to acquire businesses | 18,000,000 | |||||||||||
Contingent consideration | 39,600,000 | |||||||||||
Goodwill, tax deductible amount | 9,600,000 | |||||||||||
Indemnification assets as of acquisition date | $ 3,000,000 | |||||||||||
Caisson Interventional LLC [Member] | Prepaid Expenses and Other Current Assets [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Indemnification assets as of acquisition date | 2,000,000 | 2,000,000 | ||||||||||
Caisson Interventional LLC [Member] | Other Noncurrent Assets [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Indemnification assets as of acquisition date | $ 1,000,000 | $ 1,000,000 | ||||||||||
Scenario, Forecast [Member] | Caisson Interventional LLC [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Payments to acquire businesses | $ 14,400,000 |
Business Combinations (Consider
Business Combinations (Consideration Transferred) (Details) $ / shares in Units, $ in Thousands | Oct. 19, 2015USD ($)$ / sharesshares | Oct. 16, 2015USD ($)$ / sharesshares | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Apr. 24, 2015USD ($) |
Business Acquisition [Line Items] | |||||||
Common stock, shares outstanding (shares) | shares | 48,287,346 | 48,028,413,000 | |||||
Total stock-based compensation expense | $ 31,030 | $ 19,062 | $ 19,569 | $ 11,940 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | |||||||
Goodwill | $ 784,242 | $ 691,712 | |||||
Merger Agreement - Sorin [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Conversion ratio of shares | 0.0472 | ||||||
Shares of LivaNova issued (in shares) | shares | 48,800,000 | ||||||
Share price (in dollars per share) | $ / shares | $ 69.39 | $ 69.95 | |||||
Fair value of consideration transferred | $ 1,589,083 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||||
Cash and cash equivalents | 12,495 | ||||||
Accounts receivable | 224,466 | ||||||
Inventories | 233,832 | ||||||
Other current assets | 60,590 | ||||||
Property, plant and equipment | 206,518 | ||||||
Intangible assets | 688,729 | ||||||
Equity investments | 66,987 | ||||||
Other assets | 6,155 | ||||||
Deferred tax assets | 14,136 | ||||||
Total assets acquired | 1,513,908 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | |||||||
Current portion of debt and other obligations | 110,601 | ||||||
Other current liabilities | 238,685 | ||||||
Long-term debt | 128,458 | ||||||
Deferred tax liabilities | 130,688 | ||||||
Other long-term liabilities | 55,567 | ||||||
Total liabilities assumed | 663,999 | ||||||
Goodwill | 739,174 | ||||||
Merger Agreement - Sorin [Member] | Sorin S.p.A. Shareholders [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of shares issued | $ 1,577,603 | ||||||
Merger Agreement - Sorin [Member] | Sorin S.p.A. Share Award Holders [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of shares issued | 9,231 | ||||||
Merger Agreement - Sorin [Member] | Sorin S.p.A. Stock Appreciation Rights Holders [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of shares issued | $ 2,249 | ||||||
Merger Agreement - Sorin [Member] | Sorin S.p.A. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Common stock, shares outstanding (shares) | shares | 477,824,000 | ||||||
Conversion ratio of shares | 0.0472 | ||||||
Shares of LivaNova issued (in shares) | shares | 22,553,293 | ||||||
Share price (in dollars per share) | $ / shares | $ 69.95 | ||||||
Merger Agreement - Sorin [Member] | Previously Reported [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of consideration transferred | 1,589,083 | $ 1,589,083 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||||
Cash and cash equivalents | 12,495 | ||||||
Accounts receivable | 224,466 | ||||||
Inventories | 233,832 | ||||||
Other current assets | 60,674 | ||||||
Property, plant and equipment | 207,639 | ||||||
Intangible assets | 688,729 | ||||||
Equity investments | 67,059 | ||||||
Other assets | 7,483 | ||||||
Deferred tax assets | 135,370 | ||||||
Total assets acquired | 1,637,747 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | |||||||
Current portion of debt and other obligations | 110,601 | ||||||
Other current liabilities | 237,855 | ||||||
Long-term debt | 128,458 | ||||||
Deferred tax liabilities | 279,328 | ||||||
Other long-term liabilities | 55,567 | ||||||
Total liabilities assumed | 811,809 | ||||||
Goodwill | 763,145 | ||||||
Merger Agreement - Sorin [Member] | Adjustments [Member] | |||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||||||
Other current assets | (84) | ||||||
Property, plant and equipment | (1,121) | ||||||
Equity investments | (72) | ||||||
Other assets | (1,328) | ||||||
Deferred tax assets | (121,234) | ||||||
Total assets acquired | (123,839) | ||||||
Other current liabilities | 830 | ||||||
Deferred tax liabilities | (148,640) | ||||||
Total liabilities assumed | (147,810) | ||||||
Goodwill | (23,971) | ||||||
Share Award [Member] | Merger Agreement - Sorin [Member] | Sorin S.p.A. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Aggregate fair value of vested awards | 25,200 | ||||||
Total stock-based compensation expense | 9,200 | $ 8,300 | |||||
Compensation not yet recognized of nonvested awards | $ 16,000 | 7,700 | $ 7,700 | ||||
Stock Appreciation Rights (SARs) [Member] | Merger Agreement - Sorin [Member] | Sorin S.p.A. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Conversion ratio of shares | 0.0472 | ||||||
Aggregate fair value of vested awards | $ 3,800 | ||||||
Total stock-based compensation expense | $ 2,200 | $ 1,600 | |||||
Nonvested shares (in shares) | shares | 3,815,824 |
Business Combinations (Valuatio
Business Combinations (Valuation of Intangible Assets Acquired) (Details) - Merger Agreement - Sorin [Member] $ in Thousands | Oct. 19, 2015USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Valuation | $ 688,729 |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Valuation | $ 464,019 |
Customer Relationships [Member] | Minimum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life | 16 years |
Customer Relationships [Member] | Maximum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life | 18 years |
Developed Technology [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Valuation | $ 211,091 |
Developed Technology [Member] | Minimum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life | 9 years |
Developed Technology [Member] | Maximum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life | 15 years |
Sorin Trade-Name [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Valuation | $ 13,619 |
Useful life | 4 years |
Business Combinations (Increase
Business Combinations (Increase (Decrease) in Measurement Period Adjustments) (Details) - Merger Agreement - Sorin [Member] - Adjustments [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Business Acquisition [Line Items] | |
Adjustments in current period | $ 838 |
Amortization of Intangible Assets [Member] | |
Business Acquisition [Line Items] | |
Adjustments in current period | 1,844 |
Depreciation [Member] | |
Business Acquisition [Line Items] | |
Adjustments in current period | 2,790 |
Other Costs [Member] | |
Business Acquisition [Line Items] | |
Adjustments in current period | (40) |
Total Before Income Tax Effect [Member] | |
Business Acquisition [Line Items] | |
Adjustments in current period | 4,594 |
Income Tax [Member] | |
Business Acquisition [Line Items] | |
Adjustments in current period | $ (3,756) |
Business Combinations (Purchase
Business Combinations (Purchase Price Composition) (Details) - USD ($) $ in Thousands | May 02, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Deferred compensation - Caisson acquisition | $ 14,300 | $ 0 | |
Caisson Interventional LLC [Member] | |||
Business Acquisition [Line Items] | |||
Cash | $ 15,660 | ||
Debt forgiveness | 6,309 | ||
Deferred consideration | 12,994 | ||
Contingent consideration | 29,303 | ||
Fair value of consideration transferred | 64,266 | ||
Fair value of our interest prior to the acquisition | 52,505 | ||
Fair value of total consideration | 116,771 | ||
Post-combination compensation expense | 5,800 | ||
Post-combination compensation expense which reduced cash paid at closing of acquisition | 2,400 | ||
Payments to acquire businesses | 18,000 | ||
Post-combination deferred compensation and contingent consideration recognized at date of acquisition | 3,400 | ||
Deferred compensation - Caisson acquisition | 14,100 | ||
Contingent consideration arrangements, change in amount of contingent consideration, liability | 31,700 | ||
Provisional information, initial accounting incomplete, adjustment, notes receivable | 1,300 | ||
Equity Method Investee [Member] | Caisson Interventional LLC [Member] | |||
Business Acquisition [Line Items] | |||
Assets, fair value adjustment | $ 38,100 |
Business Combinations (Prelimin
Business Combinations (Preliminary Purchase Price Allocation) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | May 02, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 784,242 | $ 691,712 | |
Caisson Interventional LLC [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 1,468 | ||
In-process research and development | 89,000 | ||
Goodwill | 42,417 | ||
Other assets | 918 | ||
Current liabilities | 1,023 | ||
Deferred tax liabilities | 16,009 | ||
Net assets acquired | $ 116,771 |
Business Combinations (Continge
Business Combinations (Contingent Consideration) (Details) - USD ($) $ in Thousands | May 02, 2017 | Oct. 19, 2015 |
Caisson Interventional LLC [Member] | ||
Business Acquisition [Line Items] | ||
Contingent consideration liability | $ 31,688 | |
Expected volatility rate | 36.90% | |
Discounted Cash Flow [Member] | Caisson Interventional LLC [Member] | ||
Business Acquisition [Line Items] | ||
Regulatory milestone-based payments | $ 14,883 | |
Monte Carlo Simulation [Member] | Caisson Interventional LLC [Member] | ||
Business Acquisition [Line Items] | ||
Sales-based earnout | $ 16,805 | |
Minimum [Member] | Caisson Interventional LLC [Member] | ||
Business Acquisition [Line Items] | ||
Probability of payment | 90.00% | |
Minimum [Member] | Discounted Cash Flow [Member] | Caisson Interventional LLC [Member] | ||
Business Acquisition [Line Items] | ||
Discount rate | 2.60% | |
Minimum [Member] | Monte Carlo Simulation [Member] | Caisson Interventional LLC [Member] | ||
Business Acquisition [Line Items] | ||
Discount rate | 11.50% | |
Maximum [Member] | Caisson Interventional LLC [Member] | ||
Business Acquisition [Line Items] | ||
Probability of payment | 95.00% | |
Maximum [Member] | Discounted Cash Flow [Member] | Caisson Interventional LLC [Member] | ||
Business Acquisition [Line Items] | ||
Discount rate | 3.40% | |
Maximum [Member] | Monte Carlo Simulation [Member] | Caisson Interventional LLC [Member] | ||
Business Acquisition [Line Items] | ||
Discount rate | 12.70% | |
Contingent Payments [Member] | Merger Agreement - Sorin [Member] | ||
Business Acquisition [Line Items] | ||
Contingent consideration liability | $ 3,400 | |
Uncertain Tax Positions [Member] | Merger Agreement - Sorin [Member] | ||
Business Acquisition [Line Items] | ||
Contingent consideration liability | $ 9,200 |
Business Combinations (Contin60
Business Combinations (Contingent Consideration Reconciliation) (Details) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Oct. 19, 2015company | Sep. 30, 2017USD ($)company | Dec. 31, 2017USD ($)company | |
Contingent Consideration Liability [Roll Forward] | |||
Number of businesses acquired | company | 2 | 3 | 3 |
Level 3 [Member] | Caisson Interventional LLC [Member] | |||
Contingent Consideration Liability [Roll Forward] | |||
Liability value, beginning | $ 3,890 | $ 3,890 | |
Purchase price - Caisson contingent consideration | 31,688 | ||
Payments | (1,803) | ||
Changes in fair value | 56 | ||
Effect of changes in foreign currency exchange rates | 142 | ||
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Caisson Interventional LLC [Member] | |||
Contingent Consideration Liability [Roll Forward] | |||
Liability value, end | $ 33,973 |
Discontinued Operations (Textua
Discontinued Operations (Textual) (Details) | Nov. 20, 2017USD ($) | Dec. 31, 2017USD ($)employee | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)employee | Dec. 31, 2016USD ($) | Apr. 24, 2015USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Impairment of intangibles | $ 78,283,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 78,283,000 | $ 0 | $ 0 | |
CRM Business Franchise [Member] | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Disposal group, including discontinued operation, consideration | $ 190,000,000 | ||||||||
Number of employees | employee | 900 | 900 | |||||||
Depreciation and amortization, discontinued operations | 4,300,000 | $ 18,300,000 | 21,800,000 | ||||||
Capital expenditure, discontinued operations | 5,000,000 | 6,100,000 | 3,800,000 | ||||||
Stock-based compensation, discontinued operations | $ 300,000 | 1,400,000 | $ 2,100,000 | ||||||
Discontinued Operations, Held-for-sale [Member] | MicroPort Sorin CRM Co Ltd [Member] | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Payments to acquire investment | $ 4,500,000 | ||||||||
Discontinued Operations, Held-for-sale [Member] | CRM Business Franchise [Member] | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Impairment of intangibles | 78,300,000 | ||||||||
Impairment of discontinued operations, tax benefit | $ 15,300,000 |
Discontinued Operations (Assets
Discontinued Operations (Assets And Liabilities Classified As Held For Sale) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets of discontinued operations | $ 250,689 | $ 319,922 |
Liabilities of discontinued operations | 78,075 | 83,243 |
CRM Business Franchise [Member] | Discontinued Operations, Held-for-sale [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts receivable, net | 64,684 | 62,474 |
Inventories | 54,097 | 50,472 |
Prepaid taxes | 14,725 | 10,038 |
Prepaid and other assets | 3,498 | 4,349 |
Property, plant and equipment, net | 12,104 | 20,134 |
Deferred tax assets, net | 2,517 | 0 |
Investments | 6,098 | 4,866 |
Intangible assets, net | 92,966 | 167,589 |
Assets of discontinued operations | 250,689 | 319,922 |
Accounts payable | 26,501 | 21,018 |
Accrued liabilities and other | 7,669 | 8,936 |
Income taxes payable | 5,084 | 3,959 |
Accrued employee compensation and benefits | 30,753 | 29,321 |
Deferred income taxes liability | 8,068 | 20,009 |
Liabilities of discontinued operations | $ 78,075 | $ 83,243 |
Discontinued Operations (Operat
Discontinued Operations (Operating Gains And Losses) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | 20 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Impairment of tangible and intangible assets | $ 93,574 | $ 0 | $ 0 | $ 0 | |
CRM Business Franchise [Member] | Discontinued Operations, Held-for-sale [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Revenues | $ 52,470 | 245,171 | 249,067 | ||
Cost of sales | 30,439 | 92,609 | 104,168 | ||
Gross profit | 22,031 | 152,562 | 144,899 | ||
Selling, general and administrative expenses | 22,155 | 105,831 | 112,427 | ||
Research and development | 9,504 | 37,936 | 39,987 | ||
Merger and integration expenses | 11 | 22 | 160 | ||
Restructuring expenses | 829 | (1,617) | 18,566 | ||
Amortization of intangibles | 2,704 | 12,737 | 14,476 | ||
Impairment of tangible and intangible assets | 0 | 93,574 | 0 | ||
Goodwill impairment | 0 | 0 | 18,348 | ||
Total operating expenses | 35,203 | 248,483 | 203,964 | ||
Operating loss from discontinued operations | (13,172) | (95,921) | (59,065) | ||
Foreign exchange and other (losses) gains | (111) | (381) | 350 | ||
Loss from discontinued operations, before income tax | (13,283) | (96,302) | (58,715) | ||
Income tax (benefit) expense | 525 | (21,635) | 2,015 | ||
Losses from equity method investments | (1,085) | (4,887) | (3,933) | ||
Net loss from discontinued operations | $ (14,893) | $ (79,554) | $ (64,663) |
Discontinued Operations (Oper64
Discontinued Operations (Operating Lease) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
2,018 | $ 13,584 |
2,019 | 11,633 |
2,020 | 9,565 |
2,021 | 7,053 |
2,022 | 5,864 |
Thereafter | 24,632 |
Total | 72,331 |
CRM Business Franchise [Member] | Discontinued Operations, Held-for-sale [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
2,018 | 6,107 |
2,019 | 5,545 |
2,020 | 4,523 |
2,021 | 4,089 |
2,022 | 4,077 |
Thereafter | 20,388 |
Total | $ 44,729 |
Restructuring Plans (Details)
Restructuring Plans (Details) $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)employee | Dec. 31, 2016USD ($) | Apr. 24, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Assets held for sale | $ 13,628 | $ 4,477 | ||
Restructuring Reserve [Roll Forward] | ||||
Restructuring expenses | $ 10,494 | $ 17,056 | 37,377 | $ 0 |
2015 and 2016 Reorganization Plans [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected number of positions eliminated | employee | 324 | |||
Number of positions eliminated | employee | 314 | |||
Restructuring Reserve [Roll Forward] | ||||
Beginning liability balance | 0 | $ 24,148 | 6,919 | |
Restructuring expenses | 11,323 | 15,439 | 55,943 | |
Cash payments | 4,404 | 33,073 | 38,714 | |
Ending liability balance | 6,919 | 6,514 | 24,148 | 0 |
2015 and 2016 Reorganization Plans [Member] | Employee Severance and Other Termination Costs [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning liability balance | 0 | 21,092 | 6,919 | |
Restructuring expenses | 11,323 | 10,076 | 46,678 | |
Cash payments | 4,404 | 27,279 | 32,505 | |
Ending liability balance | 6,919 | 3,889 | 21,092 | 0 |
2015 and 2016 Reorganization Plans [Member] | Supply Chain Contract Termination Costs [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning liability balance | 0 | 3,056 | 0 | |
Restructuring expenses | 0 | 5,363 | 9,265 | |
Cash payments | 0 | 5,794 | 6,209 | |
Ending liability balance | $ 0 | 2,625 | $ 3,056 | $ 0 |
Suzhou Industrial Park Facility [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance costs | 500 | |||
CHINA | Building and Equipment [Member] | Suzhou Industrial Park Facility [Member] | Facility Closing [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment of building and equipment | $ (5,400) |
Restructuring Plans (Restructur
Restructuring Plans (Restructuring Expense by Segment) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | $ 10,494 | $ 17,056 | $ 37,377 | $ 0 |
Discontinued operations | 829 | (1,617) | 18,566 | |
Total | 11,323 | 15,439 | 55,943 | |
Operating Segments [Member] | Cardiac Surgery [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | 1,211 | 8,819 | 11,042 | |
Operating Segments [Member] | Neuromodulation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | 1,079 | 561 | 14,769 | |
Other [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | $ 8,204 | 7,676 | 11,566 | |
Building and Equipment [Member] | Neuromodulation [Member] | Facility Closing [Member] | COSTA RICA | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment of building and equipment | $ 5,700 | |||
Building and Equipment [Member] | Suzhou Industrial Park Facility [Member] | Facility Closing [Member] | CHINA | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment of building and equipment | $ 5,400 |
Product Remediation Liability67
Product Remediation Liability (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Product remediation accrual, start | $ 33,487 |
Adjustments | 2,452 |
Remediation activity | (11,283) |
Effect of changes in foreign currency exchange rates | 2,890 |
Product remediation accrual, end | 27,546 |
Accrued Liabilities Current [Member] | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Product remediation accrual, end | 16,800 |
Other Noncurrent Liabilities [Member] | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |
Product remediation accrual, end | $ 10,700 |
Goodwill and Intangible Asset68
Goodwill and Intangible Assets (Finite-Lived and Indefinite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | May 02, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, gross | $ 521,302 | $ 478,657 | ||
Accumulated amortization | $ (74,905) | (37,049) | ||
Net | 446,397 | $ 441,608 | ||
Goodwill | 784,242 | 691,712 | ||
Total | 873,242 | 691,712 | ||
Customer Relationships [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, gross | 327,496 | 304,056 | ||
Developed Technology [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, gross | 179,234 | 160,775 | ||
Trademarks and Trade Names [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, gross | 14,391 | 12,649 | ||
Other Intangible Assets [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, gross | 181 | 1,177 | ||
Caisson Interventional LLC [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 42,417 | |||
Caisson Interventional LLC [Member] | In-process R&D [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
In-process R&D | $ 89,000 | $ 0 |
Goodwill and Intangible Asset69
Goodwill and Intangible Assets (Amortization Periods for Finite-lived Intangible Assets) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Customer Relationships [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 16 years |
Customer Relationships [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 18 years |
Developed Technology [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 9 years |
Developed Technology [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 15 years |
Trademarks and Trade Names [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 4 years |
Trademarks and Trade Names [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 4 years |
Other Intangible Assets [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 5 years |
Other Intangible Assets [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 5 years |
Goodwill and Intangible Asset70
Goodwill and Intangible Assets (Estimated Future Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 34,720 | |
2,019 | 34,739 | |
2,020 | 34,761 | |
2,021 | 35,019 | |
2,022 | 35,019 | |
Thereafter | 272,139 | |
Intangible assets, net | $ 446,397 | $ 441,608 |
Goodwill and Intangible Asset71
Goodwill and Intangible Assets (Detail of Indefinite-lived Intangible Assets) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, starting balance | $ 691,712 |
Goodwill from the Mergers | 42,417 |
Foreign currency adjustments | 50,113 |
Goodwill, ending balance | 784,242 |
Operating Segments [Member] | Cardiac Surgery [Member] | |
Goodwill [Roll Forward] | |
Goodwill, starting balance | 375,769 |
Goodwill from the Mergers | 0 |
Foreign currency adjustments | 50,113 |
Goodwill, ending balance | 425,882 |
Operating Segments [Member] | Neuromodulation [Member] | |
Goodwill [Roll Forward] | |
Goodwill, starting balance | 315,943 |
Goodwill from the Mergers | 0 |
Foreign currency adjustments | 0 |
Goodwill, ending balance | 315,943 |
Other [Member] | |
Goodwill [Roll Forward] | |
Goodwill, starting balance | 0 |
Goodwill from the Mergers | 42,417 |
Foreign currency adjustments | 0 |
Goodwill, ending balance | $ 42,417 |
Investments (Schedule of Long-t
Investments (Schedule of Long-term Investments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Cost-method Investments [Line Items] | ||
Original cost | $ 32,693 | $ 33,777 |
Respicardia [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Debt instrument, convertible, carrying amount of equity component | (1,500) | |
Foreign currency transaction gain (loss), realized | 3,900 | |
Other Assets [Member] | Cost Method Investee [Member] | Respicardia [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Outstanding loans | 400 | |
Other Assets [Member] | Cost Method Investee [Member] | ImThera Medical, Inc. [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Outstanding loans | 1,000 | |
Respicardia Inc. [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Original cost | 17,422 | 17,518 |
ImThera Medical Inc [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Original cost | 12,900 | 12,000 |
Rainbow Medical Ltd [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Original cost | 1,172 | 3,733 |
Other than temporary impairment losses, investments | 3,000 | |
MD Start II [Member] | ||
Schedule of Cost-method Investments [Line Items] | ||
Original cost | $ 1,199 | $ 526 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 26, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Schedule of Equity Method Investments [Line Items] | |||||
Transaction gain on sale of investment | $ (7,411) | $ 109 | $ 1,084 | $ 3,141 | $ 479 |
Respicardia [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Other than temporary impairment losses, investments | 5,500 | ||||
Rainbow Medical Ltd [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Other than temporary impairment losses, investments | 3,000 | ||||
Istituto Europeo di Oncologia S.R.L. [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Transaction gain on sale of investment | 3,200 | ||||
Highlife S.A.S. [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Other than temporary impairment losses, investments | $ 13,000 |
Investments (Equity Method Inve
Investments (Equity Method Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | May 02, 2017 | Dec. 31, 2016 |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 1,799 | $ 22,449 | |
Caisson Interventional LLC [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of voting interests acquired (percent) | 51.00% | ||
Highlife S.A.S. [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage (percent) | 25.00% | 38.00% | |
Equity method investments | $ 1,782 | $ 6,009 | |
Caisson Interventional LLC [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | 0 | 16,424 | |
Other [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 17 | $ 16 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value of Assets and liabilities Measured on a Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Total assets | $ 519 | $ 8,269 |
Liabilities: | ||
Contingent consideration | 33,973 | 3,890 |
Total Liabilities | 36,018 | 6,224 |
Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Assets: | ||
Derivative asset | 4,911 | |
Liabilities: | ||
Derivative liability | 460 | |
Designated as Hedging Instrument [Member] | Interest Rate Swap Contracts [Member] | ||
Liabilities: | ||
Derivative liability | 1,585 | 2,334 |
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Assets: | ||
Derivative asset | 519 | 3,358 |
Level 1 [Member] | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 1 [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Assets: | ||
Derivative asset | 0 | |
Liabilities: | ||
Derivative liability | 0 | |
Level 1 [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swap Contracts [Member] | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 1 [Member] | Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Assets: | ||
Derivative asset | 0 | 0 |
Level 2 [Member] | ||
Assets: | ||
Total assets | 519 | 8,269 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total Liabilities | 2,045 | 2,334 |
Level 2 [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Assets: | ||
Derivative asset | 4,911 | |
Liabilities: | ||
Derivative liability | 460 | |
Level 2 [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swap Contracts [Member] | ||
Liabilities: | ||
Derivative liability | 1,585 | 2,334 |
Level 2 [Member] | Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Assets: | ||
Derivative asset | 519 | 3,358 |
Level 3 [Member] | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 33,973 | 3,890 |
Total Liabilities | 33,973 | 3,890 |
Level 3 [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Assets: | ||
Derivative asset | 0 | |
Liabilities: | ||
Derivative liability | 0 | |
Level 3 [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swap Contracts [Member] | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 3 [Member] | Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | ||
Assets: | ||
Derivative asset | $ 0 | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Long-term debt | $ 87,802 | $ 96,516 |
Financing Arrangements (Long-Te
Financing Arrangements (Long-Term Debt Outstanding) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 87,802 | $ 96,516 |
Less current portion of long-term debt | 25,844 | 21,301 |
Long-term debt obligations | 61,958 | 75,215 |
Loans Payable [Member] | European Investment Bank [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 69,893 | 78,987 |
Effective interest rate (percent) | 0.95% | |
Loans Payable [Member] | Mediocredito Italiano [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 9,118 | 7,276 |
Loans Payable [Member] | Mediocredito Italiano [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 0.50% | |
Loans Payable [Member] | Mediocredito Italiano [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 3.10% | |
Loans Payable [Member] | Banca del Mezzogiorno [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 5,499 | 6,747 |
Loans Payable [Member] | Banca del Mezzogiorno [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 0.50% | |
Loans Payable [Member] | Banca del Mezzogiorno [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 3.15% | |
Loans Payable [Member] | Bpifrance [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 1,450 | 1,909 |
Effective interest rate (percent) | 2.58% | |
Loans Payable [Member] | Region Wallonne [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 845 | 798 |
Loans Payable [Member] | Region Wallonne [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 0.00% | |
Loans Payable [Member] | Region Wallonne [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 2.45% | |
Mortgages [Member] | Mediocredito Italiano [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 997 | $ 799 |
Mortgages [Member] | Mediocredito Italiano [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 0.80% | |
Mortgages [Member] | Mediocredito Italiano [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate (percent) | 1.30% |
Financing Arrangements - Revolv
Financing Arrangements - Revolving Credit (Details) | Jun. 29, 2017USD ($) | Dec. 31, 2017USD ($) | Jun. 29, 2017EUR (€) | Dec. 31, 2016USD ($) |
Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Short-term debt | $ 58,200,000 | $ 26,300,000 | ||
Effective interest rate (percent) | 0.10% | 9.30% | ||
European Investment Bank [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 119,900,000 | € 100,000,000 | ||
Proceeds from loans | $ 0 | |||
Tranche One [Member] | European Investment Bank [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 60,000,000 | € 50,000,000 | ||
London Interbank Offered Rate (LIBOR) [Member] | European Investment Bank [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.68% |
Derivatives and Risk Manageme79
Derivatives and Risk Management (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Foreign Exchange Contract [Member] | ||
Derivative [Line Items] | ||
Gain (loss) on foreign currency fair value hedge ineffectiveness | $ 0 | $ 0 |
Gain (loss) from components excluded from assessment of cash flow hedge effectiveness, net | 0 | 0 |
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Gain reclassified to earnings from accumulated other comprehensive (loss) | 200,000 | |
Foreign Exchange Contract [Member] | Foreign Exchange and Other [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Gain (loss) on derivative | (11,700,000) | 11,000,000 |
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Notional amount | $ 231,900,000 | $ 489,100,000 |
Derivatives and Risk Manageme80
Derivatives and Risk Management (Derivative Notional Amounts) (Details) - Designated as Hedging Instrument [Member] - Cash Flow Hedging [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Notional amount | $ 121,608 | $ 127,749 |
After tax, net unrealized losses on derivatives arising during period | (919) | |
Cash flow hedge gain to be reclassified within twelve months | (771) | |
Foreign Exchange Contract [Member] | ||
Derivative [Line Items] | ||
After tax, net unrealized losses on derivatives arising during period | (712) | |
Cash flow hedge gain to be reclassified within twelve months | (712) | |
Foreign Exchange Contract [Member] | British, Pounds | ||
Derivative [Line Items] | ||
Notional amount | 16,847 | 6,663 |
Foreign Exchange Contract [Member] | Japan, Yen | ||
Derivative [Line Items] | ||
Notional amount | 32,302 | 57,840 |
Foreign Exchange Contract [Member] | Canada, Dollars | ||
Derivative [Line Items] | ||
Notional amount | 16,494 | 0 |
Interest Rate Swap Contracts [Member] | ||
Derivative [Line Items] | ||
Notional amount | 55,965 | $ 63,246 |
After tax, net unrealized losses on derivatives arising during period | (207) | |
Cash flow hedge gain to be reclassified within twelve months | $ (59) |
Derivatives and Risk Manageme81
Derivatives and Risk Management (Amount of Loss Recognized in OCI and Income Statement) (Details) - Cash Flow Hedging [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Recognized in OCI | $ (9,861) | $ 2,959 |
Gains (Losses) Reclassified from OCI to Earnings: | (3,448) | (971) |
Foreign Exchange and Other [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Reclassified from OCI to Earnings: | (6,471) | 3,705 |
Selling, general and administrative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Reclassified from OCI to Earnings: | 2,084 | (4,218) |
Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Reclassified from OCI to Earnings: | 939 | (458) |
Foreign Exchange Contract [Member] | Foreign Exchange and Other [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Recognized in OCI | (9,861) | 2,874 |
Foreign Exchange Contract [Member] | Selling, general and administrative [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Recognized in OCI | 0 | 0 |
Interest Rate Swap Contracts [Member] | Interest Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) Recognized in OCI | $ 0 | $ 85 |
Derivatives and Risk Manageme82
Derivatives and Risk Management (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | |||
Total asset derivatives | $ 519 | $ 518 | $ 8,269 |
Total liability derivatives | 2,045 | 2,334 | |
Designated as Hedging Instrument [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total asset derivatives | 0 | 4,911 | |
Total liability derivatives | 2,045 | 2,334 | |
Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | Interest Rate Contract [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total asset derivatives | 0 | 0 | |
Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | Foreign Exchange Contract [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total asset derivatives | 0 | 4,911 | |
Designated as Hedging Instrument [Member] | Accrued Liabilities [Member] | Interest Rate Contract [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total liability derivatives | 834 | 942 | |
Designated as Hedging Instrument [Member] | Accrued Liabilities [Member] | Foreign Exchange Contract [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total liability derivatives | 460 | 0 | |
Designated as Hedging Instrument [Member] | Other Assets [Member] | Interest Rate Contract [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total asset derivatives | 0 | 0 | |
Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member] | Interest Rate Contract [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total liability derivatives | 751 | 1,392 | |
Not Designated as Hedging Instrument [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total asset derivatives | 519 | 3,358 | |
Total liability derivatives | 0 | 0 | |
Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | Foreign Exchange Contract [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total asset derivatives | 519 | 3,358 | |
Not Designated as Hedging Instrument [Member] | Accrued Liabilities [Member] | Foreign Exchange Contract [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total liability derivatives | $ 0 | $ 0 |
Commitments and Contingencies83
Commitments and Contingencies (Narrative) (Details) $ in Thousands, € in Millions | Apr. 01, 2016USD ($) | Oct. 31, 2016USD ($) | Jan. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)installmentnoticeclaim | Dec. 31, 2017EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017EUR (€)installmentnoticeclaim | Aug. 27, 2015non-conformity | Oct. 30, 2009USD ($) | Oct. 30, 2009EUR (€) |
Other Commitments [Line Items] | ||||||||||||
Accrual for environmental loss contingencies | $ 27,546 | $ 33,487 | ||||||||||
Number of claims | claim | 110 | 110 | ||||||||||
Estimate of possible loss | $ 20,400 | € 17 | ||||||||||
Operating leases, rent expense | $ 3,100 | 18,800 | $ 15,600 | $ 800 | ||||||||
Settled Litigation [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Reimbursed legal fees | $ 360 | |||||||||||
Amount awarded from other party | $ 480 | |||||||||||
Threatened Litigation [Member] | Regional Internal Revenue Office of Lombardy [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Write-down under dispute | $ 75,100 | € 62.6 | $ 123,000 | € 102.6 | ||||||||
Number of installments | installment | 5 | 5 | ||||||||||
Number of notice of assessments | notice | 3 | 3 | ||||||||||
FDA Warning Letter [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Number of observed non-conformities | non-conformity | 2 | |||||||||||
SNIA [Member] | SNIA s.p.a [Member] | Pending Litigation [Member] | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Compensation sought | $ 4,000,000 |
Commitments and Contingencies84
Commitments and Contingencies (Schedule of Future Minimum Lease Payments) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 13,584 |
2,019 | 11,633 |
2,020 | 9,565 |
2,021 | 7,053 |
2,022 | 5,864 |
Thereafter | 24,632 |
Total | $ 72,331 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Apr. 24, 2015 | Nov. 30, 2016 | Aug. 01, 2016 | |
Class of Stock [Line Items] | ||||
Stock repurchased during period (in shares) | 993,339 | |||
Treasury stock acquired | $ 50,000,000 | |||
Treasury stock acquired, average cost per share (in dollars per share) | $ 50.32 | $ 55.94 | ||
Treasury stock, shares acquired (in shares) | 875,121 | |||
Common / Ordinary Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Amount authorized to repurchase | $ 30,000,000 | $ 50,000,000 | $ 150,000,000 |
Stockholders' Equity (Comprehen
Stockholders' Equity (Comprehensive Income) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, start | $ 1,706,909 | $ 1,811,462 | ||
Total other comprehensive income (loss) | $ (50,827) | 113,800 | (14,259) | $ (3,856) |
Balance, end | 1,811,462 | 1,815,314 | 1,706,909 | |
Change in unrealized gain (loss) on derivatives [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, start | 3,619 | 888 | ||
Other comprehensive income (loss) before reclassifications, before tax | (9,861) | 2,959 | ||
Tax benefit (expense) | 2,653 | (795) | ||
Other comprehensive income (loss) before reclassifications, net of tax | (7,208) | 2,164 | ||
Reclassification of loss from accumulated other comprehensive income, before tax | 3,448 | 971 | ||
Tax effect | (778) | (404) | ||
Reclassification of loss from accumulated other comprehensive income, after tax | (2,670) | (567) | ||
Total other comprehensive income (loss) | (4,538) | 2,731 | ||
Balance, end | 888 | (919) | 3,619 | |
Foreign Currency Translation Adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, start | (72,106) | (55,116) | ||
Other comprehensive income (loss) before reclassifications, before tax | 118,338 | (16,990) | ||
Tax benefit (expense) | 0 | 0 | ||
Other comprehensive income (loss) before reclassifications, net of tax | 118,338 | (16,990) | ||
Reclassification of loss from accumulated other comprehensive income, before tax | 0 | 0 | ||
Tax effect | 0 | 0 | ||
Reclassification of loss from accumulated other comprehensive income, after tax | 0 | 0 | ||
Total other comprehensive income (loss) | 118,338 | (16,990) | ||
Balance, end | (55,116) | 46,232 | (72,106) | |
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance, start | (68,487) | (54,228) | ||
Other comprehensive income (loss) before reclassifications, before tax | 108,477 | (14,031) | ||
Tax benefit (expense) | 2,653 | (795) | ||
Other comprehensive income (loss) before reclassifications, net of tax | 111,130 | (14,826) | ||
Reclassification of loss from accumulated other comprehensive income, before tax | 3,448 | 971 | ||
Tax effect | (778) | (404) | ||
Reclassification of loss from accumulated other comprehensive income, after tax | (2,670) | (567) | ||
Total other comprehensive income (loss) | 113,800 | (14,259) | ||
Balance, end | $ (54,228) | $ 45,313 | $ (68,487) |
Stock-Based Incentive Plans (Na
Stock-Based Incentive Plans (Narrative) (Details) - USD ($) $ in Thousands | Oct. 19, 2015 | Oct. 18, 2015 | Oct. 16, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 26, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Dec. 31, 2015 | Feb. 26, 2017 | Feb. 26, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Merger and integration expenses | $ 55,776 | $ 0 | $ 15,528 | $ 20,377 | $ 8,692 | |||||||
Total stock-based compensation expense | 31,030 | $ 19,062 | $ 19,569 | $ 11,940 | ||||||||
Number of options outstanding (in shares) | 2,025,122 | 1,949,328 | ||||||||||
2015 Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares available for grant (in shares) | 6,115,000 | |||||||||||
Common / Ordinary Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares converted (in shares) | 209,043 | |||||||||||
Cyberonics Inc [Member] | Executive Officer [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Cash paid to settle awards | $ 5,000 | |||||||||||
Cyberonics Inc [Member] | Executive Officer [Member] | Employee Stock Option [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of options outstanding (in shares) | 146,105 | |||||||||||
Cyberonics Inc [Member] | Amended and Restated New Employee Equity Inducement Plan and 2009 Stock Plan [Member] | Employee Stock Options and Restricted Stock Units [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of options outstanding (in shares) | 813,794 | |||||||||||
Merger Agreement - Sorin [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Merger and integration expenses | $ 42,100 | |||||||||||
Merger Agreement - Sorin [Member] | Deferred Bonus Shares [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Nonvested shares (in shares) | 1,721,530 | |||||||||||
Merger and integration expenses | $ 300 | |||||||||||
Merger Agreement - Sorin [Member] | Long-Term Incentive 2014-2016 Plan [Member] | Stock Appreciation Rights (SARs) [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Nonvested shares (in shares) | 3,815,824 | |||||||||||
Merger Agreement - Sorin [Member] | Long-Term Incentive Plans 2013-2015 and 2014-2016 [Member] | Restricted Stock Unit and Performance Stock Unit [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Nonvested shares (in shares) | 3,365,931 | |||||||||||
Merger Agreement - Sorin [Member] | Long-Term Incentive Plans 2013-2015 and 2014-2016 [Member] | Performance Share Units [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Nonvested shares (in shares) | 2,617,490 | |||||||||||
Compensation not yet recognized of nonvested awards | $ 7,700 | |||||||||||
Total stock-based compensation expense | $ 900 | $ 300 | $ 4,900 | $ 1,400 | ||||||||
Merger Agreement - Sorin [Member] | Common / Ordinary Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares converted (in shares) | 158,716 | |||||||||||
Merger Agreement - Sorin [Member] | Common / Ordinary Stock [Member] | Stock Appreciation Rights (SARs) [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares converted (in shares) | 180,076 | |||||||||||
Merger Agreement - Sorin [Member] | Common / Ordinary Stock [Member] | Performance Share Units [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares converted (in shares) | 123,456 | |||||||||||
Merger Agreement - Sorin [Member] | Common / Ordinary Stock [Member] | Performance Share Units [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Percent of outstanding awards recognized per Period | 50.00% | |||||||||||
Merger Agreement - Sorin [Member] | Common / Ordinary Stock [Member] | Performance Share Units [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Percent of outstanding awards recognized per Period | 50.00% | |||||||||||
Merger Agreement - Sorin [Member] | Common / Ordinary Stock [Member] | Deferred Bonus Shares [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares converted (in shares) | 81,251 | |||||||||||
Merger Agreement - Sorin [Member] | Sorin S.p.A. [Member] | Stock Appreciation Rights (SARs) [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Nonvested shares (in shares) | 3,815,824 | |||||||||||
Total stock-based compensation expense | $ 2,200 | $ 1,600 | ||||||||||
Merger Agreement - Sorin [Member] | Sorin S.p.A. [Member] | Stock Appreciation Rights, Restricted Stock Units and Performance Shares [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Merger and integration expenses | $ 8,800 | |||||||||||
Merger Agreement - Sorin [Member] | Sorin S.p.A. [Member] | Performance Share Units [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Merger and integration expenses | $ 8,600 |
Stock-Based Incentive Plans (Al
Stock-Based Incentive Plans (Allocation of Share Based Compensation Costs by Expense Category) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Apr. 25, 2014 | |
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Total stock-based compensation expense | $ 31,030 | $ 19,062 | $ 19,569 | $ 11,940 | |
Income tax benefit, related to awards, recognized in the consolidated statements of income | 7,776 | 4,236 | 4,645 | 3,944 | |
Total expense, net of income tax benefit | 23,254 | 14,826 | 14,924 | 7,996 | |
Cost of goods sold [Member] | |||||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Total stock-based compensation expense | 452 | 450 | 709 | 559 | |
Selling, general and administrative [Member] | |||||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Total stock-based compensation expense | 15,588 | 16,118 | 15,570 | 8,357 | |
Research and development [Member] | |||||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Total stock-based compensation expense | 1,664 | 1,119 | 912 | 3,024 | |
Merger-related expense [Member] | |||||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Total stock-based compensation expense | 13,010 | 0 | 271 | 0 | |
Continuing Operations [Member] | |||||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Total stock-based compensation expense | 30,714 | 17,687 | 17,462 | 11,940 | $ 11,940 |
Discontinued Operations [Member] | |||||
Employee Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Total stock-based compensation expense | $ 316 | $ 1,375 | $ 2,107 | $ 0 |
Stock-Based Incentive Plans (89
Stock-Based Incentive Plans (Allocation of Share-Based Compensation Costs by Type of Arrangement) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Apr. 25, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation expense from continuing operations | $ 31,030 | $ 19,062 | $ 19,569 | $ 11,940 | |
Continuing Operations [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation expense from continuing operations | 30,714 | 17,687 | 17,462 | $ 11,940 | $ 11,940 |
Continuing Operations [Member] | Service-based stock option awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation expense from continuing operations | 10,652 | 6,916 | 7,953 | 4,317 | |
Continuing Operations [Member] | Service-based restricted stock and restricted stock unit awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation expense from continuing operations | 8,204 | 8,223 | 9,388 | 6,119 | |
Continuing Operations [Member] | Market-based Performance Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation expense from continuing operations | 0 | 732 | 31 | 0 | |
Continuing Operations [Member] | Performance-based restricted stock and restricted stock unit awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation expense from continuing operations | $ 11,858 | $ 1,816 | $ 90 | $ 1,504 |
Stock-Based Incentive Plans (Sc
Stock-Based Incentive Plans (Schedule of Stock-Based Compensation Cost Unrecognized) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 43,308 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 11 months |
Service-Based Stock Appreciation Rights [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 14,628 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 3 years |
Service-based restricted stock and restricted stock unit awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 20,754 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 8 months |
Performance-based restricted stock and restricted stock unit awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 7,926 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 3 years 2 months |
Stock-Based Incentive Plans (91
Stock-Based Incentive Plans (Schedule of Share-Option Valuation Assumptions) (Details) | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividend rate | 0.00% | 0.00% | 0.00% | 0.00% |
Risk free interest rate, minimum | 1.20% | 1.70% | 1.00% | 1.60% |
Risk free interest rate, maximum | 1.40% | 2.20% | 1.80% | 2.00% |
Expected volatility rate, minimum | 34.10% | 29.60% | 30.80% | 31.70% |
Expected volatility rate, maximum | 34.10% | 30.40% | 32.40% | 41.10% |
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term | 4 years | 4 years 7 months | 4 years | 4 years 11 months |
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term | 5 years | 5 years 2 months | 5 years | 6 years 7 months 15 days |
Stock-Based Incentive Plans (92
Stock-Based Incentive Plans (Schedule of Share-Based Compensation, Stock Options, Rollforward) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Number of Optioned Shares | |
Outstanding - beginning of period, shares (in shares) | shares | 1,949,328 |
Granted, shares (in shares) | shares | 654,478 |
Exercised, shares (in shares) | shares | (345,513) |
Forfeited, shares (in shares) | shares | (154,381) |
Expired, shares (in shares) | shares | (78,790) |
Outstanding - end of period, shares (in shares) | shares | 2,025,122 |
Wtd. Avg. Exercise Price | |
Beginning of period (in dollars per share) | $ / shares | $ 57.07 |
Granted (in dollars per share) | $ / shares | 56.84 |
Exercised (in dollars per share) | $ / shares | 56.60 |
Forfeited (in dollars per share) | $ / shares | 59.52 |
Expired (in dollars per share) | $ / shares | 58.90 |
End of period (in dollars per share) | $ / shares | $ 56.82 |
Additional Disclosures [Abstract] | |
Fully vested and exercisable - end of year (shares) | shares | 944,051 |
Fully vested and expected to vest - end of period (shares) | shares | 1,990,317 |
Fully vested and exercisable - end of year, weighted average exercise price (in dollars per share) | $ / shares | $ 58.37 |
Fully vested and expected to vest - end of period, weighted average exercise price (in dollars per share) | $ / shares | $ 56.82 |
Weighted average remaining contractual term, outstanding - end of period | 6 years 9 months 5 days |
Weighted average remaining contractual term - fully vested and exercisable - end of period | 4 years 2 months 15 days |
Weighted average remaining contractual term - fully vested and expected to vest - end of year | 6 years 8 months 20 days |
Aggregate intrinsic value, outstanding - end of period | $ | $ 46,796 |
Aggregate intrinsic value, fully vested and exercisable - end of period | $ | 20,342 |
Aggregate intrinsic value, fully vested and expected to vest - end of period | $ | $ 45,989 |
Stock-Based Incentive Plans (Su
Stock-Based Incentive Plans (Summary of Share-Based Compensation, Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Share-based compensation arrangement by share-based payment award, options, grants in period, weighted average grant date fair value (in dollars per share) | $ 21.05 | $ 17.19 | $ 15.03 | $ 18.64 |
Share-based compensation arrangement by share-based payment award, options, exercises in period, intrinsic value | $ 5,464 | $ 5,462 | $ 5,033 | $ 3,973 |
Stock-Based Incentive Plans (94
Stock-Based Incentive Plans (Schedule of Restricted Stock Service-Based Rollforward) (Details) - Service-based restricted stock and restricted stock unit awards [Member] - $ / shares | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Number of Shares | ||||
Non-vested shares, beginning of year (in shares) | 506,219 | |||
Granted, shares (in shares) | 131,442 | |||
Vested, shares (in shares) | (169,580) | |||
Forfeited, shares (in shares) | (87,973) | |||
Non-vested shares, end of year (in shares) | 380,108 | 506,219 | ||
Weighted average grant date fair value, beginning of year (in dollars per share) | $ 56.56 | |||
Weighted average grant date fair value, granted (in dollars per share) | $ 57.55 | 61.37 | $ 55.53 | $ 56.85 |
Weighted average grant date fair value, vested (in dollars per share) | 59.09 | |||
Weighted average grant date fair value, forfeited (in dollars per share) | 56.68 | |||
Weighted average grant date fair value, end of year (in dollars per share) | $ 57.07 | $ 56.56 |
Stock-Based Incentive Plans (95
Stock-Based Incentive Plans (Summary of Restricted Stock Service-Based Activity) (Details) - Service-based restricted stock and restricted stock unit awards [Member] - USD ($) $ / shares in Units, $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value of service-based share grants issued during the fiscal year (in dollars per share) | $ 57.55 | $ 61.37 | $ 55.53 | $ 56.85 |
Aggregate fair value of performance-based share grants that vested during the year | $ 24,384 | $ 9,966 | $ 4,810 | $ 9,194 |
Stock-Based Incentive Plans (96
Stock-Based Incentive Plans (Schedule of Performance-Based Restricted Stock and Restricted Stock Units Rollforward) (Details) - Performance-based restricted stock and restricted stock unit awards [Member] - $ / shares | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Number of Shares | ||||
Non-vested shares, beginning of year (in shares) | 52,083 | |||
Granted, shares (in shares) | 346,584 | |||
Vested, shares (in shares) | (2,171) | |||
Forfeited, shares (in shares) | (55,109) | |||
Non-vested shares, end of year (in shares) | 341,387 | 52,083 | ||
Wtd. Avg. Grant Date Fair Value | ||||
Weighted average grant date fair value, beginning of year (in dollars per share) | $ 42.01 | |||
Weighted average grant date fair value, granted (in dollars per share) | $ 0 | 42.11 | $ 42.01 | $ 57.39 |
Weighted average grant date fair value, vested (in dollars per share) | 57.60 | |||
Weighted average grant date fair value, forfeited (in dollars per share) | $ 42.73 | |||
Weighted average grant date fair value, end of year (in dollars per share) | $ 42.01 |
Stock-Based Incentive Plans (97
Stock-Based Incentive Plans (Summary of Performance-Based Restricted Stock and Restricted Stock Unit Activity) (Details) - Performance-based restricted stock and restricted stock unit awards [Member] - USD ($) $ / shares in Units, $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value of service-based share grants issued during the fiscal year (in dollars per share) | $ 0 | $ 42.11 | $ 42.01 | $ 57.39 |
Aggregate fair value of performance-based share grants that vested during the year | $ 9,648 | $ 110 | $ 0 | $ 10,519 |
Employee Retirement Plans (Narr
Employee Retirement Plans (Narrative) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | 20 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Retirement plan expense | $ 2,900 | $ 10,200 | $ 11,600 | $ 1,800 | |
Employer contributions | 1,200 | 600 | |||
Severance indemnity expense | 1,300 | 400 | 1,100 | ||
Defined contribution plan expense | $ 2,900 | 7,800 | 10,000 | ||
U.S. Plans [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contributions | 870 | $ 648 | $ 0 | ||
Estimated future contributions in 2017 | $ 900 |
Employee Retirement Plans (Chan
Employee Retirement Plans (Change in Benefit Obligations and Funded Status) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | 20 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in plan assets: | ||||
Employer contributions | $ 1,200 | $ 600 | ||
U.S. Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Accumulated benefit obligations at year end: | $ 10,218 | 11,191 | 10,615 | $ 10,218 |
Change in projected benefit obligation: | ||||
Projected benefit obligation at beginning of year | 0 | 10,425 | 10,218 | |
Interest cost | 86 | 361 | 367 | 86 |
Benefits obligations assumed in the Mergers | 0 | 0 | 10,378 | |
Plan curtailments and settlements | 0 | 609 | 59 | |
Actuarial (gain) loss | 770 | 698 | (40) | |
Benefits paid | (555) | (249) | (147) | |
Projected benefit obligation at end of year | 10,218 | 11,001 | 10,425 | 10,218 |
Change in plan assets: | ||||
Fair value of plan assets at beginning of year | 0 | 5,925 | 5,858 | |
Actual return on plan assets | 444 | 277 | (33) | |
Plan assets acquired in the Mergers | 0 | 0 | 6,097 | |
Employer contributions | 870 | 648 | 0 | |
Plan settlements | 0 | (609) | (59) | |
Benefits paid | (360) | (249) | (147) | |
Fair value of plan assets at end of year | 5,858 | 6,879 | 5,925 | 5,858 |
Funded status at end of year: | ||||
Underfunded status of the plans | 4,360 | 4,122 | 4,500 | 4,360 |
Amounts recognized on the consolidated balance sheets consist of: | ||||
Non-current liabilities | 4,360 | 4,122 | 4,500 | 4,360 |
Recognized liability | 4,360 | 4,122 | 4,500 | 4,360 |
Non-U.S. Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Accumulated benefit obligations at year end: | 21,116 | 23,785 | 27,845 | 21,116 |
Change in projected benefit obligation: | ||||
Projected benefit obligation at beginning of year | 0 | 20,402 | 21,116 | |
Service cost | 92 | 503 | 397 | 92 |
Interest cost | 83 | 291 | 376 | 83 |
Benefits obligations assumed in the Mergers | 0 | 0 | 20,626 | |
Employee contributions | 0 | 0 | 0 | |
Plan curtailments and settlements | 0 | (20) | 0 | |
Actuarial (gain) loss | (27) | 889 | 152 | |
Benefits paid | (2,222) | (1,911) | (201) | |
Foreign currency exchange rate changes and other | 2,601 | (445) | 364 | |
Projected benefit obligation at end of year | 21,116 | 21,548 | 20,402 | 21,116 |
Change in plan assets: | ||||
Fair value of plan assets at beginning of year | 0 | 2,898 | 2,689 | |
Actual return on plan assets | 54 | 28 | 6 | |
Plan assets acquired in the Mergers | 0 | 0 | 2,607 | |
Employer contributions | 369 | 0 | 81 | |
Employee contributions | 0 | 358 | 0 | |
Plan settlements | 0 | 0 | 0 | |
Benefits paid | (393) | (238) | (5) | |
Foreign currency exchange rate changes | 147 | 61 | 0 | |
Fair value of plan assets at end of year | 2,689 | 3,075 | 2,898 | 2,689 |
Reclassification of net obligation to Current liabilities of discontinued operations | 0 | 0 | 0 | 0 |
Funded status at end of year: | ||||
Underfunded status of the plans | 18,427 | 18,473 | 17,504 | 18,427 |
Amounts recognized on the consolidated balance sheets consist of: | ||||
Non-current assets | 0 | 0 | 0 | 0 |
Current liabilities | 0 | 0 | 0 | 0 |
Non-current liabilities | 18,427 | 18,473 | 17,504 | 18,427 |
Recognized liability | $ 18,427 | $ 18,473 | $ 17,504 | $ 18,427 |
Employee Retirement Plans (Net
Employee Retirement Plans (Net Periodic Benefit Cost of the Plans) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | 20 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
U.S. Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 86 | $ 361 | $ 367 | $ 86 |
Expected return on plan assets | (77) | (282) | (277) | |
Settlement and curtailment loss (gains) | 282 | 0 | 259 | |
Amortization of net actuarial loss | 96 | 527 | 439 | |
Net periodic benefit cost | 387 | 606 | 788 | |
Non-U.S. Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 92 | 503 | 397 | 92 |
Interest cost | 83 | 291 | 376 | $ 83 |
Expected return on plan assets | 0 | (54) | (28) | |
Settlement and curtailment loss (gains) | 0 | 0 | (20) | |
Amortization of net actuarial loss | 0 | (27) | 889 | |
Net periodic benefit cost | $ 175 | $ 713 | $ 1,614 |
Employee Retirement Plans (Assu
Employee Retirement Plans (Assumptions Used) (Details) | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
U.S. Plans [Member] | |||
Actuarial assumptions used to determine benefit obligation and net periodic benefit cost: | |||
Discount rate | 3.79% | 3.28% | 3.63% |
Actuarial assumptions used to determine net periodic benefit cost: | |||
Discount rate | 3.64% | 3.63% | |
Expected return on plan assets | 5.00% | 5.00% | 5.00% |
U.S. Plans [Member] | Minimum [Member] | |||
Actuarial assumptions used to determine net periodic benefit cost: | |||
Discount rate | 3.04% | 3.04% | |
U.S. Plans [Member] | Maximum [Member] | |||
Actuarial assumptions used to determine net periodic benefit cost: | |||
Discount rate | 3.79% | 3.79% | |
Non-U.S. Plans [Member] | Minimum [Member] | |||
Actuarial assumptions used to determine benefit obligation and net periodic benefit cost: | |||
Discount rate | 0.48% | 0.27% | 0.27% |
Actuarial assumptions used to determine net periodic benefit cost: | |||
Rate of compensation increase | 2.50% | 2.50% | 2.50% |
Non-U.S. Plans [Member] | Maximum [Member] | |||
Actuarial assumptions used to determine benefit obligation and net periodic benefit cost: | |||
Discount rate | 2.00% | 1.50% | 1.50% |
Actuarial assumptions used to determine net periodic benefit cost: | |||
Rate of compensation increase | 3.89% | 3.89% | 3.89% |
Employee Retirement Plans (Targ
Employee Retirement Plans (Target Asset Allocation) (Details) | Dec. 31, 2017 |
Equity Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocation percentage | 27.00% |
Debt Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocation percentage | 63.00% |
Other [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Target allocation percentage | 10.00% |
Employee Retirement Plans (Fair
Employee Retirement Plans (Fair Value of Retirement Benefit Plan Assets) (Details) - U.S. Plans [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 24, 2015 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | $ 6,879 | $ 5,925 | $ 5,858 | $ 0 |
Level 1 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 666 | 224 | ||
Level 2 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 6,213 | 5,701 | ||
Level 3 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Equity Mutual Funds [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 1,879 | 1,660 | ||
Equity Mutual Funds [Member] | Level 1 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Equity Mutual Funds [Member] | Level 2 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 1,879 | 1,660 | ||
Equity Mutual Funds [Member] | Level 3 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Fixed Income Funds [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 4,334 | 4,041 | ||
Fixed Income Funds [Member] | Level 1 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Fixed Income Funds [Member] | Level 2 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 4,334 | 4,041 | ||
Fixed Income Funds [Member] | Level 3 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Money Market Funds [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 666 | 224 | ||
Money Market Funds [Member] | Level 1 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 666 | 224 | ||
Money Market Funds [Member] | Level 2 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 0 | 0 | ||
Money Market Funds [Member] | Level 3 [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | $ 0 | $ 0 |
Employee Retirement Plans (Expe
Employee Retirement Plans (Expected Benefit Payments)(Details) $ in Thousands | Dec. 31, 2017USD ($) |
U.S. Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | $ 1,965 |
2,019 | 622 |
2,020 | 1,034 |
2,021 | 780 |
2,022 | 1,033 |
Thereafter | 5,757 |
Non-U.S. Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | 1,670 |
2,019 | 801 |
2,020 | 1,019 |
2,021 | 911 |
2,022 | 1,085 |
Thereafter | $ 16,062 |
Income Taxes (Components and Pr
Income Taxes (Components and Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 26, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Income before income taxes: | |||||
U.K. and Non-United States | $ (27,491) | $ 71,980 | $ (36,997) | $ 2,020 | |
United States | 1,493 | 49,158 | 62,663 | 87,274 | |
Income (loss) from continuing operations before tax | (25,998) | $ 53,862 | 121,138 | 25,666 | 89,294 |
Provision for current income tax expense (benefit): | |||||
U.K. and Non-United States | 2,454 | 12,771 | 13,876 | 1,065 | |
United States | 23,544 | 26,743 | 19,706 | 21,104 | |
Current income tax expense | 25,998 | 39,514 | 33,582 | 22,169 | |
Provision for deferred income tax expense (benefit): | |||||
U.K. and Non-United States | (18,690) | (4,140) | (28,607) | 834 | |
United States | (20,809) | 14,580 | 138 | 8,443 | |
Deferred Income Tax Expense | (39,499) | 10,440 | (28,469) | 9,277 | |
Total provision for income tax expense (benefit) | $ (13,501) | $ 18,791 | $ 49,954 | $ 5,113 | $ 31,446 |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Rate Reconciliation) (Details) | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Statutory tax rate at U.S. Rate | 0.00% | 0.00% | 0.00% | 35.00% |
Statutory tax rate at U.K. Rate | 19.10% | 19.00% | 20.00% | 0.00% |
Effect of changes in tax rate | (12.90%) | (19.90%) | (0.20%) | 0.00% |
Change in deferred tax valuation allowance | 12.60% | 10.60% | 5.10% | 0.00% |
Transaction costs | (20.90%) | 2.00% | 10.20% | 0.00% |
Sale of Intellectual Property | 0.00% | 44.30% | 17.60% | 0.00% |
State and local tax provision, net of federal benefit | 0.00% | 1.20% | 7.90% | 2.70% |
Foreign tax rate differential | 37.50% | 10.70% | 101.50% | 1.50% |
Notional interest deduction | 12.00% | (13.50%) | (68.40%) | 0.00% |
U.S. Subpart F | (7.60%) | 1.50% | 7.90% | |
Research and development tax credits | 6.00% | (1.60%) | (4.00%) | (2.10%) |
Gain on warrant liability | 0.00% | (0.30%) | (55.10%) | 0.00% |
Reserve for uncertain tax positions | 0.00% | 1.20% | 8.40% | 0.00% |
Domestic manufacturing deduction | (3.00%) | 1.80% | 2.80% | 0.00% |
Tax on UK CFC interest pick-up | 0.00% | 0.00% | 1.30% | 0.00% |
Write-off/impairment of investments | (0.90%) | (14.80%) | (30.30%) | 0.00% |
Other, net | 4.00% | 2.60% | 0.80% | (1.90%) |
Effective tax rate | 51.90% | 41.20% | 19.90% | 35.20% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 3 Months Ended | 8 Months Ended | 12 Months Ended | 20 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2015 | Dec. 26, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||||||
Increase (decrease) in deferred tax asset valuation allowance | $ 2,300,000 | ||||||
Income tax expense | $ 27,500,000 | ||||||
Impairment of foreign tax credits | 12,800,000 | ||||||
Change in deferred taxes | 14,700,000 | ||||||
Valuation allowance for discontinued operations | $ 48,700,000 | $ 26,800,000 | |||||
Tax credit carryforwards | 18,585,000 | 18,585,000 | 17,242,000 | ||||
Deferred tax valuation allowance | 93,333,000 | 93,333,000 | 36,277,000 | ||||
Operating loss and foreign tax credit carryforward, valuation allowance | 44,600,000 | 44,600,000 | |||||
Annual limitation on NOL | $ 14,200,000 | $ 14,200,000 | |||||
Income tax expense (benefit) | $ (13,501,000) | $ 18,791,000 | 49,954,000 | 5,113,000 | $ 31,446,000 | ||
Prepaid taxes | 46,274,000 | 46,274,000 | 50,577,000 | ||||
Income tax payable, current | 19,400,000 | 19,400,000 | |||||
Deferred tax liabilities | 75,600,000 | 75,600,000 | |||||
Decrease resulting from deferred tax assets | 12,200,000 | 10,700,000 | |||||
Unrecognized tax benefits that would impact effective tax rate | 22,800,000 | 22,800,000 | |||||
Prepaid Expenses and Other Current Assets [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Prepaid taxes | 12,600,000 | 12,600,000 | |||||
Other Assets [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Prepaid taxes | 68,100,000 | 68,100,000 | |||||
Other Noncurrent Liabilities [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Income tax penalties and interest accrued | 8,000,000 | 8,000,000 | 6,300,000 | ||||
Other Credits [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Tax credit carryforwards | 2,400,000 | 2,400,000 | |||||
Federal [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Foreign tax credits | 12,800,000 | 12,800,000 | |||||
Federal [Member] | Capital Loss Carryforward [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Operating loss carryforwards | 2,500,000 | 2,500,000 | 5,300,000 | ||||
State and Local [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Tax credit carryforwards | $ 3,400,000 | $ 3,400,000 | |||||
Net Operating Loss and Capital Loss Carryforwards [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Deferred tax valuation allowance | 51,500,000 | ||||||
Merger Agreement - Sorin [Member] | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Useful life | 8 years | ||||||
Income tax expense (benefit) | $ 19,400,000 | $ 11,600,000 |
Income Taxes (Significant Compo
Income Taxes (Significant Components of Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 132,615 | $ 131,904 |
Tax credit carryforwards | 18,585 | 17,242 |
Deferred compensation | 4,697 | 6,521 |
Accruals and reserves | 27,146 | 28,520 |
Inventory | 2,759 | 4,441 |
Investments | 3,858 | 0 |
Other | 3,310 | 10,306 |
Gross deferred tax assets | 192,970 | 198,934 |
Valuation allowance | (93,333) | (36,277) |
Total deferred tax assets | 99,637 | 162,657 |
Deferred tax liabilities: | ||
Gain on sale of intellectual property | (75,624) | (136,117) |
Investments | (3,135) | (12,553) |
Property, equipment & intangible assets | (137,031) | (164,090) |
Other | (1,181) | (16,421) |
Gross deferred tax liabilities: | (216,971) | (329,181) |
Total deferred tax (liabilities) assets, net | (117,334) | (166,524) |
Net deferred tax asset | 14,076 | 6,017 |
Deferred tax liability | $ (131,410) | $ (172,541) |
Income Taxes (Operating Loss Ca
Income Taxes (Operating Loss Carryforwards) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Europe [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 153,350 |
Europe [Member] | Indefinite [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 141,774 |
Europe [Member] | Tax Year 2022 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 11,576 |
South America [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 14,815 |
South America [Member] | Indefinite [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 14,815 |
Far East [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 12,174 |
Far East [Member] | Indefinite [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 0 |
Far East [Member] | Tax Year 2018 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 12,174 |
Federal [Member] | United States [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 134,415 |
Federal [Member] | United States [Member] | Indefinite [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 0 |
Federal [Member] | United States [Member] | Tax Year 2021 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 134,415 |
State and Local [Member] | United States [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 106,555 |
State and Local [Member] | United States [Member] | Indefinite [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 0 |
State and Local [Member] | United States [Member] | Tax Year 2018 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 106,555 |
Income Taxes (Schedule of Unrec
Income Taxes (Schedule of Unrecognized Tax Benefits Roll-Forward) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, balance at beginning of year | $ 22,374 | $ 20,224 |
Tax positions related to current year | 324 | 0 |
Tax positions related to prior year | 1,153 | 2,548 |
Impact of foreign currency exchange rates, increase | 2,286 | |
Impact of foreign currency exchange rates, decrease | (398) | |
Unrecognized tax benefits, balance at end of year | $ 26,137 | $ 22,374 |
Income (Loss) Per Share (Schedu
Income (Loss) Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 8 Months Ended | 12 Months Ended | 20 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 26, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||||||||||||||
Net income (loss) from continuing operations | $ (31,456) | $ 27,000 | $ 45,694 | $ 13,227 | $ (6,306) | $ 6,431 | $ 12,737 | $ (10,988) | $ (14,720) | $ 35,071 | $ 54,465 | $ 1,874 | $ 57,848 | |
Net loss from discontinued operations | (80,232) | 830 | 1,804 | (1,956) | (23,493) | (8,000) | (3,780) | (29,390) | (14,893) | 0 | (79,554) | (64,663) | 0 | |
Net (loss) income | $ (111,688) | $ 27,830 | $ 47,498 | $ 11,271 | $ (29,799) | $ (1,569) | $ 8,957 | $ (40,378) | $ (29,613) | $ 35,071 | $ (25,089) | $ (62,789) | $ 57,848 | $ (29,613) |
Basic weighted average shares outstanding (in Shares) | 32,741 | 26,552 | 48,157 | 48,860 | 26,391 | |||||||||
Add effects of stock-based compensation instruments (in Shares) | 0 | 344 | 154 | 235 | ||||||||||
Diluted weighted average shares outstanding (in Shares) | 32,741 | 26,775 | 48,501 | 49,014 | 26,626 | |||||||||
Basic income (loss) per share: continuing operations, per basic share (in Dollars per Share) | $ (0.45) | $ 1.32 | $ 1.13 | $ 0.04 | $ 2.19 | |||||||||
Basic income (loss) per share: discontinued operations, per basic share (in Dollars per Share) | (0.45) | 0 | (1.65) | (1.33) | 0 | |||||||||
Basic income per share (in Dollars per Share) | (0.90) | 1.32 | (0.52) | (1.29) | 2.19 | |||||||||
Diluted income (loss) per share: continuing operations, per diluted share (in Dollars per share) | $ (0.65) | $ 0.56 | $ 0.95 | $ 0.27 | $ (0.13) | $ 0.13 | $ 0.26 | $ (0.22) | (0.45) | 1.31 | 1.12 | 0.04 | 2.17 | |
Diluted income (loss) per share: discontinued operations, per diluted share (in Dollars per share) | (1.67) | 0.01 | 0.03 | (0.04) | (0.48) | (0.16) | (0.08) | (0.61) | (0.45) | 0 | (1.64) | (1.32) | 0 | |
Diluted income per share (in Dollars per Share) | $ (2.32) | $ 0.57 | $ 0.98 | $ 0.23 | $ (0.61) | $ (0.03) | $ 0.18 | $ (0.83) | $ (0.90) | $ 1.31 | $ (0.52) | $ (1.28) | $ 2.17 |
Income (Loss) Per Share (Sch112
Income (Loss) Per Share (Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share) (Details) - shares shares in Thousands | 12 Months Ended | 20 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Dec. 31, 2015 | |
Ordinary shares [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 24 | 1,600 | ||
Service-based stock option awards [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 1,600 | |||
Cyberonics Inc [Member] | Service-based stock option awards [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 281 |
Geographic and Segment Infor113
Geographic and Segment Information (Segment Info) (Details) $ in Thousands | 3 Months Ended | 8 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 26, 2014USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Apr. 24, 2015USD ($) | |
Segment Reporting [Abstract] | |||||||||||||
Number of reportable Segments | segment | 2 | ||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net sales | $ 278,356 | $ 251,253 | $ 255,843 | $ 226,825 | $ 249,631 | $ 238,500 | $ 251,489 | $ 225,238 | $ 363,237 | $ 181,641 | $ 1,012,277 | $ 964,858 | $ 291,558 |
Reportable segments income before income taxes | 60,892 | 161,398 | 120,232 | 97,344 | |||||||||
Merger and integration expenses | (55,776) | 0 | (15,528) | (20,377) | (8,692) | ||||||||
Restructuring expenses | 10,494 | 17,056 | 37,377 | 0 | |||||||||
Integration expenses | 7,030 | 33,144 | 31,035 | 0 | |||||||||
Operating income (loss) from continuing operations | 18,334 | $ 30,045 | $ 27,573 | $ 19,718 | (14,875) | $ 30,373 | $ 25,019 | $ (9,074) | (12,408) | $ 53,636 | 95,670 | 31,443 | 88,652 |
Assets | 2,503,891 | 2,342,631 | 2,503,891 | 2,342,631 | |||||||||
Capital expenditures | 17,286 | 34,107 | 38,362 | 6,687 | |||||||||
Operating Segments [Member] | Cardiac Surgery [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Restructuring expenses | 1,211 | 8,819 | 11,042 | ||||||||||
Operating Segments [Member] | Neuromodulation [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Restructuring expenses | 1,079 | 561 | 14,769 | ||||||||||
Other [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net sales | 841 | 1,784 | 1,737 | 0 | |||||||||
Reportable segments income before income taxes | (39,815) | (107,955) | (70,925) | 0 | |||||||||
Restructuring expenses | 8,204 | 7,676 | 11,566 | ||||||||||
Continuing Operations [Member] | Operating Segments [Member] | Cardiac Surgery [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net sales | 147,635 | 635,517 | 611,715 | 0 | |||||||||
Reportable segments income before income taxes | 13,091 | 81,001 | 16,578 | 0 | |||||||||
Assets | 1,386,032 | 1,277,799 | 1,386,032 | 1,277,799 | |||||||||
Capital expenditures | 10,402 | 18,985 | 21,190 | 0 | |||||||||
Continuing Operations [Member] | Operating Segments [Member] | Neuromodulation [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net sales | 214,761 | 374,976 | 351,406 | 291,558 | |||||||||
Reportable segments income before income taxes | 87,616 | 188,352 | 174,579 | 97,344 | |||||||||
Assets | 533,067 | 611,085 | 533,067 | 611,085 | |||||||||
Capital expenditures | 1,418 | 2,504 | 8,098 | 6,687 | |||||||||
Continuing Operations [Member] | Other [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Assets | 334,103 | 133,825 | 334,103 | 133,825 | |||||||||
Capital expenditures | 512 | 7,010 | 5,265 | 0 | |||||||||
Discontinued Operations [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Assets | $ 250,689 | $ 319,922 | 250,689 | 319,922 | |||||||||
Capital expenditures | $ 4,954 | $ 5,608 | $ 3,809 | $ 0 |
Geographic and Segment Infor114
Geographic and Segment Information (Geographic Areas) (Details) $ in Thousands | 3 Months Ended | 8 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017USD ($)geographic_region | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 26, 2014USD ($) | Dec. 31, 2017USD ($)countrygeographic_regionCustomers | Dec. 31, 2016USD ($) | Apr. 24, 2015USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Number of geographic regions in which entity operates | geographic_region | 3 | 3 | |||||||||||
Net sales | $ 278,356 | $ 251,253 | $ 255,843 | $ 226,825 | $ 249,631 | $ 238,500 | $ 251,489 | $ 225,238 | $ 363,237 | $ 181,641 | $ 1,012,277 | $ 964,858 | $ 291,558 |
Property, plant and equipment, net | 192,359 | 203,708 | 192,359 | 203,708 | |||||||||
United States [Member] | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Net sales | 229,724 | 494,724 | 480,558 | 235,712 | |||||||||
Property, plant and equipment, net | 62,154 | 61,071 | 62,154 | 61,071 | |||||||||
Europe [Member] | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Net sales | 61,595 | 210,470 | 204,846 | 41,484 | |||||||||
Property, plant and equipment, net | 119,133 | 111,735 | 119,133 | 111,735 | |||||||||
United Kingdom [Member] | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Net sales | 14,300 | 30,800 | 37,300 | ||||||||||
Rest of World [Member] | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Net sales | $ 71,918 | 307,083 | 279,454 | $ 14,362 | |||||||||
Property, plant and equipment, net | $ 11,072 | $ 30,902 | $ 11,072 | $ 30,902 | |||||||||
Counties [Member] | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Number Of counties | country | 0 | ||||||||||||
Customer Concentration Risk [Member] | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Number Of customers | Customers | 0 | ||||||||||||
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Concentration risk, percentage | 10.00% | ||||||||||||
Customer Concentration Risk [Member] | Counties [Member] | |||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||||
Concentration risk, percentage | 10.00% |
(Accounts Receivable) (Details)
(Accounts Receivable) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Accounts receivable | $ 288,127 | $ 216,993 |
Allowance for bad debt | (5,982) | (3,737) |
Accounts receivable, net | $ 282,145 | $ 213,256 |
Supplemental Financial Infor116
Supplemental Financial Information (Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Raw materials | $ 39,810 | $ 37,243 |
Work-in process | 18,206 | 17,474 |
Finished goods | 86,454 | 78,300 |
Inventories | 144,470 | 133,017 |
Provision for obsolescence | $ 10,500 | $ 7,200 |
Supplemental Financial Infor117
Supplemental Financial Information (Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | |||
Prepaid expenses | $ 13,905 | $ 8,657 | |
Income taxes payable on inter-company transfers of property | 12,604 | 19,445 | |
Earthquake grant receivable | 4,064 | 4,748 | |
Deposits and advances to suppliers | 4,551 | 3,440 | |
Escrow deposit - Caisson | $ 1,000 | 2,000 | 0 |
Current loans and notes receivable | 1,395 | 7,093 | |
Derivative contract assets | 519 | 518 | 8,269 |
Prepaid expenses and other current assets | $ 39,037 | $ 39,037 | $ 51,652 |
Supplemental Financial Infor118
Supplemental Financial Information (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, gross | $ 295,567 | $ 275,681 |
Accumulated depreciation | (103,208) | (71,973) |
Property, Plant and Equipment, net, total | 192,359 | 203,708 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, gross | 16,293 | 14,420 |
Building and building improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, gross | $ 80,280 | 92,092 |
Building and building improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lives in years | 3 years | |
Building and building improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lives in years | 50 years | |
Equipment, software furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, gross | $ 182,968 | 152,864 |
Equipment, software furniture and fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lives in years | 3 years | |
Equipment, software furniture and fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lives in years | 20 years | |
Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, gross | $ 6,082 | 1,296 |
Other [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lives in years | 3 years | |
Other [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Lives in years | 10 years | |
Capital investment in process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, gross | $ 9,944 | $ 15,009 |
Suzhou Industrial Park Facility [Member] | Facility Closing [Member] | Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 13,600 | |
CHINA | Suzhou Industrial Park Facility [Member] | Facility Closing [Member] | Building and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Impairment of building and equipment | $ 5,400 |
Supplemental Financial Infor119
Supplemental Financial Information (Other Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | |||
Taxes payable on inter-company transfers of property (1) | $ 68,127 | $ 124,551 | |
Investments | 2,943 | 2,537 | |
Loans and notes receivable | 1,276 | 2,029 | |
Escrow deposit - Caisson | 1,000 | $ 2,000 | 0 |
Guaranteed deposits | 725 | 940 | |
Other | 1,913 | 613 | |
Other assets | $ 75,984 | $ 130,670 |
Supplemental Financial Infor120
Supplemental Financial Information (Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Product Remediation | $ 16,811 | $ 23,464 |
Deferred compensation - Caisson acquisition | 14,300 | 0 |
Restructuring related liabilities | 3,560 | 16,859 |
Provisions for agents, returns and other | 8,134 | 7,271 |
Legal and other administrative costs | 6,082 | 6,184 |
Royalty costs | 3,615 | 2,503 |
Deferred income | 2,900 | 0 |
Uncertain tax positions | 2,536 | 0 |
Escrow indemnity liability - Caisson | 2,000 | 0 |
Product warranty obligations | 1,476 | 2,360 |
Derivative contract liabilities | 1,294 | 942 |
Government grants | 1,174 | 1,708 |
Research and development costs | 797 | 839 |
Other accrued expenses | 14,263 | 8,917 |
Accrued Liabilities, current, total | $ 78,942 | $ 71,047 |
Supplemental Financial Infor121
Supplemental Financial Information (Warranties) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning Balance | $ 2,360 | $ 1,828 |
Product warranty accrual | 707 | 1,172 |
Settlements | (1,897) | (657) |
Effect of changes in currency exchange rates and other | 306 | 17 |
Ending Balance | $ 1,476 | $ 2,360 |
Supplemental Financial Infor122
Supplemental Financial Information (Other Long-term Liabilities) (Details) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Oct. 19, 2015company | Sep. 30, 2017company | Dec. 31, 2017USD ($)company | Dec. 31, 2016USD ($) | |
Receivables [Abstract] | ||||
Contingent consideration | $ 33,973 | $ 3,890 | ||
Product remediation liability | 10,735 | 10,023 | ||
Uncertain tax positions (inclusive of penalties and interest) | 18,306 | 12,086 | ||
Escrow indemnity liability - Caisson | 1,000 | 0 | ||
Government grants | 918 | 3,631 | ||
Financial derivatives | 751 | 1,392 | ||
Unfavorable operating leases | 252 | 1,672 | ||
Other | 3,149 | 2,377 | ||
Other long-term liabilities | $ 69,084 | $ 35,071 | ||
Number of businesses acquired | company | 2 | 3 | 3 |
Quarterly Financial Informat123
Quarterly Financial Information (unaudited) (Schedule of Quarterly Financial Information) (Details) - USD ($) | 3 Months Ended | 8 Months Ended | 12 Months Ended | 20 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 26, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Net sales | $ 278,356,000 | $ 251,253,000 | $ 255,843,000 | $ 226,825,000 | $ 249,631,000 | $ 238,500,000 | $ 251,489,000 | $ 225,238,000 | $ 363,237,000 | $ 181,641,000 | $ 1,012,277,000 | $ 964,858,000 | $ 291,558,000 | |
Gross profit | 172,069,000 | 161,869,000 | 170,042,000 | 147,640,000 | 125,419,000 | 153,901,000 | 148,452,000 | 131,734,000 | 249,833,000 | 164,806,000 | 651,620,000 | 559,506,000 | 264,247,000 | |
Operating income from continuing operations | 18,334,000 | 30,045,000 | 27,573,000 | 19,718,000 | (14,875,000) | 30,373,000 | 25,019,000 | (9,074,000) | (12,408,000) | 53,636,000 | 95,670,000 | 31,443,000 | 88,652,000 | |
Net income (loss) from continuing operations | (31,456,000) | 27,000,000 | 45,694,000 | 13,227,000 | (6,306,000) | 6,431,000 | 12,737,000 | (10,988,000) | (14,720,000) | 35,071,000 | 54,465,000 | 1,874,000 | 57,848,000 | |
Loss from discontinued operations, net of tax | (1,949,000) | 830,000 | 1,804,000 | (1,956,000) | (14,893,000) | (1,271,000) | (64,663,000) | 0 | ||||||
Impairment of discontinued operations, net of tax | (78,283,000) | 0 | 0 | 0 | 0 | (78,283,000) | 0 | 0 | ||||||
Net loss from discontinued operations | (80,232,000) | 830,000 | 1,804,000 | (1,956,000) | (23,493,000) | (8,000,000) | (3,780,000) | (29,390,000) | (14,893,000) | 0 | (79,554,000) | (64,663,000) | 0 | |
Net (loss) income | $ (111,688,000) | $ 27,830,000 | $ 47,498,000 | $ 11,271,000 | $ (29,799,000) | $ (1,569,000) | $ 8,957,000 | $ (40,378,000) | $ (29,613,000) | $ 35,071,000 | $ (25,089,000) | $ (62,789,000) | $ 57,848,000 | $ (29,613,000) |
Income (loss) from continuing operations, per diluted share (in Dollars per share) | $ (0.65) | $ 0.56 | $ 0.95 | $ 0.27 | $ (0.13) | $ 0.13 | $ 0.26 | $ (0.22) | $ (0.45) | $ 1.31 | $ 1.12 | $ 0.04 | $ 2.17 | |
Discontinued operations, per diluted share (in Dollars per share) | (1.67) | 0.01 | 0.03 | (0.04) | (0.48) | (0.16) | (0.08) | (0.61) | (0.45) | 0 | (1.64) | (1.32) | 0 | |
Diluted income per share (in Dollars per Share) | $ (2.32) | $ 0.57 | $ 0.98 | $ 0.23 | $ (0.61) | $ (0.03) | $ 0.18 | $ (0.83) | $ (0.90) | $ 1.31 | $ (0.52) | $ (1.28) | $ 2.17 |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) $ in Millions | Jan. 01, 2018USD ($) |
Retained Earnings [Member] | Scenario, Forecast [Member] | Accounting Standards Update 2016-16 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative-effect reduction to retained earnings | $ (21.4) |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Thousands | Feb. 18, 2018 | Feb. 14, 2018 | Jan. 16, 2018 | Dec. 31, 2015 | Dec. 26, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 |
Subsequent Event [Line Items] | ||||||||
Upfront costs | $ 55,776 | $ 0 | $ 15,528 | $ 20,377 | $ 8,692 | |||
ImThera Medical, Inc. [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of voting interests acquired (percent) | 86.00% | |||||||
Consideration transferred | $ 225,000 | |||||||
Upfront costs | $ 78,000 | |||||||
TandemLife [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Consideration transferred | $ 250,000 | |||||||
Upfront costs | 200,000 | |||||||
Contingency consideration | $ 50,000 | |||||||
Bridge Facility Agreement [Member] | Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 170,000 | |||||||
Covenant terms | The Bridge Facility Agreement contains financial covenants that require LivaNova to maintain a maximum semi-annual leverage ratio and a minimum semi-annual interest coverage ratio. The Bridge Facility Agreement also contains customary representations and warranties, covenants, and events of default. |
Transition Period Financial 126
Transition Period Financial Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 8 Months Ended | 12 Months Ended | 20 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 26, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 24, 2015 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||
Net sales | $ 278,356 | $ 251,253 | $ 255,843 | $ 226,825 | $ 249,631 | $ 238,500 | $ 251,489 | $ 225,238 | $ 363,237 | $ 181,641 | $ 1,012,277 | $ 964,858 | $ 291,558 | |
Cost of sales | 113,404 | 16,835 | 353,403 | 367,818 | 27,311 | |||||||||
Gross profit | 172,069 | 161,869 | 170,042 | 147,640 | 125,419 | 153,901 | 148,452 | 131,734 | 249,833 | 164,806 | 651,620 | 559,506 | 264,247 | |
Selling, general and administrative | 147,025 | 83,045 | 380,560 | 356,807 | 123,619 | |||||||||
Research and development | 41,916 | 28,125 | 109,662 | 82,467 | 42,245 | |||||||||
Merger and integration expenses | 55,776 | 0 | 15,528 | 20,377 | 8,692 | |||||||||
Restructuring expenses | 10,494 | 17,056 | 37,377 | 0 | ||||||||||
Amortization of intangibles | 7,030 | 0 | 33,144 | 31,035 | 1,039 | |||||||||
Total operating expenses | 262,241 | 111,170 | 555,950 | 528,063 | 175,595 | |||||||||
Operating income from continuing operations | 18,334 | 30,045 | 27,573 | 19,718 | (14,875) | 30,373 | 25,019 | (9,074) | (12,408) | 53,636 | 95,670 | 31,443 | 88,652 | |
Interest income | 392 | 125 | 1,318 | 1,698 | 184 | |||||||||
Interest expense | (1,509) | (8) | (7,797) | (10,616) | (21) | |||||||||
Impairment of cost-method investments | 5,062 | 0 | 8,565 | 0 | 0 | $ 5,127 | ||||||||
Foreign exchange and other gains (losses) | (7,411) | 109 | 1,084 | 3,141 | 479 | |||||||||
Income (loss) from continuing operations before tax | (25,998) | 53,862 | 121,138 | 25,666 | 89,294 | |||||||||
Income tax expense (benefit) | (13,501) | 18,791 | 49,954 | 5,113 | 31,446 | |||||||||
Losses from equity method investments | 2,223 | 0 | 16,719 | 18,679 | 0 | |||||||||
Net income (loss) from continuing operations | (31,456) | 27,000 | 45,694 | 13,227 | (6,306) | 6,431 | 12,737 | (10,988) | (14,720) | 35,071 | 54,465 | 1,874 | 57,848 | |
Net loss from discontinued operations | (80,232) | 830 | 1,804 | (1,956) | (23,493) | (8,000) | (3,780) | (29,390) | (14,893) | 0 | (79,554) | (64,663) | 0 | |
Net (loss) income | $ (111,688) | $ 27,830 | $ 47,498 | $ 11,271 | $ (29,799) | $ (1,569) | $ 8,957 | $ (40,378) | $ (29,613) | $ 35,071 | $ (25,089) | $ (62,789) | $ 57,848 | $ (29,613) |
Income (Loss) from continuing operations, per basic share (in Dollars per Share) | $ (0.45) | $ 1.32 | $ 1.13 | $ 0.04 | $ 2.19 | |||||||||
Discontinued operation, income (loss) from discontinued operation, net of tax, per basic share (in Dollars per share) | (0.45) | 0 | (1.65) | (1.33) | 0 | |||||||||
Basic income per share (in Dollars per Share) | (0.90) | 1.32 | (0.52) | (1.29) | 2.19 | |||||||||
Income (loss) from continuing operations, per diluted share (in Dollars per share) | $ (0.65) | $ 0.56 | $ 0.95 | $ 0.27 | $ (0.13) | $ 0.13 | $ 0.26 | $ (0.22) | (0.45) | 1.31 | 1.12 | 0.04 | 2.17 | |
Discontinued operations, per diluted share (in Dollars per share) | (1.67) | 0.01 | 0.03 | (0.04) | (0.48) | (0.16) | (0.08) | (0.61) | (0.45) | 0 | (1.64) | (1.32) | 0 | |
Diluted income per share (in Dollars per Share) | $ (2.32) | $ 0.57 | $ 0.98 | $ 0.23 | $ (0.61) | $ (0.03) | $ 0.18 | $ (0.83) | $ (0.90) | $ 1.31 | $ (0.52) | $ (1.28) | $ 2.17 | |
Shares used in computing basic (loss) income per share (in Shares) | 32,741 | 26,552 | 48,157 | 48,860 | 26,391 | |||||||||
Shares used in computing diluted (loss) income per share (in Shares) | 32,741 | 26,775 | 48,501 | 49,014 | 26,626 |