Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 29, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-37599 | |
Entity Incorporation, State or Country Code | X0 | |
Entity Tax Identification Number | 98-1268150 | |
Entity Address, Address Line One | 20 Eastbourne Terrace | |
Entity Address, City or Town | London | |
Entity Address, Country | GB | |
Entity Address, Postal Zip Code | W2 6LG | |
Country Region | 44 | |
City Area Code | 0 | |
Local Phone Number | 203 325-0660 | |
Title of 12(b) Security | Ordinary Shares - £1.00 par value per share | |
Trading Symbol | LIVN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 48,391,670 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | LIVANOVA PLC | |
Entity Central Index Key | 0001639691 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 277,169 | $ 287,498 | $ 527,970 | $ 537,896 |
Costs and expenses: | ||||
Cost of sales - exclusive of amortization | 74,942 | 91,993 | 159,196 | 176,591 |
Product remediation | 5,113 | 1,542 | 8,060 | 5,257 |
Selling, general and administrative | 127,213 | 123,439 | 252,917 | 227,600 |
Research and development | 34,544 | 34,215 | 78,119 | 65,967 |
Merger and integration expenses | 4,378 | 4,409 | 7,629 | 7,369 |
Restructuring expenses | 1,332 | 476 | 3,865 | 2,357 |
Impairment of intangible assets | 50,295 | 0 | 50,295 | 0 |
Amortization of intangibles | 9,228 | 9,817 | 18,544 | 18,618 |
Operating (loss) income from continuing operations | (29,876) | 21,607 | (50,655) | 34,137 |
Interest income | 224 | 232 | 473 | 679 |
Interest expense | (4,054) | (3,006) | (5,716) | (5,117) |
Gain on acquisition | 0 | 0 | 0 | 11,484 |
Foreign exchange and other losses | (1,851) | (70) | (1,122) | (343) |
(Loss) income from continuing operations before tax | (35,557) | 18,763 | (57,020) | 40,840 |
Income tax (benefit) expense | (6,164) | (1,030) | (12,778) | 2,863 |
Losses from equity method investments | 0 | (265) | 0 | (627) |
Net (loss) income from continuing operations | (29,393) | 19,528 | (44,242) | 37,350 |
Net income (loss) from discontinued operations, net of tax | 178 | (4,462) | 178 | (9,011) |
Net (loss) income | $ (29,215) | $ 15,066 | $ (44,064) | $ 28,339 |
Basic (loss) income per share: | ||||
Continuing operations (in Dollars per Share) | $ (0.61) | $ 0.40 | $ (0.92) | $ 0.77 |
Discontinued operations (in Dollars per Share) | 0.01 | (0.09) | 0.01 | (0.18) |
Basic (loss) income per share (in Dollars per Share) | (0.60) | 0.31 | (0.91) | 0.59 |
Diluted (loss) income per share: | ||||
Continuing operations (in Dollars per Share) | (0.61) | 0.40 | (0.92) | 0.76 |
Discontinued operations (in Dollars per Share) | 0.01 | (0.09) | 0.01 | (0.18) |
Diluted (loss) income per share (in Dollars per Share) | $ (0.60) | $ 0.31 | $ (0.91) | $ 0.58 |
Shares used in computing basic (loss) income per share (in Shares) | 48,342 | 48,487 | 48,295 | 48,406 |
Shares used in computing diluted (loss) income per share (in Shares) | 48,342 | 49,338 | 48,295 | 49,263 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (29,215) | $ 15,066 | $ (44,064) | $ 28,339 |
Other comprehensive income (loss): | ||||
Net change in unrealized gain (loss) on derivatives | 215 | 801 | 205 | (456) |
Tax effect | (52) | (192) | (50) | 111 |
Net of tax | 163 | 609 | 155 | (345) |
Foreign currency translation adjustment, net of tax | 15,376 | (58,154) | 11,147 | (47,601) |
Total other comprehensive income (loss) | 15,539 | (57,545) | 11,302 | (47,946) |
Total comprehensive (loss) income | $ (13,676) | $ (42,479) | $ (32,762) | $ (19,607) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 44,511 | $ 47,204 |
Accounts receivable, net of allowance of $11,891 at June 30, 2019 and $11,598 at December 31, 2018 | 256,121 | 256,135 |
Inventories | 168,669 | 153,535 |
Prepaid and refundable taxes | 74,275 | 46,852 |
Prepaid expenses and other current assets | 24,868 | 29,571 |
Total Current Assets | 568,444 | 533,297 |
Property, plant and equipment, net | 185,098 | 191,400 |
Goodwill | 961,715 | 956,815 |
Intangible assets, net | 721,033 | 770,439 |
Operating lease assets | 56,831 | 0 |
Investments | 25,095 | 24,823 |
Deferred tax assets | 97,622 | 68,146 |
Other assets | 5,821 | 4,781 |
Total Assets | 2,621,659 | 2,549,701 |
Current Liabilities: | ||
Current debt obligations | 37,725 | 28,794 |
Accounts payable | 88,516 | 76,735 |
Accrued liabilities and other | 140,728 | 124,285 |
Current litigation provision liability | 256,581 | 161,851 |
Taxes payable | 11,571 | 22,530 |
Accrued employee compensation and related benefits | 60,788 | 82,551 |
Total Current Liabilities | 595,909 | 496,746 |
Long-term debt obligations | 174,376 | 139,538 |
Contingent consideration | 133,072 | 161,381 |
Litigation provision liability | 36,750 | 132,210 |
Deferred tax liabilities | 108,766 | 68,189 |
Long-term operating lease liabilities | 47,377 | 0 |
Long-term employee compensation and related benefits | 26,986 | 25,264 |
Other long-term liabilities | 15,095 | 22,635 |
Total Liabilities | 1,138,331 | 1,045,963 |
Commitments and contingencies (Note 12) | ||
Stockholders’ Equity: | ||
Ordinary Shares, £1.00 par value: unlimited shares authorized; 49,380,284 shares issued and 48,391,071 shares outstanding at June 30, 2019; 49,323,418 shares issued and 48,205,783 shares outstanding at December 31, 2018 | 76,217 | 76,144 |
Additional paid-in capital | 1,717,220 | 1,705,111 |
Accumulated other comprehensive loss | (13,174) | (24,476) |
Accumulated deficit | (295,643) | (251,579) |
Treasury stock at cost, 991,811 ordinary shares at June 30, 2019; 1,117,635 ordinary shares at December 31, 2018 | (1,292) | (1,462) |
Total Stockholders’ Equity | 1,483,328 | 1,503,738 |
Total Liabilities and Stockholders’ Equity | $ 2,621,659 | $ 2,549,701 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands | Jun. 30, 2019USD ($)shares | Jun. 30, 2019£ / shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2018£ / shares |
Statement of Financial Position [Abstract] | ||||
Allowance for doubtful accounts | $ | $ 11,891 | $ 11,598 | ||
Ordinary shares, par value (in Pounds per Share) | £ / shares | £ 1 | £ 1 | ||
Ordinary shares issued (shares) | 49,380,284 | 49,323,418 | ||
Ordinary shares outstanding (shares) | 48,391,071 | 48,205,783 | ||
Treasury stock (shares) | 989,213 | 1,117,635 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating Activities: | ||
Net (loss) income | $ (44,064) | $ 28,339 |
Non-cash items included in net (loss) income: | ||
Impairment of intangible assets | 50,295 | 0 |
Amortization | 18,544 | 18,609 |
Deferred tax expense (benefit) | 15,897 | (9,909) |
Stock-based compensation | 15,596 | 14,220 |
Depreciation | 15,287 | 16,624 |
Remeasurement of contingent consideration to fair value | (10,600) | (5,546) |
Amortization of operating lease assets | 6,334 | 0 |
Amortization of income taxes payable on intercompany transfers of property | 3,233 | 5,166 |
Gain on acquisition | 0 | (11,484) |
Other | 2,699 | 1,375 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (277) | 21,799 |
Inventories | (14,284) | (11,285) |
Other current and non-current assets | 1,529 | (15,786) |
Accounts payable and accrued current and non-current liabilities | (29,129) | (5,104) |
Taxes payable | (43,008) | 1,234 |
Restructuring reserve | (5,473) | 284 |
Net cash (used in) provided by operating activities | (17,421) | 48,536 |
Investing Activities: | ||
Purchases of property, plant and equipment | (10,796) | (12,486) |
Acquisitions, net of cash acquired | (10,750) | (279,863) |
Purchases of intangible assets | (1,022) | (745) |
Proceeds from asset sales | 401 | 13,222 |
Purchase of investment | (287) | 0 |
Proceeds from the sale of CRM business franchise, net of cash disposed | 0 | 186,682 |
Net cash used in investing activities | (22,454) | (93,190) |
Financing Activities: | ||
Proceeds from long-term debt obligations | 53,777 | 0 |
Repayment of long-term debt obligations | (12,125) | (12,240) |
Shares repurchased from employees for minimum tax withholding | (5,714) | (7,130) |
Debt issuance costs | (3,688) | 0 |
Proceeds from share issuances under ESPP | 2,574 | 0 |
Change in short-term borrowing, net | 2,355 | (17,971) |
Proceeds from short-term borrowing (maturities greater than 90 days) | 0 | 240,000 |
Repayment of short-term borrowing (maturities greater than 90 days) | 0 | (190,000) |
Payment of deferred consideration - acquisition of Caisson Interventional, LLC | 0 | (14,073) |
Proceeds from exercise of stock options | 323 | 2,731 |
Other | (445) | (390) |
Net cash provided by financing activities | 37,057 | 927 |
Effect of exchange rate changes on cash and cash equivalents | 125 | (2,508) |
Net decrease in cash and cash equivalents | (2,693) | (46,235) |
Cash and cash equivalents at beginning of period | 47,204 | 93,615 |
Cash and cash equivalents at end of period | $ 44,511 | $ 47,380 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Financial Statements | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Unaudited Condensed Consolidated Financial Statements | Note 1. Unaudited Condensed Consolidated Financial Statements Basis of Presentation The accompanying condensed consolidated financial statements of LivaNova as of, and for the three and six months ended June 30, 2019 and 2018 , have been prepared in accordance with U.S. GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The accompanying condensed consolidated balance sheet of LivaNova at December 31, 2018 has been derived from audited financial statements contained in our 2018 Form 10-K, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair statement of the operating results of LivaNova and its subsidiaries, for the three and six months ended June 30, 2019 and are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . The financial information presented herein should be read in conjunction with the audited consolidated financial statements and notes thereto accompanying our 2018 Form 10-K. Reclassifications We have reclassified certain prior period amounts for comparative purposes. These reclassifications did not have a material effect on our financial condition, results of operations or cash flows. We have reclassified certain amounts reported in “ Note 3. Discontinued Operations ” for the three and six months ended June 30, 2018. These corrections had no net impact to our previously reported net loss from discontinued operations for the three and six months ended June 30, 2018. Gross profit, as previously presented for the six months ended June 30, 2018 , excluded amortization of certain intangible assets. For the six months ended June 30, 2018 , $6.9 million of such amortization expense should have been included in cost of sales. The Company has determined that this misclassification error was not material to any prior annual or interim periods. For comparability among periods, the Company no longer presents gross profit within its condensed consolidated statements of income (loss) for all periods. Significant Accounting Policies Our significant accounting policies are detailed in “Note 2. Basis of Presentation, Use of Accounting Estimates and Significant Accounting Policies” and “Note 3. Revenue Recognition” of our 2018 Form 10-K. Changes to our accounting policies as a result of adopting the new lease accounting standard are discussed below. On January 1, 2019, we adopted ASC Update (“ASU”) No 2016-02, Leases , including subsequent related accounting updates (collectively referred to as “Topic 842”), which supersedes the previous accounting model for leases. We adopted the standard using the modified retrospective approach with an effective date as of January 1, 2019. Prior year financial statements were not recast under the new standard. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward our historical assessment of whether contracts are or contain leases and lease classification. We also elected the practical expedient to account for lease and non-lease components together as a single combined lease component, which is applicable to all asset classes. We did not, however, elect the practical expedient related to using hindsight in determining the lease term as this was not relevant following our election of the modified retrospective approach. In addition, we elected certain practical expedients on an ongoing basis, including the practical expedient for short-term leases pursuant to which a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a lease liability and operating lease asset for leases with a term of 12 months or less and that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. We have applied this accounting policy to all asset classes in our portfolio and will recognize the lease payments for such short-term leases within profit and loss on a straight-line basis over the lease term. Furthermore, from a lessor perspective, certain of our agreements that allow the customer to use, rather than purchase, our medical devices will meet the criteria of being a lease in accordance with the new standard. While the amount of revenue and expenses recognized over the contract term will not be impacted, the timing of revenue and expense recognition will be impacted depending upon lease classification. We enacted appropriate changes to our business processes, systems and internal controls to support recognition and disclosure under the new standard. We determine if an arrangement is or contains a lease at inception. Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the latter of our lease standard effective date for adoption or the lease commencement date. Variable lease payments, such as common area rent maintenance charges and rent escalations not known upon lease commencement, are not included in determination of the minimum lease payments and will be expensed in the period in which the obligation for those payments is incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement in determining the present value of future payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. We used the incremental borrowing rate available nearest to our adoption date for leases that commenced prior to that date. The operating lease asset also includes any lease payments made in advance and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For additional information refer to “ Note 11. Leases |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | TandemLife On April 4, 2018, we acquired CardiacAssist, Inc., doing business as TandemLife (“TandemLife”) for cash consideration of up to $254 million . Cash of $204 million was paid at closing with up to $50 million in contingent consideration based on achieving regulatory milestones. TandemLife is focused on the delivery of leading-edge temporary life support systems, including cardiopulmonary and respiratory support solutions. TandemLife complements our Cardiovascular portfolio and expands our existing line of cardiopulmonary products. The following table presents the acquisition date fair value of the consideration transferred (in thousands): Cash $ 203,671 Contingent consideration 40,190 Fair value of consideration transferred $ 243,861 The purchase price allocation for the TandemLife acquisition was finalized during the second quarter of 2019 and is presented in the following table, including certain measurement period adjustments (in thousands): Initial Purchase Price Allocation Measurement Period Adjustments (1) Adjusted Purchase Price Allocation In-process research and development (“IPR&D”) (2) (3) $ 110,977 $ (3,474 ) $ 107,503 Trade names (2) 11,539 — 11,539 Developed technology (2) 6,387 — 6,387 Goodwill 118,917 (797 ) 118,120 Inventory 10,296 (140 ) 10,156 Other assets and liabilities, net 3,632 242 3,874 Deferred tax liabilities, net (17,887 ) 4,169 (13,718 ) Net assets acquired $ 243,861 $ — $ 243,861 (1) During the third quarter of 2018, measurement period adjustments were recorded based upon new information regarding future estimates of R&D expenses that existed as of the acquisition date. In addition, during the first quarter of 2019, measurement period adjustments related to finalizing our tax attributes were recorded, which resulted in an increase of $3.3 million in deferred tax assets and a commensurate decrease to goodwill. (2) The amounts are included in intangible assets, net in the condensed consolidated balance sheets at June 30, 2019 and December 31, 2018 . Trade names and developed technology are amortized over remaining useful lives of 15 and 2 years, respectively. (3) The fair value of IPR&D was determined using the income approach, which is a valuation technique that provides a fair value estimate based on the market participant expectations of cash flows the asset would generate. The cash flows were discounted commensurate with the level of risk associated with the asset. The discount rates were developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in reaching certain regulatory milestones and risks associated with commercialization of the product. Goodwill arising from the TandemLife acquisition, which is not deductible for tax purposes, primarily represents the synergies anticipated between TandemLife and our existing cardiovascular business. The assets acquired, including goodwill, are recognized in our Cardiovascular segment. The results of the TandemLife acquisition added $6.0 million in revenue and $6.1 million in operating losses during each of the three and six months ended June 30, 2018. Additionally, we recognized TandemLife acquisition-related expenses of approximately $1.6 million and $1.9 million for legal and valuation expenses during the three and six months ended June 30, 2018, respectively. These expenses are included within “Selling, general and administrative” expenses in the condensed consolidated statement of income. Pro forma financial information assuming the TandemLife acquisition had occurred as of the beginning of the calendar year prior to the year of acquisition was not material for disclosure purposes. The TandemLife business combination involved a contingent consideration arrangement composed of potential cash payments upon the achievement of certain regulatory milestones. The arrangement is a Level 3 fair value measurement and includes the following significant unobservable inputs (in thousands): TandemLife Acquisition Fair value at April 4, 2018 Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments $ 40,190 Discounted cash flow Discount rate 4.2% - 4.8% Probability of payments 75% - 95% Projected payment years 2019 - 2020 For a reconciliation of the beginning and ending balance of the contingent consideration refer to “ Note 8. Fair Value Measurements .” Miami Instruments On June 12, 2019, we acquired the minimally invasive cardiac surgery instruments business from Miami Instruments, LLC (“Miami Instruments”) for cash consideration of up to $17.0 million . The related operations have been integrated into our Cardiovascular business franchise as part of our Heart Valves portfolio. Cash of $10.8 million was paid at closing with up to $6.0 million in contingent consideration based on achieving certain milestones. In connection with this acquisition, we recognized $14.7 million in developed technology and IPR&D intangible assets and $1.5 million |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 3. Discontinued Operations In November 2017, we concluded that the sale of our Cardiac Rhythm Management (“CRM”) business franchise represented a strategic shift in our business that would have a major effect on future operations and financial results. Accordingly, the operating results of CRM are classified as discontinued operations on our condensed consolidated statements of income (loss) for all the periods presented in this Quarterly Report on Form 10-Q. We completed the CRM Sale on April 30, 2018 to MicroPort Cardiac Rhythm B.V. and MicroPort Scientific Corporation for total cash proceeds of $195.9 million , less cash transferred of $9.2 million , subject to a closing working capital adjustment. In conjunction with the sale, we entered into transition services agreements to provide certain support services generally for up to twelve months from the closing date of the sale. The services include, among others, accounting, information technology, human resources, quality assurance, regulatory affairs, supply chain, clinical affairs and customer support. During three and six months ended June 30, 2019 , we recognized income of $0.2 million and $0.8 million , respectively, for providing these services. Income recognized related to the transition services agreements is recorded as a reduction to the related expenses in the associated expense line items in the condensed consolidated statements of income (loss). The following table represents the financial results of CRM presented as net loss from discontinued operations in the condensed consolidated statements of income (loss) (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net sales $ — $ 17,259 $ — $ 77,366 Costs and expenses: Cost of sales (43 ) 5,168 (43 ) 27,306 Selling, general and administrative expenses 26 11,072 26 42,898 Research and development (161 ) 5,296 (161 ) 16,577 Restructuring expenses — — — 651 Revaluation gain on assets and liabilities held for sale — — — (1,213 ) Loss on sale of CRM — 214 — 214 Operating income (loss) from discontinued operations 178 (4,491 ) 178 (9,067 ) Foreign exchange and other gains — 23 — 102 Income (loss) from discontinued operations, before tax 178 (4,468 ) 178 (8,965 ) Income tax benefit — (6 ) — (1,165 ) Losses from equity method investments — — — (1,211 ) Net income (loss) from discontinued operations $ 178 $ (4,462 ) $ 178 $ (9,011 ) Cash flows attributable to our discontinued operations are included in our condensed consolidated statements of cash flows. For the six months ended June 30, 2018 , CRM’s capital expenditures were $0.9 million and stock-based compensation expense was $2.1 million |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Note 4. Restructuring 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 condensed consolidated statements of income (loss). Our 2015 and 2016 Reorganization Plans (the “Prior Plans”) were initiated October 2015 and March 2016, respectively, in conjunction with the completion of the merger of Cyberonics, Inc. and Sorin S.p.A. in October 2015. The Prior Plans include the closure of the R&D facility in Meylan, France and consolidation of its R&D capabilities into the Clamart, France facility. We completed the Prior Plans during 2018. In December 2018, we initiated a reorganization plan (the “2018 Plan”) in order to reduce manufacturing and operational costs associated with our Cardiovascular facilities in Saluggia and Mirandola, Italy and Arvada, Colorado. We estimate that the 2018 Plan will result in a net reduction of approximately 75 personnel and is expected to be completed by the end of 2019. The following table presents the accruals, inventory obsolescence and other reserves, recorded in connection with our reorganization plans (in thousands): Employee Severance and Other Termination Costs Other Total Balance at December 31, 2018 $ 10,195 $ 3,069 $ 13,264 Charges 3,809 56 3,865 Cash payments and other (9,922 ) (2,946 ) (12,868 ) Balance at June 30, 2019 (1) $ 4,082 $ 179 $ 4,261 (1) Cumulatively, we have recognized a total of $103.1 million in restructuring expense inclusive of discontinued operations under the Prior Plans and the 2018 Plan. The following table presents restructuring expense by reportable segment (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cardiovascular $ 316 $ 398 $ 738 $ 1,739 Neuromodulation 53 11 485 17 Other 963 67 2,642 601 Total $ 1,332 $ 476 $ 3,865 $ 2,357 |
Product Remediation Liability
Product Remediation Liability | 6 Months Ended |
Jun. 30, 2019 | |
Product Remediation [Abstract] | |
Product Remediation Liability | Note 5. Product Remediation Liability On December 29, 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 CDC and FDA separately released safety notifications regarding 3T Heater-Cooler devices in response to which we issued a Field Safety Notice Update for U.S. users of our 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 canister and internal sealing upgrade on a customer-owned device. We are currently implementing the vacuum canister and internal sealing upgrade program in as many countries as possible until all devices are upgraded. On October 11, 2018, after review of information provided by us, the FDA concluded that we could commence the vacuum canister and internal sealing upgrade program in the U.S. As part of the remediation plan, we continue to offer a no-charge deep disinfection service (deep cleaning service) for 3T device users as we receive the required regulatory approvals. On April 12, 2018, the FDA agreed to allow us to move forward with the deep cleaning service in the U.S., adding to the growing list of countries around the world in which we offer this service. Also, 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, 2018 $ 14,745 Adjustments 2,669 Remediation activity (6,840 ) Effect of changes in foreign currency exchange rates (89 ) Balance at June 30, 2019 (1) $ 10,485 (1) At June 30, 2019 , the product remediation liability balance is included within accrued liabilities and other on the condensed consolidated balance sheet. We recognized product remediation expenses during the three and six months ended June 30, 2019 , of $5.1 million and $8.1 million , respectively, and $1.5 million and $5.3 million , respectively, during the three and six months ended June 30, 2018 . Product remediation expenses include internal labor costs, costs to remediate certain inspectional observations made by the FDA at our Munich facility and costs associated with the incorporation of the modification of the 3T device design into the next generation 3T device. These costs and related legal costs are expensed as incurred and are not included within the product remediation liability presented above. At June 30, 2019, our balance sheet includes a $293.3 million provision related to litigation involving our 3T device. For further information, please refer to “ Note 12. Commitments and Contingencies .” |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6. Intangible Assets Intangible Asset Impairment During the second quarter of 2019, we determined that LivaNova will experience a delay in the estimated commercialization date of the Company’s obstructive sleep apnea product currently under development. This delay constituted a triggering event that required evaluation of the IPR&D asset arising from the ImThera Medical Inc. (“ImThera”) acquisition for impairment. Based on the assessment performed, we determined that the IPR&D asset was impaired and as a result, recorded an impairment of $50.3 million, which is included in our Neuromodulation segment. The new carrying value of the IPR&D asset as of June 30, 2019 is $112.0 million . The estimated fair value of IPR&D was determined using the income approach. Future delays in commercialization or changes in management estimates could result in further impairment. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2019 | |
Investments [Abstract] | |
Investments | Note 7. Investments The following table details the carrying value of our investments in equity securities of non-consolidated affiliates without readily determinable fair values for which we do not exert significant influence over the investee. These equity investments are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. These equity investments are included in investments on the condensed consolidated balance sheets (in thousands): Equity Investments Without Readily Determinable Fair Values June 30, 2019 December 31, 2018 Respicardia Inc. (1) $ 17,706 $ 17,706 Ceribell, Inc. 3,000 3,000 Rainbow Medical Ltd. 1,114 1,119 MD Start II 1,139 1,144 Highlife S.A.S. 1,079 1,084 Other 770 770 24,808 24,823 Equity method investments (2) 287 — $ 25,095 $ 24,823 (1) Respicardia Inc. (“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 $0.6 million as of June 30, 2019 and December 31, 2018 , which is included in prepaid expenses and other current assets in the condensed consolidated balance sheet. (2) During the second quarter of 2019, we invested in equity securities that we account for under the equity method of accounting due to our deemed ability to exercise significant influence. We invested an initial amount of $287 thousand and are required to fund up to approximately €5.0 million (approximately $5.7 million as of June 30, 2019 ) based on cash calls. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 8. 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 six months ended June 30, 2019 and 2018 . Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value as of June 30, 2019 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - freestanding instruments (foreign currency exchange rate “FX”) $ 654 $ — $ 654 $ — $ 654 $ — $ 654 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 769 $ — $ 769 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 663 — 663 — Derivative liabilities - freestanding instruments (FX) 388 — 388 — Contingent consideration (1) 176,227 — — 176,227 $ 178,047 $ — $ 1,820 $ 176,227 Fair Value as of December 31, 2018 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - freestanding instruments (FX) $ 236 $ — $ 236 $ — $ 236 $ — $ 236 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 1,354 $ — $ 1,354 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 865 — 865 — Derivative liabilities - freestanding instruments (FX) 3,173 — 3,173 — Contingent consideration (1) 179,911 — — 179,911 $ 185,303 $ — $ 5,392 $ 179,911 (1) The contingent consideration liability represents contingent payments primarily related to five completed acquisitions, including: Inversiones Drilltex SAS (“Drilltex”), Caisson, ImThera, TandemLife and Miami Instruments. See the table below for additional information. Our recurring fair value measurements, using significant unobservable inputs (Level 3), relate solely to our contingent consideration liability. The following table provides a reconciliation of the beginning and ending balance of the contingent consideration liability (in thousands): Total contingent consideration liability at December 31, 2018 $ 179,911 Additions (1) 7,184 Payments (234 ) Changes in fair value (2) (3) (10,600 ) Effect of changes in foreign currency exchange rates (34 ) Total contingent consideration liability at June 30, 2019 176,227 Less current portion of contingent consideration liability at June 30, 2019 (4) 43,155 Long-term portion of contingent consideration liability at June 30, 2019 $ 133,072 (1) See “ Note 2. Business Combinations ” for additional discussion. (2) The change in fair value includes a decrease of $17.8 million primarily due to the delay in timing of anticipated regulatory approval and commercialization for ImThera. While the probability of payment remains unchanged from the time of acquisition, the projected years of payment for the regulatory milestone-based payment and the sales-based earnout have been updated to occur between 2023-2024 and 2024-2028, respectively. See “ Note 6. Intangible Assets ” for additional discussion. (3) During the six months ended June 30, 2019 , the change in fair value resulted in a decrease of $5.8 million and $4.9 million recorded to cost of sales - exclusive of amortization and research and development, respectively. (4) On July 15, 2019, we achieved a regulatory milestone specified in our TandemLife acquisition and, therefore, will be required to pay $19.0 million during the third quarter of 2019 to settle the related contingent consideration liability. As of June 30, 2019 , approximately $17.6 million was included in the current portion of contingent consideration related to this milestone. |
Financing Arrangements
Financing Arrangements | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 9. Financing Arrangements The outstanding principal amount of long-term debt (in thousands, except interest rates): June 30, 2019 December 31, 2018 Maturity Interest Rate 2017 European Investment Bank (1) $ 103,570 $ 103,570 June 2026 3.72% 2019 Debt Facility (2) 50,631 — March 2022 1.40% - 3.98% 2014 European Investment Bank (3) 37,916 47,606 June 2021 1.05% Mediocredito Italiano 6,951 7,623 December 2023 0.50% - 2.94% Bank of America, U.S. 2,499 — January 2021 4.51% Banca del Mezzogiorno 1,358 2,718 December 2019 0.50% - 2.99% Region Wallonne 678 742 December 2023 and June 2033 0.75% - 1.24% Mediocredito Italiano - mortgages and other 548 582 September 2021 and September 2026 0.69% - 1.19% Other 39 — Total long-term facilities 204,190 162,841 Less current portion of long-term debt 29,814 23,303 Total long-term debt $ 174,376 $ 139,538 (1) The 2017 European Investment Bank (“2017 EIB”) loan was obtained to support certain product development projects. The interest rate for the 2017 EIB loan is reset by the lender each principal payment date based on LIBOR. Interest payments are paid quarterly and principal payments are paid semi-annually. (2) The facility agreement with Bank of America Merrill Lynch International DAC, Barclays Bank PLC, BNP Paribas (London Branch) and Intesa Sanpaolo S.P.A. provides a multicurrency term loan facility in an aggregate amount of $350 million and terminates on March 26, 2022 (the “2019 Debt Facility”). (3) The 2014 European Investment Bank (“2014 EIB”) loan was obtained in July 2014 to support certain product development projects. The interest rate for the 2014 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. On March 26, 2019, we entered into the 2019 Debt Facility. Borrowings under the facility bear interest at a rate of LIBOR plus 1.6% for borrowings in U.S. dollars and EURIBOR plus 1.4% for Euro-denominated borrowings. Proceeds from the facility are used for general corporate and working capital purposes, excluding acquisitions, dividends and share buybacks. Available borrowings under the 2019 Debt Facility commenced on March 26, 2019 and extend through March 26, 2020. The 2019 Debt Facility contains financial covenants that require LivaNova to maintain a maximum consolidated net debt to EBITDA ratio, a minimum interest coverage ratio and a maximum consolidated net debt to net worth ratio. LivaNova must also maintain a minimum amount of consolidated net worth. The 2019 Debt Facility also contains customary representations and warranties, covenants, and events of default. At June 30, 2019, LivaNova was in compliance with all covenants. On July 25, 2019, we entered into a €40.0 million (approximately $44.6 million as of July 25, 2019) credit facility agreement with Banca Nazionale del Lavoro SpA for working capital needs. The credit facility has a term of two years and borrowings bear interest at Euribor plus 0.8% . Revolving Credit The outstanding principal amount of our short-term unsecured revolving credit agreements and other agreements with various banks was $7.9 million and $5.5 million , at June 30, 2019 and December 31, 2018 , respectively, with interest rates ranging from 0.15% to 8.50% and loan terms ranging from five days to 15 days as of June 30, 2019 . |
Derivatives and Risk Management
Derivatives and Risk Management | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Risk Management | Note 10. 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 exchange 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 on the condensed 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, changes in the fair value of the derivative will be recorded in 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 our condensed consolidated statements of income (loss) as shown in the tables below and interest rate swap gains and losses in AOCI are reclassified to interest expense on our condensed consolidated statements of income (loss). 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 and the gains or losses are reclassified into earnings. Cash flows from derivative contracts are reported as operating activities on our condensed consolidated statements of cash flows. Freestanding FX Derivative Contracts The gross notional amount of FX derivative contracts, not designated as hedging instruments, outstanding at June 30, 2019 and December 31, 2018 was $198.4 million and $320.2 million , respectively. These derivative contracts are designed to offset the FX effects in earnings of various intercompany loans, our 2014 EIB loan, the Euro-denominated borrowings under the 2019 Debt Facility and trade receivables. We recorded net gains (losses) for these freestanding derivatives of $1.0 million and $(4.1) million for the three months ended June 30, 2019 and 2018 , respectively, and net gains (losses) of $4.7 million and $(11.7) million for the six months ended June 30, 2019 and 2018 , respectively. These gains and (losses) are included in foreign exchange and other losses on our condensed consolidated statements of income (loss). Cash Flow Hedges Notional amounts of open derivative contracts designated as cash flow hedges (in thousands): Description of Derivative Contract June 30, 2019 December 31, 2018 FX derivative contracts to be exchanged for British Pounds $ 8,186 $ 9,629 FX derivative contracts to be exchanged for Japanese Yen 28,100 23,985 FX derivative contracts to be exchanged for Canadian Dollars 1,900 7,637 FX derivative contracts to be exchanged for Euros 31,058 29,768 Interest rate swap contracts 30,356 38,115 $ 99,600 $ 109,134 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 twelve months (in thousands): Description of Derivative Contract After-Tax Net Loss in AOCI as of June 30, 2019 Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ (621 ) $ (621 ) Interest rate swap contracts (168 ) (84 ) $ (789 ) $ (705 ) 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): Three Months Ended June 30, 2019 2018 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings Losses Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other gains $ 313 $ 489 $ (25 ) $ (1,358 ) FX derivative contracts SG&A — (418 ) — 549 Interest rate swap contracts Interest expense — 27 — (17 ) $ 313 $ 98 $ (25 ) $ (826 ) Six Months Ended June 30, 2019 2018 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings Gains Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other gains $ 1,622 $ 2,131 $ 189 $ (512 ) FX derivative contracts SG&A — (728 ) — 1,174 Interest rate swap contracts Interest expense — 14 — (17 ) $ 1,622 $ 1,417 $ 189 $ 645 We offset fair value amounts associated with our derivative instruments on our condensed consolidated balance sheets that are executed with the same counterparty under master netting arrangements. Our netting arrangements include a right to set off or net together purchases and sales of similar products in the settlement process. The following tables present the fair value and the location of derivative contracts reported in the condensed consolidated balance sheets (in thousands): June 30, 2019 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 Accrued liabilities $ 460 Interest rate swap contracts Other long-term liabilities 203 FX derivative contracts Accrued liabilities 769 Total derivatives designated as hedging instruments 1,432 Derivatives Not Designated as Hedging Instruments FX derivative contracts Accrued liabilities $ 654 Accrued liabilities 388 Total derivatives not designated as hedging instruments 654 388 Total derivatives $ 654 $ 1,820 December 31, 2018 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 Accrued liabilities $ 536 Interest rate swap contracts Other long-term liabilities 329 FX derivative contracts Accrued liabilities 1,354 Total derivatives designated as hedging instruments 2,219 Derivatives Not Designated as Hedging Instruments FX derivative contracts Prepaid expenses and other current assets $ 236 Accrued liabilities 3,173 Total derivatives not designated as hedging instruments 236 3,173 Total derivatives $ 236 $ 5,392 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “ Note 8. Fair Value Measurements .” |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Note 11. Leases We have operating leases primarily for (i) office space, (ii) manufacturing, warehouse and research and development facilities and (iii) vehicles. Our leases have remaining lease terms up to 12 years, some of which include options to extend the leases, and some of which include options to terminate the leases at our sole discretion. The components of operating lease assets, liabilities and costs are as follows (in thousands): Operating Lease Assets and Liabilities June 30, 2019 Assets Operating lease right-of-use assets $ 56,831 Liabilities Accrued liabilities and other $ 10,926 Long-term operating lease liabilities 47,377 Total lease liabilities $ 58,303 Operating Lease Cost Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating lease cost $ 3,469 $ 7,209 Variable lease cost 255 426 Short-term lease cost 194 280 Total lease cost $ 3,918 $ 7,915 Contractual maturities of our lease liabilities as of June 30, 2019 , are as follows (in thousands): 2019 $ 6,379 2020 11,119 2021 9,192 2022 8,074 2023 6,826 Thereafter 22,294 Total lease payments 63,884 Less: Amount representing interest 5,581 Present value of lease liabilities $ 58,303 Lease Term and Discount Rate June 30, 2019 Weighted Average Remaining Lease Term (in years) 7.5 Weighted Average Discount Rate 2.3 % Other Information (in thousands) Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for leases $ 2,507 $ 6,349 Operating lease assets obtained in exchange for lease liabilities $ 2,485 $ 2,950 Disclosures Related to Periods Prior to Adoption of Topic 842 On January 1, 2019, we adopted Topic 842 using the modified retrospective adoption approach, as noted in “ Note 1. Unaudited Condensed Consolidated Financial Statements .” As required and as previously disclosed in our 2018 Form 10-K, the following table summarizes our future minimum operating lease payments as of December 31, 2018 (in thousands): Less than one year $ 11,986 One to three years 21,031 Three to five years 14,998 Thereafter 20,943 Total $ 68,958 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies FDA Warning Letter On December 29, 2015, the FDA issued a 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 are responding to the FDA’s requests. CDC and FDA Safety Communications and Company Field Safety Notice On October 13, 2016, the CDC and the 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, concurrent with the CDC’s HAN and FDA’s Safety Communication, 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, including a vacuum canister and internal sealing upgrade program and a deep disinfection service. 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 the risk mitigation strategies described above. We are currently implementing the vacuum and sealing upgrade program in as many countries as possible until all devices are upgraded. On October 11, 2018, after review of information provided by us, the FDA concluded that we could commence the vacuum and sealing upgrade program in the U.S. Furthermore, we continue to offer a no-charge deep disinfection service (deep cleaning service) for 3T device users as we receive the required regulatory approvals. On April 12, 2018, the FDA agreed to allow us to move forward with the deep cleaning service in the U.S. adding to the growing list of countries around the world in which we offer this service. 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 June 30, 2019 , the product remediation liability was $10.5 million . Refer to “ Note 5. Product Remediation Liability ” for additional information. Litigation Product Liability The Company is currently involved in litigation involving our 3T device. 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, various U.S. state court cases and cases in jurisdictions outside the U.S. The class action, filed in February 2016, 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. On March 29, 2019, we announced a settlement framework that provides for a comprehensive resolution of the personal injury cases pending in the multi-district litigation in U.S. federal court, the related class action pending in federal court, as well as certain cases in state courts across the United States. The agreement, which makes no admission of liability, is subject to certain conditions, including acceptance of the settlement by individual claimants and provides for a total payment of up to $225 million to resolve the claims covered by the settlement. Per the agreed-upon terms, the first payment of $135 million was paid into a qualified settlement fund in July 2019, and the remainder will be paid in January 2020. Cases covered by the settlement will be dismissed as amounts are disbursed to individual plaintiffs from the qualified settlement fund. Cases in state courts in the U.S. and in jurisdictions outside the U.S. continue to progress. As of July 30, 2019, including the cases encompassed in the settlement framework described above, we are aware of approximately 215 filed and unfiled 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 or concealment, unjust enrichment, and violations of various state consumer protection statutes. In the fourth quarter of 2018, we recognized a $294.1 million provision, which represented our best estimate of the Company’s liability for these matters. At June 30, 2019 , the provision is $293.3 million . While the amount accrued represents our best estimate, the actual liability for resolution of these matters remains uncertain and may vary from our estimate. On July 24, 2019, the Company entered into agreements with its insurance carriers to recover $33.8 million under the Company’s product liability insurance policies. The insurance recovery proceeds are due within 30 days of the execution of the agreements, and as such, the Company expects to receive the proceeds during the third quarter of 2019. The Company has not recorded a receivable for insurance recovery proceeds under the insurance policies as of June 30, 2019 . Environmental Liability SNIA Litigation Our subsidiary, Sorin S.p.A. (“Sorin”) 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 to the Supreme Court. In addition, the Bankruptcy Court of Milan’s decision has been appealed. 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 $332,000 for legal fees. The Public Administrations appealed the 2016 Decision to the Court of Appeal of Milan. On March 5, 2019, the Court of Appeal issued a partial decision on the merits: declaring Sorin/LivaNova jointly liable with SNIA for SNIA’s environmental liabilities in an amount up to the fair value of the net worth received by Sorin as a result of the Sorin spin-off. Additionally the Court issued a separate order, staying the proceeding until a Panel of three experts can assess the environmental damages, the cost of clean-up, and the costs that the Public Administrations already has borne for the clean-up of the Sites to allow the Court to decide on the second claim of the Public Administrations against LivaNova, i.e., to refund the Public Administrations for the SNIA environmental liabilities. In the interim, we are appealing the decision to the Supreme Court. 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 before the Commercial Division of the Court of Milan to the merger of Sorin and Cyberonics, Inc., the predecessor companies to LivaNova. The Court authorized the merger and the Public Administrations did not appeal that decision. The proceeding then continued as a civil case, with the Public Administrations seeking damages. The Commercial Court of Milan delivered a decision in October 2016, fully rejecting the Public Administrations’ request and awarding us approximately €400,000 (approximately $455,000 as of June 30, 2019 ) in damages for frivolous litigation and legal fees. The Public Administrations appealed to the Court of Appeal of Milan. On May 15, 2018, the Court of Appeal of Milan confirmed its decision authorizing the merger but annulled the penalty for frivolous litigation and reduced the overall contribution to legal fees to €84,000 (approximately $96,000 as of June 30, 2019 ) for legal fees. The Public Administrations subsequently filed an appeal with the Supreme Court against the decision of the Court of Appeal of Milan. The proceedings before the Supreme Court are presently pending, and no decision is expected in 2019. 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. Patent Litigation On May 11, 2018, Neuro and Cardiac Technologies LLC (“NCT”), a non-practicing entity, filed a complaint in the United States District Court for the Southern District of Texas asserting that the VNS Therapy System, when used with the SenTiva Model 1000 generator, infringes the claims of U.S. Patent No. 7,076,307 owned by NCT. The complaint requests damages that include a royalty, costs, interest, and attorneys’ fees. On November 12, 2018, we petitioned the Patent Trial and Appeal Board of the U. S. Patent and Trademark Office (the “Patent Office”) for an inter partes review (“IPR”) of the validity of the ‘307 patent. The Patent Office instituted an IPR of all the challenged claims. The Court has stayed the litigation pending the outcome of the IPR proceeding. 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. Tax Litigation In a tax audit report received on 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 $116.8 million as of June 30, 2019 ), 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 2004. 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. On November 16, 2018, the Supreme Court returned the decisions for years 2005 and 2006 to the previous-level Court (Regional Tax Court) due to lack of substance of the motivation given in the 2 nd level judgments that were appealed. 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 $71.3 million as of June 30, 2019 ). 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 for the full amount of the potential liability. On May 31, 2019, we filed an application to settle the litigation according to law N. 136/2018 and paid the required settlement balance of €1.9 million (approximately $2.2 million as of June 30, 2019 ). As per law N. 136/2018, the Italian Revenue Agency will review the settlement and decide to accept or reject the application by July 31, 2020. Until the settlement is accepted by the Italian Revenue Agency, we will continue to reserve for the full amount of the potential liability, by recognizing a €15.4 million reserve for uncertain tax position ( $17.5 million as of June 30, 2019 ), net of the settlement payment. 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 income, financial position or liquidity. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 13. Stockholders’ Equity The tables below present the condensed consolidated statement of stockholders’ equity as of and for the three and six months ended June 30, 2019 and 2018 (in thousands): Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive (Loss) Income Retained Deficit Total Stockholders' Equity March 31, 2019 49,329 $ 76,151 $ 1,707,117 $ (1,321 ) $ (28,713 ) $ (266,428 ) $ 1,486,806 Stock-based compensation plans 51 66 10,103 29 — — 10,198 Net loss — — — — — (29,215 ) (29,215 ) Other comprehensive income — — — — 15,539 — 15,539 June 30, 2019 49,380 $ 76,217 $ 1,717,220 $ (1,292 ) $ (13,174 ) $ (295,643 ) $ 1,483,328 March 31, 2018 48,628 $ 75,224 $ 1,738,044 $ (375 ) $ 54,910 $ (48,821 ) $ 1,818,982 Stock-based compensation plans 33 45 6,218 266 — — 6,529 Net income — — — — — 15,066 15,066 Other comprehensive loss — — — — (57,543 ) — (57,543 ) June 30, 2018 48,661 $ 75,269 $ 1,744,262 $ (109 ) $ (2,633 ) $ (33,755 ) $ 1,783,034 Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive (Loss) Income Retained Deficit Total Stockholders' Equity December 31, 2018 49,323 $ 76,144 $ 1,705,111 $ (1,462 ) $ (24,476 ) $ (251,579 ) $ 1,503,738 Stock-based compensation plans 57 73 12,109 170 — — 12,352 Net loss — — — — — (44,064 ) (44,064 ) Other comprehensive income — — — — 11,302 — 11,302 June 30, 2019 49,380 $ 76,217 $ 1,717,220 $ (1,292 ) $ (13,174 ) $ (295,643 ) $ 1,483,328 December 31, 2017 48,290 $ 74,750 $ 1,735,048 $ (133 ) $ 45,313 $ (39,664 ) $ 1,815,314 Adoption of ASU No. 2016-16 — — — — — (22,430 ) (22,430 ) Share issuances 300 422 — (422 ) — — — Stock-based compensation plans 71 97 9,214 446 — — 9,757 Net income — — — — — 28,339 28,339 Other comprehensive loss — — — — (47,946 ) — (47,946 ) June 30, 2018 48,661 $ 75,269 $ 1,744,262 $ (109 ) $ (2,633 ) $ (33,755 ) $ 1,783,034 The table below presents the change in each component of AOCI, net of tax, and the reclassifications out of AOCI into net income for the six months ended June 30, 2019 and 2018 (in thousands): Change in Unrealized Gain (Loss) on Derivatives Foreign Currency Translation Adjustments Gain (Loss) ( 1) Total As of December 31, 2018 $ (944 ) $ (23,532 ) $ (24,476 ) Other comprehensive income before reclassifications, before tax 1,622 11,147 12,769 Tax expense (390 ) — (390 ) Other comprehensive income before reclassifications, net of tax 1,232 11,147 12,379 Reclassification of gain from accumulated other comprehensive income (loss), before tax (1,417 ) — (1,417 ) Reclassification of tax expense 340 — 340 Reclassification of gain from accumulated other comprehensive income (loss), after tax (1,077 ) — (1,077 ) Net current-period other comprehensive gain, net of tax 155 11,147 11,302 As of June 30, 2019 $ (789 ) $ (12,385 ) $ (13,174 ) As of December 31, 2017 $ (919 ) $ 46,232 $ 45,313 Other comprehensive income (loss) before reclassifications, before tax 189 (38,590 ) (38,401 ) Tax expense (45 ) — (45 ) Other comprehensive income (loss) before reclassifications, net of tax 144 (38,590 ) (38,446 ) Reclassification of gain from accumulated other comprehensive income (loss), before tax (645 ) (9,011 ) (2) (9,656 ) Reclassification of tax expense 156 — 156 Reclassification of gain from accumulated other comprehensive income (loss), after tax (489 ) (9,011 ) (9,500 ) Net current-period other comprehensive loss, net of tax (345 ) (47,601 ) (47,946 ) As of June 30, 2018 $ (1,264 ) $ (1,369 ) $ (2,633 ) (1) Taxes are 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. (2) Cumulative foreign currency translation adjustments eliminated upon the sale of CRM. |
Stock-Based Incentive Plans
Stock-Based Incentive Plans | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Incentive Plans | Note 14. Stock-Based Incentive Plans Stock-based incentive plans compensation expense is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Service-based restricted stock units (“RSUs”) $ 3,875 $ 2,634 $ 6,845 $ 4,790 Service-based stock appreciation rights (“SARs”) 2,900 2,675 4,908 4,023 Market performance-based restricted stock units 838 959 1,389 1,305 Operating performance-based restricted stock units 798 1,185 1,769 2,032 Employee stock purchase plan 313 — 685 — Total stock-based compensation expense $ 8,724 $ 7,453 $ 15,596 $ 12,150 During the six months ended June 30, 2019 , we issued stock-based compensatory awards with terms approved by the Compensation Committee of our Board of Directors. The awards with service conditions generally vest ratably over four years, subject to forfeiture unless service conditions are met. Market performance-based awards cliff vest after three years subject to the rank of our total shareholder return for the three -year period ending December 31, 2021 relative to the total shareholder returns for a peer group of companies. Operating performance-based awards cliff vest after three years subject to the achievement of certain thresholds of cumulative adjusted free cash flow for the three year period ending December 31, 2021. Compensation expense related to awards granted during 2019 for the three and six months ended June 30, 2019 was $3.1 million and $3.2 million , respectively. On January 1, 2019, we initiated the LivaNova Global Employee Share Purchase Plan (“ESPP”). Compensation expense related to the ESPP for the three and six months ended June 30, 2019 was $0.3 million and $0.7 million , respectively. Stock-based compensation agreements issued during the six months ended June 30, 2019 , representing potential shares and their weighted average grant date fair values by type follows (shares in thousands, fair value in dollars): Six Months Ended June 30, 2019 Shares Weighted Average Grant Date Fair Value Service-based SARs 592 $ 31.22 Service-based RSUs 278 $ 93.25 Market performance-based RSUs 44 $ 100.41 Operating performance-based RSUs 44 $ 96.59 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15. Income Taxes Our effective income tax rate from continuing operations for the three and six months ended June 30, 2019 was 17.3% and 22.4% , respectively, compared with (5.5)% and 7.0% the three and six months ended June 30, 2018 , respectively. Our effective income tax rate fluctuates based on, among other factors, changes in pretax income in countries with varying statutory tax rates, changes in valuation allowances, changes in tax credits and incentives, and changes in unrecognized tax benefits associated with uncertain tax positions. Compared with the three and six months ended June 30, 2018 , the change in the effective tax rate for the three and six months ended June 30, 2019 was primarily attributable to the establishment of a valuation allowance for a portion of the U.S. federal and state net operating losses, partly offset by a release of uncertain tax positions. We operate in multiple jurisdictions throughout the world, and our tax returns are periodically audited or subjected to review by tax authorities. As a result, there is an uncertainty in income taxes recognized in our financial statements. Tax benefits totaling $17.2 million and $22.9 million were unrecognized as of June 30, 2019 and December 31, 2018 , respectively. It is reasonably possible that, within the next twelve months, due to the settlement of uncertain tax positions with various tax authorities and the expiration of statutes of limitations, unrecognized tax benefits could decrease by up to approximately $1.3 million . We monitor income tax developments in countries where we conduct business. In 2017, the U.S. enacted the “Tax Cuts and Jobs Act” (the “Tax Act”). To determine the full effects of the Tax Act, we are awaiting the finalization of several proposed U.S. Treasury regulations that were issued during 2018, as well as additional regulations to be proposed and finalized pursuant to the U.S. Treasury’s expanded regulatory authority under the Tax Act. It is also possible that technical correction legislation concerning the Tax Act could retroactively affect tax liabilities for 2018. In addition, state legislative changes addressing conformity to the Tax Act are still pending. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 16. Net Income Per Share Reconciliation of the shares used in the basic and diluted earnings per share computations for the three and six months ended June 30, 2019 and 2018 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic weighted average shares outstanding 48,342 48,487 48,295 48,406 Add effects of share-based compensation instruments (1) — 851 — 857 Diluted weighted average shares outstanding 48,342 49,338 48,295 49,263 (1) Excluded from the computation of diluted earnings per share for the three months ended June 30, 2019 and 2018 were stock options, SARs and restricted share units totaling 3.1 million and 0.7 million , respectively, and 3.2 million and 0.8 million for the six months ended June 30, 2019 and 2018 , respectively, because to include them would have been anti-dilutive under the treasury stock method. |
Geographic and Segment Informat
Geographic and Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Geographic and Segment Information | Note 17. Geographic and 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: Cardiovascular and Neuromodulation. The Cardiovascular segment generates its revenue from the development, production and sale of cardiopulmonary products, heart valves and advanced circulatory support. Cardiopulmonary products include oxygenators, heart-lung machines, autotransfusion systems, perfusion tubing systems, cannulae and other related accessories. Heart valves include mechanical heart valves, tissue heart valves and related repair products. Advanced circulatory support includes temporary life support product kits that can include a combination of pumps, oxygenators, and cannulae. On June 12, 2019, we acquired certain assets from Miami Instruments, which are integrated into our Cardiovascular business franchise as part of our Heart Valves portfolio. Our Neuromodulation segment generates its revenue from the design, development and marketing of neuromodulation therapy systems for the treatment of drug-resistant epilepsy and treatment-resistant depression (“TRD”). Neuromodulation products include the VNS Therapy System, which consists of an implantable pulse generator, a lead that connects the generator to the vagus nerve, and other accessories. Our Neuromodulation segment also includes 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. “Other” includes corporate shared service expenses for finance, legal, human resources and information technology and corporate business development and New Ventures. 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 and amortization of intangibles. We operate under three geographic regions: U.S., Europe, and Rest of world. The table below presents net sales by operating segment and geographic region (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cardiopulmonary United States $ 41,403 $ 42,139 $ 80,526 $ 80,584 Europe 34,320 35,916 69,881 72,786 Rest of world 54,856 58,584 101,742 108,399 130,579 136,639 252,149 261,769 Heart Valves United States 4,678 6,147 9,034 12,683 Europe 10,672 11,863 21,185 23,979 Rest of world 18,001 15,792 28,805 28,182 33,351 33,802 59,024 64,844 Advanced Circulatory Support United States 7,944 5,468 15,977 5,468 Europe 192 353 311 353 Rest of world 178 194 274 194 8,314 6,015 16,562 6,015 Cardiovascular United States 54,025 53,754 105,537 98,735 Europe 45,184 48,132 91,377 97,118 Rest of world 73,035 74,570 130,821 136,775 172,244 176,456 327,735 332,628 Neuromodulation United States 80,551 89,395 157,437 167,387 Europe 12,996 11,943 23,655 22,234 Rest of world 10,722 9,315 17,826 14,876 104,269 110,653 198,918 204,497 Other 656 389 1,317 771 Totals United States 134,576 143,149 262,974 266,122 Europe (1) 58,180 60,075 115,032 119,352 Rest of world 84,413 84,274 149,964 152,422 Total (2) $ 277,169 $ 287,498 $ 527,970 $ 537,896 (1) 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. (2) No single customer represented over 10% of our consolidated net sales. No country’s net sales exceeded 10% of our consolidated sales except for the U.S. The table below presents a reconciliation of segment income from continuing operations to consolidated income from continuing operations before tax (in thousands): Three Months Ended June 30, Six Months Ended June 30, Operating Income from Continuing Operations 2019 2018 2019 2018 Cardiovascular $ 10,120 $ 16,337 $ 11,109 $ 26,595 Neuromodulation (1) 619 57,211 22,250 95,945 Other (25,677 ) (37,239 ) (53,976 ) (60,059 ) Total reportable segment (loss) income from continuing operations (14,938 ) 36,309 (20,617 ) 62,481 Merger and integration expenses 4,378 4,409 7,629 7,369 Restructuring expenses 1,332 476 3,865 2,357 Amortization of intangibles 9,228 9,817 18,544 18,618 Operating (loss) income from continuing operations (29,876 ) 21,607 (50,655 ) 34,137 Interest income 224 232 473 679 Interest expense (4,054 ) (3,006 ) (5,716 ) (5,117 ) Gain on acquisition — — — 11,484 Foreign exchange and other losses (1,851 ) (70 ) (1,122 ) (343 ) (Loss) income from continuing operations before tax $ (35,557 ) $ 18,763 $ (57,020 ) $ 40,840 (1) Results for the three and six months ended June 30, 2019 include the impairment of intangible assets of $50.3 million . Assets by reportable segment are as follows (in thousands): Assets June 30, 2019 December 31, 2018 Cardiovascular $ 1,571,953 $ 1,532,825 Neuromodulation 716,531 731,840 Other 333,175 285,036 Total assets $ 2,621,659 $ 2,549,701 Capital expenditures by segment are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, Capital expenditures 2019 2018 2019 2018 Cardiovascular $ 4,835 $ 4,594 $ 8,386 $ 7,725 Neuromodulation 127 500 530 847 Other 951 1,256 1,880 2,699 Discontinued operations — — — 925 Total $ 5,913 $ 6,350 $ 10,796 $ 12,196 The changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2019 were as follows (in thousands): Neuromodulation Cardiovascular Other Total December 31, 2018 $ 398,539 $ 515,859 $ 42,417 $ 956,815 Goodwill as a result of acquisitions — 1,550 — 1,550 Measurement period adjustments — (3,326 ) — (3,326 ) Foreign currency adjustments 675 6,001 — 6,676 June 30, 2019 $ 399,214 $ 520,084 $ 42,417 $ 961,715 Property, plant and equipment, net by geography are as follows (in thousands): PP&E June 30, 2019 December 31, 2018 United States $ 65,079 $ 68,862 Europe 109,807 112,376 Rest of world 10,212 10,162 Total $ 185,098 $ 191,400 |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Jun. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Financial Information | Note 18. Supplemental Financial Information Inventories consisted of the following (in thousands): June 30, 2019 December 31, 2018 Raw materials $ 46,403 $ 40,387 Work-in-process 20,446 15,999 Finished goods 101,820 97,149 $ 168,669 $ 153,535 Inventories are reported net of the provision for obsolescence. This provision, which reflects normal obsolescence and includes components that are phased out or expired, totaled $11.0 million and $11.6 million at June 30, 2019 and December 31, 2018 , respectively. Accrued liabilities and other consisted of the following (in thousands): June 30, 2019 December 31, 2018 Contingent consideration (1) $ 43,155 $ 18,530 CRM purchase price adjustment payable to MicroPort Scientific Corporation 14,891 14,891 Operating lease liabilities (2) 10,926 — Product remediation (3) 10,485 13,945 Legal and administrative costs 8,777 9,189 Provisions for agents, returns and other 4,052 4,934 Restructuring related liabilities (4) 4,261 9,393 Other amounts payable to MicroPort Scientific Corporation 2,857 9,319 Derivative contract liabilities (5) 963 5,063 Other accrued expenses 40,361 39,021 $ 140,728 $ 124,285 (1) Refer to “ Note 8. Fair Value Measurements ” (2) Refer to “ Note 11. Leases ” (3) Refer to “ Note 5. Product Remediation Liability ” (4) Refer to “ Note 4. Restructuring ” (5) Refer to “ Note 10. Derivatives and Risk Management ” As of June 30, 2019 and December 31, 2018 , contract liabilities of $5.6 million and $4.8 million , respectively, are included within accrued liabilities and other and other long-term liabilities on the condensed consolidated balance sheets. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | Note 19. New Accounting Pronouncements Adoption of New Accounting Pronouncements The following table provides a description of our adoption of new Accounting Standards Updates (“ASUs”) issued by the FASB and the impact of the adoption on our condensed financial statements: Issue Date & Standard Description Date of Adoption Effect on Financial Statements or Other Significant Matters February 2016 ASU No. 2016-02, Leases (Topic 842) and subsequent amendments The standard requires lessees to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use (“ROU”) assets and to provide enhanced disclosures. Furthermore, from a lessor perspective, certain of our agreements that allow the customer to use, rather than purchase, our medical devices met the criteria of being a lease in accordance with the new standard. January 1, 2019 Adoption of the new standard resulted in the recognition of ROU assets and lease liabilities of approximately $60 million as of January 1, 2019. Refer to “Note 11. Leases.” June 2018 ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting This update simplifies the accounting for non-employee share-based payment transactions. January 1, 2019 There was no material impact to our condensed consolidated financial statements as a result of adopting this ASU. Future Adoption of New Accounting Pronouncements The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted: Issue Date & Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters June 2016 ASU 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 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. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. January 2017 ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment 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. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. August 2018 ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement This update removes, modifies and adds certain disclosure requirements related to fair value measurements. Early adoption is permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans This update adds and removes certain disclosure requirements related to defined benefit plans. This ASU is to be implemented on a retrospective basis for all periods presented with early adoption permitted. January 1, 2021 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This update clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is to be applied either retrospectively or prospectively with early adoption permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statements. |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Financial Statements (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying condensed consolidated financial statements of LivaNova as of, and for the three and six months ended June 30, 2019 and 2018 , have been prepared in accordance with U.S. GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The accompanying condensed consolidated balance sheet of LivaNova at December 31, 2018 has been derived from audited financial statements contained in our 2018 Form 10-K, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair statement of the operating results of LivaNova and its subsidiaries, for the three and six months ended June 30, 2019 and are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . The financial information presented herein should be read in conjunction with the audited consolidated financial statements and notes thereto accompanying our 2018 Form 10-K. |
New Accounting Pronouncements | On January 1, 2019, we adopted ASC Update (“ASU”) No 2016-02, Leases , including subsequent related accounting updates (collectively referred to as “Topic 842”), which supersedes the previous accounting model for leases. We adopted the standard using the modified retrospective approach with an effective date as of January 1, 2019. Prior year financial statements were not recast under the new standard. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward our historical assessment of whether contracts are or contain leases and lease classification. We also elected the practical expedient to account for lease and non-lease components together as a single combined lease component, which is applicable to all asset classes. We did not, however, elect the practical expedient related to using hindsight in determining the lease term as this was not relevant following our election of the modified retrospective approach. In addition, we elected certain practical expedients on an ongoing basis, including the practical expedient for short-term leases pursuant to which a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a lease liability and operating lease asset for leases with a term of 12 months or less and that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. We have applied this accounting policy to all asset classes in our portfolio and will recognize the lease payments for such short-term leases within profit and loss on a straight-line basis over the lease term. Furthermore, from a lessor perspective, certain of our agreements that allow the customer to use, rather than purchase, our medical devices will meet the criteria of being a lease in accordance with the new standard. While the amount of revenue and expenses recognized over the contract term will not be impacted, the timing of revenue and expense recognition will be impacted depending upon lease classification. We enacted appropriate changes to our business processes, systems and internal controls to support recognition and disclosure under the new standard. We determine if an arrangement is or contains a lease at inception. Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the latter of our lease standard effective date for adoption or the lease commencement date. Variable lease payments, such as common area rent maintenance charges and rent escalations not known upon lease commencement, are not included in determination of the minimum lease payments and will be expensed in the period in which the obligation for those payments is incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement in determining the present value of future payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. We used the incremental borrowing rate available nearest to our adoption date for leases that commenced prior to that date. The operating lease asset also includes any lease payments made in advance and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For additional information refer to “ Note 11. Leases Adoption of New Accounting Pronouncements The following table provides a description of our adoption of new Accounting Standards Updates (“ASUs”) issued by the FASB and the impact of the adoption on our condensed financial statements: Issue Date & Standard Description Date of Adoption Effect on Financial Statements or Other Significant Matters February 2016 ASU No. 2016-02, Leases (Topic 842) and subsequent amendments The standard requires lessees to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use (“ROU”) assets and to provide enhanced disclosures. Furthermore, from a lessor perspective, certain of our agreements that allow the customer to use, rather than purchase, our medical devices met the criteria of being a lease in accordance with the new standard. January 1, 2019 Adoption of the new standard resulted in the recognition of ROU assets and lease liabilities of approximately $60 million as of January 1, 2019. Refer to “Note 11. Leases.” June 2018 ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting This update simplifies the accounting for non-employee share-based payment transactions. January 1, 2019 There was no material impact to our condensed consolidated financial statements as a result of adopting this ASU. Future Adoption of New Accounting Pronouncements The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted: Issue Date & Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters June 2016 ASU 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 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. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. January 2017 ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment 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. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. August 2018 ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement This update removes, modifies and adds certain disclosure requirements related to fair value measurements. Early adoption is permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans This update adds and removes certain disclosure requirements related to defined benefit plans. This ASU is to be implemented on a retrospective basis for all periods presented with early adoption permitted. January 1, 2021 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This update clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is to be applied either retrospectively or prospectively with early adoption permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statements. |
Derivatives | If the derivative qualifies for hedge accounting, changes in the fair value of the derivative will be recorded in 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 our condensed consolidated statements of income (loss) as shown in the tables below and interest rate swap gains and losses in AOCI are reclassified to interest expense on our condensed consolidated statements of income (loss). 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 and the gains or losses are reclassified into earnings. Cash flows from derivative contracts are reported as operating activities on our condensed consolidated statements of cash flows. |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table presents the acquisition date fair value of the consideration transferred (in thousands): Cash $ 203,671 Contingent consideration 40,190 Fair value of consideration transferred $ 243,861 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The purchase price allocation for the TandemLife acquisition was finalized during the second quarter of 2019 and is presented in the following table, including certain measurement period adjustments (in thousands): Initial Purchase Price Allocation Measurement Period Adjustments (1) Adjusted Purchase Price Allocation In-process research and development (“IPR&D”) (2) (3) $ 110,977 $ (3,474 ) $ 107,503 Trade names (2) 11,539 — 11,539 Developed technology (2) 6,387 — 6,387 Goodwill 118,917 (797 ) 118,120 Inventory 10,296 (140 ) 10,156 Other assets and liabilities, net 3,632 242 3,874 Deferred tax liabilities, net (17,887 ) 4,169 (13,718 ) Net assets acquired $ 243,861 $ — $ 243,861 (1) During the third quarter of 2018, measurement period adjustments were recorded based upon new information regarding future estimates of R&D expenses that existed as of the acquisition date. In addition, during the first quarter of 2019, measurement period adjustments related to finalizing our tax attributes were recorded, which resulted in an increase of $3.3 million in deferred tax assets and a commensurate decrease to goodwill. (2) The amounts are included in intangible assets, net in the condensed consolidated balance sheets at June 30, 2019 and December 31, 2018 . Trade names and developed technology are amortized over remaining useful lives of 15 and 2 years, respectively. (3) The fair value of IPR&D was determined using the income approach, which is a valuation technique that provides a fair value estimate based on the market participant expectations of cash flows the asset would generate. The cash flows were discounted commensurate with the level of risk associated with the asset. The discount rates were developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in reaching certain regulatory milestones and risks associated with commercialization of the product. |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The arrangement is a Level 3 fair value measurement and includes the following significant unobservable inputs (in thousands): TandemLife Acquisition Fair value at April 4, 2018 Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments $ 40,190 Discounted cash flow Discount rate 4.2% - 4.8% Probability of payments 75% - 95% Projected payment years 2019 - 2020 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of discontinued operations | The following table represents the financial results of CRM presented as net loss from discontinued operations in the condensed consolidated statements of income (loss) (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net sales $ — $ 17,259 $ — $ 77,366 Costs and expenses: Cost of sales (43 ) 5,168 (43 ) 27,306 Selling, general and administrative expenses 26 11,072 26 42,898 Research and development (161 ) 5,296 (161 ) 16,577 Restructuring expenses — — — 651 Revaluation gain on assets and liabilities held for sale — — — (1,213 ) Loss on sale of CRM — 214 — 214 Operating income (loss) from discontinued operations 178 (4,491 ) 178 (9,067 ) Foreign exchange and other gains — 23 — 102 Income (loss) from discontinued operations, before tax 178 (4,468 ) 178 (8,965 ) Income tax benefit — (6 ) — (1,165 ) Losses from equity method investments — — — (1,211 ) Net income (loss) from discontinued operations $ 178 $ (4,462 ) $ 178 $ (9,011 ) |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table presents the accruals, inventory obsolescence and other reserves, recorded in connection with our reorganization plans (in thousands): Employee Severance and Other Termination Costs Other Total Balance at December 31, 2018 $ 10,195 $ 3,069 $ 13,264 Charges 3,809 56 3,865 Cash payments and other (9,922 ) (2,946 ) (12,868 ) Balance at June 30, 2019 (1) $ 4,082 $ 179 $ 4,261 (1) Cumulatively, we have recognized a total of $103.1 million in restructuring expense inclusive of discontinued operations under the Prior Plans and the 2018 Plan. |
Schedule of Restructuring Expense by Reportable Segment | The following table presents restructuring expense by reportable segment (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cardiovascular $ 316 $ 398 $ 738 $ 1,739 Neuromodulation 53 11 485 17 Other 963 67 2,642 601 Total $ 1,332 $ 476 $ 3,865 $ 2,357 |
Product Remediation Liability (
Product Remediation Liability (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Product Remediation [Abstract] | |
Product Liability Contingencies | Changes in the carrying amount of the product remediation liability are as follows (in thousands): Balance at December 31, 2018 $ 14,745 Adjustments 2,669 Remediation activity (6,840 ) Effect of changes in foreign currency exchange rates (89 ) Balance at June 30, 2019 (1) $ 10,485 (1) At June 30, 2019 , the product remediation liability balance is included within accrued liabilities and other on the condensed consolidated balance sheet. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments [Abstract] | |
Schedule of Long-term Investments | These equity investments are included in investments on the condensed consolidated balance sheets (in thousands): Equity Investments Without Readily Determinable Fair Values June 30, 2019 December 31, 2018 Respicardia Inc. (1) $ 17,706 $ 17,706 Ceribell, Inc. 3,000 3,000 Rainbow Medical Ltd. 1,114 1,119 MD Start II 1,139 1,144 Highlife S.A.S. 1,079 1,084 Other 770 770 24,808 24,823 Equity method investments (2) 287 — $ 25,095 $ 24,823 (1) Respicardia Inc. (“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 $0.6 million as of June 30, 2019 and December 31, 2018 , which is included in prepaid expenses and other current assets in the condensed consolidated balance sheet. (2) During the second quarter of 2019, we invested in equity securities that we account for under the equity method of accounting due to our deemed ability to exercise significant influence. We invested an initial amount of $287 thousand and are required to fund up to approximately €5.0 million (approximately $5.7 million as of June 30, 2019 ) based on cash calls. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements on a Recurring Basis | The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value as of June 30, 2019 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - freestanding instruments (foreign currency exchange rate “FX”) $ 654 $ — $ 654 $ — $ 654 $ — $ 654 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 769 $ — $ 769 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 663 — 663 — Derivative liabilities - freestanding instruments (FX) 388 — 388 — Contingent consideration (1) 176,227 — — 176,227 $ 178,047 $ — $ 1,820 $ 176,227 Fair Value as of December 31, 2018 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - freestanding instruments (FX) $ 236 $ — $ 236 $ — $ 236 $ — $ 236 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 1,354 $ — $ 1,354 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 865 — 865 — Derivative liabilities - freestanding instruments (FX) 3,173 — 3,173 — Contingent consideration (1) 179,911 — — 179,911 $ 185,303 $ — $ 5,392 $ 179,911 (1) The contingent consideration liability represents contingent payments primarily related to five completed acquisitions, including: Inversiones Drilltex SAS (“Drilltex”), Caisson, ImThera, TandemLife and Miami Instruments. See the table below for additional information. |
Reconciliation of Beginning and Ending Balances of Contingent Consideration | The following table provides a reconciliation of the beginning and ending balance of the contingent consideration liability (in thousands): Total contingent consideration liability at December 31, 2018 $ 179,911 Additions (1) 7,184 Payments (234 ) Changes in fair value (2) (3) (10,600 ) Effect of changes in foreign currency exchange rates (34 ) Total contingent consideration liability at June 30, 2019 176,227 Less current portion of contingent consideration liability at June 30, 2019 (4) 43,155 Long-term portion of contingent consideration liability at June 30, 2019 $ 133,072 (1) See “ Note 2. Business Combinations ” for additional discussion. (2) The change in fair value includes a decrease of $17.8 million primarily due to the delay in timing of anticipated regulatory approval and commercialization for ImThera. While the probability of payment remains unchanged from the time of acquisition, the projected years of payment for the regulatory milestone-based payment and the sales-based earnout have been updated to occur between 2023-2024 and 2024-2028, respectively. See “ Note 6. Intangible Assets ” for additional discussion. (3) During the six months ended June 30, 2019 , the change in fair value resulted in a decrease of $5.8 million and $4.9 million recorded to cost of sales - exclusive of amortization and research and development, respectively. (4) On July 15, 2019, we achieved a regulatory milestone specified in our TandemLife acquisition and, therefore, will be required to pay $19.0 million during the third quarter of 2019 to settle the related contingent consideration liability. As of June 30, 2019 , approximately $17.6 million was included in the current portion of contingent consideration related to this milestone. |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The outstanding principal amount of long-term debt (in thousands, except interest rates): June 30, 2019 December 31, 2018 Maturity Interest Rate 2017 European Investment Bank (1) $ 103,570 $ 103,570 June 2026 3.72% 2019 Debt Facility (2) 50,631 — March 2022 1.40% - 3.98% 2014 European Investment Bank (3) 37,916 47,606 June 2021 1.05% Mediocredito Italiano 6,951 7,623 December 2023 0.50% - 2.94% Bank of America, U.S. 2,499 — January 2021 4.51% Banca del Mezzogiorno 1,358 2,718 December 2019 0.50% - 2.99% Region Wallonne 678 742 December 2023 and June 2033 0.75% - 1.24% Mediocredito Italiano - mortgages and other 548 582 September 2021 and September 2026 0.69% - 1.19% Other 39 — Total long-term facilities 204,190 162,841 Less current portion of long-term debt 29,814 23,303 Total long-term debt $ 174,376 $ 139,538 (1) The 2017 European Investment Bank (“2017 EIB”) loan was obtained to support certain product development projects. The interest rate for the 2017 EIB loan is reset by the lender each principal payment date based on LIBOR. Interest payments are paid quarterly and principal payments are paid semi-annually. (2) The facility agreement with Bank of America Merrill Lynch International DAC, Barclays Bank PLC, BNP Paribas (London Branch) and Intesa Sanpaolo S.P.A. provides a multicurrency term loan facility in an aggregate amount of $350 million and terminates on March 26, 2022 (the “2019 Debt Facility”). (3) The 2014 European Investment Bank (“2014 EIB”) loan was obtained in July 2014 to support certain product development projects. The interest rate for the 2014 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. |
Derivatives and Risk Manageme_2
Derivatives and Risk Management (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Derivative Contracts Designated Cash Flow Hedges | Notional amounts of open derivative contracts designated as cash flow hedges (in thousands): Description of Derivative Contract June 30, 2019 December 31, 2018 FX derivative contracts to be exchanged for British Pounds $ 8,186 $ 9,629 FX derivative contracts to be exchanged for Japanese Yen 28,100 23,985 FX derivative contracts to be exchanged for Canadian Dollars 1,900 7,637 FX derivative contracts to be exchanged for Euros 31,058 29,768 Interest rate swap contracts 30,356 38,115 $ 99,600 $ 109,134 |
Unrealized Gain (Loss) in AOCI | 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 twelve months (in thousands): Description of Derivative Contract After-Tax Net Loss in AOCI as of June 30, 2019 Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ (621 ) $ (621 ) Interest rate swap contracts (168 ) (84 ) $ (789 ) $ (705 ) |
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): Three Months Ended June 30, 2019 2018 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings Losses Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other gains $ 313 $ 489 $ (25 ) $ (1,358 ) FX derivative contracts SG&A — (418 ) — 549 Interest rate swap contracts Interest expense — 27 — (17 ) $ 313 $ 98 $ (25 ) $ (826 ) Six Months Ended June 30, 2019 2018 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings Gains Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other gains $ 1,622 $ 2,131 $ 189 $ (512 ) FX derivative contracts SG&A — (728 ) — 1,174 Interest rate swap contracts Interest expense — 14 — (17 ) $ 1,622 $ 1,417 $ 189 $ 645 |
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 condensed consolidated balance sheets (in thousands): June 30, 2019 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 Accrued liabilities $ 460 Interest rate swap contracts Other long-term liabilities 203 FX derivative contracts Accrued liabilities 769 Total derivatives designated as hedging instruments 1,432 Derivatives Not Designated as Hedging Instruments FX derivative contracts Accrued liabilities $ 654 Accrued liabilities 388 Total derivatives not designated as hedging instruments 654 388 Total derivatives $ 654 $ 1,820 December 31, 2018 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 Accrued liabilities $ 536 Interest rate swap contracts Other long-term liabilities 329 FX derivative contracts Accrued liabilities 1,354 Total derivatives designated as hedging instruments 2,219 Derivatives Not Designated as Hedging Instruments FX derivative contracts Prepaid expenses and other current assets $ 236 Accrued liabilities 3,173 Total derivatives not designated as hedging instruments 236 3,173 Total derivatives $ 236 $ 5,392 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “ Note 8. Fair Value Measurements .” |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lessee, Components Of Operating Lease Assets, Liabilities And Costs | The components of operating lease assets, liabilities and costs are as follows (in thousands): Operating Lease Assets and Liabilities June 30, 2019 Assets Operating lease right-of-use assets $ 56,831 Liabilities Accrued liabilities and other $ 10,926 Long-term operating lease liabilities 47,377 Total lease liabilities $ 58,303 |
Lease, Cost | Operating Lease Cost Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating lease cost $ 3,469 $ 7,209 Variable lease cost 255 426 Short-term lease cost 194 280 Total lease cost $ 3,918 $ 7,915 |
Lessee, Operating Lease, Liability, Maturity | Contractual maturities of our lease liabilities as of June 30, 2019 , are as follows (in thousands): 2019 $ 6,379 2020 11,119 2021 9,192 2022 8,074 2023 6,826 Thereafter 22,294 Total lease payments 63,884 Less: Amount representing interest 5,581 Present value of lease liabilities $ 58,303 |
Leases, Lease Term and Discount Rate | Lease Term and Discount Rate June 30, 2019 Weighted Average Remaining Lease Term (in years) 7.5 Weighted Average Discount Rate 2.3 % |
Schedule of Cash Flow, Supplemental Disclosures | Other Information (in thousands) Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for leases $ 2,507 $ 6,349 Operating lease assets obtained in exchange for lease liabilities $ 2,485 $ 2,950 |
Schedule of Future Minimum Rental Payments for Operating Leases | As required and as previously disclosed in our 2018 Form 10-K, the following table summarizes our future minimum operating lease payments as of December 31, 2018 (in thousands): Less than one year $ 11,986 One to three years 21,031 Three to five years 14,998 Thereafter 20,943 Total $ 68,958 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders Equity | The tables below present the condensed consolidated statement of stockholders’ equity as of and for the three and six months ended June 30, 2019 and 2018 (in thousands): Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive (Loss) Income Retained Deficit Total Stockholders' Equity March 31, 2019 49,329 $ 76,151 $ 1,707,117 $ (1,321 ) $ (28,713 ) $ (266,428 ) $ 1,486,806 Stock-based compensation plans 51 66 10,103 29 — — 10,198 Net loss — — — — — (29,215 ) (29,215 ) Other comprehensive income — — — — 15,539 — 15,539 June 30, 2019 49,380 $ 76,217 $ 1,717,220 $ (1,292 ) $ (13,174 ) $ (295,643 ) $ 1,483,328 March 31, 2018 48,628 $ 75,224 $ 1,738,044 $ (375 ) $ 54,910 $ (48,821 ) $ 1,818,982 Stock-based compensation plans 33 45 6,218 266 — — 6,529 Net income — — — — — 15,066 15,066 Other comprehensive loss — — — — (57,543 ) — (57,543 ) June 30, 2018 48,661 $ 75,269 $ 1,744,262 $ (109 ) $ (2,633 ) $ (33,755 ) $ 1,783,034 Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive (Loss) Income Retained Deficit Total Stockholders' Equity December 31, 2018 49,323 $ 76,144 $ 1,705,111 $ (1,462 ) $ (24,476 ) $ (251,579 ) $ 1,503,738 Stock-based compensation plans 57 73 12,109 170 — — 12,352 Net loss — — — — — (44,064 ) (44,064 ) Other comprehensive income — — — — 11,302 — 11,302 June 30, 2019 49,380 $ 76,217 $ 1,717,220 $ (1,292 ) $ (13,174 ) $ (295,643 ) $ 1,483,328 December 31, 2017 48,290 $ 74,750 $ 1,735,048 $ (133 ) $ 45,313 $ (39,664 ) $ 1,815,314 Adoption of ASU No. 2016-16 — — — — — (22,430 ) (22,430 ) Share issuances 300 422 — (422 ) — — — Stock-based compensation plans 71 97 9,214 446 — — 9,757 Net income — — — — — 28,339 28,339 Other comprehensive loss — — — — (47,946 ) — (47,946 ) June 30, 2018 48,661 $ 75,269 $ 1,744,262 $ (109 ) $ (2,633 ) $ (33,755 ) $ 1,783,034 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below presents the change in each component of AOCI, net of tax, and the reclassifications out of AOCI into net income for the six months ended June 30, 2019 and 2018 (in thousands): Change in Unrealized Gain (Loss) on Derivatives Foreign Currency Translation Adjustments Gain (Loss) ( 1) Total As of December 31, 2018 $ (944 ) $ (23,532 ) $ (24,476 ) Other comprehensive income before reclassifications, before tax 1,622 11,147 12,769 Tax expense (390 ) — (390 ) Other comprehensive income before reclassifications, net of tax 1,232 11,147 12,379 Reclassification of gain from accumulated other comprehensive income (loss), before tax (1,417 ) — (1,417 ) Reclassification of tax expense 340 — 340 Reclassification of gain from accumulated other comprehensive income (loss), after tax (1,077 ) — (1,077 ) Net current-period other comprehensive gain, net of tax 155 11,147 11,302 As of June 30, 2019 $ (789 ) $ (12,385 ) $ (13,174 ) As of December 31, 2017 $ (919 ) $ 46,232 $ 45,313 Other comprehensive income (loss) before reclassifications, before tax 189 (38,590 ) (38,401 ) Tax expense (45 ) — (45 ) Other comprehensive income (loss) before reclassifications, net of tax 144 (38,590 ) (38,446 ) Reclassification of gain from accumulated other comprehensive income (loss), before tax (645 ) (9,011 ) (2) (9,656 ) Reclassification of tax expense 156 — 156 Reclassification of gain from accumulated other comprehensive income (loss), after tax (489 ) (9,011 ) (9,500 ) Net current-period other comprehensive loss, net of tax (345 ) (47,601 ) (47,946 ) As of June 30, 2018 $ (1,264 ) $ (1,369 ) $ (2,633 ) (1) Taxes are 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. (2) Cumulative foreign currency translation adjustments eliminated upon the sale of CRM. |
Stock-Based Incentive Plan (Tab
Stock-Based Incentive Plan (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation, Stock Options, Activity | Stock-based incentive plans compensation expense is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Service-based restricted stock units (“RSUs”) $ 3,875 $ 2,634 $ 6,845 $ 4,790 Service-based stock appreciation rights (“SARs”) 2,900 2,675 4,908 4,023 Market performance-based restricted stock units 838 959 1,389 1,305 Operating performance-based restricted stock units 798 1,185 1,769 2,032 Employee stock purchase plan 313 — 685 — Total stock-based compensation expense $ 8,724 $ 7,453 $ 15,596 $ 12,150 Stock-based compensation agreements issued during the six months ended June 30, 2019 , representing potential shares and their weighted average grant date fair values by type follows (shares in thousands, fair value in dollars): Six Months Ended June 30, 2019 Shares Weighted Average Grant Date Fair Value Service-based SARs 592 $ 31.22 Service-based RSUs 278 $ 93.25 Market performance-based RSUs 44 $ 100.41 Operating performance-based RSUs 44 $ 96.59 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income Per Share | Reconciliation of the shares used in the basic and diluted earnings per share computations for the three and six months ended June 30, 2019 and 2018 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Basic weighted average shares outstanding 48,342 48,487 48,295 48,406 Add effects of share-based compensation instruments (1) — 851 — 857 Diluted weighted average shares outstanding 48,342 49,338 48,295 49,263 (1) Excluded from the computation of diluted earnings per share for the three months ended June 30, 2019 and 2018 were stock options, SARs and restricted share units totaling 3.1 million and 0.7 million , respectively, and 3.2 million and 0.8 million for the six months ended June 30, 2019 and 2018 , respectively, because to include them would have been anti-dilutive under the treasury stock method. |
Geographic and Segment Inform_2
Geographic and Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Geographic Areas | The table below presents net sales by operating segment and geographic region (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cardiopulmonary United States $ 41,403 $ 42,139 $ 80,526 $ 80,584 Europe 34,320 35,916 69,881 72,786 Rest of world 54,856 58,584 101,742 108,399 130,579 136,639 252,149 261,769 Heart Valves United States 4,678 6,147 9,034 12,683 Europe 10,672 11,863 21,185 23,979 Rest of world 18,001 15,792 28,805 28,182 33,351 33,802 59,024 64,844 Advanced Circulatory Support United States 7,944 5,468 15,977 5,468 Europe 192 353 311 353 Rest of world 178 194 274 194 8,314 6,015 16,562 6,015 Cardiovascular United States 54,025 53,754 105,537 98,735 Europe 45,184 48,132 91,377 97,118 Rest of world 73,035 74,570 130,821 136,775 172,244 176,456 327,735 332,628 Neuromodulation United States 80,551 89,395 157,437 167,387 Europe 12,996 11,943 23,655 22,234 Rest of world 10,722 9,315 17,826 14,876 104,269 110,653 198,918 204,497 Other 656 389 1,317 771 Totals United States 134,576 143,149 262,974 266,122 Europe (1) 58,180 60,075 115,032 119,352 Rest of world 84,413 84,274 149,964 152,422 Total (2) $ 277,169 $ 287,498 $ 527,970 $ 537,896 (1) 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. (2) No single customer represented over 10% of our consolidated net sales. No country’s net sales exceeded 10% of our consolidated sales except for the U.S. |
Schedule of Segment Reporting Information, by Segment | The table below presents a reconciliation of segment income from continuing operations to consolidated income from continuing operations before tax (in thousands): Three Months Ended June 30, Six Months Ended June 30, Operating Income from Continuing Operations 2019 2018 2019 2018 Cardiovascular $ 10,120 $ 16,337 $ 11,109 $ 26,595 Neuromodulation (1) 619 57,211 22,250 95,945 Other (25,677 ) (37,239 ) (53,976 ) (60,059 ) Total reportable segment (loss) income from continuing operations (14,938 ) 36,309 (20,617 ) 62,481 Merger and integration expenses 4,378 4,409 7,629 7,369 Restructuring expenses 1,332 476 3,865 2,357 Amortization of intangibles 9,228 9,817 18,544 18,618 Operating (loss) income from continuing operations (29,876 ) 21,607 (50,655 ) 34,137 Interest income 224 232 473 679 Interest expense (4,054 ) (3,006 ) (5,716 ) (5,117 ) Gain on acquisition — — — 11,484 Foreign exchange and other losses (1,851 ) (70 ) (1,122 ) (343 ) (Loss) income from continuing operations before tax $ (35,557 ) $ 18,763 $ (57,020 ) $ 40,840 (1) Results for the three and six months ended June 30, 2019 include the impairment of intangible assets of $50.3 million . Assets by reportable segment are as follows (in thousands): Assets June 30, 2019 December 31, 2018 Cardiovascular $ 1,571,953 $ 1,532,825 Neuromodulation 716,531 731,840 Other 333,175 285,036 Total assets $ 2,621,659 $ 2,549,701 Capital expenditures by segment are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, Capital expenditures 2019 2018 2019 2018 Cardiovascular $ 4,835 $ 4,594 $ 8,386 $ 7,725 Neuromodulation 127 500 530 847 Other 951 1,256 1,880 2,699 Discontinued operations — — — 925 Total $ 5,913 $ 6,350 $ 10,796 $ 12,196 |
Schedule of Goodwill | The changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2019 were as follows (in thousands): Neuromodulation Cardiovascular Other Total December 31, 2018 $ 398,539 $ 515,859 $ 42,417 $ 956,815 Goodwill as a result of acquisitions — 1,550 — 1,550 Measurement period adjustments — (3,326 ) — (3,326 ) Foreign currency adjustments 675 6,001 — 6,676 June 30, 2019 $ 399,214 $ 520,084 $ 42,417 $ 961,715 |
Long-lived Assets by Geographic Areas | Property, plant and equipment, net by geography are as follows (in thousands): PP&E June 30, 2019 December 31, 2018 United States $ 65,079 $ 68,862 Europe 109,807 112,376 Rest of world 10,212 10,162 Total $ 185,098 $ 191,400 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Inventories | Inventories consisted of the following (in thousands): June 30, 2019 December 31, 2018 Raw materials $ 46,403 $ 40,387 Work-in-process 20,446 15,999 Finished goods 101,820 97,149 $ 168,669 $ 153,535 |
Accrued Liabilities | Accrued liabilities and other consisted of the following (in thousands): June 30, 2019 December 31, 2018 Contingent consideration (1) $ 43,155 $ 18,530 CRM purchase price adjustment payable to MicroPort Scientific Corporation 14,891 14,891 Operating lease liabilities (2) 10,926 — Product remediation (3) 10,485 13,945 Legal and administrative costs 8,777 9,189 Provisions for agents, returns and other 4,052 4,934 Restructuring related liabilities (4) 4,261 9,393 Other amounts payable to MicroPort Scientific Corporation 2,857 9,319 Derivative contract liabilities (5) 963 5,063 Other accrued expenses 40,361 39,021 $ 140,728 $ 124,285 (1) Refer to “ Note 8. Fair Value Measurements ” (2) Refer to “ Note 11. Leases ” (3) Refer to “ Note 5. Product Remediation Liability ” (4) Refer to “ Note 4. Restructuring ” (5) Refer to “ Note 10. Derivatives and Risk Management ” |
New Accounting Pronouncements (
New Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted: Issue Date & Standard Description Projected Date of Adoption Effect on Financial Statements or Other Significant Matters June 2016 ASU 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 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. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. January 2017 ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment 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. Early adoption is permitted. January 1, 2020 We are currently evaluating the effect this standard will have on our condensed consolidated financial statements and related disclosures. August 2018 ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement This update removes, modifies and adds certain disclosure requirements related to fair value measurements. Early adoption is permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans This update adds and removes certain disclosure requirements related to defined benefit plans. This ASU is to be implemented on a retrospective basis for all periods presented with early adoption permitted. January 1, 2021 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statement disclosures. August 2018 ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract This update clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is to be applied either retrospectively or prospectively with early adoption permitted. January 1, 2020 We do not expect the adoption of this update to have a material effect on our condensed consolidated financial statements. |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Financial Statements (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Short-term Debt [Line Items] | ||||
Amortization of intangibles | $ 9,228 | $ 9,817 | $ 18,544 | $ 18,618 |
Incorrectly Excluded From Cost Of Sales | Cost of Sales | ||||
Short-term Debt [Line Items] | ||||
Amortization of intangibles | $ 6,900 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Jun. 12, 2019 | Apr. 04, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Business Acquisition [Line Items] | |||||
Goodwill as a result of acquisitions | $ 1,550 | ||||
TandemLife | |||||
Business Acquisition [Line Items] | |||||
Fair value of consideration transferred | $ 243,861 | ||||
Cash | 203,671 | ||||
Contingent consideration | 50,000 | ||||
Revenue | $ 6,000 | 6,000 | |||
Operating loss | (6,100) | $ (6,100) | |||
Miami Instruments | |||||
Business Acquisition [Line Items] | |||||
Fair value of consideration transferred | $ 17,000 | ||||
Cash | 10,800 | ||||
Contingent consideration | 6,000 | ||||
Goodwill as a result of acquisitions | 1,500 | ||||
Miami Instruments | Developed technology and in process research and development | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | $ 14,700 | ||||
SG&A | TandemLife | |||||
Business Acquisition [Line Items] | |||||
Acquisition-related expense | $ 1,600 | $ 1,900 | |||
Maximum | TandemLife | |||||
Business Acquisition [Line Items] | |||||
Fair value of consideration transferred | $ 254,000 |
Business Combinations - Purchas
Business Combinations - Purchase Price Composition (Details) - TandemLife $ in Thousands | Apr. 04, 2018USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 203,671 |
Contingent consideration | 40,190 |
Fair value of consideration transferred | $ 243,861 |
Business Combinations - Prelimi
Business Combinations - Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Apr. 04, 2018 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 961,715 | $ 961,715 | $ 956,815 | |
Goodwill, adjustment | $ (3,326) | |||
TandemLife | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 118,120 | |||
Goodwill, adjustment | (797) | |||
Inventory | 10,156 | |||
Inventory, adjustment | (140) | |||
Other assets and liabilities, net | 3,874 | |||
Other assets and liabilities, net , adjustment | 242 | |||
Deferred income tax liabilities, net | (13,718) | |||
Deferred income taxes, net, adjustment | 4,169 | |||
Net assets acquired | 243,861 | |||
Net assets acquired, adjustment | 0 | |||
TandemLife | Previously Reported | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 118,917 | |||
Inventory | 10,296 | |||
Other assets and liabilities, net | 3,632 | |||
Deferred income tax liabilities, net | (17,887) | |||
Net assets acquired | 243,861 | |||
In Process Research and Development | TandemLife | ||||
Business Acquisition [Line Items] | ||||
Intangible asset | 107,503 | |||
Intangible asset, adjustment | (3,474) | |||
In Process Research and Development | TandemLife | Previously Reported | ||||
Business Acquisition [Line Items] | ||||
Intangible asset | 110,977 | |||
Trade Names | TandemLife | ||||
Business Acquisition [Line Items] | ||||
Intangible asset | 11,539 | |||
Intangible asset, adjustment | 0 | |||
Useful life | 15 years | |||
Trade Names | TandemLife | Previously Reported | ||||
Business Acquisition [Line Items] | ||||
Intangible asset | 11,539 | |||
Developed Technology | TandemLife | ||||
Business Acquisition [Line Items] | ||||
Intangible asset | 6,387 | |||
Intangible asset, adjustment | $ 0 | |||
Useful life | 2 years | |||
Developed Technology | TandemLife | Previously Reported | ||||
Business Acquisition [Line Items] | ||||
Intangible asset | $ 6,387 |
Business Combinations - Conting
Business Combinations - Contingent Consideration (Details) - TandemLife - Discounted Cash Flow $ in Thousands | Apr. 04, 2018USD ($) |
Business Acquisition, Contingent Consideration [Line Items] | |
Regulatory milestone-based payment | $ 40,190 |
Discount Rate | Minimum | |
Business Acquisition, Contingent Consideration [Line Items] | |
Contingent consideration, measurement inputs | 4.20% |
Discount Rate | Maximum | |
Business Acquisition, Contingent Consideration [Line Items] | |
Contingent consideration, measurement inputs | 4.80% |
Probability of Payment | Minimum | |
Business Acquisition, Contingent Consideration [Line Items] | |
Contingent consideration, measurement inputs | 75.00% |
Probability of Payment | Maximum | |
Business Acquisition, Contingent Consideration [Line Items] | |
Contingent consideration, measurement inputs | 95.00% |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | Apr. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Capital expenditures | $ 5,913 | $ 6,350 | $ 10,796 | $ 12,196 | |
Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Capital expenditures | 0 | 0 | 0 | $ 925 | |
CRM Business Franchise | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Consideration transferred | $ 195,900 | ||||
Consideration transferred, cash | $ 9,200 | ||||
Transition services | $ 200 | $ 800 | |||
Stock-based compensation | 2,100 | ||||
CRM Business Franchise | Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Capital expenditures | $ 900 |
Discontinued Operations (Operat
Discontinued Operations (Operating Gains And Losses) (Details) - CRM Business Franchise - Discontinued Operations, Held-for-sale - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net sales | $ 0 | $ 17,259 | $ 0 | $ 77,366 |
Costs and expenses: | ||||
Cost of sales | (43) | 5,168 | (43) | 27,306 |
Selling, general and administrative expenses | 26 | 11,072 | 26 | 42,898 |
Research and development | (161) | 5,296 | (161) | 16,577 |
Restructuring expenses | 0 | 0 | 0 | 651 |
Revaluation gain on assets and liabilities held for sale | 0 | 0 | 0 | (1,213) |
Loss on sale of CRM | 0 | 214 | 0 | 214 |
Operating income (loss) from discontinued operations | 178 | (4,491) | 178 | (9,067) |
Foreign exchange and other gains | 0 | 23 | 0 | 102 |
Income (loss) from discontinued operations, before tax | 178 | (4,468) | 178 | (8,965) |
Income tax benefit | 0 | (6) | 0 | (1,165) |
Losses from equity method investments | 0 | 0 | 0 | (1,211) |
Net income (loss) from discontinued operations | $ 178 | $ (4,462) | $ 178 | $ (9,011) |
Restructuring (Narrative) (Deta
Restructuring (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2019employee | |
2018 Reorganization Plan | Cardiovascular | |
Restructuring Cost and Reserve [Line Items] | |
Expected number of positions eliminated | 75 |
Restructuring (Restructuing and
Restructuring (Restructuing and Related Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Restructuring Reserve [Roll Forward] | ||||
Charges | $ 1,332 | $ 476 | $ 3,865 | $ 2,357 |
Reorganization Plans | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning liability balance | 13,264 | |||
Charges | 3,865 | |||
Cash payments and other | (12,868) | |||
Ending liability balance | 4,261 | 4,261 | ||
Reorganization Plans | Employee Severance and Other Termination Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning liability balance | 10,195 | |||
Charges | 3,809 | |||
Cash payments and other | (9,922) | |||
Ending liability balance | 4,082 | 4,082 | ||
Reorganization Plans | Other | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning liability balance | 3,069 | |||
Charges | 56 | |||
Cash payments and other | (2,946) | |||
Ending liability balance | $ 179 | 179 | ||
Discontinued Operations | Reorganization Plans | ||||
Restructuring Reserve [Roll Forward] | ||||
Charges | $ 103,100 |
Restructuring (Restructuring Ex
Restructuring (Restructuring Expense by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 1,332 | $ 476 | $ 3,865 | $ 2,357 |
Operating Segments | Cardiovascular | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 316 | 398 | 738 | 1,739 |
Operating Segments | Neuromodulation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 53 | 11 | 485 | 17 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 963 | $ 67 | $ 2,642 | $ 601 |
Product Remediation Liability_2
Product Remediation Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |||||
Product remediation, beginning | $ 14,745 | ||||
Adjustments | 2,669 | ||||
Remediation activity | (6,840) | ||||
Effect of changes in foreign currency exchange rates | (89) | ||||
Product remediation, ending | $ 10,485 | 10,485 | |||
Product remediation expense | $ 5,113 | $ 1,542 | $ 8,060 | $ 5,257 | |
Litigation provision liability, net | $ 293,300 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets | $ 50,295 | $ 0 | $ 50,295 | $ 0 |
In Process Research and Development | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets | 50,300 | |||
Indefinite-lived intangible assets | $ 112,000 | $ 112,000 |
Investments (Details)
Investments (Details) $ in Thousands, € in Millions | 3 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2019EUR (€) | Dec. 31, 2018USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||
Investments | $ 24,808 | $ 24,823 | |
Equity method investments | 287 | 0 | |
Total Investments | 25,095 | 24,823 | |
Payment to acquire Investments | 5,700 | € 5 | |
Cost Method Investee | Respicardia | Prepaid expenses and other current assets | |||
Schedule of Equity Method Investments [Line Items] | |||
Outstanding loans | 600 | 600 | |
Respicardia | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 17,706 | 17,706 | |
Ceribell, Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 3,000 | 3,000 | |
Rainbow Medical Ltd. | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 1,114 | 1,119 | |
MD Start II | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 1,139 | 1,144 | |
Highlife S.A.S. | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 1,079 | 1,084 | |
Other | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | $ 770 | $ 770 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019USD ($)acquisition | Dec. 31, 2018USD ($) | |
Liabilities: | ||
Number of businesses acquired | acquisition | 5 | |
Level 3 | ||
Liabilities: | ||
Contingent consideration | $ 179,911 | |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Total assets | $ 654 | 236 |
Liabilities: | ||
Contingent consideration | 176,227 | 179,911 |
Total liabilities | 178,047 | 185,303 |
Fair Value, Measurements, Recurring | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Liabilities: | ||
Derivative liabilities | 769 | 1,354 |
Fair Value, Measurements, Recurring | Derivatives Designated as Hedging Instruments | Interest Rate Contract | ||
Liabilities: | ||
Derivative liabilities | 663 | 865 |
Fair Value, Measurements, Recurring | Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 654 | 236 |
Liabilities: | ||
Derivative liabilities | 388 | 3,173 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Derivatives Designated as Hedging Instruments | Interest Rate Contract | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total assets | 654 | 236 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 1,820 | 5,392 |
Fair Value, Measurements, Recurring | Level 2 | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Liabilities: | ||
Derivative liabilities | 769 | 1,354 |
Fair Value, Measurements, Recurring | Level 2 | Derivatives Designated as Hedging Instruments | Interest Rate Contract | ||
Liabilities: | ||
Derivative liabilities | 663 | 865 |
Fair Value, Measurements, Recurring | Level 2 | Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 654 | 236 |
Liabilities: | ||
Derivative liabilities | 388 | 3,173 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 176,227 | |
Total liabilities | 176,227 | 179,911 |
Fair Value, Measurements, Recurring | Level 3 | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Derivatives Designated as Hedging Instruments | Interest Rate Contract | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Derivatives Not Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Sep. 30, 2019 | Jun. 30, 2019 | |
Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent consideration, start | $ 179,911 | |
Acquisitions | 7,184 | |
Payments | (234) | |
Changes in fair value | (10,600) | |
Effect of changes in foreign currency exchange rates | (34) | |
Fair value, current liability | 43,155 | |
Fair value, non-current liability | 133,072 | |
Level 3 | ImThera Medical, Inc. | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, current liability | 17,600 | |
Timing delay of anticipated regulatory approval, amount | 17,800 | |
Cost of sales - exclusive of amortization | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Interest rate changes | (5,800) | |
Research and development | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Interest rate changes | $ (4,900) | |
Forecast | ImThera Medical, Inc. | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Payments | $ 19,000 |
Financing Arrangements (Long-Te
Financing Arrangements (Long-Term Debt Outstanding, Revolving Credit and European Investment Bank Financing Agreement) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 204,190 | $ 162,841 |
Other | 39 | 0 |
Less current portion of long-term debt | 29,814 | 23,303 |
Total long-term debt | 174,376 | 139,538 |
Loans Payable | 2017 European Investment Bank | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 103,570 | 103,570 |
Interest rate (percent) | 3.72% | |
Loans Payable | 2019 Debt Facility | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 50,631 | 0 |
Loans Payable | 2019 Debt Facility | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 1.40% | |
Loans Payable | 2019 Debt Facility | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 3.98% | |
Loans Payable | 2014 European Investment Bank | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 37,916 | 47,606 |
Interest rate (percent) | 1.05% | |
Loans Payable | Mediocredito Italiano | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 6,951 | 7,623 |
Loans Payable | Mediocredito Italiano | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 0.50% | |
Loans Payable | Mediocredito Italiano | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 2.94% | |
Loans Payable | Bank of America, U.S. | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 2,499 | 0 |
Interest rate (percent) | 4.51% | |
Loans Payable | Banca del Mezzogiorno | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 1,358 | 2,718 |
Loans Payable | Banca del Mezzogiorno | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 0.50% | |
Loans Payable | Banca del Mezzogiorno | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 2.99% | |
Loans Payable | Region Wallonne | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 678 | 742 |
Loans Payable | Region Wallonne | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 0.75% | |
Loans Payable | Region Wallonne | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 1.24% | |
Mortgages | Mediocredito Italiano | ||
Debt Instrument [Line Items] | ||
Total long-term facilities | $ 548 | $ 582 |
Mortgages | Mediocredito Italiano | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 0.69% | |
Mortgages | Mediocredito Italiano | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate (percent) | 1.19% |
Financing Arrangements (Details
Financing Arrangements (Details) € in Millions | Jul. 25, 2019USD ($) | Jun. 30, 2019USD ($) | Jul. 25, 2019EUR (€) | Dec. 31, 2018USD ($) |
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Short-term debt | $ 7,900,000 | $ 5,500,000 | ||
Minimum | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, term | 5 days | |||
Interest rate (percent) | 0.15% | |||
Maximum | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, term | 15 years | |||
Interest rate (percent) | 8.50% | |||
US Denominated Borrowings | London Interbank Offered Rate (LIBOR) | Multicurrency Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.60% | |||
Euro Denominated Borrowings | London Interbank Offered Rate (LIBOR) | Multicurrency Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.40% | |||
Letter of credit | 2019 Debt Facility | ||||
Debt Instrument [Line Items] | ||||
Finance contract, borrowing base | $ 350,000,000 | |||
Subsequent Event | Banca Nazionale del Lavoro SpA | ||||
Debt Instrument [Line Items] | ||||
Finance contract, borrowing base | $ 44,600,000 | € 40 | ||
Debt instrument, term | 2 years | |||
Subsequent Event | Banca Nazionale del Lavoro SpA | Euro Interbank Offered Rate (EURIBOR) | Multicurrency Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.80% |
Derivatives and Risk Manageme_3
Derivatives and Risk Management (Narrative) (Details) - Derivatives Not Designated as Hedging Instruments - Foreign Exchange Contract - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Derivative [Line Items] | |||||
Notional amount | $ 198.4 | $ 198.4 | $ 320.2 | ||
Foreign exchange and other gains | |||||
Derivative [Line Items] | |||||
Gain (loss) on derivative | $ 1 | $ (4.1) | $ 4.7 | $ (11.7) |
Derivatives and Risk Manageme_4
Derivatives and Risk Management (Derivative Notional Amounts) (Details) - Derivatives Designated as Hedging Instruments - Cash Flow Hedging - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Notional amount | $ 99,600 | $ 109,134 |
After-tax, net unrealized losses on derivatives arising during period | (789) | |
Net amount expected to be reclassified to earnings in the next 12 months | (705) | |
Foreign Exchange Contract | ||
Derivative [Line Items] | ||
After-tax, net unrealized losses on derivatives arising during period | (621) | |
Net amount expected to be reclassified to earnings in the next 12 months | (621) | |
Foreign Exchange Contract | United Kingdom, Pounds | ||
Derivative [Line Items] | ||
Notional amount | 8,186 | 9,629 |
Foreign Exchange Contract | Japan, Yen | ||
Derivative [Line Items] | ||
Notional amount | 28,100 | 23,985 |
Foreign Exchange Contract | Canada, Dollars | ||
Derivative [Line Items] | ||
Notional amount | 1,900 | 7,637 |
Foreign Exchange Contract | Euro Member Countries, Euro | ||
Derivative [Line Items] | ||
Notional amount | 31,058 | 29,768 |
Interest Rate Swap Contracts | ||
Derivative [Line Items] | ||
Notional amount | 30,356 | $ 38,115 |
After-tax, net unrealized losses on derivatives arising during period | (168) | |
Net amount expected to be reclassified to earnings in the next 12 months | $ (84) |
Derivatives and Risk Manageme_5
Derivatives and Risk Management (Amount of Gain (Loss) Recognized in OCI and Income Statement) (Details) - Cash Flow Hedging - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in OCI | $ 313 | $ (25) | $ 1,622 | $ 189 |
Gains (Losses) Reclassified from AOCI to Earnings | 98 | (826) | 1,417 | 645 |
Foreign Exchange Contract | Foreign exchange and other gains | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in OCI | 313 | (25) | 1,622 | 189 |
Gains (Losses) Reclassified from AOCI to Earnings | 489 | (1,358) | 2,131 | (512) |
Foreign Exchange Contract | SG&A | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in OCI | 0 | 0 | 0 | 0 |
Gains (Losses) Reclassified from AOCI to Earnings | (418) | 549 | (728) | 1,174 |
Interest Rate Swap Contracts | Interest expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in OCI | 0 | 0 | 0 | 0 |
Gains (Losses) Reclassified from AOCI to Earnings | $ 27 | $ (17) | $ 14 | $ (17) |
Derivatives and Risk Manageme_6
Derivatives and Risk Management (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | $ 654 | $ 236 |
Total liability derivatives | 1,820 | 5,392 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 1,432 | 2,219 |
Derivatives Designated as Hedging Instruments | Accrued liabilities | Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 460 | 536 |
Derivatives Designated as Hedging Instruments | Accrued liabilities | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 769 | 1,354 |
Derivatives Designated as Hedging Instruments | Other long-term liabilities | Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 203 | 329 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 654 | 236 |
Total liability derivatives | 388 | 3,173 |
Derivatives Not Designated as Hedging Instruments | Prepaid expenses and other current assets | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 654 | 236 |
Derivatives Not Designated as Hedging Instruments | Accrued liabilities | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | $ 388 | $ 3,173 |
Leases - Components Of Operatin
Leases - Components Of Operating Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Lessee, operating lease, renewal term | 12 years | |
Operating lease right-of-use assets | $ 56,831 | $ 0 |
Accrued liabilities and other | 10,926 | 0 |
Long-term operating lease liabilities | 47,377 | $ 0 |
Total lease liabilities | $ 58,303 |
Leases - Costs (Details)
Leases - Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 3,469 | $ 7,209 |
Variable lease cost | 255 | 426 |
Short-term lease cost | 194 | 280 |
Lease, Cost | $ 3,918 | $ 7,915 |
Leases - Contractual Maturities
Leases - Contractual Maturities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 6,379 |
2020 | 11,119 |
2021 | 9,192 |
2022 | 8,074 |
2023 | 6,826 |
2024 | 22,294 |
Total lease payments | 63,884 |
Less: Amount representing interest | 5,581 |
Present value of lease liabilities | $ 58,303 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Jun. 30, 2019 |
Leases [Abstract] | |
Weighted Average Remaining Lease Term (in years) | 7 years 6 months |
Weighted Average Discount Rate | 2.30% |
Leases - Cash Flow (Details)
Leases - Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows for leases | $ 2,507 | $ 6,349 |
Operating lease assets obtained in exchange for lease liabilities | $ 2,485 | $ 2,950 |
Leases - Future Minimum Operati
Leases - Future Minimum Operating Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
Less than one year | $ 11,986 |
One to three years | 21,031 |
Three to five years | 14,998 |
Thereafter | 20,943 |
Total | $ 68,958 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) € in Thousands, $ in Thousands | Jul. 24, 2019USD ($) | May 15, 2018EUR (€) | Apr. 01, 2016USD ($) | Jul. 31, 2019USD ($) | Oct. 31, 2016EUR (€) | Jun. 30, 2019USD ($)installmentnotice | Dec. 31, 2018USD ($) | Jun. 30, 2019USD ($)installmentnotice | Dec. 31, 2004USD ($) | Jul. 30, 2019claim | Jun. 30, 2019EUR (€)installmentnotice | May 31, 2019EUR (€) | Aug. 27, 2015non-conformity | Oct. 30, 2009EUR (€) |
Other Commitments [Line Items] | ||||||||||||||
Product remediation | $ 10,485 | $ 14,745 | $ 10,485 | |||||||||||
Unrecognized tax benefits, net of settlement payment | 17,500 | 17,500 | € 15,400 | |||||||||||
Regional Internal Revenue Office of Lombardy | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Application pending approval, payments for legal settlements | 2,200 | 2,200 | € 1,900 | |||||||||||
Settled Litigation | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Litigation settlement | € 400 | 455 | ||||||||||||
Legal fees | € 84 | 96 | ||||||||||||
Threatened Litigation | Regional Internal Revenue Office of Lombardy | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Losses under dispute | $ 71,300 | $ 71,300 | € 62,600 | |||||||||||
Number of equal installments | installment | 5 | 5 | 5 | |||||||||||
Number of notice of assessments | notice | 3 | 3 | 3 | |||||||||||
FDA Warning Letter | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Number of observed non-conformities | non-conformity | 2 | |||||||||||||
Product Liability | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Litigation settlement, amount awarded to other party | $ 225,000 | |||||||||||||
Litigation provision | $ 293,300 | $ 294,100 | ||||||||||||
SNIA | Pending Litigation | SNIA s.p.a | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Compensation sought | $ 4,000,000 | |||||||||||||
SNIA | Settled Litigation | Sorin S.p.A. | Positive Outcome of Litigation | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Litigation settlement | $ 332 | |||||||||||||
Subsequent Event | Product Liability | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Pending claims, number | claim | 215 | |||||||||||||
Insurance recoveries | $ 33,800 | |||||||||||||
Insurance recoveries, number of days to be received within | 30 days | |||||||||||||
Forecast | Product Liability | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Payments for legal settlements | $ 135,000 | |||||||||||||
Tax Years 2002 - 2006 | Threatened Litigation | Regional Internal Revenue Office of Lombardy | ||||||||||||||
Other Commitments [Line Items] | ||||||||||||||
Losses under dispute | $ 116,800 | $ 116,800 | € 102,600 |
Stockholders' Equity Statement
Stockholders' Equity Statement of Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning Balance (shares) | 49,323,418 | ||||
Beginning Balance | $ 1,486,806 | $ 1,818,982 | $ 1,503,738 | $ 1,815,314 | |
Share issuances | 0 | ||||
Stock-based compensation plans | 10,198 | 6,529 | 12,352 | 9,757 | |
Net income (loss) | (29,215) | 15,066 | (44,064) | 28,339 | |
Other comprehensive Income (loss) | $ 15,539 | (57,543) | $ 11,302 | (47,946) | |
Ending Balance (shares) | 49,380,284 | 49,380,284 | |||
Ending Balance | $ 1,483,328 | $ 1,783,034 | $ 1,483,328 | $ 1,783,034 | |
Ordinary Shares | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning Balance (shares) | 49,329,000 | 48,628,000 | 49,323,000 | 48,290,000 | |
Beginning Balance | $ 76,151 | $ 75,224 | $ 76,144 | $ 74,750 | |
Share issuances (in shares) | 300,000 | ||||
Share issuances | $ 422 | ||||
Stock-based compensation plans (in shares) | 51,000 | 33,000 | 57,000 | 71,000 | |
Stock-based compensation plans | $ 66 | $ 45 | $ 73 | $ 97 | |
Ending Balance (shares) | 49,380,000 | 48,661,000 | 49,380,000 | 48,661,000 | |
Ending Balance | $ 76,217 | $ 75,269 | $ 76,217 | $ 75,269 | |
Additional Paid-In Capital | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning Balance | 1,707,117 | 1,738,044 | 1,705,111 | 1,735,048 | |
Stock-based compensation plans | 10,103 | 6,218 | 12,109 | 9,214 | |
Ending Balance | 1,717,220 | 1,744,262 | 1,717,220 | 1,744,262 | |
Treasury Stock | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning Balance | (1,321) | (375) | (1,462) | (133) | |
Share issuances | (422) | ||||
Stock-based compensation plans | 29 | 266 | 170 | 446 | |
Ending Balance | (1,292) | (109) | (1,292) | (109) | |
Accumulated Other Comprehensive (Loss) Income | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning Balance | (28,713) | 54,910 | (24,476) | 45,313 | |
Other comprehensive Income (loss) | 15,539 | 11,302 | (47,946) | ||
Ending Balance | (13,174) | (2,633) | (13,174) | (2,633) | |
Retained Deficit | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning Balance | (266,428) | (48,821) | (251,579) | (39,664) | |
Net income (loss) | (29,215) | 15,066 | (44,064) | 28,339 | |
Ending Balance | $ (295,643) | $ (33,755) | $ (295,643) | $ (33,755) | |
Accounting Standards Update 2016-16 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of ASU | $ (22,430) | ||||
Accounting Standards Update 2016-16 | Retained Deficit | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of ASU | $ (22,430) |
Stockholders' Equity (Comprehen
Stockholders' Equity (Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | $ 1,486,806 | $ 1,818,982 | $ 1,503,738 | $ 1,815,314 |
Net current-period other comprehensive loss, net of tax | 15,539 | (57,543) | 11,302 | (47,946) |
Ending Balance | 1,483,328 | 1,783,034 | 1,483,328 | 1,783,034 |
Change in Unrealized Gain (Loss) on Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | (944) | (919) | ||
Other comprehensive income (loss) before reclassifications, before tax | 1,622 | 189 | ||
Tax expense (benefit) | (390) | (45) | ||
Other comprehensive income (loss) before reclassifications, net of tax | 1,232 | 144 | ||
Reclassification of gain from accumulated other comprehensive income (loss), before tax | (1,417) | (645) | ||
Reclassification of tax expense (benefit) | 340 | 156 | ||
Reclassification of gain from accumulated other comprehensive income (loss), after tax | (1,077) | (489) | ||
Net current-period other comprehensive loss, net of tax | 155 | (345) | ||
Ending Balance | (789) | (1,264) | (789) | (1,264) |
Foreign Currency Translation Adjustments Gain (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | (23,532) | 46,232 | ||
Other comprehensive income (loss) before reclassifications, before tax | 11,147 | (38,590) | ||
Tax expense (benefit) | 0 | 0 | ||
Other comprehensive income (loss) before reclassifications, net of tax | 11,147 | (38,590) | ||
Reclassification of gain from accumulated other comprehensive income (loss), before tax | 0 | (9,011) | ||
Reclassification of tax expense (benefit) | 0 | 0 | ||
Reclassification of gain from accumulated other comprehensive income (loss), after tax | 0 | (9,011) | ||
Net current-period other comprehensive loss, net of tax | 11,147 | (47,601) | ||
Ending Balance | (12,385) | (1,369) | (12,385) | (1,369) |
Accumulated Other Comprehensive (Loss) Income | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | (28,713) | 54,910 | (24,476) | 45,313 |
Other comprehensive income (loss) before reclassifications, before tax | 12,769 | (38,401) | ||
Tax expense (benefit) | (390) | (45) | ||
Other comprehensive income (loss) before reclassifications, net of tax | 12,379 | (38,446) | ||
Reclassification of gain from accumulated other comprehensive income (loss), before tax | (1,417) | (9,656) | ||
Reclassification of tax expense (benefit) | 340 | 156 | ||
Reclassification of gain from accumulated other comprehensive income (loss), after tax | (1,077) | (9,500) | ||
Net current-period other comprehensive loss, net of tax | 15,539 | 11,302 | (47,946) | |
Ending Balance | $ (13,174) | $ (2,633) | $ (13,174) | $ (2,633) |
Stock-Based Incentive Plan (Com
Stock-Based Incentive Plan (Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 8,724 | $ 7,453 | $ 15,596 | $ 12,150 |
Share-based compensation arrangement, vesting period | 4 years | |||
Share-based compensation arrangement, compensation cost | 3,100 | $ 3,200 | ||
Service-based restricted stock units (“RSUs”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 3,875 | 2,634 | 6,845 | 4,790 |
Service-based stock appreciation rights (“SARs”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 2,900 | 2,675 | 4,908 | 4,023 |
Market performance-based restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 838 | 959 | $ 1,389 | 1,305 |
Share-based compensation arrangement, vesting period | 3 years | |||
Operating performance-based restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 798 | 1,185 | $ 1,769 | 2,032 |
Share-based compensation arrangement, vesting period | 3 years | |||
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 313 | $ 0 | $ 685 | $ 0 |
Stock-Based Incentive Plan (Exe
Stock-Based Incentive Plan (Executed Agreements) (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Service-based stock appreciation rights (“SARs”) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 592 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 31.22 |
Service-based restricted stock units (“RSUs”) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 278 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 93.25 |
Market performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 44 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 100.41 |
Operating performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 44 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 96.59 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate (percent) | 17.30% | (5.50%) | 22.40% | 7.00% | |
Unrecognized tax benefits | $ 17.2 | $ 17.2 | $ 22.9 | ||
Unrecognized tax benefits, potential decrease amount | $ 1.3 |
Net Income Per Share (Schedule
Net Income Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average shares outstanding (in Shares) | 48,342 | 48,487 | 48,295 | 48,406 |
Add effects of share-based compensation instruments (in Shares) | 0 | 851 | 0 | 857 |
Diluted weighted average shares outstanding (in Shares) | 48,342 | 49,338 | 48,295 | 49,263 |
Net Income Per Share (Narrative
Net Income Per Share (Narrative of Antidilutive Securities Excluded from Computation of Earnings Per Share) (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock Compensation Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 3.1 | 0.7 | 3.2 | 0.8 |
Geographic and Segment Inform_3
Geographic and Segment Information (Segment Info) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($)geographic_region | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segmentgeographic_region | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||||
Reportable segments | segment | 2 | ||||
Number of geographic regions in which entity operates | geographic_region | 3 | 3 | |||
Net sales | $ 277,169 | $ 287,498 | $ 527,970 | $ 537,896 | |
Total reportable segment (loss) income from continuing operations | (14,938) | 36,309 | (20,617) | 62,481 | |
Merger and integration expenses | 4,378 | 4,409 | 7,629 | 7,369 | |
Charges | 1,332 | 476 | 3,865 | 2,357 | |
Amortization of intangibles | 9,228 | 9,817 | 18,544 | 18,618 | |
Operating (loss) income from continuing operations | (29,876) | 21,607 | (50,655) | 34,137 | |
Interest income | 224 | 232 | 473 | 679 | |
Interest expense | (4,054) | (3,006) | (5,716) | (5,117) | |
Gain on acquisition | 0 | 0 | 0 | 11,484 | |
Foreign exchange and other losses | (1,851) | (70) | (1,122) | (343) | |
(Loss) income from continuing operations before tax | (35,557) | 18,763 | (57,020) | 40,840 | |
Impairment of intangible assets | 50,295 | 0 | 50,295 | 0 | |
Assets | 2,621,659 | 2,621,659 | $ 2,549,701 | ||
Capital expenditures | 5,913 | 6,350 | 10,796 | 12,196 | |
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 277,169 | 287,498 | 527,970 | 537,896 | |
Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 172,244 | 176,456 | 327,735 | 332,628 | |
Charges | 316 | 398 | 738 | 1,739 | |
Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 104,269 | 110,653 | 198,918 | 204,497 | |
Charges | 53 | 11 | 485 | 17 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Charges | 963 | 67 | 2,642 | 601 | |
Continuing Operations | Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Total reportable segment (loss) income from continuing operations | 10,120 | 16,337 | 11,109 | 26,595 | |
Assets | 1,571,953 | 1,571,953 | 1,532,825 | ||
Capital expenditures | 4,835 | 4,594 | 8,386 | 7,725 | |
Continuing Operations | Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Total reportable segment (loss) income from continuing operations | 619 | 57,211 | 22,250 | 95,945 | |
Assets | 716,531 | 716,531 | 731,840 | ||
Capital expenditures | 127 | 500 | 530 | 847 | |
Continuing Operations | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total reportable segment (loss) income from continuing operations | (25,677) | (37,239) | (53,976) | (60,059) | |
Assets | 333,175 | 333,175 | $ 285,036 | ||
Capital expenditures | 951 | 1,256 | 1,880 | 2,699 | |
Discontinued Operations | |||||
Segment Reporting Information [Line Items] | |||||
Capital expenditures | 0 | 0 | 0 | 925 | |
United States | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 134,576 | 143,149 | 262,974 | 266,122 | |
United States | Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 54,025 | 53,754 | 105,537 | 98,735 | |
United States | Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 80,551 | 89,395 | 157,437 | 167,387 | |
Europe | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 58,180 | 60,075 | 115,032 | 119,352 | |
Europe | Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 45,184 | 48,132 | 91,377 | 97,118 | |
Europe | Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 12,996 | 11,943 | 23,655 | 22,234 | |
Rest of world | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 84,413 | 84,274 | 149,964 | 152,422 | |
Rest of world | Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 73,035 | 74,570 | 130,821 | 136,775 | |
Rest of world | Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 10,722 | 9,315 | 17,826 | 14,876 | |
Rest of world | Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 656 | 389 | 1,317 | 771 | |
Cardiopulmonary | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 130,579 | 136,639 | 252,149 | 261,769 | |
Cardiopulmonary | United States | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 41,403 | 42,139 | 80,526 | 80,584 | |
Cardiopulmonary | Europe | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 34,320 | 35,916 | 69,881 | 72,786 | |
Cardiopulmonary | Rest of world | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 54,856 | 58,584 | 101,742 | 108,399 | |
Heart Valves | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 33,351 | 33,802 | 59,024 | 64,844 | |
Heart Valves | United States | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 4,678 | 6,147 | 9,034 | 12,683 | |
Heart Valves | Europe | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 10,672 | 11,863 | 21,185 | 23,979 | |
Heart Valves | Rest of world | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 18,001 | 15,792 | 28,805 | 28,182 | |
Advanced Circulatory Support | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 8,314 | 6,015 | 16,562 | 6,015 | |
Advanced Circulatory Support | United States | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 7,944 | 5,468 | 15,977 | 5,468 | |
Advanced Circulatory Support | Europe | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 192 | 353 | 311 | 353 | |
Advanced Circulatory Support | Rest of world | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 178 | $ 194 | $ 274 | $ 194 |
Geographic and Segment Inform_4
Geographic and Segment Information (Changes in Carrying Amount of Goodwill) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning | $ 956,815 |
Goodwill as a result of acquisitions | 1,550 |
Measurement period adjustments | (3,326) |
Foreign currency adjustments | 6,676 |
Goodwill, ending | 961,715 |
Operating Segments | Neuromodulation | |
Goodwill [Roll Forward] | |
Goodwill, beginning | 398,539 |
Goodwill as a result of acquisitions | 0 |
Measurement period adjustments | 0 |
Foreign currency adjustments | 675 |
Goodwill, ending | 399,214 |
Operating Segments | Cardiovascular | |
Goodwill [Roll Forward] | |
Goodwill, beginning | 515,859 |
Goodwill as a result of acquisitions | 1,550 |
Measurement period adjustments | (3,326) |
Foreign currency adjustments | 6,001 |
Goodwill, ending | 520,084 |
Other | |
Goodwill [Roll Forward] | |
Goodwill, beginning | 42,417 |
Goodwill as a result of acquisitions | 0 |
Measurement period adjustments | 0 |
Foreign currency adjustments | 0 |
Goodwill, ending | $ 42,417 |
Geographic and Segment Inform_5
Geographic and Segment Information (Geographic Areas) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 185,098 | $ 191,400 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 65,079 | 68,862 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 109,807 | 112,376 |
Rest of world | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 10,212 | $ 10,162 |
Supplemental Financial Inform_3
Supplemental Financial Information (Summary of Inventory) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 46,403 | $ 40,387 |
Work-in-process | 20,446 | 15,999 |
Finished goods | 101,820 | 97,149 |
Inventory, Net | 168,669 | 153,535 |
Provision for obsolescence | $ 11,000 | $ 11,600 |
Supplemental Financial Inform_4
Supplemental Financial Information (Summary of Accrued Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Contingent consideration | $ 43,155 | $ 18,530 |
CRM purchase price adjustment payable to MicroPort Scientific Corporation | 14,891 | 14,891 |
Operating lease liabilities | 10,926 | 0 |
Product remediation | 10,485 | 13,945 |
Legal and administrative costs | 8,777 | 9,189 |
Provisions for agents, returns and other | 4,052 | 4,934 |
Restructuring related liabilities | 4,261 | 9,393 |
Other amounts payable to MicroPort Scientific Corporation | 2,857 | 9,319 |
Derivative contract liabilities | 963 | 5,063 |
Other accrued expenses | 40,361 | 39,021 |
Accrued liabilities | 140,728 | 124,285 |
Contract liability | $ 5,600 | $ 4,800 |
New Accounting Pronouncements_2
New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease assets | $ 56,831 | $ 0 | |
Present value of lease liabilities | $ 58,303 | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease assets | $ 60,000 | ||
Present value of lease liabilities | $ 60,000 |