Cover Page
Cover Page - shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jul. 27, 2020 | |
Cover [Abstract] | |||
Document Type | 10-Q | ||
Document Quarterly Report | true | ||
Document Period End Date | Jun. 30, 2020 | ||
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 (in shares) | 48,666,835 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 182,206 | $ 277,169 | $ 424,603 | $ 527,970 |
Costs and expenses: | ||||
Cost of sales - exclusive of amortization | 56,762 | 74,942 | 125,685 | 159,196 |
Product remediation | 4,269 | 5,113 | 5,735 | 8,060 |
Selling, general and administrative | 98,048 | 127,213 | 218,225 | 252,917 |
Research and development | 25,152 | 34,544 | 61,054 | 78,119 |
Merger and integration expenses | 2,048 | 4,378 | 5,522 | 7,629 |
Restructuring expenses | 794 | 1,332 | 2,374 | 3,865 |
Impairment of intangible assets | 0 | 50,295 | 0 | 50,295 |
Amortization of intangibles | 9,394 | 9,228 | 19,661 | 18,544 |
Litigation provision, net | 976 | 0 | 976 | 0 |
Operating loss from continuing operations | (15,237) | (29,876) | (14,629) | (50,655) |
Interest income | 287 | 224 | 435 | 473 |
Interest expense | (5,715) | (4,054) | (10,564) | (5,716) |
Foreign exchange and other losses | (999) | (1,851) | (2,913) | (1,122) |
Loss from continuing operations before tax | (21,664) | (35,557) | (27,671) | (57,020) |
Income tax expense (benefit) | 66,285 | (6,164) | 21,571 | (12,778) |
Losses from equity method investments | (44) | 0 | (173) | 0 |
Net loss from continuing operations | (87,993) | (29,393) | (49,415) | (44,242) |
Net income (loss) from discontinued operations, net of tax | 0 | 178 | (995) | 178 |
Net loss | $ (87,993) | $ (29,215) | $ (50,410) | $ (44,064) |
Basic (loss) income per share: | ||||
Continuing operations (in dollars per share) | $ (1.81) | $ (0.61) | $ (1.02) | $ (0.92) |
Discontinued operations (in dollars per share) | 0 | 0.01 | (0.02) | 0.01 |
Earnings per share (in dollars per share) | (1.81) | (0.60) | (1.04) | (0.91) |
Diluted (loss) income per share: | ||||
Continuing operations (in dollars per share) | (1.81) | (0.61) | (1.02) | (0.92) |
Discontinued operations (in dollars per share) | 0 | 0.01 | (0.02) | 0.01 |
Earnings per share (in dollars per share) | $ (1.81) | $ (0.60) | $ (1.04) | $ (0.91) |
Shares used in computing basic (loss) income per share (in shares) | 48,611 | |||
Shares used in computing diluted (loss) income per share (in shares) | 48,611 | 48,342 | 48,548 | 48,295 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (87,993) | $ (29,215) | $ (50,410) | $ (44,064) |
Other comprehensive income (loss): | ||||
Net change in unrealized loss on derivatives | 1,029 | 215 | (327) | 205 |
Tax effect | (246) | (52) | 79 | (50) |
Net of tax | 783 | 163 | (248) | 155 |
Foreign currency translation adjustment | 16,651 | 15,376 | (15,449) | 11,147 |
Total other comprehensive income (loss) | 17,434 | 15,539 | (15,697) | 11,302 |
Total comprehensive loss | $ (70,559) | $ (13,676) | $ (66,107) | $ (32,762) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 232,549 | $ 61,137 |
Accounts receivable, net of allowance of $15,320 at June 30, 2020 and $13,105 at December 31, 2019 | 186,144 | 257,769 |
Inventories, net | 177,246 | 164,154 |
Prepaid and refundable taxes | 41,662 | 37,779 |
Prepaid expenses and other current assets | 34,838 | 28,604 |
Total Current Assets | 672,439 | 549,443 |
Property, plant and equipment, net | 185,670 | 181,354 |
Goodwill | 902,204 | 915,794 |
Intangible assets, net | 583,490 | 607,546 |
Operating lease assets | 51,114 | 54,372 |
Investments | 30,245 | 27,256 |
Deferred tax assets | 23,148 | 68,676 |
Other assets | 54,353 | 7,356 |
Total Assets | 2,502,663 | 2,411,797 |
Current Liabilities: | ||
Current debt obligations | 7,449 | 77,396 |
Accounts payable | 69,065 | 85,892 |
Accrued liabilities and other | 97,238 | 120,100 |
Current litigation provision liability | 37,420 | 146,026 |
Taxes payable | 8,365 | 12,719 |
Accrued employee compensation and related benefits | 48,827 | 70,420 |
Total Current Liabilities | 268,364 | 512,553 |
Long-term debt obligations | 639,189 | 260,330 |
Contingent consideration | 71,236 | 114,396 |
Litigation provision liability | 11,611 | 24,378 |
Deferred tax liabilities | 30,106 | 32,219 |
Long-term operating lease liabilities | 42,388 | 46,027 |
Long-term employee compensation and related benefits | 22,398 | 22,797 |
Long-term derivative liability | 71,501 | 61 |
Other long-term liabilities | 12,684 | 15,319 |
Total Liabilities | 1,169,477 | 1,028,080 |
Commitments and contingencies (Note 10) | ||
Stockholders’ Equity: | ||
Ordinary Shares, £1.00 par value: unlimited shares authorized; 49,476,223 shares issued and 48,667,203 shares outstanding at June 30, 2020; 49,411,016 shares issued and 48,443,830 shares outstanding at December 31, 2019 | 76,338 | 76,257 |
Additional paid-in capital | 1,750,798 | 1,734,870 |
Accumulated other comprehensive loss | (35,089) | (19,392) |
Accumulated deficit | (457,804) | (406,755) |
Treasury stock at cost, 809,020 ordinary shares at June 30, 2020, 967,186 ordinary shares at December 31, 2019 | (1,057) | (1,263) |
Total Stockholders’ Equity | 1,333,186 | 1,383,717 |
Total Liabilities and Stockholders’ Equity | $ 2,502,663 | $ 2,411,797 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands | Jun. 30, 2020USD ($)shares | Jun. 30, 2020£ / shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2019£ / shares |
Statement of Financial Position [Abstract] | ||||
Allowance for doubtful accounts | $ | $ 15,320 | $ 13,105 | ||
Ordinary shares, par value (in pounds per share) | £ / shares | £ 1 | £ 1 | ||
Ordinary shares issued (in shares) | 49,476,223 | 49,411,016 | ||
Ordinary shares outstanding (in shares) | 48,667,203 | 48,443,830 | ||
Treasury stock (in shares) | 809,020 | 967,186 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Activities: | ||
Net loss | $ (50,410) | $ (44,064) |
Non-cash items included in net loss: | ||
Deferred tax expense | 46,171 | 15,897 |
Remeasurement of contingent consideration to fair value | (46,034) | (10,600) |
Amortization | 19,661 | 18,544 |
Stock-based compensation | 19,034 | 15,596 |
Depreciation | 13,596 | 15,287 |
Remeasurement of derivative instruments | (7,250) | (3,762) |
Amortization of operating lease assets | 6,297 | 6,334 |
Impairment of intangible assets | 0 | 50,295 |
Other | 5,433 | 5,932 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 66,256 | (277) |
Inventories, net | (16,210) | (14,284) |
Other current and non-current assets | (10,263) | 5,291 |
Accounts payable and accrued current and non-current liabilities | (47,084) | (29,129) |
Taxes payable | (2,150) | (43,008) |
Litigation provision liability | (121,194) | 0 |
Restructuring reserve | (917) | (5,473) |
Net cash used in operating activities | (125,064) | (17,421) |
Investing Activities: | ||
Purchases of property, plant and equipment | (17,955) | (10,796) |
Purchase of investments | (3,168) | (287) |
Loans to investees | (2,250) | 0 |
Acquisitions, net of cash acquired | 0 | (10,750) |
Other | 707 | (621) |
Net cash used in investing activities | (22,666) | (22,454) |
Financing Activities: | ||
Proceeds from long-term debt obligations | 886,899 | 53,777 |
Repayment of long-term debt obligations | (481,254) | (12,125) |
Proceeds from short term borrowings (maturities greater than 90 days) | 46,717 | 0 |
Repayments of short term borrowings (maturities greater than 90 days) | (44,838) | 0 |
Purchase of capped call | (43,096) | 0 |
Debt issuance costs | (19,970) | (3,688) |
Closing adjustment payment for sale of CRM business | (14,891) | 0 |
Payment of contingent consideration | (5,250) | (284) |
Shares repurchased from employees for minimum tax withholding | (5,177) | (5,714) |
Proceeds from share issuances under ESPP | 2,064 | 2,574 |
Change in short-term borrowing, net | (1,532) | 2,355 |
Other | 25 | 162 |
Net cash provided by financing activities | 319,697 | 37,057 |
Effect of exchange rate changes on cash and cash equivalents | (555) | 125 |
Net increase (decrease) in cash and cash equivalents | 171,412 | (2,693) |
Cash and cash equivalents at beginning of period | 61,137 | 47,204 |
Cash and cash equivalents at end of period | $ 232,549 | $ 44,511 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Financial Statements | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
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, 2020 and 2019, 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, 2019 has been derived from audited financial statements contained in our 2019 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, 2020, and are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The financial information presented herein should be read in conjunction with the audited consolidated financial statements and notes thereto accompanying our 2019 Form 10-K. Recent Developments Regarding COVID-19 Due to the COVID-19 pandemic (COVID 19), we have experienced and may continue to experience significant and unpredictable reductions in the demand for our products as healthcare customers have diverted medical resources and priorities towards the treatment of COVID-19. In addition, public health bodies have delayed elective procedures during the COVID-19 pandemic, which has negatively impacted the usage of our products, including the number of Neuromodulation procedures. Further, some people are avoiding seeking treatment for non-COVID-19 emergency procedures, which has also negatively impacted the demand for our products. We are beginning to see signs of stabilization in certain geographies as elective surgeries resume and expect this trend to continue on a global basis during the second half of 2020. We expect elective procedure recovery rates to vary by country, and to be impacted by COVID-19 case volumes, hospital occupancy and staffing levels, patient’s willingness to re-book previously deferred procedures, travel restrictions, transportation limitations, quarantine restrictions, economic uncertainty and potential COVID-19 resurgence. 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. Significant Accounting Policies |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | 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 segment as a part of our Heart Valves business. Cash of $10.8 million was paid at closing with up to $6.0 million in contingent consideration based on achieving certain milestones. The purchase price allocation for the Miami Instruments acquisition was finalized during the second quarter of 2020 and resulted in no measurement period adjustments. In connection with this acquisition, we recognized $14.7 million in developed technology and in-process research and development (“IPR&D”) intangible assets and $1.5 million in goodwill. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | On April 30, 2018, we completed the sale of our Cardiac Rhythm Management (“CRM”) business franchise to MicroPort Cardiac Rhythm B.V. and MicroPort Scientific Corporation (“MicroPort”) for total cash proceeds of $195.9 million, less cash transferred of $9.2 million, subject to a closing working capital adjustment. In March 2020, we finalized the working capital adjustment and as a result, made a $16.4 million payment to MicroPort during the first quarter of 2020 and incurred an additional $1.0 million loss on sale, net of a $0.1 million tax benefit. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
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). The following table presents the accruals and other reserves recorded in connection with our restructuring plans (in thousands): Employee Severance and Other Termination Costs Other Total Balance at December 31, 2019 $ 4,097 $ 1,400 $ 5,497 Charges 2,374 — 2,374 Cash payments and other (5,327) (736) (6,063) Balance at June 30, 2020 $ 1,144 $ 664 $ 1,808 The following table presents restructuring expense by reportable segment (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cardiovascular $ 570 $ 316 $ 1,256 $ 738 Neuromodulation 305 53 808 485 Other (81) 963 310 2,642 Total $ 794 $ 1,332 $ 2,374 $ 3,865 |
Product Remediation Liability
Product Remediation Liability | 6 Months Ended |
Jun. 30, 2020 | |
Product Remediation [Abstract] | |
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. In October 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., and on February 25, 2020, LivaNova received clearance for K191402, a 510(k) for the 3T devices that addressed issues contained in the 2015 Warning Letter along with design changes that further mitigate the potential risk of aerosolization. Concurrent with this clearance, (1) 3T devices manufactured in accordance with K191402 will not be subjected to the import alert previously issued by the FDA and (2) LivaNova initiated a correction to distribute the updated Operating Instructions cleared under K191402. As a second 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. The deep disinfection service was rolled out in Europe in the second half of 2015, and in April 2018, the FDA agreed to allow us to move forward with the deep cleaning service in the U.S., thereby adding to the growing list of countries around the world in which we offer this service. Finally, we are continuing to offer the loaner program for 3T devices, initiated in the fourth quarter of 2016, to provide existing 3T device users with a new loaner 3T device at no charge pending regulatory approval and implementation of the vacuum system addition and deep disinfection service worldwide. This loaner program is available on a global basis. The following table provides a reconciliation of the beginning and ending balance of the product remediation liability included within accrued liabilities and other on the condensed consolidated balance sheet (in thousands): Balance at December 31, 2019 $ 3,251 Adjustments 1,392 Remediation activity (3,099) Effect of changes in foreign currency exchange rates (11) Balance at June 30, 2020 $ 1,533 We recognized product remediation expenses of $4.3 million and $5.1 million during the three months ended June 30, 2020 and 2019, respectively, and $5.7 million and $8.1 million during the six months ended June 30, 2020 and 2019, respectively. 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, 2020, our balance sheet includes a $49.0 million provision related to litigation involving our 3T device. For further information, please refer to “Note 10. Commitments and Contingencies.” |
Investments
Investments | 6 Months Ended |
Jun. 30, 2020 | |
Investments [Abstract] | |
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. The below equity investments are included in investments on the condensed consolidated balance sheets (in thousands): Equity Investments Without Readily Determinable Fair Values June 30, 2020 December 31, 2019 Respicardia Inc. (1) $ 17,706 $ 17,706 ALung Technologies, Inc. (2) 3,000 — Ceribell, Inc. 3,000 3,000 ShiraTronics, Inc. 2,045 2,045 Rainbow Medical Ltd. 1,097 1,099 MD Start II 1,121 1,121 Highlife S.A.S. 1,063 1,064 Other 770 770 29,802 26,805 Equity method investment 443 451 $ 30,245 $ 27,256 (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 $0.8 million and $0.6 million as of June 30, 2020 and December 31, 2019, respectively, which is included in prepaid expenses and other current assets on the condensed consolidated balance sheet. (2) During the first quarter of 2020, we invested in ALung Technologies, Inc. (“ALung”). ALung is a privately held medical device company focused on creating advanced medical devices for treating respiratory failure. ALung’s Hemolung Respiratory Assist System is a dialysis-like alternative or supplement to mechanical ventilation which removes carbon dioxide directly from the blood in patients with acute respiratory failure. During the second quarter of 2020, we provided a loan to ALung for $2.0 million, due July 10, 2021. The loan may be converted, at LivaNova’s option, to either ALung’s Series C Senior Convertible Participating Preferred Stock or ALung’s Series D convertible participating preferred stock at $0.8069 per share. As of June 30, 2020, the carrying amount of the loan was $2.0 million , which is included in other assets on the condensed consolidated balance sheet. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
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, 2020 and 2019. 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, 2020 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (foreign currency exchange rate “FX”) $ 383 $ — $ 383 $ — Derivative assets - freestanding instruments (FX) 20 — 20 — Derivative assets - capped call derivatives 44,925 — — 44,925 Convertible notes receivable 2,267 — — 2,267 $ 47,595 $ — $ 403 $ 47,192 Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 78 $ — $ 78 $ — Derivative liabilities - freestanding instruments (interest rate swaps) 194 — 194 — Derivative liabilities - freestanding instruments (FX) 1,601 — 1,601 — Derivative liabilities - embedded exchange feature 71,501 — — 71,501 Contingent consideration arrangements 85,120 — — 85,120 $ 158,494 $ — $ 1,873 $ 156,621 Fair Value as of December 31, 2019 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (FX) $ 535 $ — $ 535 $ — Derivative assets - freestanding instruments (FX) 26 — 26 — $ 561 $ — $ 561 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 169 $ — $ 169 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 374 — 374 — Derivative liabilities - freestanding instruments (FX) 3,137 — 3,137 — Contingent consideration arrangements 137,349 — — 137,349 $ 141,029 $ — $ 3,680 $ 137,349 The following table provides a reconciliation of the beginning and ending balances of our recurring fair value measurements, using significant unobservable inputs (Level 3) (in thousands): Capped Call Derivative Asset Embedded Exchange Feature Liability Contingent Consideration Liability Arrangements Convertible Notes Receivable As of December 31, 2019 $ — $ — $ 137,349 $ — Additions 43,096 74,951 — 2,267 Payments (1) — — (6,068) — Changes in fair value (2) (3) (4) 1,829 (3,450) (46,034) — Effect of changes in foreign currency exchange rates — — (127) — Total at June 30, 2020 44,925 71,501 85,120 2,267 Less current portion at June 30, 2020 — — 13,884 — Long-term portion at June 30, 2020 $ 44,925 $ 71,501 $ 71,236 $ 2,267 (1) During the six months ended June 30, 2020, we paid $5.0 million under the contingent consideration arrangement for the acquisition of CardiacAssist, Inc., doing business as TandemLife (“TandemLife”). Additionally, we made the final payments for the contingent consideration arrangements with the previous acquisitions of two distributors. (2) The contingent consideration change in fair value during the six months ended June 30, 2020 is primarily due to a one-year delay in the projected achievement of a certain regulatory milestone and timing of sales-based earnout payments for ImThera Medical Inc. (“ImThera”), and the impact of an increase in discount rates utilized in the valuation of contingent consideration. Refer to the tables below for further information regarding the fair value measurements of contingent consideration. (3) During the six months ended June 30, 2020, the contingent consideration change in fair value resulted in a decrease of $24.4 million and $21.6 million recorded to cost of sales - exclusive of amortization and research and development, respectively. (4) Changes in the fair value of the embedded exchange feature derivative and capped call derivatives are recognized in foreign exchange and other losses in the condensed consolidated statements of income (loss). Embedded Exchange Feature and Capped Call Derivatives In June 2020, the Company issued $287.5 million in cash exchangeable senior notes and entered into related capped call transactions. The cash exchangeable senior notes include an embedded exchange option that is bifurcated from the cash exchangeable senior notes. Please refer to “Note 8. Financing Arrangements” for further details. The embedded exchange feature derivative is measured at fair value using a binomial lattice model and discounted cash flows that utilize observable and unobservable market data. The capped call derivative is measured at fair value using the Black-Scholes model utilizing observable and unobservable market data. These significant inputs include stock price, remaining contractual term, expected volatility, risk-free interest rate and expected dividend yield, as applicable. The embedded exchange feature and capped call derivatives are classified as Level 3 as the Company uses stock price historical volatility and implied volatility from options traded to determine expected volatility which is an unobservable input that is significant to the valuation. In general, an increase in our stock price volatility would increase the fair value of the embedded exchange feature and capped call derivatives which would result in a net loss. An increase in our stock price would also increase the fair value of the derivatives and would result in a net loss. As time to expiration of the options decreases with passage of time, the fair value of the derivatives would decrease. The future impact on net income depends on how significant inputs such as stock price, stock price volatility and time to expiration of the options change in relation to other inputs. The stock price volatility as of June 30, 2020 was 38%. As of June 30, 2020, a 10% lower volatility, holding other inputs constant, would result in approximate fair value for the embedded exchange feature derivative of $55.2 million and a 10% higher volatility, holding other inputs constant, would result in approximate fair value of $87.2 million. As of June 30, 2020, a 10% lower volatility, holding other inputs constant would result in approximate fair value for the capped call derivatives of $37.2 million and a 10% higher volatility, holding other inputs constant, would result in approximate fair value of $46.5 million. Contingent Consideration Arrangements The following table provides the fair value of our Level 3 contingent consideration arrangements by acquisition (in thousands): June 30, 2020 December 31, 2019 ImThera $ 71,236 $ 113,503 TandemLife 9,136 17,311 Miami Instruments 4,748 5,338 Drilltex — 294 Other — 903 $ 85,120 $ 137,349 The ImThera business combination involved contingent consideration arrangements composed of potential cash payments upon the achievement of a certain regulatory milestone and a sales-based earnout associated with sales of products. The sales-based earnout is valued using projected sales from our internal strategic plan. Both arrangements are Level 3 fair value measurements and include the following significant unobservable inputs as of June 30, 2020: ImThera Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payment Discounted cash flow Discount rate 10.0% Probability of payment 85% Projected payment year 2024 Sales-based earnout Monte Carlo simulation Risk-adjusted discount rate 12.3 % - 12.5% Credit risk discount rate 10.1 % - 10.8% Revenue volatility 32.5% Probability of payment 85% Projected years of earnout 2025 - 2028 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 as of June 30, 2020: TandemLife Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments Discounted cash flow Discount rate 9.3% Probability of payments 70 % - 100% Projected payment years 2020 - 2021 The Miami Instruments 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 as of June 30, 2020: Miami Instruments Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments Discounted cash flow Discount rate 9.3 % - 9.4% Probability of payments 80 % - 95% Projected payment years 2020 - 2021 |
Financing Arrangements
Financing Arrangements | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | The carrying amount of our long-term debt as of June 30, 2020 and December 31, 2019 was as follows (in thousands, except interest rates): June 30, 2020 December 31, 2019 Maturity Interest Rate 2020 Senior Secured Term Loan $ 421,941 $ — June 2025 LIBOR (1% Floor) + 6.50% 2020 Cash Exchangeable Senior Notes 206,119 — December 2025 3.00% Bank of America Merrill Lynch Banco Múltiplo S.A. 6,182 8,422 July 2021 6.70% Mediocredito Italiano 5,578 6,222 December 2023 0.50 % - 2.94% Bank of America, U.S. 2,029 2,004 January 2021 3.48% 2019 Debt Facility — 184,275 2017 European Investment Bank — 103,570 2014 European Investment Bank — 28,053 Other 982 965 Total long-term facilities 642,831 333,511 Less current portion of long-term debt 3,642 73,181 Total long-term debt $ 639,189 $ 260,330 Revolving Credit The outstanding principal amount of our short-term unsecured revolving credit agreements and other agreements with various banks was $3.8 million and $4.2 million, at June 30, 2020 and December 31, 2019, respectively, with interest rates ranging from 3.21% to 7.70% and loan terms ranging from 1 day to 10 months, as of June 30, 2020. 2020 Senior Secured Term Loan On June 10, 2020, we entered into a $450.0 million five Test Period Total Secured Leverage Ratio 4 Quarters ending June 30, 2020 through each fiscal quarter thereafter until (and including) the fiscal quarter ending June 30, 2021 5.625 : 1.00 4 Quarters ending September 30, 2021 and ending each fiscal quarter thereafter 4.5 : 1.00 Debt discounts and issuance costs related to the Term Loan were approximately $28.2 million and included various legal, bank and accounting fees. Amortization of debt discount and issuance costs was $0.1 million for the three months ended June 30, 2020 and was included as part of interest expense on the condensed consolidated statement of income (loss). 2020 Cash Exchangeable Senior Notes On June 17, 2020, our wholly-owned subsidiary, LivaNova USA, Inc., issued $287.5 million aggregate principal amount of 3.00% cash exchangeable senior notes (the “Notes”) by private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The sale of the Notes resulted in approximately $278.2 million in net proceeds to the Company after deducting issuance costs. The Notes bear interest at a rate of 3.00% per year and interest will be payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The Notes mature on December 15, 2025 unless earlier exchanged, repurchased, or redeemed. Debt discounts and issuance costs related to the Notes were approximately $81.8 million and included $75.0 million of discount attributable to the embedded exchange feature, discussed below, and $6.8 million of allocated issuance costs to the Notes related to legal, bank and accounting fees. Amortization of debt discount and issuance costs was $0.4 million for the three months ended June 30, 2020 and was included as part interest expense on the condensed consolidated statement of income (loss). The Notes are exchangeable at the option of the holders only under certain circumstances and solely into cash in an amount based on the trading prices of LivaNova’s ordinary shares during a related observation period. The Notes are not exchangeable into ordinary shares of LivaNova or any other security under any circumstances. The initial exchange rate for the Notes is 16.3980 ordinary shares per $1,000 principal amount of Notes (equivalent to an initial exchange price of approximately $60.98 per share. The exchange rate is subject to adjustment in certain circumstances, as set forth in the indenture governing the Notes. The Company may redeem the Notes at its option, on or after June 20, 2023, in whole or in part, if the last reported sale price per ordinary share has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Additionally, the Company may redeem the Notes at its option, prior to December 15, 2025, in whole but not in part, in connection with certain tax-related events. Embedded Exchange Feature The embedded exchange feature of the Notes requires bifurcation from the Notes and is accounted for as a derivative liability. The fair value of the Notes’ embedded exchange feature derivative at the time of issuance was $75.0 million and was recorded as debt discount on the Notes. This discount is amortized as interest expense using the effective interest method over the term of the Notes. The Notes’ embedded exchange feature derivative is carried on the condensed consolidated balance sheets at its estimated fair value and is adjusted at the end of each reporting period, with unrealized gain or loss reflected in the consolidated statements of income (loss). The fair value of the embedded exchange feature derivative liability was $71.5 million as of June 30, 2020. See “Note 7. Fair Value Measurements.” Capped Call Transactions In connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions with certain of the initial purchasers of the Notes or their respective affiliates. The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of LivaNova’s ordinary shares underlying the Notes and are expected generally to offset any cash payments the Company is required to make upon exchange of the Notes in excess of the principal amount thereof in the event that the market value per ordinary share, as measured under the capped call transactions, is greater than the strike price of the capped call transactions, with such offset being subject to an initial cap price of $100.00 per share. The aggregate cost of the capped calls derivative assets was $43.1 million. The capped call transactions expire on December 15, 2025 and must be settled in cash. The capped calls are carried on the condensed consolidated balance sheets as a derivative asset at their estimated fair value and are adjusted at the end of each reporting period, with unrealized gain or loss reflected in the condensed consolidated statement of income (loss). The fair value of capped call derivative assets was $44.9 million as of June 30, 2020. The current and non-current classification is evaluated at each balance sheet date and may change depending on whether any exchange conditions are met. As of June 30, 2020, no exchange conditions have been met and the Notes, embedded exchange feature derivative liability, and the capped call derivative assets are classified as non-current. Please refer to “Note 7. Fair Value Measurements” for details on the valuation of the embedded exchange feature derivative liability and capped call derivative assets. Extinguishment of Debt The Company used the net proceeds from the Term Loan, together with a portion of the net proceeds of the Notes, after fees, discounts, commissions and other expenses, to repay outstanding indebtedness under the Company’s 2017 European Investment Bank loan, 2014 European Investment Bank loan, Banca Nazionale del Lavoro S.p.A loan, and 2019 Debt Facility and related expenses. The Company repaid approximately $528.0 million in aggregate outstanding principal, accrued interest and associated fees, including breakage fees and legal fees. The Company recognized a loss on debt extinguishment of $1.4 million during the three and six months ended June 30, 2020. The loss on debt extinguishment was recognized in foreign exchange and other losses in the condensed consolidated statements of income (loss). The remainder of the proceeds from the concurrent financing transactions were used to pay the cost of capped call transactions and for general corporate purposes. |
Derivatives and Risk Management
Derivatives and Risk Management | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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 FX derivative contracts to reduce the impact of foreign currency exchange rate fluctuations on earnings and cash flow. We are also exposed to equity price risk in connection with our Notes, including exchange and settlement provisions based on the price of our ordinary shares at exchange or maturity of the Notes. In addition, the capped call transactions associated with the Notes also include settlement provisions that are based on the price of our ordinary shares, subject to a capped price per share. 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. 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, 2020 and December 31, 2019 was $372.1 million and $338.0 million, respectively. These derivative contracts are designed to offset the FX effects in earnings of various intercompany loans and trade receivables. We recorded net (losses) gains for these freestanding derivatives of $(1.2) million and $1.0 million for the three months ended June 30, 2020 and 2019, respectively, and $6.9 million and $4.7 million for the six months ended June 30, 2020 and 2019, respectively. These (losses) and gains are included in foreign exchange and other losses on our condensed consolidated statement of income (loss). Counterparty Credit Risk We are exposed to credit risk in the event of non-performance by the counterparties to our derivatives at maturity. The two counterparties to the capped call transactions are financial institutions. To limit our credit risk, we selected financial institutions with a minimum long-term investment grade credit rating. Our exposure to the credit risk of the counterparties is not secured by any collateral. If a counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings, with a claim equal to our exposure at that time under the capped call transactions with that counterparty. To manage credit risk with respect to our other derivatives, the Company selects and periodically reviews counterparties based on credit ratings, limits its exposure with respect to each counterparty, and monitors the market positions. However, if one or more of these counterparties were in a liability position to the Company and were unable to meet their obligations, any transactions with the counterparty could be subject to early termination, which could result in substantial losses for the Company. Cash Flow Hedges The gross notional amounts of open derivative contracts designated as cash flow hedges at June 30, 2020 and December 31, 2019 were as follows (in thousands): Description of Derivative Contract June 30, 2020 December 31, 2019 FX derivative contracts to be exchanged for British Pounds $ 8,369 $ 10,128 FX derivative contracts to be exchanged for Japanese Yen 17,177 25,342 FX derivative contracts to be exchanged for Euros 40,315 48,838 Interest rate swap contracts (1) — 22,442 $ 65,861 $ 106,750 (1) Interest rate swap contracts were de-designated upon the repayment of the 2014 European Investment Bank loan. Refer to “Note 8. Financing Arrangements.” 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 are as follows (in thousands): Description of Derivative Contract After-Tax Net Gain in AOCI as of June 30, 2020 After-Tax Net Gain in AOCI as of Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ 265 $ 265 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 were as follows (in thousands): Three Months Ended June 30, 2020 2019 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 Gains (Losses) Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other losses $ 1,230 $ 520 $ 313 $ 489 FX derivative contracts SG&A — (234) — (418) Interest rate swap contracts Interest expense — (85) — 27 $ 1,230 $ 201 $ 313 $ 98 Six Months Ended June 30, 2020 2019 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Losses Recognized in OCI Losses Reclassified from AOCI to Earnings Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other losses $ (850) $ (85) $ 1,622 $ 2,131 FX derivative contracts SG&A — (325) — (728) Interest rate swap contracts Interest expense — (113) — 14 $ (850) $ (523) $ 1,622 $ 1,417 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 on the condensed consolidated balance sheets (in thousands): June 30, 2020 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) FX derivative contracts Prepaid expenses and other current assets $ 383 Accrued liabilities $ 78 Total derivatives designated as hedging instruments 383 78 Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Accrued liabilities 194 FX derivative contracts Prepaid expenses and other current assets 20 Accrued liabilities 1,601 Capped call derivatives Other assets 44,925 Embedded exchange feature Long-term derivative liability 71,501 Total derivatives not designated as hedging instruments 44,945 73,296 Total derivatives $ 45,328 $ 73,374 December 31, 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 $ 313 Interest rate swap contracts Long-term derivative liability 61 FX derivative contracts Prepaid expenses and other current assets $ 148 Accrued liabilities 169 FX derivative contracts Accrued liabilities 387 Total derivatives designated as hedging instruments 535 543 Derivatives Not Designated as Hedging Instruments FX derivative contracts Accrued liabilities 26 Accrued liabilities 3,104 FX derivative contracts Prepaid expenses and other current assets 33 Total derivatives not designated as hedging instruments 26 3,137 Total derivatives $ 561 $ 3,680 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 7. Fair Value Measurements.” |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
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 were 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 had informed us that the import alert was limited to the 3T devices, but that the agency reserved the right to expand the scope of the import alert if future circumstances warranted 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 were 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 were reasonably related would not be approved until the violations had been corrected; however, this restriction applied only to the Munich and Arvada facilities, which do not manufacture or design devices subject to Class III premarket approval. On February 25, 2020, LivaNova received clearance for K191402, a 510(k) for the 3T devices that addressed issues contained in the 2015 Warning Letter along with design changes that further mitigate the potential risk of aerosolization. Concurrent with this clearance, (1) 3T devices manufactured in accordance with K191402 will not be subjected to the import alert and (2) LivaNova initiated a correction to distribute the updated Operating Instructions cleared under K191402. We continue to work diligently to remediate the FDA’s inspectional observations for the Munich facility, as well as the additional issues identified in the Warning Letter. We take these matters seriously and intend to respond timely and fully to the FDA’s requests. CDC and FDA Safety Communications and Company Field Safety Notice 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 is available on a global basis. 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., and on February 25, 2020, LivaNova received clearance for K191402, a 510(k) for the 3T devices that addressed issues contained in the 2015 Warning Letter along with design changes that further mitigate the potential risk of aerosolization. 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. The deep disinfection service was rolled out in Europe in the second half of 2015, and on April 12, 2018, the FDA agreed to allow us to move forward with the deep cleaning service in the U.S. thereby 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, 2020, the product remediation liability was $1.5 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 second payment of $90 million was paid in January 2020. Cases covered by the settlement are being 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 29, 2020, including the cases encompassed in the settlement framework described above that have not yet been dismissed, we are aware of approximately 85 filed and unfiled claims worldwide, with the majority of the claims in various federal or state courts throughout the United States. This includes cases that have settled but have not yet been dismissed. 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. At June 30, 2020, the provision for these matters was $49.0 million. While the amount accrued represents our best estimate, the actual liability for resolution of these matters may vary from our estimate. The changes in the litigation provision liability during the six months ended June 30, 2020 are as follows (in thousands): Litigation Provision Liability Total litigation provision liability at December 31, 2019 $ 170,404 Payments (122,170) Adjustments 976 FX and other (179) Total litigation provision liability at June 30, 2020 49,031 Less current portion of litigation liability at June 30, 2020 37,420 Long-term portion of litigation provision liability at June 30, 2020 $ 11,611 Environmental Liability 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 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, respectively, 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 has appealed that decision to the Supreme Court. Meanwhile, 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. The Public Administrations intervened in the proceeding, with a claim for environmental damages of approximately $4 billion. 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 €292,000 (approximately $327,318 as of June 30, 2020) for legal fees. The Public Administrations appealed the 2016 Decision to the Court of Appeal of Milan, and 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 because of the Sorin spin-off, an estimated €572.1 million (approximately $641.3 million as of June 30, 2020). Additionally the Court issued a separate order, staying the proceeding until a panel of three experts can assess the environmental damages, the costs of clean-up, and the costs that the Public Administrations has already borne for the clean-up of the sites to allow the Court to decide on the second claim of the Public Administration against LivaNova, (i.e., to refund the Public Administrations for the SNIA environmental liabilities). Both LivaNova and the Public Administrations have appealed the decision to the Italian Supreme Court (Corte di Cassazione). 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 September 13, 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, and on May 18, 2020, the Patent Office issued a Final Written Decision determining that all challenged claims are unpatentable. NCT is appealing the Final Written Decision. On March 24, 2020, we were granted our request for an ex parte reexamination of the ‘307 patent, which is currently pending. The Court has stayed the litigation pending the outcome of the IPR appeal 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. Contract Litigation On November 25, 2019, LivaNova received notice of a lawsuit initiated by former members of Caisson Interventional, LLC (“Caisson”), a subsidiary of the Company acquired in 2017. The lawsuit, Todd J. Mortier, as Member Representative of the former Members of Caisson Interventional, LLC v. LivaNova USA, Inc., is currently pending in the United States District Court for the District of Minnesota. The complaint alleges (i) breach of contract, (ii) breach of the covenant of good faith and fair dealing and (iii) unjust enrichment in connection with the Company’s operation of Caisson’s Transcatheter Mitral Valve Replacement (“TMVR”) program and the Company’s November 20, 2019 announcement that it was ending the TMVR program at the end of 2019. The lawsuit seeks damages arising out of the 2017 acquisition agreement, including various regulatory milestone payments. We intend to vigorously defend this claim. The Company has not recognized an expense related to this matter because any potential loss is not currently probable or reasonably estimable. In addition, we cannot reasonably estimate a range of potential loss, if any, that may result from this matter. 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 $115.0 million as of June 30, 2020), 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 $70.2 million as of June 30, 2020). 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 $2.1 million as of June 30, 2020). As per law N. 136/2018, the Italian Revenue Agency will review the settlement and decide to approve or reject the application by July 31, 2020. Until the settlement is approved by the Italian Revenue Agency, we will continue to reserve for the full amount of the potential liability, by recognizing a €15.5 million reserve for uncertain tax position (approximately $17.4 million as of June 30, 2020), 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, 2020 | |
Stockholders' Equity Note [Abstract] | |
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, 2020 and 2019 (in thousands): Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity March 31, 2020 49,414 $ 76,259 $ 1,739,873 $ (1,090) $ (52,523) $ (369,811) $ 1,392,708 Stock-based compensation plans 62 79 10,925 33 — — 11,037 Net loss — — — — — (87,993) (87,993) Other comprehensive income — — — — 17,434 — 17,434 June 30, 2020 49,476 $ 76,338 $ 1,750,798 $ (1,057) $ (35,089) $ (457,804) $ 1,333,186 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 Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity December 31, 2019 49,411 $ 76,257 $ 1,734,870 $ (1,263) $ (19,392) $ (406,755) $ 1,383,717 Adoption of ASU No. 2016-13 (1) — — — — — (639) (639) Stock-based compensation plans 65 81 15,928 206 — — 16,215 Net loss — — — — — (50,410) (50,410) Other comprehensive loss — — — — (15,697) — (15,697) June 30, 2020 49,476 $ 76,338 $ 1,750,798 $ (1,057) $ (35,089) $ (457,804) $ 1,333,186 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 (1) Refer to “Note 17. New Accounting Pronouncements” 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, 2020 and 2019 (in thousands): Change in Unrealized Gain (Loss) on Derivatives Foreign Currency Translation Adjustments Gain (Loss) (1) Total December 31, 2019 $ 513 $ (19,905) $ (19,392) Other comprehensive loss before reclassifications, before tax (850) (15,449) (16,299) Tax benefit 204 — 204 Other comprehensive loss before reclassifications, net of tax (646) (15,449) (16,095) Reclassification of loss from accumulated other comprehensive loss, before tax 523 — 523 Reclassification of tax benefit (125) — (125) Reclassification of loss from accumulated other comprehensive loss, after tax 398 — 398 Net current-period other comprehensive loss, net of tax (248) (15,449) (15,697) June 30, 2020 $ 265 $ (35,354) $ (35,089) 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 loss, before tax (1,417) — (1,417) Reclassification of tax expense 340 — 340 Reclassification of gain from accumulated other comprehensive loss, after tax (1,077) — (1,077) Net current-period other comprehensive income, net of tax 155 11,147 11,302 June 30, 2019 $ (789) $ (12,385) $ (13,174) (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. |
Stock-Based Incentive Plans
Stock-Based Incentive Plans | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
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, 2020 2019 2020 2019 Service-based restricted stock units (“RSUs”) $ 4,250 $ 3,875 $ 8,728 $ 6,845 Service-based stock appreciation rights (“SARs”) 3,290 2,900 5,974 4,908 Market performance-based restricted stock units 1,035 838 1,931 1,389 Operating performance-based restricted stock units 1,149 798 1,844 1,769 Employee share purchase plan 267 313 557 685 Total stock-based compensation expense $ 9,991 $ 8,724 $ 19,034 $ 15,596 During the six months ended June 30, 2020, 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 three Stock-based compensation agreements issued during the six months ended June 30, 2020, 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, 2020 Shares Weighted Average Grant Date Fair Value Service-based SARs 1,133 $ 15.73 Service-based RSUs 576 $ 44.36 Market performance-based RSUs 93 $ 39.83 Operating performance-based RSUs 93 $ 43.57 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Our effective income tax rate from continuing operations for the three and six months ended June 30, 2020 was (306.0)% and (78.0)% compared with 17.3% and 22.4% for the three and six months ended June 30, 2019, 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 months ended June 30, 2019, the change in the effective tax rate for the three months ended June 30, 2020 was primarily attributable to a $70.0 million valuation allowance for the U.K. net operating losses and attributes, as compared to the establishment of a valuation allowance for a portion of the U.S. federal and state net operating losses during the three months ended June 30, 2019. These valuation allowances are a result of cumulative losses and the current forecast, including the extended impact of COVID-19, that it is more likely than not that we will be unable to realize the related historical deferred tax assets. Compared with the six months ended June 30, 2019, the change in the effective tax rate for the six months ended June 30, 2020 was primarily attributable to a $42.9 million realized discrete tax benefit related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) offset by the establishment of a $70.0 million valuation allowance for the U.K. net operating losses and attributes, as compared to a release of uncertain tax positions and other discrete tax items offset by the establishment of a valuation allowance for a portion of the U.S. federal and state net operating losses during the six months ended June 30, 2019. 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 $12.9 million were unrecognized as of June 30, 2020 and December 31, 2019. 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 $12.0 million. We monitor income tax developments in countries where we conduct business. On March 27, 2020, the U.S. enacted the CARES Act which provided for a 5-year loss carryback for losses incurred in 2018-2020. We recorded a discrete tax benefit of $42.9 million to account for the effect of the CARES Act during the six months ended June 30, 2020. Further regulations and notices as well as state legislative changes addressing conformity to the CARES Act are still pending. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings 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, 2020 and 2019 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Basic and diluted weighted average shares outstanding (1) 48,611 48,342 48,548 48,295 (1) Excluded from the computation of diluted earnings per share were stock options, SARs and restricted share units totaling 4.2 million and 3.1 million for the three months ended June 30, 2020 and 2019, respectively, and 4.2 million and 3.2 million for the six months ended June 30, 2020 and 2019, 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, 2020 | |
Segment Reporting [Abstract] | |
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, developing and executing our strategy, 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 related products 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, related repair products and minimally invasive surgical instruments. Advanced circulatory support includes temporary life support controllers and product kits that can include a combination of pumps, oxygenators, and cannulae. Our Neuromodulation segment generates its revenue from the design, development and marketing of neuromodulation therapy systems for the treatment of drug-resistant epilepsy, difficult-to-treat depression (“DTD”) and obstructive sleep apnea. 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. “Other” includes corporate shared service expenses for finance, legal, human resources, information technology and corporate business development. 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, 2020 2019 2020 2019 Cardiopulmonary United States $ 25,816 $ 41,403 $ 62,674 $ 80,526 Europe 23,294 34,320 57,528 69,881 Rest of World 51,946 54,856 97,221 101,742 101,056 130,579 217,423 252,149 Heart Valves United States 2,488 4,678 5,861 9,034 Europe 5,348 10,672 14,877 21,185 Rest of World 9,630 18,001 21,939 28,805 17,466 33,351 42,677 59,024 Advanced Circulatory Support United States 5,668 7,944 15,744 15,977 Europe 303 192 673 311 Rest of World 42 178 87 274 6,013 8,314 16,504 16,562 Cardiovascular United States 33,972 54,025 84,279 105,537 Europe 28,945 45,184 73,078 91,377 Rest of World 61,618 73,035 119,247 130,821 124,535 172,244 276,604 327,735 Neuromodulation United States 44,215 80,551 117,491 157,437 Europe 6,416 12,996 16,999 23,655 Rest of World 6,581 10,722 12,379 17,826 57,212 104,269 146,869 198,918 Other 459 656 1,130 1,317 Totals United States 78,187 134,576 201,770 262,974 Europe (1) 35,361 58,180 90,077 115,032 Rest of World 68,658 84,413 132,756 149,964 Total (2) $ 182,206 $ 277,169 $ 424,603 $ 527,970 (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 (loss) income from continuing operations to consolidated loss from continuing operations before tax (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cardiovascular $ (9,407) $ 10,120 $ (726) $ 11,109 Neuromodulation 27,282 619 61,140 22,250 Other (20,876) (25,677) (47,486) (53,976) Total reportable segment (loss) income from continuing operations (3,001) (14,938) 12,928 (20,617) Merger and integration expenses 2,048 4,378 5,522 7,629 Restructuring expenses 794 1,332 2,374 3,865 Amortization of intangibles 9,394 9,228 19,661 18,544 Operating loss from continuing operations (15,237) (29,876) (14,629) (50,655) Interest income 287 224 435 473 Interest expense (5,715) (4,054) (10,564) (5,716) Foreign exchange and other losses (999) (1,851) (2,913) (1,122) Loss from continuing operations before tax $ (21,664) $ (35,557) $ (27,671) $ (57,020) Assets by segment are as follows (in thousands): June 30, 2020 December 31, 2019 Cardiovascular $ 1,428,992 $ 1,546,520 Neuromodulation 655,611 749,069 Other 418,060 116,208 Total assets $ 2,502,663 $ 2,411,797 Capital expenditures by segment are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cardiovascular $ 5,445 $ 4,835 $ 10,737 $ 8,386 Neuromodulation 836 127 6,075 530 Other 364 951 2,207 1,880 Total $ 6,645 $ 5,913 $ 19,019 $ 10,796 The changes in the carrying amount of goodwill by segment for the six months ended June 30, 2020 were as follows (in thousands): Neuromodulation Cardiovascular Total December 31, 2019 $ 398,754 $ 517,040 $ 915,794 Foreign currency adjustments — (13,590) (13,590) June 30, 2020 $ 398,754 $ 503,450 $ 902,204 Property, plant and equipment, net by geography are as follows (in thousands): June 30, 2020 December 31, 2019 United States $ 64,628 $ 61,410 Europe 112,103 110,270 Rest of World 8,939 9,674 Total $ 185,670 $ 181,354 |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Financial Information | Inventories, net consisted of the following (in thousands): June 30, 2020 December 31, 2019 Raw materials $ 47,384 $ 45,225 Work-in-process 17,810 14,581 Finished goods 112,052 104,348 $ 177,246 $ 164,154 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 $13.6 million and $12.7 million at June 30, 2020 and December 31, 2019, respectively. Accrued liabilities and other consisted of the following (in thousands): June 30, 2020 December 31, 2019 Legal and administrative costs $ 14,069 $ 11,066 Contingent consideration (1) 13,884 22,953 Operating lease liabilities 11,135 11,110 Contract liabilities 9,432 6,728 Research and development costs 5,401 5,160 Provisions for agents, returns and other 3,729 3,922 Derivative contract liabilities (2) 1,873 3,173 Restructuring related liabilities (3) 1,808 4,315 Product remediation (4) 1,533 3,251 CRM purchase price adjustment payable to MicroPort Scientific Corporation — 14,891 Other accrued expenses 34,374 33,531 $ 97,238 $ 120,100 (1) Refer to “Note 7. Fair Value Measurements” (2) Refer to “ Note 9. Derivatives and Risk Management” (3) Refer to “Note 4. Restructuring” (4) Refer to “Note 5. Product Remediation Liability” As of June 30, 2020 and December 31, 2019, contract liabilities of $11.2 million and $8.6 million, respectively, are included within accrued liabilities and other long-term liabilities on the condensed consolidated balance sheets. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
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 June 2016 ASU No. 2016-13 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. We adopted the update effective January 1, 2020 We recognized the following cumulative-effect adjustments, including to retained earnings, upon adoption at January 1, 2020: Accounts receivable, net decreased $0.6 million and accumulated deficit increased $0.6 million. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 There was no material impact to our 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 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. |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Financial Statements (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of LivaNova as of, and for the three and six months ended June 30, 2020 and 2019, 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, 2019 has been derived from audited financial statements contained in our 2019 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, 2020, and are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The financial information presented herein should be read in conjunction with the audited consolidated financial statements and notes thereto accompanying our 2019 Form 10-K. |
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. Cash flows from derivative contracts are reported as operating activities on our condensed consolidated statements of cash flows. |
Adoption of 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 June 2016 ASU No. 2016-13 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. We adopted the update effective January 1, 2020 We recognized the following cumulative-effect adjustments, including to retained earnings, upon adoption at January 1, 2020: Accounts receivable, net decreased $0.6 million and accumulated deficit increased $0.6 million. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 There was no material impact to our 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 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. |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table presents the accruals and other reserves recorded in connection with our restructuring plans (in thousands): Employee Severance and Other Termination Costs Other Total Balance at December 31, 2019 $ 4,097 $ 1,400 $ 5,497 Charges 2,374 — 2,374 Cash payments and other (5,327) (736) (6,063) Balance at June 30, 2020 $ 1,144 $ 664 $ 1,808 |
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, 2020 2019 2020 2019 Cardiovascular $ 570 $ 316 $ 1,256 $ 738 Neuromodulation 305 53 808 485 Other (81) 963 310 2,642 Total $ 794 $ 1,332 $ 2,374 $ 3,865 |
Product Remediation Liability (
Product Remediation Liability (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Product Remediation [Abstract] | |
Product Liability Contingencies | The following table provides a reconciliation of the beginning and ending balance of the product remediation liability included within accrued liabilities and other on the condensed consolidated balance sheet (in thousands): Balance at December 31, 2019 $ 3,251 Adjustments 1,392 Remediation activity (3,099) Effect of changes in foreign currency exchange rates (11) Balance at June 30, 2020 $ 1,533 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments [Abstract] | |
Schedule of Long-term Investments | The below equity investments are included in investments on the condensed consolidated balance sheets (in thousands): Equity Investments Without Readily Determinable Fair Values June 30, 2020 December 31, 2019 Respicardia Inc. (1) $ 17,706 $ 17,706 ALung Technologies, Inc. (2) 3,000 — Ceribell, Inc. 3,000 3,000 ShiraTronics, Inc. 2,045 2,045 Rainbow Medical Ltd. 1,097 1,099 MD Start II 1,121 1,121 Highlife S.A.S. 1,063 1,064 Other 770 770 29,802 26,805 Equity method investment 443 451 $ 30,245 $ 27,256 (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 $0.8 million and $0.6 million as of June 30, 2020 and December 31, 2019, respectively, which is included in prepaid expenses and other current assets on the condensed consolidated balance sheet. (2) During the first quarter of 2020, we invested in ALung Technologies, Inc. (“ALung”). ALung is a privately held medical device company focused on creating advanced medical devices for treating respiratory failure. ALung’s Hemolung Respiratory Assist System is a dialysis-like alternative or supplement to mechanical ventilation which removes carbon dioxide directly from the blood in patients with acute respiratory failure. During the second quarter of 2020, we provided a loan to ALung for $2.0 million, due July 10, 2021. The loan may be converted, at LivaNova’s option, to either ALung’s Series C Senior Convertible Participating Preferred Stock or ALung’s Series D convertible participating preferred stock at $0.8069 per share. As of June 30, 2020, the carrying amount of the loan was $2.0 million , which is included in other assets on the condensed consolidated balance sheet. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (foreign currency exchange rate “FX”) $ 383 $ — $ 383 $ — Derivative assets - freestanding instruments (FX) 20 — 20 — Derivative assets - capped call derivatives 44,925 — — 44,925 Convertible notes receivable 2,267 — — 2,267 $ 47,595 $ — $ 403 $ 47,192 Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 78 $ — $ 78 $ — Derivative liabilities - freestanding instruments (interest rate swaps) 194 — 194 — Derivative liabilities - freestanding instruments (FX) 1,601 — 1,601 — Derivative liabilities - embedded exchange feature 71,501 — — 71,501 Contingent consideration arrangements 85,120 — — 85,120 $ 158,494 $ — $ 1,873 $ 156,621 Fair Value as of December 31, 2019 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (FX) $ 535 $ — $ 535 $ — Derivative assets - freestanding instruments (FX) 26 — 26 — $ 561 $ — $ 561 $ — Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 169 $ — $ 169 $ — Derivative liabilities - designated as cash flow hedges (interest rate swaps) 374 — 374 — Derivative liabilities - freestanding instruments (FX) 3,137 — 3,137 — Contingent consideration arrangements 137,349 — — 137,349 $ 141,029 $ — $ 3,680 $ 137,349 |
Reconciliation of Beginning and Ending Balances of Contingent Consideration | The following table provides a reconciliation of the beginning and ending balances of our recurring fair value measurements, using significant unobservable inputs (Level 3) (in thousands): Capped Call Derivative Asset Embedded Exchange Feature Liability Contingent Consideration Liability Arrangements Convertible Notes Receivable As of December 31, 2019 $ — $ — $ 137,349 $ — Additions 43,096 74,951 — 2,267 Payments (1) — — (6,068) — Changes in fair value (2) (3) (4) 1,829 (3,450) (46,034) — Effect of changes in foreign currency exchange rates — — (127) — Total at June 30, 2020 44,925 71,501 85,120 2,267 Less current portion at June 30, 2020 — — 13,884 — Long-term portion at June 30, 2020 $ 44,925 $ 71,501 $ 71,236 $ 2,267 (1) During the six months ended June 30, 2020, we paid $5.0 million under the contingent consideration arrangement for the acquisition of CardiacAssist, Inc., doing business as TandemLife (“TandemLife”). Additionally, we made the final payments for the contingent consideration arrangements with the previous acquisitions of two distributors. (2) The contingent consideration change in fair value during the six months ended June 30, 2020 is primarily due to a one-year delay in the projected achievement of a certain regulatory milestone and timing of sales-based earnout payments for ImThera Medical Inc. (“ImThera”), and the impact of an increase in discount rates utilized in the valuation of contingent consideration. Refer to the tables below for further information regarding the fair value measurements of contingent consideration. (3) During the six months ended June 30, 2020, the contingent consideration change in fair value resulted in a decrease of $24.4 million and $21.6 million recorded to cost of sales - exclusive of amortization and research and development, respectively. (4) Changes in the fair value of the embedded exchange feature derivative and capped call derivatives are recognized in foreign exchange and other losses in the condensed consolidated statements of income (loss). |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The following table provides the fair value of our Level 3 contingent consideration arrangements by acquisition (in thousands): June 30, 2020 December 31, 2019 ImThera $ 71,236 $ 113,503 TandemLife 9,136 17,311 Miami Instruments 4,748 5,338 Drilltex — 294 Other — 903 $ 85,120 $ 137,349 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Both arrangements are Level 3 fair value measurements and include the following significant unobservable inputs as of June 30, 2020: ImThera Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payment Discounted cash flow Discount rate 10.0% Probability of payment 85% Projected payment year 2024 Sales-based earnout Monte Carlo simulation Risk-adjusted discount rate 12.3 % - 12.5% Credit risk discount rate 10.1 % - 10.8% Revenue volatility 32.5% Probability of payment 85% Projected years of earnout 2025 - 2028 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 as of June 30, 2020: TandemLife Acquisition Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments Discounted cash flow Discount rate 9.3% Probability of payments 70 % - 100% Projected payment years 2020 - 2021 The Miami Instruments 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 as of June 30, 2020: Miami Instruments Valuation Technique Unobservable Input Ranges Regulatory milestone-based payments Discounted cash flow Discount rate 9.3 % - 9.4% Probability of payments 80 % - 95% Projected payment years 2020 - 2021 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The carrying amount of our long-term debt as of June 30, 2020 and December 31, 2019 was as follows (in thousands, except interest rates): June 30, 2020 December 31, 2019 Maturity Interest Rate 2020 Senior Secured Term Loan $ 421,941 $ — June 2025 LIBOR (1% Floor) + 6.50% 2020 Cash Exchangeable Senior Notes 206,119 — December 2025 3.00% Bank of America Merrill Lynch Banco Múltiplo S.A. 6,182 8,422 July 2021 6.70% Mediocredito Italiano 5,578 6,222 December 2023 0.50 % - 2.94% Bank of America, U.S. 2,029 2,004 January 2021 3.48% 2019 Debt Facility — 184,275 2017 European Investment Bank — 103,570 2014 European Investment Bank — 28,053 Other 982 965 Total long-term facilities 642,831 333,511 Less current portion of long-term debt 3,642 73,181 Total long-term debt $ 639,189 $ 260,330 |
Schedule of Debt Covenants | The financial covenants under the Term Loan state (i) the net revenue of LivaNova PLC, LivaNova USA, Inc. and any restricted subsidiaries on a consolidated basis shall not be lower than $700 million for each trailing 12 month period, such threshold to decrease pro rata (not below $550 million) upon prepayments of the Term Loan made by LivaNova USA, Inc. out of the proceeds of certain asset sales, and (ii) the total secured leverage ratio (as defined in the debt agreement) for LivaNova PLC, LivaNova USA, Inc. and any restricted subsidiaries on a consolidated basis shall not be greater than the applicable ratio set forth below: Test Period Total Secured Leverage Ratio 4 Quarters ending June 30, 2020 through each fiscal quarter thereafter until (and including) the fiscal quarter ending June 30, 2021 5.625 : 1.00 4 Quarters ending September 30, 2021 and ending each fiscal quarter thereafter 4.5 : 1.00 |
Derivatives and Risk Manageme_2
Derivatives and Risk Management (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Derivative Contracts Designated Cash Flow Hedges | The gross notional amounts of open derivative contracts designated as cash flow hedges at June 30, 2020 and December 31, 2019 were as follows (in thousands): Description of Derivative Contract June 30, 2020 December 31, 2019 FX derivative contracts to be exchanged for British Pounds $ 8,369 $ 10,128 FX derivative contracts to be exchanged for Japanese Yen 17,177 25,342 FX derivative contracts to be exchanged for Euros 40,315 48,838 Interest rate swap contracts (1) — 22,442 $ 65,861 $ 106,750 (1) Interest rate swap contracts were de-designated upon the repayment of the 2014 European Investment Bank loan. Refer to “Note 8. Financing Arrangements.” |
Schedule of Cash Flow Hedges Included 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 are as follows (in thousands): Description of Derivative Contract After-Tax Net Gain in AOCI as of June 30, 2020 After-Tax Net Gain in AOCI as of Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ 265 $ 265 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 were as follows (in thousands): Three Months Ended June 30, 2020 2019 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 Gains (Losses) Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other losses $ 1,230 $ 520 $ 313 $ 489 FX derivative contracts SG&A — (234) — (418) Interest rate swap contracts Interest expense — (85) — 27 $ 1,230 $ 201 $ 313 $ 98 Six Months Ended June 30, 2020 2019 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Losses Recognized in OCI Losses Reclassified from AOCI to Earnings Gains Recognized in OCI Gains (Losses) Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other losses $ (850) $ (85) $ 1,622 $ 2,131 FX derivative contracts SG&A — (325) — (728) Interest rate swap contracts Interest expense — (113) — 14 $ (850) $ (523) $ 1,622 $ 1,417 |
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 on the condensed consolidated balance sheets (in thousands): June 30, 2020 Asset Derivatives Liability Derivatives Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value (1) Balance Sheet Location Fair Value (1) FX derivative contracts Prepaid expenses and other current assets $ 383 Accrued liabilities $ 78 Total derivatives designated as hedging instruments 383 78 Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Accrued liabilities 194 FX derivative contracts Prepaid expenses and other current assets 20 Accrued liabilities 1,601 Capped call derivatives Other assets 44,925 Embedded exchange feature Long-term derivative liability 71,501 Total derivatives not designated as hedging instruments 44,945 73,296 Total derivatives $ 45,328 $ 73,374 December 31, 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 $ 313 Interest rate swap contracts Long-term derivative liability 61 FX derivative contracts Prepaid expenses and other current assets $ 148 Accrued liabilities 169 FX derivative contracts Accrued liabilities 387 Total derivatives designated as hedging instruments 535 543 Derivatives Not Designated as Hedging Instruments FX derivative contracts Accrued liabilities 26 Accrued liabilities 3,104 FX derivative contracts Prepaid expenses and other current assets 33 Total derivatives not designated as hedging instruments 26 3,137 Total derivatives $ 561 $ 3,680 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 7. Fair Value Measurements.” |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation Provision Liabilities | The changes in the litigation provision liability during the six months ended June 30, 2020 are as follows (in thousands): Litigation Provision Liability Total litigation provision liability at December 31, 2019 $ 170,404 Payments (122,170) Adjustments 976 FX and other (179) Total litigation provision liability at June 30, 2020 49,031 Less current portion of litigation liability at June 30, 2020 37,420 Long-term portion of litigation provision liability at June 30, 2020 $ 11,611 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019 (in thousands): Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity March 31, 2020 49,414 $ 76,259 $ 1,739,873 $ (1,090) $ (52,523) $ (369,811) $ 1,392,708 Stock-based compensation plans 62 79 10,925 33 — — 11,037 Net loss — — — — — (87,993) (87,993) Other comprehensive income — — — — 17,434 — 17,434 June 30, 2020 49,476 $ 76,338 $ 1,750,798 $ (1,057) $ (35,089) $ (457,804) $ 1,333,186 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 Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity December 31, 2019 49,411 $ 76,257 $ 1,734,870 $ (1,263) $ (19,392) $ (406,755) $ 1,383,717 Adoption of ASU No. 2016-13 (1) — — — — — (639) (639) Stock-based compensation plans 65 81 15,928 206 — — 16,215 Net loss — — — — — (50,410) (50,410) Other comprehensive loss — — — — (15,697) — (15,697) June 30, 2020 49,476 $ 76,338 $ 1,750,798 $ (1,057) $ (35,089) $ (457,804) $ 1,333,186 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 (1) Refer to “Note 17. New Accounting Pronouncements” 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, 2020 and 2019 (in thousands): Change in Unrealized Gain (Loss) on Derivatives Foreign Currency Translation Adjustments Gain (Loss) (1) Total December 31, 2019 $ 513 $ (19,905) $ (19,392) Other comprehensive loss before reclassifications, before tax (850) (15,449) (16,299) Tax benefit 204 — 204 Other comprehensive loss before reclassifications, net of tax (646) (15,449) (16,095) Reclassification of loss from accumulated other comprehensive loss, before tax 523 — 523 Reclassification of tax benefit (125) — (125) Reclassification of loss from accumulated other comprehensive loss, after tax 398 — 398 Net current-period other comprehensive loss, net of tax (248) (15,449) (15,697) June 30, 2020 $ 265 $ (35,354) $ (35,089) 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 loss, before tax (1,417) — (1,417) Reclassification of tax expense 340 — 340 Reclassification of gain from accumulated other comprehensive loss, after tax (1,077) — (1,077) Net current-period other comprehensive income, net of tax 155 11,147 11,302 June 30, 2019 $ (789) $ (12,385) $ (13,174) (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. |
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, 2020 and 2019 (in thousands): Change in Unrealized Gain (Loss) on Derivatives Foreign Currency Translation Adjustments Gain (Loss) (1) Total December 31, 2019 $ 513 $ (19,905) $ (19,392) Other comprehensive loss before reclassifications, before tax (850) (15,449) (16,299) Tax benefit 204 — 204 Other comprehensive loss before reclassifications, net of tax (646) (15,449) (16,095) Reclassification of loss from accumulated other comprehensive loss, before tax 523 — 523 Reclassification of tax benefit (125) — (125) Reclassification of loss from accumulated other comprehensive loss, after tax 398 — 398 Net current-period other comprehensive loss, net of tax (248) (15,449) (15,697) June 30, 2020 $ 265 $ (35,354) $ (35,089) 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 loss, before tax (1,417) — (1,417) Reclassification of tax expense 340 — 340 Reclassification of gain from accumulated other comprehensive loss, after tax (1,077) — (1,077) Net current-period other comprehensive income, net of tax 155 11,147 11,302 June 30, 2019 $ (789) $ (12,385) $ (13,174) (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. |
Stock-Based Incentive Plans (Ta
Stock-Based Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 2019 2020 2019 Service-based restricted stock units (“RSUs”) $ 4,250 $ 3,875 $ 8,728 $ 6,845 Service-based stock appreciation rights (“SARs”) 3,290 2,900 5,974 4,908 Market performance-based restricted stock units 1,035 838 1,931 1,389 Operating performance-based restricted stock units 1,149 798 1,844 1,769 Employee share purchase plan 267 313 557 685 Total stock-based compensation expense $ 9,991 $ 8,724 $ 19,034 $ 15,596 Stock-based compensation agreements issued during the six months ended June 30, 2020, 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, 2020 Shares Weighted Average Grant Date Fair Value Service-based SARs 1,133 $ 15.73 Service-based RSUs 576 $ 44.36 Market performance-based RSUs 93 $ 39.83 Operating performance-based RSUs 93 $ 43.57 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Basic and diluted weighted average shares outstanding (1) 48,611 48,342 48,548 48,295 (1) Excluded from the computation of diluted earnings per share were stock options, SARs and restricted share units totaling 4.2 million and 3.1 million for the three months ended June 30, 2020 and 2019, respectively, and 4.2 million and 3.2 million for the six months ended June 30, 2020 and 2019, 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, 2020 | |
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, 2020 2019 2020 2019 Cardiopulmonary United States $ 25,816 $ 41,403 $ 62,674 $ 80,526 Europe 23,294 34,320 57,528 69,881 Rest of World 51,946 54,856 97,221 101,742 101,056 130,579 217,423 252,149 Heart Valves United States 2,488 4,678 5,861 9,034 Europe 5,348 10,672 14,877 21,185 Rest of World 9,630 18,001 21,939 28,805 17,466 33,351 42,677 59,024 Advanced Circulatory Support United States 5,668 7,944 15,744 15,977 Europe 303 192 673 311 Rest of World 42 178 87 274 6,013 8,314 16,504 16,562 Cardiovascular United States 33,972 54,025 84,279 105,537 Europe 28,945 45,184 73,078 91,377 Rest of World 61,618 73,035 119,247 130,821 124,535 172,244 276,604 327,735 Neuromodulation United States 44,215 80,551 117,491 157,437 Europe 6,416 12,996 16,999 23,655 Rest of World 6,581 10,722 12,379 17,826 57,212 104,269 146,869 198,918 Other 459 656 1,130 1,317 Totals United States 78,187 134,576 201,770 262,974 Europe (1) 35,361 58,180 90,077 115,032 Rest of World 68,658 84,413 132,756 149,964 Total (2) $ 182,206 $ 277,169 $ 424,603 $ 527,970 (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. |
Schedule of Segment Reporting Information, by Segment | The table below presents a reconciliation of segment (loss) income from continuing operations to consolidated loss from continuing operations before tax (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cardiovascular $ (9,407) $ 10,120 $ (726) $ 11,109 Neuromodulation 27,282 619 61,140 22,250 Other (20,876) (25,677) (47,486) (53,976) Total reportable segment (loss) income from continuing operations (3,001) (14,938) 12,928 (20,617) Merger and integration expenses 2,048 4,378 5,522 7,629 Restructuring expenses 794 1,332 2,374 3,865 Amortization of intangibles 9,394 9,228 19,661 18,544 Operating loss from continuing operations (15,237) (29,876) (14,629) (50,655) Interest income 287 224 435 473 Interest expense (5,715) (4,054) (10,564) (5,716) Foreign exchange and other losses (999) (1,851) (2,913) (1,122) Loss from continuing operations before tax $ (21,664) $ (35,557) $ (27,671) $ (57,020) Assets by segment are as follows (in thousands): June 30, 2020 December 31, 2019 Cardiovascular $ 1,428,992 $ 1,546,520 Neuromodulation 655,611 749,069 Other 418,060 116,208 Total assets $ 2,502,663 $ 2,411,797 Capital expenditures by segment are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cardiovascular $ 5,445 $ 4,835 $ 10,737 $ 8,386 Neuromodulation 836 127 6,075 530 Other 364 951 2,207 1,880 Total $ 6,645 $ 5,913 $ 19,019 $ 10,796 |
Schedule of Goodwill | The changes in the carrying amount of goodwill by segment for the six months ended June 30, 2020 were as follows (in thousands): Neuromodulation Cardiovascular Total December 31, 2019 $ 398,754 $ 517,040 $ 915,794 Foreign currency adjustments — (13,590) (13,590) June 30, 2020 $ 398,754 $ 503,450 $ 902,204 |
Long-lived Assets by Geographic Areas | Property, plant and equipment, net by geography are as follows (in thousands): June 30, 2020 December 31, 2019 United States $ 64,628 $ 61,410 Europe 112,103 110,270 Rest of World 8,939 9,674 Total $ 185,670 $ 181,354 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Inventories | Inventories, net consisted of the following (in thousands): June 30, 2020 December 31, 2019 Raw materials $ 47,384 $ 45,225 Work-in-process 17,810 14,581 Finished goods 112,052 104,348 $ 177,246 $ 164,154 |
Accrued Liabilities | Accrued liabilities and other consisted of the following (in thousands): June 30, 2020 December 31, 2019 Legal and administrative costs $ 14,069 $ 11,066 Contingent consideration (1) 13,884 22,953 Operating lease liabilities 11,135 11,110 Contract liabilities 9,432 6,728 Research and development costs 5,401 5,160 Provisions for agents, returns and other 3,729 3,922 Derivative contract liabilities (2) 1,873 3,173 Restructuring related liabilities (3) 1,808 4,315 Product remediation (4) 1,533 3,251 CRM purchase price adjustment payable to MicroPort Scientific Corporation — 14,891 Other accrued expenses 34,374 33,531 $ 97,238 $ 120,100 (1) Refer to “Note 7. Fair Value Measurements” (2) Refer to “ Note 9. Derivatives and Risk Management” (3) Refer to “Note 4. Restructuring” (4) Refer to “Note 5. Product Remediation Liability” |
New Accounting Pronouncements (
New Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | 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 June 2016 ASU No. 2016-13 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. We adopted the update effective January 1, 2020 We recognized the following cumulative-effect adjustments, including to retained earnings, upon adoption at January 1, 2020: Accounts receivable, net decreased $0.6 million and accumulated deficit increased $0.6 million. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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. January 1, 2020 There was no material impact to our consolidated financial statements as a result of adopting this ASU. 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 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. |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Financial Statements (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||||
Cash and cash equivalents | $ 232,549 | $ 61,137 | $ 44,511 | $ 47,204 |
Goodwill | 902,204 | 915,794 | ||
Cardiovascular | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill | 503,450 | 517,040 | ||
Neuromodulation | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill | $ 398,754 | $ 398,754 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Jun. 12, 2019 | Jun. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 902,204 | $ 915,794 | |
Miami Instruments | |||
Business Acquisition [Line Items] | |||
Fair value of consideration transferred | $ 17,000 | ||
Cash | 10,800 | ||
Contingent consideration | 6,000 | ||
Goodwill | 1,500 | ||
Miami Instruments | Developed technology and in process research and development | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | $ 14,700 |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) - CRM Business Franchise - Discontinued Operations - USD ($) $ in Millions | Apr. 30, 2018 | Mar. 31, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Consideration transferred | $ 195.9 | |
Consideration transferred, cash | $ 9.2 | |
Working capital adjustment | $ 16.4 | |
Operating loss from discontinued operations | (1) | |
Tax benefit | $ 0.1 |
Restructuring Restructuring and
Restructuring Restructuring and Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Reserve [Roll Forward] | ||||
Charges | $ 794 | $ 1,332 | $ 2,374 | $ 3,865 |
Reorganization Plans | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 5,497 | |||
Charges | 2,374 | |||
Cash payments and other | (6,063) | |||
Balance at end of period | 1,808 | 1,808 | ||
Reorganization Plans | Employee Severance and Other Termination Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 4,097 | |||
Charges | 2,374 | |||
Cash payments and other | (5,327) | |||
Balance at end of period | 1,144 | 1,144 | ||
Reorganization Plans | Other | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | 1,400 | |||
Charges | 0 | |||
Cash payments and other | (736) | |||
Balance at end of period | $ 664 | $ 664 |
Restructuring Restructuring Exp
Restructuring Restructuring Expense by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 794 | $ 1,332 | $ 2,374 | $ 3,865 |
Operating Segments | Cardiovascular | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 570 | 316 | 1,256 | 738 |
Operating Segments | Neuromodulation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 305 | 53 | 808 | 485 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ (81) | $ 963 | $ 310 | $ 2,642 |
Product Remediation Liability_2
Product Remediation Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Accrual for Environmental Loss Contingencies [Roll Forward] | |||||
Balance at December 31, 2019 | $ 3,251 | ||||
Adjustments | 1,392 | ||||
Remediation activity | (3,099) | ||||
Effect of changes in foreign currency exchange rates | (11) | ||||
Balance at June 30, 2020 | $ 1,533 | 1,533 | |||
Product remediation expense | 4,269 | $ 5,113 | 5,735 | $ 8,060 | |
Product Liability | |||||
Product Liability Contingency [Line Items] | |||||
Litigation provision liability | $ 49,031 | $ 49,031 | $ 170,404 |
Investments (Details)
Investments (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | ||
Investments | $ 29,802 | $ 26,805 |
Equity method investment | 443 | 451 |
Total investments | 30,245 | 27,256 |
Respicardia Inc. | Cost Method Investee | Prepaid expenses and other current assets | ||
Schedule of Equity Method Investments [Line Items] | ||
Outstanding loans | 800 | 600 |
ALung Technologies, Inc. | Convertible Notes Receivable | ||
Schedule of Equity Method Investments [Line Items] | ||
Outstanding loans | 2,000 | |
Notes receivable gross | $ 2,000 | |
Preferred stock conversion, price per share (in dollars per share) | $ 0.8069 | |
Respicardia Inc. | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments | $ 17,706 | 17,706 |
ALung Technologies, Inc. | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments | 3,000 | 0 |
Ceribell, Inc. | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments | 3,000 | 3,000 |
ShiraTronics, Inc. | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments | 2,045 | 2,045 |
Rainbow Medical Ltd. | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments | 1,097 | 1,099 |
MD Start II | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments | 1,121 | 1,121 |
Highlife S.A.S. | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments | 1,063 | 1,064 |
Other | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments | $ 770 | $ 770 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Liabilities: | ||
Contingent consideration | $ 71,236 | $ 114,396 |
Capped Call Derivative | ||
Assets: | ||
Derivative asset | 44,900 | |
Not Designated as Hedging Instrument | Embedded Exchange | ||
Liabilities: | ||
Derivative liabilities | 71,501 | |
Level 1 | Not Designated as Hedging Instrument | Embedded Exchange | ||
Liabilities: | ||
Derivative liabilities | 0 | |
Level 2 | Not Designated as Hedging Instrument | Embedded Exchange | ||
Liabilities: | ||
Derivative liabilities | 0 | |
Level 3 | Not Designated as Hedging Instrument | Embedded Exchange | ||
Liabilities: | ||
Derivative liabilities | 71,501 | |
Fair Value, Recurring | ||
Assets: | ||
Convertible notes receivable | 2,267 | |
Total assets | 47,595 | 561 |
Liabilities: | ||
Contingent consideration | 85,120 | 137,349 |
Total liabilities | 158,494 | 141,029 |
Fair Value, Recurring | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 383 | 535 |
Liabilities: | ||
Derivative liabilities | 78 | 169 |
Fair Value, Recurring | Derivatives Designated as Hedging Instruments | Interest Rate Contract | ||
Liabilities: | ||
Derivative liabilities | 194 | 374 |
Fair Value, Recurring | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 20 | 26 |
Liabilities: | ||
Derivative liabilities | 1,601 | 3,137 |
Fair Value, Recurring | Not Designated as Hedging Instrument | Capped Call Derivative | ||
Assets: | ||
Derivative asset | 44,925 | |
Fair Value, Recurring | Level 1 | ||
Assets: | ||
Convertible notes receivable | 0 | |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Recurring | Level 1 | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 1 | Derivatives Designated as Hedging Instruments | Interest Rate Contract | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 1 | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 1 | Not Designated as Hedging Instrument | Capped Call Derivative | ||
Assets: | ||
Derivative asset | 0 | |
Fair Value, Recurring | Level 2 | ||
Assets: | ||
Convertible notes receivable | 0 | |
Total assets | 403 | 561 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 1,873 | 3,680 |
Fair Value, Recurring | Level 2 | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 383 | 535 |
Liabilities: | ||
Derivative liabilities | 78 | 169 |
Fair Value, Recurring | Level 2 | Derivatives Designated as Hedging Instruments | Interest Rate Contract | ||
Liabilities: | ||
Derivative liabilities | 194 | 374 |
Fair Value, Recurring | Level 2 | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 20 | 26 |
Liabilities: | ||
Derivative liabilities | 1,601 | 3,137 |
Fair Value, Recurring | Level 2 | Not Designated as Hedging Instrument | Capped Call Derivative | ||
Assets: | ||
Derivative asset | 0 | |
Fair Value, Recurring | Level 3 | ||
Assets: | ||
Convertible notes receivable | 2,267 | |
Total assets | 47,192 | 0 |
Liabilities: | ||
Contingent consideration | 85,120 | 137,349 |
Total liabilities | 156,621 | 137,349 |
Fair Value, Recurring | Level 3 | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 3 | Derivatives Designated as Hedging Instruments | Interest Rate Contract | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 3 | Not Designated as Hedging Instrument | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | $ 0 |
Fair Value, Recurring | Level 3 | Not Designated as Hedging Instrument | Capped Call Derivative | ||
Assets: | ||
Derivative asset | $ 44,925 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration Reconciliation (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Liabilities Measured on Recurring Basis | ||
Contingent consideration paid | $ 5,000 | |
Remeasurement of contingent consideration to fair value | (46,034) | $ (10,600) |
Cost of sales - exclusive of amortization | ||
Liabilities Measured on Recurring Basis | ||
Remeasurement of contingent consideration to fair value | 24,400 | |
Research and development | ||
Liabilities Measured on Recurring Basis | ||
Remeasurement of contingent consideration to fair value | 21,600 | |
Fair Value, Recurring | Embedded Derivative Liability, Type [Extensible List] | ||
Liabilities Measured on Recurring Basis | ||
Total at beginning of the period | 0 | |
Additions | 74,951 | |
Payments | 0 | |
Changes in fair value | (3,450) | |
Effect of changes in foreign currency exchange rates | 0 | |
Total at period end | 71,501 | |
Less current portion at period end | 0 | |
Long-term portion at period end | 71,501 | |
Fair Value, Recurring | Derivative Financial Instruments, Assets | ||
Assets Measured on Recurring Basis | ||
December 31, 2019 | 0 | |
Additions | 43,096 | |
Payments | 0 | |
Changes in fair value | 1,829 | |
Effect of changes in foreign currency exchange rates | 0 | |
Total at period end | 44,925 | |
Less current portion at period end | 0 | |
Long-term portion at period end | 44,925 | |
Fair Value, Recurring | Notes Receivable | ||
Assets Measured on Recurring Basis | ||
December 31, 2019 | 0 | |
Additions | 2,267 | |
Payments | 0 | |
Changes in fair value | 0 | |
Effect of changes in foreign currency exchange rates | 0 | |
Total at period end | 2,267 | |
Less current portion at period end | 0 | |
Long-term portion at period end | 2,267 | |
Fair Value, Recurring | Level 3 | ||
Liabilities Measured on Recurring Basis | ||
Total at beginning of the period | 137,349 | |
Fair Value, Recurring | Level 3 | Contingent Consideration Liability | ||
Liabilities Measured on Recurring Basis | ||
Total at beginning of the period | 137,349 | |
Additions | 0 | |
Payments | (6,068) | |
Changes in fair value | (46,034) | |
Effect of changes in foreign currency exchange rates | (127) | |
Total at period end | 85,120 | |
Less current portion at period end | 13,884 | |
Long-term portion at period end | $ 71,236 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Jun. 30, 2020USD ($) | Jun. 17, 2020USD ($) |
Embedded Exchange | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
10 percent decrease in stock price volatility, fair value | $ 55,200,000 | |
10 percent increase in stock price volatility, fair value | 87,200,000 | |
Capped Call Derivative | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
10 percent decrease in stock price volatility, fair value | 37,200,000 | |
10 percent increase in stock price volatility, fair value | $ 46,500,000 | |
Senior Notes | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt instrument, face amount | $ 287,500,000 | |
2020 Cash Exchangeable Senior Notes | Senior Notes | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Debt instrument, face amount | $ 287,500,000 | |
Measurement Input, Stock Price Volatility | Embedded Exchange | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.38 | |
Measurement Input, Stock Price Volatility | Capped Call Derivative | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.38 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Contingent Consideration by Acquisition (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | $ 71,236 | $ 114,396 |
Fair Value, Recurring | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 85,120 | 137,349 |
Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 85,120 | 137,349 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value | 137,349 | |
ImThera | Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 71,236 | 113,503 |
TandemLife | Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 9,136 | 17,311 |
Miami Instruments | Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 4,748 | 5,338 |
Drilltex | Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 0 | 294 |
Other | Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | $ 0 | $ 903 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Valuations (Details) - Level 3 | Jun. 30, 2020 |
ImThera | Discounted cash flow | Discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.100 |
ImThera | Discounted cash flow | Probability of payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.85 |
ImThera | Monte Carlo simulation | Revenue volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.325 |
ImThera | Minimum | Monte Carlo simulation | Probability of payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.85 |
ImThera | Minimum | Monte Carlo simulation | Risk-adjusted discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.123 |
ImThera | Minimum | Monte Carlo simulation | Credit risk discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.101 |
ImThera | Maximum | Monte Carlo simulation | Risk-adjusted discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.125 |
ImThera | Maximum | Monte Carlo simulation | Credit risk discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.108 |
TandemLife | Discounted cash flow | Discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.093 |
TandemLife | Minimum | Discounted cash flow | Probability of payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.70 |
TandemLife | Maximum | Discounted cash flow | Probability of payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 1 |
Miami Instruments | Minimum | Discounted cash flow | Discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.093 |
Miami Instruments | Minimum | Discounted cash flow | Probability of payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.80 |
Miami Instruments | Maximum | Discounted cash flow | Discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.094 |
Miami Instruments | Maximum | Discounted cash flow | Probability of payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.95 |
Financing Arrangements Schedule
Financing Arrangements Schedule of Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 17, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 642,831 | $ 333,511 | |
Less current portion of long-term debt | 3,642 | 73,181 | |
Long-term debt obligations | $ 639,189 | 260,330 | |
Bank of America Merrill Lynch Banco Múltiplo S.A. | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 6.70% | ||
Mediocredito Italiano | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 0.50% | ||
Mediocredito Italiano | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.94% | ||
Bank of America, U.S. | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3.48% | ||
Secured Debt | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 421,941 | 0 | |
Secured Debt | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
LIBOR floor rate | 1.00% | ||
Debt instrument, basis spread on variable rate | 6.50% | ||
Senior Notes | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 206,119 | 0 | |
Interest rate, stated percentage | 3.00% | 3.00% | |
Loans Payable | Bank of America Merrill Lynch Banco Múltiplo S.A. | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 6,182 | 8,422 | |
Loans Payable | Mediocredito Italiano | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | 5,578 | 6,222 | |
Loans Payable | Bank of America, U.S. | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | 2,029 | 2,004 | |
Loans Payable | 2019 Debt Facility | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | 0 | 184,275 | |
Loans Payable | 2017 European Investment Bank | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | 0 | 103,570 | |
Loans Payable | 2014 European Investment Bank | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | 0 | 28,053 | |
Other | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 982 | $ 965 |
Financing Arrangements - Narrat
Financing Arrangements - Narrative (Details) | Jun. 17, 2020USD ($)$ / shares | Jun. 10, 2020USD ($) | Jun. 30, 2020USD ($)claim$ / shares | Jun. 30, 2020USD ($)claim$ / shares | Jun. 30, 2019USD ($) | Jun. 11, 2020USD ($) |
Debt Instrument [Line Items] | ||||||
Proceeds from long-term debt obligations | $ 886,899,000 | $ 53,777,000 | ||||
Minimum pro rata net revenue | 550,000,000 | |||||
Repayments of debt | $ 528,000,000 | |||||
Loss on debt extinguishment | $ 1,400,000 | $ 1,400,000 | ||||
Capped Call Derivative | ||||||
Debt Instrument [Line Items] | ||||||
Derivative, cap price per share | $ / shares | $ 100 | $ 100 | ||||
Derivative, cost of hedge | $ 43,100,000 | |||||
Derivative asset | $ 44,900,000 | $ 44,900,000 | ||||
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 287,500,000 | |||||
Proceeds from long-term debt obligations | 278,200,000 | |||||
Debt discounts and issuance costs | $ 81,800,000 | |||||
Amortization of debt issuance costs | $ 400,000 | |||||
Interest rate, stated percentage | 3.00% | 3.00% | 3.00% | |||
Unamortized discount | $ 75,000,000 | |||||
Debt issuance costs, net | $ 6,800,000 | |||||
Debt instrument, exchangeable, conversion ratio | 0.016368 | |||||
Option to exchange, price per share | $ / shares | $ 60.98 | |||||
Redemption price, percentage of exchange price | 130.00% | |||||
Redemption, threshold trading days | claim | 20 | 20 | ||||
Redemption, threshold consecutive trading days | claim | 30 | 30 | ||||
Redemption price, percentage | 100.00% | |||||
Fair value of embedded derivative liability | $ 71,500,000 | $ 71,500,000 | ||||
Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 450,000,000 | |||||
Long-term debt, term | 5 years | |||||
Proceeds from long-term debt obligations | $ 421,700,000 | |||||
Minimum net revenue | $ 700,000,000 | |||||
Debt discounts and issuance costs | $ 28,200,000 | |||||
Amortization of debt issuance costs | $ 100,000 | |||||
Secured Debt | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
LIBOR floor rate | 1.00% | 1.00% | ||||
Debt instrument, basis spread on variable rate | 6.50% | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Short-term debt | $ 3,800,000 | $ 3,800,000 | $ 4,200,000 | |||
Minimum | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (percent) | 3.21% | 3.21% | ||||
Debt instrument, term | 1 day | |||||
Maximum | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (percent) | 7.70% | 7.70% | ||||
Debt instrument, term | 10 months |
Financing Arrangements - Levera
Financing Arrangements - Leverage Ratios (Details) | Jun. 30, 2020 |
Debt Disclosure [Abstract] | |
Debt Instrument, Covenant, Secured Leverage Ratio, Period One | 5.625 |
Debt Instrument, Covenant, Secured Leverage Ratio, Period Two | 4.5 |
Derivatives and Risk Manageme_3
Derivatives and Risk Management Narrative (Details) - Foreign Exchange Contract - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Foreign exchange and other losses | |||||
Derivative [Line Items] | |||||
Gain (loss) on derivative | $ (1.2) | $ 1 | $ 6.9 | $ 4.7 | |
Not Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Notional amount | $ 372.1 | $ 372.1 | $ 338 |
Derivatives and Risk Manageme_4
Derivatives and Risk Management Derivative Notional Amounts (Details) - Derivatives Designated as Hedging Instruments - Cash Flow Hedging - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Notional amount | $ 65,861 | $ 106,750 |
Foreign Exchange Contract | United Kingdom, Pounds | ||
Derivative [Line Items] | ||
Notional amount | 8,369 | 10,128 |
Foreign Exchange Contract | Japan, Yen | ||
Derivative [Line Items] | ||
Notional amount | 17,177 | 25,342 |
Foreign Exchange Contract | Euro Member Countries, Euro | ||
Derivative [Line Items] | ||
Notional amount | 40,315 | 48,838 |
Interest Rate Swap Contracts | ||
Derivative [Line Items] | ||
Notional amount | $ 0 | $ 22,442 |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in OCI | $ 1,230 | $ 313 | $ (850) | $ 1,622 |
Gains (Losses) Reclassified from AOCI to Earnings | 201 | 98 | (523) | 1,417 |
Foreign Exchange Contract | Foreign exchange and other losses | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) Recognized in OCI | 1,230 | 313 | (850) | 1,622 |
Gains (Losses) Reclassified from AOCI to Earnings | 520 | 489 | (85) | 2,131 |
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 | (234) | (418) | (325) | (728) |
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 | $ (85) | $ 27 | (113) | $ 14 |
Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
After-Tax Net Loss in AOCI as of period end | 265 | |||
Amount Expected to be Reclassified to Earnings in Next 12 Months | $ 265 |
Derivatives and Risk Manageme_6
Derivatives and Risk Management Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | $ 45,328 | $ 561 |
Total liability derivatives | 73,374 | 3,680 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 383 | 535 |
Total liability derivatives | 78 | 543 |
Derivatives Designated as Hedging Instruments | Prepaid expenses and other current assets | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 383 | 148 |
Derivatives Designated as Hedging Instruments | Accrued liabilities | Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 313 | |
Derivatives Designated as Hedging Instruments | Accrued liabilities | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 387 | |
Total liability derivatives | 78 | 169 |
Derivatives Designated as Hedging Instruments | Long-term derivative liability | Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 61 | |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 44,945 | 26 |
Total liability derivatives | 73,296 | 3,137 |
Not Designated as Hedging Instrument | Capped Call Derivative | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | ||
Not Designated as Hedging Instrument | Prepaid expenses and other current assets | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 20 | |
Total liability derivatives | 33 | |
Not Designated as Hedging Instrument | Accrued liabilities | Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 194 | |
Not Designated as Hedging Instrument | Accrued liabilities | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 26 | |
Total liability derivatives | 1,601 | $ 3,104 |
Not Designated as Hedging Instrument | Long-term derivative liability | Embedded Exchange | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 71,501 | |
Not Designated as Hedging Instrument | Other Assets | Capped Call Derivative | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | $ 44,925 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) € in Thousands | Jun. 30, 2020USD ($)installmentnotice | Mar. 29, 2019USD ($) | Apr. 01, 2016EUR (€) | Jan. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Jan. 31, 2004USD ($) | Jun. 30, 2020USD ($)installmentnotice | Jul. 29, 2020claim | Jun. 30, 2020EUR (€)installmentnotice | Dec. 31, 2019USD ($) | May 31, 2019USD ($) | May 31, 2019EUR (€) | Mar. 05, 2019EUR (€) | Aug. 27, 2015non-conformity | Oct. 30, 2009USD ($) | Oct. 30, 2009EUR (€) |
Other Commitments [Line Items] | ||||||||||||||||
Product remediation | $ 1,533,000 | $ 1,533,000 | $ 3,251,000 | |||||||||||||
Unrecognized tax benefits, net of settlement payment | $ 17,400,000 | $ 17,400,000 | € 15,500 | |||||||||||||
Regional Internal Revenue Office of Lombardy | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Application pending approval, payments for legal settlements | $ 2,100,000 | € 1,900 | ||||||||||||||
Threatened Litigation | Regional Internal Revenue Office of Lombardy | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Number of equal installments | installment | 5 | 5 | 5 | |||||||||||||
Number of notice of assessments | notice | 3 | 3 | 3 | |||||||||||||
Losses under dispute | $ 70,200,000 | $ 70,200,000 | € 62,600 | |||||||||||||
Pending Litigation | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Estimate of possible loss | 641,300,000 | 641,300,000 | € 572,100 | |||||||||||||
Tax Years 2002 - 2006 | Threatened Litigation | Regional Internal Revenue Office of Lombardy | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Losses under dispute | $ 115,000,000 | € 102,600 | ||||||||||||||
Subsequent Event | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Pending claims, number | claim | 85 | |||||||||||||||
FDA Warning Letter | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Number of observed non-conformities | non-conformity | 2 | |||||||||||||||
Product Liability | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Payments for legal settlements | $ 90,000,000 | $ 135,000,000 | ||||||||||||||
Litigation provision liability | 49,031,000 | 49,031,000 | $ 170,404,000 | |||||||||||||
FX and other | $ (179,000) | |||||||||||||||
Product Liability | Maximum | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Litigation settlement, amount awarded to other party | $ 225,000,000 | |||||||||||||||
SNIA | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Reimbursed legal fees | $ 327,318 | € 292 | ||||||||||||||
SNIA | Pending Litigation | SNIA s.p.a | ||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||
Compensation sought | $ 4,000,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Product Liability (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Litigation Provision Liability | ||
Adjustments | $ 976 | |
Less current portion of litigation liability at June 30, 2020 | 37,420 | $ 146,026 |
Long-term portion of litigation provisions liability at June 30, 2020 | 11,611 | |
Product Liability | ||
Litigation Provision Liability | ||
Total litigation provision liability at December 31, 2019 | 170,404 | |
Payments | (122,170) | |
FX and other | (179) | |
Total litigation provision liability at June 30, 2020 | 49,031 | |
Less current portion of litigation liability at June 30, 2020 | 37,420 | |
Long-term portion of litigation provisions liability at June 30, 2020 | $ 11,611 |
Stockholders' Equity Statement
Stockholders' Equity Statement of Stockholders' Equity (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Class of Stock [Line Items] | ||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance (in shares) | 49,411,016 | |||||
Beginning Balance | $ 1,392,708 | $ 1,486,806 | $ 1,383,717 | $ 1,503,738 | $ 1,503,738 | |
Stock-based compensation plans | 11,037 | 10,198 | 16,215 | 12,352 | ||
Net loss | (87,993) | (29,215) | (50,410) | (44,064) | ||
Other comprehensive income | $ 17,434 | 15,539 | $ (15,697) | 11,302 | ||
Ending Balance (in shares) | 49,476,223 | 49,476,223 | 49,411,016 | |||
Ending Balance | $ 1,333,186 | $ 1,483,328 | $ 1,333,186 | $ 1,483,328 | $ 1,383,717 | |
Cumulative Effect, Period of Adoption, Adjustment | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | $ (639) | |||||
Ending Balance | $ (639) | |||||
Ordinary Shares | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance (in shares) | 49,414,000 | 49,329,000 | 49,411,000 | 49,323,000 | 49,323,000 | |
Beginning Balance | $ 76,259 | $ 76,151 | $ 76,257 | $ 76,144 | $ 76,144 | |
Stock-based compensation plans (in shares) | 62,000 | 51,000 | 65,000 | 57,000 | ||
Stock-based compensation plans | $ 79 | $ 66 | $ 81 | $ 73 | ||
Ending Balance (in shares) | 49,476,000 | 49,380,000 | 49,476,000 | 49,380,000 | 49,411,000 | |
Ending Balance | $ 76,338 | $ 76,217 | $ 76,338 | $ 76,217 | $ 76,257 | |
Additional Paid-In Capital | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | 1,739,873 | 1,707,117 | 1,734,870 | 1,705,111 | 1,705,111 | |
Stock-based compensation plans | 10,925 | 10,103 | 15,928 | 12,109 | ||
Ending Balance | 1,750,798 | 1,717,220 | 1,750,798 | 1,717,220 | 1,734,870 | |
Treasury Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | (1,090) | (1,321) | (1,263) | (1,462) | (1,462) | |
Stock-based compensation plans | 33 | 29 | 206 | 170 | ||
Ending Balance | (1,057) | (1,292) | (1,057) | (1,292) | (1,263) | |
Accumulated Other Comprehensive Loss | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | (52,523) | (28,713) | (19,392) | (24,476) | (24,476) | |
Other comprehensive income | 17,434 | 15,539 | (15,697) | 11,302 | ||
Ending Balance | (35,089) | (13,174) | (35,089) | (13,174) | (19,392) | |
Accumulated Deficit | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | (369,811) | (266,428) | (406,755) | (251,579) | (251,579) | |
Net loss | (87,993) | (29,215) | (50,410) | (44,064) | ||
Ending Balance | $ (457,804) | $ (295,643) | (457,804) | $ (295,643) | (406,755) | |
Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjustment | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning Balance | $ (639) | |||||
Ending Balance | $ (639) |
Stockholders' Equity (Comprehen
Stockholders' Equity (Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | $ 1,392,708 | $ 1,486,806 | $ 1,383,717 | $ 1,503,738 |
Other comprehensive loss before reclassifications, before tax | (16,299) | 12,769 | ||
Tax benefit | 204 | (390) | ||
Other comprehensive loss before reclassifications, net of tax | (16,095) | 12,379 | ||
Reclassification of loss from accumulated other comprehensive loss, before tax | 523 | (1,417) | ||
Reclassification of tax benefit | (125) | 340 | ||
Reclassification of loss from accumulated other comprehensive loss, after tax | 398 | (1,077) | ||
Total other comprehensive income (loss) | 17,434 | 15,539 | (15,697) | 11,302 |
Ending Balance | 1,333,186 | 1,483,328 | 1,333,186 | 1,483,328 |
Total | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | (52,523) | (28,713) | (19,392) | (24,476) |
Total other comprehensive income (loss) | 17,434 | 15,539 | (15,697) | 11,302 |
Ending Balance | (35,089) | (13,174) | (35,089) | (13,174) |
Change in Unrealized Gain (Loss) on Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | 513 | (944) | ||
Other comprehensive loss before reclassifications, before tax | (850) | 1,622 | ||
Tax benefit | 204 | (390) | ||
Other comprehensive loss before reclassifications, net of tax | (646) | 1,232 | ||
Reclassification of loss from accumulated other comprehensive loss, before tax | 523 | (1,417) | ||
Reclassification of tax benefit | (125) | 340 | ||
Reclassification of loss from accumulated other comprehensive loss, after tax | 398 | (1,077) | ||
Total other comprehensive income (loss) | (248) | 155 | ||
Ending Balance | 265 | (789) | 265 | (789) |
Foreign Currency Translation Adjustments Gain (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning Balance | (19,905) | (23,532) | ||
Other comprehensive loss before reclassifications, before tax | (15,449) | 11,147 | ||
Tax benefit | 0 | 0 | ||
Other comprehensive loss before reclassifications, net of tax | (15,449) | 11,147 | ||
Reclassification of loss from accumulated other comprehensive loss, before tax | 0 | 0 | ||
Reclassification of tax benefit | 0 | 0 | ||
Reclassification of loss from accumulated other comprehensive loss, after tax | 0 | 0 | ||
Total other comprehensive income (loss) | (15,449) | 11,147 | ||
Ending Balance | $ (35,354) | $ (12,385) | $ (35,354) | $ (12,385) |
Stock-Based Incentive Plans (Co
Stock-Based Incentive Plans (Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 9,991 | $ 8,724 | $ 19,034 | $ 15,596 |
Share-based compensation arrangement, vesting period | 4 years | |||
Share-based compensation arrangement, compensation cost | 2,800 | $ 3,200 | ||
Service-based restricted stock units (“RSUs”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 4,250 | 3,875 | 8,728 | 6,845 |
Service-based stock appreciation rights (“SARs”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 3,290 | 2,900 | 5,974 | 4,908 |
Market performance-based restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,035 | 838 | $ 1,931 | 1,389 |
Share-based compensation arrangement, vesting period | 3 years | 3 years | ||
Operating performance-based restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,149 | 798 | $ 1,844 | 1,769 |
Share-based compensation arrangement, vesting period | 3 years | 3 years | ||
Employee share purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 267 | $ 313 | $ 557 | $ 685 |
Stock-Based Incentive Plans (Ex
Stock-Based Incentive Plans (Executed Agreements) (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Service-based stock appreciation rights (“SARs”) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 1,133 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 15.73 |
Service-based restricted stock units (“RSUs”) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 576 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 44.36 |
Market performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 93 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 39.83 |
Operating performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 93 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 43.57 |
Income Taxes Narrative (Details
Income Taxes Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate (percent) | (306.00%) | 17.30% | (78.00%) | 22.40% | |
Tax benefit, CARES Act | $ 42.9 | ||||
Valuation allowance | $ 70 | 70 | |||
Unrecognized tax benefits | 12.9 | 12.9 | $ 12.9 | ||
Unrecognized tax benefits, potential decrease amount | $ 12 | $ 12 |
Earnings Per Share - Schedule o
Earnings 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, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |||
Basic and diluted weighted average shares outstanding (in shares) | 48,342 | 48,548 | 48,295 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
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) | 4.2 | 3.1 | 4.2 | 3.2 |
Geographic and Segment Inform_3
Geographic and Segment Information Segment Info (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($)geographic_region | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segmentgeographic_region | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||||
Reportable segments | segment | 2 | ||||
Number of geographic regions in which entity operates | geographic_region | 3 | 3 | |||
Net sales | $ 182,206 | $ 277,169 | $ 424,603 | $ 527,970 | |
Merger and integration expenses | 2,048 | 4,378 | 5,522 | 7,629 | |
Restructuring expenses | 794 | 1,332 | 2,374 | 3,865 | |
Amortization of intangibles | 9,394 | 9,228 | 19,661 | 18,544 | |
Operating loss from continuing operations | (15,237) | (29,876) | (14,629) | (50,655) | |
Interest income | 287 | 224 | 435 | 473 | |
Interest expense | 5,715 | 4,054 | 10,564 | 5,716 | |
Foreign exchange and other losses | (999) | (1,851) | (2,913) | (1,122) | |
Loss from continuing operations before tax | (21,664) | (35,557) | (27,671) | (57,020) | |
Assets | 2,502,663 | 2,502,663 | $ 2,411,797 | ||
Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 124,535 | 172,244 | 276,604 | 327,735 | |
Restructuring expenses | 570 | 316 | 1,256 | 738 | |
Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 57,212 | 104,269 | 146,869 | 198,918 | |
Restructuring expenses | 305 | 53 | 808 | 485 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 459 | 656 | 1,130 | 1,317 | |
Restructuring expenses | (81) | 963 | 310 | 2,642 | |
Continuing Operations | |||||
Segment Reporting Information [Line Items] | |||||
Total reportable segment (loss) income from continuing operations | (3,001) | (14,938) | 12,928 | (20,617) | |
Merger and integration expenses | 2,048 | 4,378 | 5,522 | 7,629 | |
Restructuring expenses | 794 | 1,332 | 2,374 | 3,865 | |
Amortization of intangibles | 9,394 | 9,228 | 19,661 | 18,544 | |
Operating loss from continuing operations | (15,237) | (29,876) | (14,629) | (50,655) | |
Capital expenditures | 6,645 | 5,913 | 19,019 | 10,796 | |
Continuing Operations | Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Total reportable segment (loss) income from continuing operations | (9,407) | 10,120 | (726) | 11,109 | |
Assets | 1,428,992 | 1,428,992 | 1,546,520 | ||
Capital expenditures | 5,445 | 4,835 | 10,737 | 8,386 | |
Continuing Operations | Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Total reportable segment (loss) income from continuing operations | 27,282 | 619 | 61,140 | 22,250 | |
Assets | 655,611 | 655,611 | 749,069 | ||
Capital expenditures | 836 | 127 | 6,075 | 530 | |
Continuing Operations | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total reportable segment (loss) income from continuing operations | (20,876) | (25,677) | (47,486) | (53,976) | |
Assets | 418,060 | 418,060 | $ 116,208 | ||
Capital expenditures | 364 | 951 | 2,207 | 1,880 | |
United States | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 78,187 | 134,576 | 201,770 | 262,974 | |
United States | Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 33,972 | 54,025 | 84,279 | 105,537 | |
United States | Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 44,215 | 80,551 | 117,491 | 157,437 | |
Europe | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 35,361 | 58,180 | 90,077 | 115,032 | |
Europe | Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 28,945 | 45,184 | 73,078 | 91,377 | |
Europe | Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 6,416 | 12,996 | 16,999 | 23,655 | |
Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 68,658 | 84,413 | 132,756 | 149,964 | |
Rest of World | Operating Segments | Cardiovascular | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 61,618 | 73,035 | 119,247 | 130,821 | |
Rest of World | Operating Segments | Neuromodulation | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 6,581 | 10,722 | 12,379 | 17,826 | |
Cardiopulmonary | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 101,056 | 130,579 | 217,423 | 252,149 | |
Cardiopulmonary | United States | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 25,816 | 41,403 | 62,674 | 80,526 | |
Cardiopulmonary | Europe | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 23,294 | 34,320 | 57,528 | 69,881 | |
Cardiopulmonary | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 51,946 | 54,856 | 97,221 | 101,742 | |
Heart Valves | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 17,466 | 33,351 | 42,677 | 59,024 | |
Heart Valves | United States | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 2,488 | 4,678 | 5,861 | 9,034 | |
Heart Valves | Europe | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 5,348 | 10,672 | 14,877 | 21,185 | |
Heart Valves | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 9,630 | 18,001 | 21,939 | 28,805 | |
Advanced Circulatory Support | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 6,013 | 8,314 | 16,504 | 16,562 | |
Advanced Circulatory Support | United States | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 5,668 | 7,944 | 15,744 | 15,977 | |
Advanced Circulatory Support | Europe | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 303 | 192 | 673 | 311 | |
Advanced Circulatory Support | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 42 | $ 178 | $ 87 | $ 274 |
Geographic and Segment Inform_4
Geographic and Segment Information Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill | |
Goodwill, beginning | $ 915,794 |
Foreign currency adjustments | (13,590) |
Goodwill, ending | 902,204 |
Neuromodulation | |
Goodwill | |
Goodwill, beginning | 398,754 |
Foreign currency adjustments | 0 |
Goodwill, ending | 398,754 |
Cardiovascular | |
Goodwill | |
Goodwill, beginning | 517,040 |
Foreign currency adjustments | (13,590) |
Goodwill, ending | $ 503,450 |
Geographic and Segment Inform_5
Geographic and Segment Information Geographic Areas (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 185,670 | $ 181,354 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 64,628 | 61,410 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 112,103 | 110,270 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 8,939 | $ 9,674 |
Supplemental Financial Inform_3
Supplemental Financial Information (Summary of Inventory) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 47,384 | $ 45,225 |
Work-in-process | 17,810 | 14,581 |
Finished goods | 112,052 | 104,348 |
Inventory, Net | 177,246 | 164,154 |
Provision for obsolescence | $ 13,600 | $ 12,700 |
Supplemental Financial Inform_4
Supplemental Financial Information (Summary of Accrued Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Contingent consideration | $ 13,884 | $ 22,953 |
Operating lease liabilities | 11,135 | 11,110 |
Legal and administrative costs | 14,069 | 11,066 |
Contract liabilities | 9,432 | 6,728 |
Research and development costs | 5,401 | 5,160 |
Provisions for agents, returns and other | 3,729 | 3,922 |
Restructuring related liabilities | 1,808 | 4,315 |
Product remediation | 1,533 | 3,251 |
Derivative contract liabilities | 1,873 | 3,173 |
Other amounts payable to MicroPort Scientific Corporation | 0 | |
CRM purchase price adjustment payable to MicroPort Scientific Corporation | 0 | 14,891 |
Other accrued expenses | 34,374 | 33,531 |
Accrued liabilities | 97,238 | 120,100 |
Contract liability | $ 11,200 | $ 8,600 |
New Accounting Pronouncements_2
New Accounting Pronouncements (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2016 | Dec. 31, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Jan. 01, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Increase (decrease) in accounts receivable | $ 257,769 | $ 186,144 | $ 600 | |||||
Stockholders' Equity Attributable to Parent | $ (1,383,717) | (1,333,186) | $ (1,392,708) | $ (1,483,328) | $ (1,486,806) | $ (1,503,738) | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | ||||||
Retained Earnings | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Stockholders' Equity Attributable to Parent | $ 406,755 | $ 457,804 | $ 369,811 | $ (600) | $ 295,643 | $ 266,428 | $ 251,579 |