Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 22, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-37599 | |
Entity Registrant Name | LivaNova PLC | |
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) | 48,856,606 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001639691 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 247,603 | $ 242,397 |
Costs and expenses: | ||
Cost of sales - exclusive of amortization | 79,216 | 68,923 |
Product remediation | 68 | 1,466 |
Selling, general and administrative | 112,618 | 120,177 |
Research and development | 44,625 | 35,902 |
Merger and integration expenses | 630 | 3,474 |
Restructuring expenses | 6,092 | 1,580 |
Revaluation of disposal group | (966) | 0 |
Amortization of intangibles | 6,699 | 10,267 |
Litigation provision, net | 3,044 | 0 |
Operating (loss) income from continuing operations | (4,423) | 608 |
Interest income | (74) | 148 |
Interest expense | (15,936) | (4,849) |
Foreign exchange and other losses | (6,369) | (1,914) |
Loss from continuing operations before tax | (26,802) | (6,007) |
Income tax expense (benefit) | 2,856 | (44,714) |
Losses from equity method investments | (40) | (129) |
Net (loss) income from continuing operations | (29,698) | 38,578 |
Net loss from discontinued operations, net of tax | 0 | (995) |
Net (loss) income | $ (29,698) | $ 37,583 |
Basic (loss) income per share: | ||
Continuing operations (in dollars per share) | $ (0.61) | $ 0.80 |
Discontinued operations (in dollars per share) | 0 | (0.02) |
Earnings per share (in dollars per share) | (0.61) | 0.78 |
Diluted (loss) income per share: | ||
Continuing operations (in dollars per share) | (0.61) | 0.79 |
Discontinued operations (in dollars per share) | 0 | (0.02) |
Earnings per share (in dollars per share) | $ (0.61) | $ 0.77 |
Shares used in computing basic (loss) income per share (in shares) | 48,736 | 48,485 |
Shares used in computing diluted (loss) income per share (in shares) | 48,736 | 48,769 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (29,698) | $ 37,583 |
Other comprehensive income (loss): | ||
Net change in unrealized gain (loss) on derivatives | (335) | (1,356) |
Tax effect | 339 | 325 |
Net of tax | 4 | (1,031) |
Foreign currency translation adjustment | (25,875) | (32,100) |
Total other comprehensive income (loss) | (25,871) | (33,131) |
Total comprehensive income (loss) | $ (55,569) | $ 4,452 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 252,539 | $ 252,832 |
Accounts receivable, net of allowance of $11,268 at March 31, 2021 and $10,310 at December 31, 2020 | 180,707 | 184,356 |
Inventories | 124,523 | 126,675 |
Prepaid and refundable taxes | 36,632 | 60,240 |
Assets held for sale | 67,475 | 70,539 |
Prepaid expenses and other current assets | 28,754 | 24,792 |
Total Current Assets | 690,630 | 719,434 |
Property, plant and equipment, net | 157,892 | 163,805 |
Goodwill | 909,992 | 922,318 |
Intangible assets, net | 423,850 | 437,636 |
Operating lease assets | 49,861 | 50,525 |
Investments | 36,772 | 31,094 |
Deferred tax assets | 2,921 | 2,990 |
Long-term derivative assets | 84,852 | 72,302 |
Other assets | 12,399 | 11,247 |
Total Assets | 2,369,169 | 2,411,351 |
Current Liabilities: | ||
Current debt obligations | 11,788 | 13,343 |
Accounts payable | 62,448 | 73,668 |
Accrued liabilities and other | 92,034 | 95,408 |
Current litigation provision liability | 26,570 | 28,612 |
Taxes payable | 18,538 | 16,463 |
Accrued employee compensation and related benefits | 56,860 | 51,879 |
Liabilities held for sale | 27,118 | 29,679 |
Total Current Liabilities | 295,356 | 309,052 |
Long-term debt obligations | 646,369 | 642,298 |
Contingent consideration | 89,847 | 89,850 |
Litigation provision liability | 7,740 | 7,878 |
Deferred tax liabilities | 8,151 | 8,915 |
Long-term operating lease liabilities | 42,332 | 42,221 |
Long-term employee compensation and related benefits | 19,010 | 20,628 |
Long-term derivative liabilities | 148,283 | 121,940 |
Other long-term liabilities | 46,324 | 49,740 |
Total Liabilities | 1,303,412 | 1,292,522 |
Commitments and contingencies (Note 8) | ||
Stockholders’ Equity: | ||
Ordinary Shares, £1.00 par value: unlimited shares authorized; 49,454,726 shares issued and 48,844,543 shares outstanding at March 31, 2021; 49,447,473 shares issued and 48,655,863 shares outstanding at December 31, 2020 | 76,310 | 76,300 |
Additional paid-in capital | 1,770,407 | 1,768,156 |
Accumulated other comprehensive income | 1,938 | 27,809 |
Accumulated deficit | (782,100) | (752,402) |
Treasury stock at cost, 610,183 ordinary shares at March 31, 2021; 791,610 ordinary shares at December 31, 2020 | (798) | (1,034) |
Total Stockholders’ Equity | 1,065,757 | 1,118,829 |
Total Liabilities and Stockholders’ Equity | $ 2,369,169 | $ 2,411,351 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands | Mar. 31, 2021USD ($)shares | Mar. 31, 2021£ / shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2020£ / shares |
Statement of Financial Position [Abstract] | ||||
Allowance for doubtful accounts | $ | $ 11,268 | $ 10,310 | ||
Ordinary shares, par value (in pounds per share) | £ / shares | £ 1 | £ 1 | ||
Ordinary shares issued (in shares) | 49,454,726 | 49,447,473 | ||
Ordinary shares outstanding (in shares) | 48,844,543 | 48,655,863 | ||
Treasury stock (in shares) | 610,183 | 791,610 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Activities: | ||
Net (loss) income | $ (29,698) | $ 37,583 |
Non-cash items included in net loss: | ||
Remeasurement of derivative instruments | 7,268 | (9,752) |
Stock-based compensation | 9,536 | 9,043 |
Amortization | 6,699 | 10,267 |
Depreciation | 6,079 | 6,796 |
Amortization of operating lease assets | 5,389 | 3,136 |
Remeasurement of Respicardia investment and loan | (4,640) | 0 |
Amortization of debt issuance costs | 4,409 | 543 |
Remeasurement of contingent consideration to fair value | 453 | (17,283) |
Deferred tax expense (benefit) | 37 | (22,884) |
Other | 673 | (1,968) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (3,372) | 24,336 |
Inventories | (2,900) | (12,513) |
Other current and non-current assets | 26,820 | (15,948) |
Accounts payable and accrued current and non-current liabilities | (1,858) | (1,792) |
Taxes payable | (3,337) | 0 |
Litigation provision liability | (2,078) | (115,609) |
Net cash provided by (used in) operating activities | 19,480 | (106,045) |
Investing Activities: | ||
Purchases of property, plant and equipment | (8,220) | (8,597) |
Purchase of investments | (1,800) | (3,000) |
Proceeds from asset sales | 162 | 834 |
Other | 0 | (322) |
Net cash used in investing activities | (9,858) | (11,085) |
Financing Activities: | ||
Payment of contingent consideration | (4,387) | (4,604) |
Shares repurchased from employees for minimum tax withholding | (3,740) | (3,997) |
Change in short-term borrowing, net | (643) | (2,477) |
Proceeds from long-term debt obligations | 0 | 162,899 |
Proceeds from short term borrowings (maturities greater than 90 days) | 0 | 46,115 |
Closing adjustment payment for sale of CRM business | 0 | (14,891) |
Other | 442 | 48 |
Net cash (used in) provided by financing activities | (8,328) | 183,093 |
Effect of exchange rate changes on cash and cash equivalents | (1,587) | (1,277) |
Net (decrease) increase in cash and cash equivalents | (293) | 64,686 |
Cash and cash equivalents at beginning of period | 252,832 | 61,137 |
Cash and cash equivalents at end of period | $ 252,539 | $ 125,823 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Financial Statements | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Unaudited Condensed Consolidated Financial Statements | Note 1. Unaudited Condensed Consolidated Financial Statements Basis of Presentation The accompanying condensed consolidated financial statements of LivaNova as of, and for the three months ended March 31, 2021 and 2020, 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, 2020 has been derived from audited financial statements contained in our 2020 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 considered necessary for a fair statement of the operating results of LivaNova and its subsidiaries, for the three months ended March 31, 2021, and are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The financial information presented herein should be read in conjunction with the audited consolidated financial statements and notes thereto accompanying our 2020 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 observed improving market dynamics during the first quarter of 2021, especially in the Unites States; however, we continue to be impacted in regions with COVID-19 case rate variability. We expect the recovery to continue during the remainder of the year as patients and their caregivers return to in-person physician visits and procedure volumes improve. 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 |
Assets and Liabilities Held For
Assets and Liabilities Held For Sale | 3 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Held For Sale | Note 2. Assets and Liabilities Held For Sale Heart Valves On December 2, 2020, LivaNova entered into a Share and Asset Purchase Agreement (“Purchase Agreement”) with Mitral Holdco S.à r.l. (the “Purchaser”), a company incorporated under the laws of Luxembourg and wholly owned and controlled by funds advised by Gyrus Capital S.A., a Swiss private equity firm. The Purchase Agreement provides for the divestiture of certain of LivaNova’s subsidiaries as well as certain other assets and liabilities relating to the Company’s Heart Valve business and site management operations conducted by the Company’s subsidiary LivaNova Site Management S.r.l. (“LSM”) at the Company’s Saluggia campus. The purchase price of €60.0 million (approximately $70.4 million as of March 31, 2021) will be payable in two tranches: €50.0 million (approximately $58.7 million as of March 31, 2021) payable at closing, subject to customary trade working capital and net indebtedness adjustments, as set forth in the Purchase Agreement, and an additional €10.0 million (approximately $11.7 million as of March 31, 2021) payable on December 30, 2022. On April 9, 2021, LivaNova and the Purchaser entered into an Amended and Restated Share and Asset Purchase Agreement (the “A&R Purchase Agreement”) which amends and restates the original Purchase Agreement to, among other things, defer the closing of the sale and purchase of LSM by up to two years and include or amend certain additional terms relating to such deferral, including certain amendments relating to the potential hazardous substances liabilities of LSM and the related expense reimbursement provisions. In addition, the A&R Purchase Agreement includes certain amendments relating to mechanics and timing for the initial closing of the transaction and subsequent closings of the local businesses. The initial closing of the transaction with respect to the heart valve business is expected to occur in the first half of 2021. As a result of entering into the Purchase Agreement, during the fourth quarter of 2020 the Company concluded that the assets and liabilities of the Heart Valve business being sold meet the criteria to be classified as held for sale. As a result, we recognized an impairment of $180.2 million during the fourth quarter of 2020 to record the Heart Valves disposal group at fair value less estimated cost to sell. During the first quarter of 2021 we increased the carrying value of the disposal group by $1.0 million. The major classes of assets and liabilities held for sale on the consolidated balance sheet as of March 31, 2021 and December 31, 2020 were as follows (in thousands): March 31, 2021 December 31, 2020 Accounts receivable, net $ 20,280 $ 20,059 Inventories 44,623 45,081 Prepaid and refundable taxes 2,901 2,751 Prepaid expenses and other current assets 2,488 2,436 Property, plant and equipment, net 24,672 25,042 Intangible assets, net 150,197 153,632 Deferred tax assets — — Operating lease assets 1,508 1,698 Impairment charge of disposal group (179,194) (180,160) Total assets held for sale $ 67,475 $ 70,539 Accounts payable $ 7,492 $ 9,518 Accrued liabilities and other 3,743 4,205 Taxes payable 543 363 Accrued employee compensation and related benefits 8,829 8,781 Deferred tax liabilities 614 671 Long-term employee compensation and related benefits 5,038 4,994 Long-term operating lease liabilities 531 841 Other long-term liabilities 328 306 Total liabilities held for sale $ 27,118 $ 29,679 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Note 3. 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). During the fourth quarter of 2020, we initiated a reorganization plan (the “2020 Plan”) to reduce our cost structure. We incurred restructuring expenses of $5.3 million during the three months ended December 31, 2020 primarily associated with severance costs for 54 employees, and $6.1 million during the three months ended March 31, 2021 primarily associated with severance costs for 12 additional employees under the 2020 Plan and lease abandonment costs. The following table provides a reconciliation of the beginning and ending balance of the accruals and other reserves recorded in connection with our restructuring plans included within accrued liabilities and other and other long-term liabilities on the condensed consolidated balance sheet (in thousands): Employee Severance and Other Termination Costs Other Total Balance at December 31, 2020 $ 5,749 $ 546 $ 6,295 Charges 4,110 1,982 6,092 Cash payments and other (4,652) (2,129) (6,781) Balance at March 31, 2021 $ 5,207 $ 399 $ 5,606 The following table presents restructuring expense by reportable segment (in thousands): Three Months Ended March 31, 2021 2020 Cardiovascular $ 1,896 $ 686 Neuromodulation 1,210 503 Other 2,986 391 Total $ 6,092 $ 1,580 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2021 | |
Investments [Abstract] | |
Investments | Note 4. 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): March 31, 2021 December 31, 2020 Respicardia Inc. (1) (2) $ 21,796 $ 17,706 ALung Technologies, Inc. (3) 3,000 3,000 Ceribell, Inc. 3,000 3,000 ShiraTronics, Inc. 2,045 2,045 Noctrix Health, Inc. 3,159 1,359 MD Start II 1,174 1,227 Rainbow Medical Ltd. 1,149 1,201 Highlife S.A.S. 1,113 1,163 36,436 30,701 Equity method investment 336 393 $ 36,772 $ 31,094 (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 $1.3 million and $0.8 million as of March 31, 2021 and December 31, 2020, respectively, which is included in prepaid expenses and other current assets on the condensed consolidated balance sheet. (2) In April 2021, Zoll Medical Corporation acquired Respicardia Inc. As a result of the acquisition we received proceeds of $23.1 million for our investment and loan receivable with carrying values of $17.7 million and $0.8 million as of December 31, 2020, respectively. The Company recorded a gain of $4.6 million during the first quarter of 2021 to adjust the investment and loans receivable to fair value, which is included in foreign exchange and other losses on the condensed consolidated statement of income (loss). (3) ALung Technologies, Inc. (“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. We have a loan outstanding to ALung, with a carrying amount of $2.5 million and $2.5 million as of March 31, 2021 and December 31, 2020, respectively, which is included in prepaid expenses and other current assets on the condensed consolidated balance sheet. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5. 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 three months ended March 31, 2021 and 2020. 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 March 31, 2021 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”) $ 1,379 $ — $ 1,379 $ — Derivative assets - freestanding instruments (FX) 863 — 863 — Derivative assets - capped call derivatives 84,852 — — 84,852 Convertible notes receivable 2,758 — — 2,758 $ 89,852 $ — $ 2,242 $ 87,610 Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 724 $ — $ 724 $ — Derivative liabilities - freestanding instruments (interest rate swaps) 36 — 36 — Derivative liabilities - freestanding instruments (FX) 705 — 705 — Derivative liabilities - embedded exchange feature 148,091 — — 148,091 Derivative liabilities - other 1,123 — — 1,123 Contingent consideration arrangements 99,271 — — 99,271 $ 249,950 $ — $ 1,465 $ 248,485 Fair Value as of December 31, 2020 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (FX) $ 2,893 $ — $ 2,893 $ — Derivative assets - freestanding instruments (FX) 55 — 55 — Derivative assets - capped call derivatives 72,302 — — 72,302 Convertible notes receivable 2,775 — — 2,775 $ 78,025 $ — $ 2,948 $ 75,077 Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 14 $ — $ 14 $ — Derivative liabilities - freestanding instruments (interest rate swaps) 74 — 74 — Derivative liabilities - freestanding instruments (FX) 4,073 — 4,073 — Derivative liabilities - embedded exchange feature 121,756 — — 121,756 Derivative liabilities - other 4,290 — — 4,290 Contingent consideration arrangements 103,818 — — 103,818 $ 234,025 $ — $ 4,161 $ 229,864 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 Convertible Notes Receivable Embedded Exchange Feature Derivative Liability Other Derivative Liabilities Contingent Consideration Liability Arrangements As of December 31, 2020 $ 72,302 $ 2,775 $ 121,756 $ 4,290 $ 103,818 Payments (1) — — — — (5,000) Changes in fair value 12,550 (17) 26,335 (3,167) 453 Total at March 31, 2021 84,852 2,758 148,091 1,123 99,271 Less current portion at March 31, 2021 — 2,495 — 931 9,424 Long-term portion at March 31, 2021 $ 84,852 $ 263 $ 148,091 $ 192 $ 89,847 (1) During the three months ended March 31, 2021, we paid $5.0 million under the contingent consideration arrangement for the acquisition of Miami Instruments, LLC (“Miami Instruments”). 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 feature that is bifurcated from the cash exchangeable senior notes. Please refer to “Note 6. 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, including 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 historical volatility and implied volatility from options traded to determine expected stock price volatility which is an unobservable input that is significant to the valuation. In general, an increase in our stock price or stock price volatility would increase the fair value of the embedded exchange feature and capped call derivatives which would result in an increase in expense. As time to the expiration of the derivatives 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 the expiration of the derivatives change in relation to other inputs. 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). The stock price volatility as of March 31, 2021 was 34%. As of March 31, 2021, a 10% lower volatility, holding other inputs constant, would result in approximate fair value for the embedded exchange feature derivative of $131.7 million and a 10% higher volatility, holding other inputs constant, would result in approximate fair value of $165.6 million. As of March 31, 2021, a 10% lower volatility, holding other inputs constant would result in approximate fair value for the capped call derivatives of $88.9 million and a 10% higher volatility, holding other inputs constant, would result in approximate fair value of $78.5 million. Contingent Consideration Arrangements The following table provides the fair value of our Level 3 contingent consideration arrangements by acquisition (in thousands): March 31, 2021 December 31, 2020 ImThera Medical, Inc. (“ImThera”) $ 89,426 $ 89,436 CardiacAssist, Inc., doing business as TandemLife (“TandemLife”) 8,942 8,809 Miami Instruments 903 5,573 $ 99,271 $ 103,818 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 March 31, 2021: ImThera Acquisition Valuation Technique Unobservable Input Inputs Regulatory milestone-based payment Discounted cash flow Discount rate 6.7% Probability of payment 85% Projected payment year 2024 Sales-based earnout Monte Carlo simulation Risk-adjusted discount rate 12.0% - 12.7% Credit risk discount rate 7.0% - 7.8% 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 March 31, 2021: TandemLife Acquisition Valuation Technique Unobservable Input Inputs Regulatory milestone-based payment Discounted cash flow Discount rate 4.9% Probability of payment 70% Projected payment year 2021 |
Financing Arrangements
Financing Arrangements | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 6. Financing Arrangements The outstanding principal amount of our long-term debt as of March 31, 2021 and December 31, 2020 was as follows (in thousands, except interest rates): March 31, 2021 December 31, 2020 Maturity Interest Rate 2020 Senior Secured Term Loan $ 425,167 $ 424,002 June 2025 LIBOR (1% Floor) + 6.50% 2020 Cash Exchangeable Senior Notes 215,145 212,073 December 2025 3.00% Bank of America Merrill Lynch Banco Múltiplo S.A. 5,901 6,515 July 2021 4.27% Mediocredito Italiano 5,198 5,406 December 2023 0.50 % - 2.74% Bank of America, U.S. 2,016 2,019 January 2023 2.75% Other 641 660 Total long-term facilities 654,068 650,675 Less current portion of long-term debt 7,699 8,377 Total long-term debt $ 646,369 $ 642,298 Revolving Credit The outstanding principal amount of our short-term unsecured revolving credit agreements and other agreements with various banks was $4.1 million and $5.0 million, at March 31, 2021 and December 31, 2020, respectively, with interest rates ranging from 3.06% to 7.65% and loan terms ranging from overnight to 365 days, as of March 31, 2021. On December 30, 2020, we entered into the $50.0 million 2020 Revolving Credit Facility for working capital needs. The 2020 Revolving Credit Facility has a maturity of June 30, 2024 and borrowings bear interest at either LIBOR (subject to a 1% floor) plus 5.0% or ABR (subject to a 2% floor) plus 4.0%. There were no borrowings under the 2020 Revolving Credit Facility during the three months ended March 31, 2021. The 2020 Revolving Credit Facility has financial covenants consistent with those of the Term Loan described below. 2020 Senior Secured Term Loan On June 10, 2020, we entered into a $450.0 million five-year senior secured term loan (the “Term Loan”) through our wholly owned subsidiary LivaNova USA Inc., with funds managed by affiliates of Ares Management Corporation, as administrative agent and collateral agent, resulting in cash proceeds of approximately $421.5 million, net of discounts and issuance costs. The obligations under the Term Loan are guaranteed by LivaNova and its existing and future wholly owned material subsidiaries, and are secured by a perfected security interest in substantially all tangible and intangible assets of LivaNova and certain U.S. and UK subsidiaries of LivaNova, subject in each case to certain exceptions contained in the Term Loan. Borrowings under the Term Loan bear interest at a variable annual rate equal to the three-month LIBOR rate (subject to a 1% floor), plus an applicable margin of 6.5% per annum. The effective interest rate of the Term Loan at March 31, 2021 was 9.05%. The Term Loan will mature on June 30, 2025 and includes certain affirmative, negative and financial 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 (1) 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 (1) The secured leverage ratio is calculated as the ratio of (a) debt secured by a lien on assets to (b) Consolidated EBITDA as defined under the Term Loan agreement for the period of four consecutive fiscal quarters ended on the calculation date. The Company was in compliance with all financial covenants as of March 31, 2021, as amended. Debt discounts and issuance costs related to the Term Loan were approximately $28.5 million and included various legal, bank and accounting fees. Amortization of debt discount and issuance costs was $1.2 million for the three months ended March 31, 2021 and is included in interest expense on the condensed consolidated statement of income (loss). The unamortized discount related to the Term Loan as of March 31, 2021 was $24.8 million. 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 $278.0 million in net proceeds to the Company after deducting issuance costs. Interest is payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The effective interest rate of the Notes at March 31, 2021 was 9.95%. The Notes mature on December 15, 2025 unless earlier exchanged, repurchased, or redeemed. Debt discounts and issuance costs related to the Notes were approximately $82.0 million and included $75.0 million of discount attributable to the embedded exchange feature, discussed below, and $7.0 million of allocated issuance costs to the Notes related to legal, bank and accounting fees. Amortization of debt discount and issuance costs was $3.1 million for the three months ended March 31, 2021 and is included in interest expense on the condensed consolidated statement of income (loss). The unamortized discount related to the Notes as of March 31, 2021 was $72.4 million. Holders of the Notes are entitled to exchange the Notes at any time during specified periods, at their option, and are entitled to exchange the Notes during any calendar quarter, if the last reported sale price of LivaNova’s ordinary shares, with a nominal value of £1.00 per share for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price, or $79.27 per share, on each applicable trading day. The Notes are exchangeable solely into cash and 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 and prior to the 51 st scheduled trading day immediately preceding the maturity date, 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 their stated maturity, 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 $148.1 million as of March 31, 2021. 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 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 $84.9 million as of March 31, 2021. 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 March 31, 2021, 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 5. Fair Value |
Derivatives and Risk Management
Derivatives and Risk Management | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Risk Management | Note 7. Derivatives and Risk Management Due to the global nature of our operations, we are exposed to foreign currency exchange rate fluctuations. 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. 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 March 31, 2021 and December 31, 2020 was $200.4 million and $352.6 million, respectively. These derivative contracts are designed to offset the FX effects in earnings of various intercompany loans and trade receivables. We recorded net gains for these freestanding derivatives of $7.7 million and $8.1 million for the three months ended March 31, 2021 and 2020, respectively. These 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. 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 We utilize FX derivative contracts, designed as cash flow hedges, to hedge the variability of cash flows associated with our 12 months U.S. dollar forecasts of revenues and costs denominated in British Pound, Japanese Yen and the Euro. We transfer to earnings from AOCI the gain or loss realized on the FX derivative contracts at the time of invoicing. The gross notional amounts of open derivative contracts designated as cash flow hedges at March 31, 2021 and December 31, 2020 were as follows (in thousands): Description of Derivative Contract March 31, 2021 December 31, 2020 FX derivative contracts to be exchanged for British Pounds $ 10,214 $ 9,545 FX derivative contracts to be exchanged for Japanese Yen 16,209 18,637 FX derivative contracts to be exchanged for Euros 41,325 47,444 $ 67,748 $ 75,626 After-tax net loss associated with derivatives designated as cash flow hedges recorded in the ending balance of AOCI and the amount expected to be reclassified to earnings in the next 12 months are as follows (in thousands): Description of Derivative Contract After-Tax Net Gain in AOCI as of March 31, 2021 After-Tax Net Gain in AOCI as of Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ 1,249 $ 1,249 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 March 31, 2021 2020 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Losses Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings Losses Recognized in OCI Losses Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other losses $ (2,223) $ (1,496) $ (2,080) $ (605) FX derivative contracts SG&A — 685 — (91) Interest rate swap contracts Interest expense — — — (28) $ (2,223) $ (811) $ (2,080) $ (724) 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): March 31, 2021 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 $ 1,048 Accrued liabilities $ 724 FX derivative contracts Accrued liabilities 331 Total derivatives designated as hedging instruments 1,379 724 Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Accrued liabilities 36 FX derivative contracts Prepaid expenses and other current assets 863 Accrued liabilities 705 Capped call derivatives Other assets 84,852 Embedded exchange feature Long-term derivative liability 148,091 Other derivatives Accrued liabilities 931 Other derivatives Long-term derivative liability 192 Total derivatives not designated as hedging instruments 85,715 149,955 Total derivatives $ 87,094 $ 150,679 December 31, 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 $ 1,998 Accrued liabilities $ 14 FX derivative contracts Accrued liabilities 895 Total derivatives designated as hedging instruments 2,893 14 Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Accrued liabilities 74 FX derivative contracts Prepaid expenses and other current assets 55 Accrued liabilities 4,073 Capped call derivatives Long-term derivative assets 72,302 Embedded exchange feature Long-term derivative liability 121,756 Other derivatives Accrued liabilities 4,106 Other derivatives Long-term derivative liability 184 Total derivatives not designated as hedging instruments 72,357 130,193 Total derivatives $ 75,250 $ 130,207 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 5. Fair Value Measurements.” |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. 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. With this 510(k) clearance, all actions to remediate the FDA’s inspectional observations in the Warning Letter are complete, and at this time, LivaNova is awaiting the FDA’s close-out inspection. CDC and FDA Safety Communications and Company Field Safety Notice On October 13, 2016, the Center for Disease Control (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 the 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. In April 2017, we obtained CE Mark in Europe for the design change of the 3T device, and in October 2018, the FDA concluded that we could commence the vacuum canister and internal sealing upgrade program in the U.S. 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 are in the process of completing and closing out all recall activities with the FDA. While our vacuum canister and internal sealing upgrade program and deep cleaning service in the U.S. are substantially complete, these services will continue as a servicing option outside of the U.S. 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 March 31, 2021, the product remediation liability was $0.4 million. Saluggia Site Hazardous Substances LivaNova Site Management S.r.l. (“LSM”), formerly a subsidiary of Sorin, one of the companies that merged into LivaNova PLC in 2015, manages site services for the campus in Saluggia, Italy. In addition to a LivaNova manufacturing facility, the Saluggia campus is also the location of manufacturing facilities of third parties, a cafeteria for workers, and storage facilities for hazardous substances and equipment previously used in a nuclear research center, later turned nuclear medicine business, between the 1960s and the late 1990s. Pursuant to authorization from the Italian government, LSM has, and continues to, perform ordinary maintenance, secure the facilities, monitor air and water quality and file applicable reports with the competent environmental authorities. During 2020, LSM received correspondence from ISIN (a sub-body of the Italian Ministry of Economic Development) requesting that within five years, LSM demonstrate the financial capacity to meet its obligations under Italian law to clean and dismantle any contaminated buildings and equipment as well as to deliver hazardous substances to a national repository. This repository will be built by the Italian government at a location and time yet to be determined. ISIN subsequently published Technical Guide n. 30, which identifies the technical criteria, and general safety and protection requirements for the design, construction, operation and dismantling of temporary storage facilities for the hazardous substances. Most recently, in January 2021, a list of 67 potential sites for the national repository was published. There is no legal obligation to begin any work or deliver the hazardous substances, as the performance of these obligations is contingent on the construction of the as-yet unbuilt national repository. However, as a result of the above correspondence and publication from ISIN and the publication of potential sites for the national repository, some of the substantial uncertainties regarding the obligation became more certain. In connection with developing the plan required by ISIN, we retained a third party specialist to assist in the estimation of the potential costs. Based on the aforementioned factors, the Company concluded its obligation to clean, dismantle, and deliver any hazardous substances to a national repository, was probable and reasonably estimable as of December 31, 2020. Accordingly, in the fourth quarter of 2020, we recognized a $42.2 million provision for this matter. The liability as of December 31, 2020 was $43.0 million which represented the low end of the estimated range of loss of $43.0 million to $55.0 million. At March 31, 2021 the liability was $41.0 million. The decrease in the liability from December 31, 2020 was primarily due to the effects of foreign currency changes during the first quarter of 2021. 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 April 28, 2021, 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 number 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 March 31, 2021, the provision for these matters was $34.3 million. While the amount accrued represents our best estimate for those filed and unfiled claims that are both probable and estimable, the actual liability for resolution of these matters may vary from our estimate. Changes in the carrying amount of the litigation provision liability are as follows (in thousands): Total litigation provision liability at December 31, 2020 $ 36,490 Payments (5,122) Adjustments 3,044 FX and other (102) Total litigation provision liability at March 31, 2021 34,310 Less current portion of litigation provision liability at March 31, 2021 26,570 Long-term portion of litigation provision liability at March 31, 2021 $ 7,740 Environmental Liability Sorin was created as a result of a spin-off (the “Sorin spin-off”) from SNIA in January 2004, and in October 2015, Sorin was merged into LivaNova. SNIA subsequently became insolvent and the Italian Ministry of the Environment and the Protection of Land and Sea (the “Italian Ministry of the Environment”), sought compensation from SNIA in an aggregate amount of approximately $4 billion for remediation costs relating to the environmental damage at chemical sites previously operated by SNIA’s other subsidiaries. In September 2011 and July 2014, the Bankruptcy Court of Udine and the Bankruptcy Court of Milan held (in proceedings to which we are not parties) that the Italian Ministry of the Environment and other Italian government agencies (the “Public Administrations”) were not creditors of either SNIA or its subsidiaries in connection with their claims in the Italian insolvency proceedings. The Public Administrations appealed and in January 2016, the Court of Udine rejected the appeal. The Public Administrations have also appealed that decision to the Supreme Court. In addition, the Bankruptcy Court of Milan’s decision has been appealed. In January 2012, SNIA filed a civil action against Sorin in the Civil Court of Milan asserting joint liability of a parent and a spun-off company; the Public Administrations entered voluntarily into the proceeding, asking Sorin, as jointly liable with SNIA, to pay compensation for SNIA’s environmental damages. 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 $343,000 as of March 31, 2021) for legal fees. The Public Administrations appealed the 2016 Decision to the Court of Appeal of Milan. On March 5, 2019, the Court of Appeal issued a partial decision on the merits declaring Sorin/LivaNova jointly liable with SNIA for SNIA’s environmental liabilities in an amount up to the fair value of the net worth received by Sorin because of the Sorin spin-off, an estimated €572.1 million (approximately $671.4 million as of March 31, 2021). Next the Court will evaluate a report delivered by a panel of three experts assessing the environmental damages, including the costs of clean-up and compensatory damages; conduct a hearing; and review briefs from the parties. Thereafter, the Court will issue its ruling on the amount of damages attributable to LivaNova. In the interim, we have appealed the partial decision on liability to the Italian Supreme Court (Corte di Cassazione). In 2011, Caffaro, a SNIA subsidiary, sold its Brescia chemical business to Caffaro Brescia, a third party belonging to the Todisco group, and as part of the acquisition, Caffaro Brescia agreed to secure hydraulic barriers at the site and maintain existing environmental security measures. In September 2020, Caffaro Brescia declared it was withdrawing from its agreement to maintain the environmental measures. In January 2021, we (in addition to Caffaro Brescia, and other non-LivaNova entities) received an administrative order (“Order”) from the Italian Ministry of the Environment requiring us to ensure the maintenance of the environmental measures and to guarantee that such works remain fully operational, the annual management and maintenance for which is estimated at approximately €1 million per year. LivaNova’s receipt of the Order appears to be based on the aforementioned Court of Appeals decision regarding our alleged joint liability with SNIA for SNIA’s environmental liabilities. Our response, dated February 16, 2021, disputes the grounds upon which the Order is based. We have not recognized a liability in connection with these related matters matter because any potential loss is not currently probable or reasonably estimable. 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, and in April 2021, the Patent Office issued a Non-Final Rejection of all the ‘307 claims. The Court has stayed the litigation pending the outcome of the IPR appeal proceeding. We have not recognized a liability in connection with this matter because any potential loss is not currently probable or reasonably estimable. 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 a liability related to this matter because any potential loss is not currently probable or reasonably estimable. 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 | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 9. Stockholders' Equity The tables below present the condensed consolidated statement of stockholders’ equity as of and for the three months ended March 31, 2021 and 2020 (in thousands): Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders' Equity December 31, 2020 49,447 $ 76,300 $ 1,768,156 $ (1,034) $ 27,809 $ (752,402) $ 1,118,829 Stock-based compensation plans 8 10 2,251 236 — — 2,497 Net loss — — — — — (29,698) (29,698) Other comprehensive income — — — — (25,871) — (25,871) March 31, 2021 49,455 $ 76,310 $ 1,770,407 $ (798) $ 1,938 $ (782,100) $ 1,065,757 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 — — — — — (639) (639) Stock-based compensation plans 3 2 5,003 173 — — 5,178 Net income — — — — — 37,583 37,583 Other comprehensive loss — — — — (33,131) — (33,131) March 31, 2020 49,414 $ 76,259 $ 1,739,873 $ (1,090) $ (52,523) $ (369,811) $ 1,392,708 (1) Refer to “Note 15. 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 three months ended March 31, 2021 and 2020 (in thousands): Change in Unrealized Gain (Loss) on Derivatives Foreign Currency Translation Adjustments Gain (Loss) (1) Total December 31, 2020 $ 2,319 $ 25,490 $ 27,809 Other comprehensive income before reclassifications, before tax (1,146) (25,875) (27,021) Tax expense 534 — 534 Other comprehensive income before reclassifications, net of tax (612) (25,875) (26,487) Reclassification of loss from accumulated other comprehensive income (loss), before tax 811 — 811 Reclassification of tax benefit (195) — (195) Reclassification of loss from accumulated other comprehensive income (loss), after tax 616 — 616 Net current-period other comprehensive income, net of tax 4 (25,875) (25,871) March 31, 2021 $ 2,323 $ (385) $ 1,938 December 31, 2019 $ 513 $ (19,905) $ (19,392) Other comprehensive loss before reclassifications, before tax (2,080) (32,100) (34,180) Tax benefit 498 — 498 Other comprehensive loss before reclassifications, net of tax (1,582) (32,100) (33,682) Reclassification of loss from accumulated other comprehensive income (loss), before tax 724 — 724 Reclassification of tax expense (173) — (173) Reclassification of loss from accumulated other comprehensive income (loss), after tax 551 — 551 Net current-period other comprehensive loss, net of tax (1,031) (32,100) (33,131) March 31, 2020 $ (518) $ (52,005) $ (52,523) (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 | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Incentive Plans | Note 10. Stock-Based Incentive Plans Stock-based incentive plans compensation expense is as follows (in thousands): Three Months Ended March 31, 2021 2020 Service-based restricted stock units (“RSUs”) $ 4,842 $ 4,478 Service-based stock appreciation rights (“SARs”) 3,322 2,684 Market performance-based restricted stock units 763 896 Operating performance-based restricted stock units 267 695 Employee share purchase plan 342 290 Total stock-based compensation expense $ 9,536 $ 9,043 During the three months ended March 31, 2021, 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 from two Stock-based compensation agreements issued during the three months ended March 31, 2021, representing potential shares and their weighted average grant date fair values by type follows (shares in thousands, fair value in dollars): Three Months Ended March 31, 2021 Shares Weighted Average Grant Date Fair Value Service-based SARs 594,617 $ 29.22 Service-based RSUs 322,310 $ 73.25 Market performance-based RSUs 47,916 $ 114.74 Operating performance-based RSUs 76,040 $ 73.25 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes Our effective income tax rate from continuing operations for the three months ended March 31, 2021 was (10.7)% compared with 744.4% for the three months ended March 31, 2020. 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. We continually assess the realizability of our worldwide deferred tax asset and valuation allowance positions, and when the need arises, we establish or release valuation allowances accordingly. Compared with the three months ended March 31, 2020, the change in the effective tax rate for the three months ended March 31, 2021 was primarily attributable to changes in valuation allowances and other discrete items as compared to the discrete tax benefit of $41.3 million related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) during the three months ended March 31, 2020. 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 $3.3 million and $3.4 million were unrecognized as of March 31, 2021 and December 31, 2020, respectively. It is reasonably possible that, within the next twelve months, due to the settlement of uncertain tax positions with various tax authorities and the expiration of statutes of limitations, unrecognized tax benefits could decrease by up to approximately $1.7 million. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 12. Earnings Per Share Reconciliation of the shares used in the basic and diluted earnings per share computations for the three months ended March 31, 2021 and 2020 are as follows (in thousands): Three Months Ended March 31, 2021 2020 Basic weighted average shares outstanding 48,736 48,485 Add effects of share-based compensation instruments (1) — 284 Diluted weighted average shares outstanding 48,736 48,769 (1) Excluded from the computation of diluted earnings per share were stock options, SARs and restricted share units totaling 4.3 million and 1.5 million for the three months ended March 31, 2021 and 2020, respectively, because to include them would have been anti-dilutive under the treasury stock method. |
Geographic and Segment Informat
Geographic and Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Geographic and Segment Information | Note 13. 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. Advanced Circulatory Support includes temporary life support product kits that can include a combination of pumps, oxygenators, and cannulae. 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 that each reportable segment develops and manufactures or distributes. 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 March 31, 2021 2020 Cardiopulmonary United States $ 35,759 $ 36,858 Europe 30,626 34,234 Rest of World 42,334 45,275 108,719 116,367 Heart Valves United States 2,717 3,373 Europe 8,284 9,529 Rest of World 10,454 12,309 21,455 25,211 Advanced Circulatory Support United States 12,560 10,076 Europe 228 370 Rest of World 204 45 12,992 10,491 Cardiovascular United States 51,036 50,307 Europe 39,138 44,133 Rest of World 52,992 57,629 143,166 152,069 Neuromodulation United States 82,300 73,276 Europe 11,679 10,583 Rest of World 9,720 5,798 103,699 89,657 Other 738 671 Totals United States 133,336 123,583 Europe (1) 50,817 54,716 Rest of World 63,450 64,098 Total (2) $ 247,603 $ 242,397 (1) Europe sales include those countries in which we have a direct sales presence, whereas European countries in which we sell through distributors are included in Rest of World. (2) No single customer represented over 10% of our consolidated net sales. No country’s net sales exceeded 10% of our consolidated sales except for the U.S. The table below presents a reconciliation of segment income from continuing operations to consolidated income from continuing operations before tax (in thousands): Three Months Ended March 31, 2021 2020 Cardiovascular $ 5,628 $ 8,681 Neuromodulation 34,039 33,858 Other (30,669) (26,610) Total reportable segment income from continuing operations 8,998 15,929 Merger and integration expenses 630 3,474 Restructuring expenses 6,092 1,580 Amortization of intangibles 6,699 10,267 Operating income from continuing operations (4,423) 608 Interest income (74) 148 Interest expense (15,936) (4,849) Foreign exchange and other losses (6,369) (1,914) Income from continuing operations before tax $ (26,802) $ (6,007) Assets by segment are as follows (in thousands): March 31, 2021 December 31, 2020 Cardiovascular $ 1,319,493 $ 1,361,669 Neuromodulation 642,123 673,586 Other 407,553 376,096 Total assets $ 2,369,169 $ 2,411,351 Capital expenditures by segment are as follows (in thousands): Three Months Ended March 31, 2021 2020 Cardiovascular $ 4,149 $ 5,292 Neuromodulation 40 5,239 Other 925 1,843 Total $ 5,114 $ 12,374 The changes in the carrying amount of goodwill by segment for the three months ended March 31, 2021 were as follows (in thousands): Cardiovascular Neuromodulation Total December 31, 2020 $ 523,564 $ 398,754 $ 922,318 Foreign currency adjustments (12,326) — (12,326) March 31, 2021 $ 511,238 $ 398,754 $ 909,992 Property, plant and equipment, net by geography are as follows (in thousands): March 31, 2021 December 31, 2020 United States $ 64,002 $ 64,553 Europe 87,945 93,821 Rest of World 5,945 5,431 Total $ 157,892 $ 163,805 |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Financial Information | Note 14. Supplemental Financial Information Inventories consisted of the following (in thousands): March 31, 2021 December 31, 2020 Raw materials $ 42,907 $ 43,257 Work-in-process 9,755 8,055 Finished goods 71,861 75,363 $ 124,523 $ 126,675 As of March 31, 2021 and December 31, 2020, inventories include adjustments totaling $4.0 million and $6.6 million, respectively, to record balances at lower of cost or net realizable value. Accrued liabilities and other consisted of the following (in thousands): March 31, 2021 December 31, 2020 Legal and administrative costs $ 15,650 $ 15,820 Operating lease liabilities 11,535 11,276 Contingent consideration (1) 9,424 13,968 Contract liabilities 9,234 6,929 Restructuring related liabilities (2) 5,569 6,258 Derivative contract liabilities (3) 2,065 7,372 Research and development costs 4,752 4,257 Provisions for agents, returns and other 2,377 3,063 Other accrued expenses 31,428 26,465 $ 92,034 $ 95,408 (1) Refer to “Note 5. Fair Value Measurements” (2) Refer to “Note 3. Restructuring” (3) Refer to “Note 7. Derivatives and Risk Management” As of March 31, 2021 and December 31, 2020, contract liabilities of $9.5 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 | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | Note 15. 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 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. January 1, 2021 There was no material impact to our consolidated financial statements as a result of adopting this ASU. December 2019 ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This update simplifies various aspects related to the accounting for income taxes. The standard removes certain exceptions to the general principles in Topic 740 and also clarifies and modifies existing guidance to improve consistent application of Topic 740. January 1, 2021 There was no material impact to our consolidated financial statements as a result of adopting this ASU. August 2020 ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity This update simplifies the accounting for convertible debt instruments by removing certain accounting separation models as well as the accounting for debt instruments with embedded conversion features that are not required to be accounted for as derivative instruments. The update also improves the consistency of earnings per share calculations for convertible instruments. January 1, 2021 There was no material impact to our consolidated financial statements as a result of adopting this ASU. |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of LivaNova as of, and for the three months ended March 31, 2021 and 2020, 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, 2020 has been derived from audited financial statements contained in our 2020 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 considered necessary for a fair statement of the operating results of LivaNova and its subsidiaries, for the three months ended March 31, 2021, and are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The financial information presented herein should be read in conjunction with the audited consolidated financial statements and notes thereto accompanying our 2020 Form 10-K. |
Reclassifications | 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. |
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. 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 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. January 1, 2021 There was no material impact to our consolidated financial statements as a result of adopting this ASU. December 2019 ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This update simplifies various aspects related to the accounting for income taxes. The standard removes certain exceptions to the general principles in Topic 740 and also clarifies and modifies existing guidance to improve consistent application of Topic 740. January 1, 2021 There was no material impact to our consolidated financial statements as a result of adopting this ASU. August 2020 ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity This update simplifies the accounting for convertible debt instruments by removing certain accounting separation models as well as the accounting for debt instruments with embedded conversion features that are not required to be accounted for as derivative instruments. The update also improves the consistency of earnings per share calculations for convertible instruments. January 1, 2021 There was no material impact to our consolidated financial statements as a result of adopting this ASU. |
Assets and Liabilities Held F_2
Assets and Liabilities Held For Sale (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Discontinued Operations | The major classes of assets and liabilities held for sale on the consolidated balance sheet as of March 31, 2021 and December 31, 2020 were as follows (in thousands): March 31, 2021 December 31, 2020 Accounts receivable, net $ 20,280 $ 20,059 Inventories 44,623 45,081 Prepaid and refundable taxes 2,901 2,751 Prepaid expenses and other current assets 2,488 2,436 Property, plant and equipment, net 24,672 25,042 Intangible assets, net 150,197 153,632 Deferred tax assets — — Operating lease assets 1,508 1,698 Impairment charge of disposal group (179,194) (180,160) Total assets held for sale $ 67,475 $ 70,539 Accounts payable $ 7,492 $ 9,518 Accrued liabilities and other 3,743 4,205 Taxes payable 543 363 Accrued employee compensation and related benefits 8,829 8,781 Deferred tax liabilities 614 671 Long-term employee compensation and related benefits 5,038 4,994 Long-term operating lease liabilities 531 841 Other long-term liabilities 328 306 Total liabilities held for sale $ 27,118 $ 29,679 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table provides a reconciliation of the beginning and ending balance of the accruals and other reserves recorded in connection with our restructuring plans included within accrued liabilities and other and other long-term liabilities on the condensed consolidated balance sheet (in thousands): Employee Severance and Other Termination Costs Other Total Balance at December 31, 2020 $ 5,749 $ 546 $ 6,295 Charges 4,110 1,982 6,092 Cash payments and other (4,652) (2,129) (6,781) Balance at March 31, 2021 $ 5,207 $ 399 $ 5,606 |
Schedule of Restructuring Expense by Reportable Segment | The following table presents restructuring expense by reportable segment (in thousands): Three Months Ended March 31, 2021 2020 Cardiovascular $ 1,896 $ 686 Neuromodulation 1,210 503 Other 2,986 391 Total $ 6,092 $ 1,580 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investments [Abstract] | |
Schedule of Long-term Investments | The below equity investments are included in investments on the condensed consolidated balance sheets (in thousands): March 31, 2021 December 31, 2020 Respicardia Inc. (1) (2) $ 21,796 $ 17,706 ALung Technologies, Inc. (3) 3,000 3,000 Ceribell, Inc. 3,000 3,000 ShiraTronics, Inc. 2,045 2,045 Noctrix Health, Inc. 3,159 1,359 MD Start II 1,174 1,227 Rainbow Medical Ltd. 1,149 1,201 Highlife S.A.S. 1,113 1,163 36,436 30,701 Equity method investment 336 393 $ 36,772 $ 31,094 (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 $1.3 million and $0.8 million as of March 31, 2021 and December 31, 2020, respectively, which is included in prepaid expenses and other current assets on the condensed consolidated balance sheet. (2) In April 2021, Zoll Medical Corporation acquired Respicardia Inc. As a result of the acquisition we received proceeds of $23.1 million for our investment and loan receivable with carrying values of $17.7 million and $0.8 million as of December 31, 2020, respectively. The Company recorded a gain of $4.6 million during the first quarter of 2021 to adjust the investment and loans receivable to fair value, which is included in foreign exchange and other losses on the condensed consolidated statement of income (loss). (3) ALung Technologies, Inc. (“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. We have a loan outstanding to ALung, with a carrying amount of $2.5 million and $2.5 million as of March 31, 2021 and December 31, 2020, respectively, which is included in prepaid expenses and other current assets on the condensed consolidated balance sheet. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 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”) $ 1,379 $ — $ 1,379 $ — Derivative assets - freestanding instruments (FX) 863 — 863 — Derivative assets - capped call derivatives 84,852 — — 84,852 Convertible notes receivable 2,758 — — 2,758 $ 89,852 $ — $ 2,242 $ 87,610 Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 724 $ — $ 724 $ — Derivative liabilities - freestanding instruments (interest rate swaps) 36 — 36 — Derivative liabilities - freestanding instruments (FX) 705 — 705 — Derivative liabilities - embedded exchange feature 148,091 — — 148,091 Derivative liabilities - other 1,123 — — 1,123 Contingent consideration arrangements 99,271 — — 99,271 $ 249,950 $ — $ 1,465 $ 248,485 Fair Value as of December 31, 2020 Fair Value Measurements Using Inputs Considered as: Level 1 Level 2 Level 3 Assets: Derivative assets - designated as cash flow hedges (FX) $ 2,893 $ — $ 2,893 $ — Derivative assets - freestanding instruments (FX) 55 — 55 — Derivative assets - capped call derivatives 72,302 — — 72,302 Convertible notes receivable 2,775 — — 2,775 $ 78,025 $ — $ 2,948 $ 75,077 Liabilities: Derivative liabilities - designated as cash flow hedges (FX) $ 14 $ — $ 14 $ — Derivative liabilities - freestanding instruments (interest rate swaps) 74 — 74 — Derivative liabilities - freestanding instruments (FX) 4,073 — 4,073 — Derivative liabilities - embedded exchange feature 121,756 — — 121,756 Derivative liabilities - other 4,290 — — 4,290 Contingent consideration arrangements 103,818 — — 103,818 $ 234,025 $ — $ 4,161 $ 229,864 |
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 Convertible Notes Receivable Embedded Exchange Feature Derivative Liability Other Derivative Liabilities Contingent Consideration Liability Arrangements As of December 31, 2020 $ 72,302 $ 2,775 $ 121,756 $ 4,290 $ 103,818 Payments (1) — — — — (5,000) Changes in fair value 12,550 (17) 26,335 (3,167) 453 Total at March 31, 2021 84,852 2,758 148,091 1,123 99,271 Less current portion at March 31, 2021 — 2,495 — 931 9,424 Long-term portion at March 31, 2021 $ 84,852 $ 263 $ 148,091 $ 192 $ 89,847 |
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): March 31, 2021 December 31, 2020 ImThera Medical, Inc. (“ImThera”) $ 89,426 $ 89,436 CardiacAssist, Inc., doing business as TandemLife (“TandemLife”) 8,942 8,809 Miami Instruments 903 5,573 $ 99,271 $ 103,818 |
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 March 31, 2021: ImThera Acquisition Valuation Technique Unobservable Input Inputs Regulatory milestone-based payment Discounted cash flow Discount rate 6.7% Probability of payment 85% Projected payment year 2024 Sales-based earnout Monte Carlo simulation Risk-adjusted discount rate 12.0% - 12.7% Credit risk discount rate 7.0% - 7.8% 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 March 31, 2021: TandemLife Acquisition Valuation Technique Unobservable Input Inputs Regulatory milestone-based payment Discounted cash flow Discount rate 4.9% Probability of payment 70% Projected payment year 2021 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The outstanding principal amount of our long-term debt as of March 31, 2021 and December 31, 2020 was as follows (in thousands, except interest rates): March 31, 2021 December 31, 2020 Maturity Interest Rate 2020 Senior Secured Term Loan $ 425,167 $ 424,002 June 2025 LIBOR (1% Floor) + 6.50% 2020 Cash Exchangeable Senior Notes 215,145 212,073 December 2025 3.00% Bank of America Merrill Lynch Banco Múltiplo S.A. 5,901 6,515 July 2021 4.27% Mediocredito Italiano 5,198 5,406 December 2023 0.50 % - 2.74% Bank of America, U.S. 2,016 2,019 January 2023 2.75% Other 641 660 Total long-term facilities 654,068 650,675 Less current portion of long-term debt 7,699 8,377 Total long-term debt $ 646,369 $ 642,298 |
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 (1) 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) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 and December 31, 2020 were as follows (in thousands): Description of Derivative Contract March 31, 2021 December 31, 2020 FX derivative contracts to be exchanged for British Pounds $ 10,214 $ 9,545 FX derivative contracts to be exchanged for Japanese Yen 16,209 18,637 FX derivative contracts to be exchanged for Euros 41,325 47,444 $ 67,748 $ 75,626 |
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 12 months are as follows (in thousands): Description of Derivative Contract After-Tax Net Gain in AOCI as of March 31, 2021 After-Tax Net Gain in AOCI as of Amount Expected to be Reclassified to Earnings in Next 12 Months FX derivative contracts $ 1,249 $ 1,249 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 March 31, 2021 2020 Description of Derivative Contract Location in Earnings of Reclassified Gain or Loss Losses Recognized in OCI (Losses) Gains Reclassified from AOCI to Earnings Losses Recognized in OCI Losses Reclassified from AOCI to Earnings FX derivative contracts Foreign exchange and other losses $ (2,223) $ (1,496) $ (2,080) $ (605) FX derivative contracts SG&A — 685 — (91) Interest rate swap contracts Interest expense — — — (28) $ (2,223) $ (811) $ (2,080) $ (724) |
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): March 31, 2021 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 $ 1,048 Accrued liabilities $ 724 FX derivative contracts Accrued liabilities 331 Total derivatives designated as hedging instruments 1,379 724 Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Accrued liabilities 36 FX derivative contracts Prepaid expenses and other current assets 863 Accrued liabilities 705 Capped call derivatives Other assets 84,852 Embedded exchange feature Long-term derivative liability 148,091 Other derivatives Accrued liabilities 931 Other derivatives Long-term derivative liability 192 Total derivatives not designated as hedging instruments 85,715 149,955 Total derivatives $ 87,094 $ 150,679 December 31, 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 $ 1,998 Accrued liabilities $ 14 FX derivative contracts Accrued liabilities 895 Total derivatives designated as hedging instruments 2,893 14 Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Accrued liabilities 74 FX derivative contracts Prepaid expenses and other current assets 55 Accrued liabilities 4,073 Capped call derivatives Long-term derivative assets 72,302 Embedded exchange feature Long-term derivative liability 121,756 Other derivatives Accrued liabilities 4,106 Other derivatives Long-term derivative liability 184 Total derivatives not designated as hedging instruments 72,357 130,193 Total derivatives $ 75,250 $ 130,207 (1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 5. Fair Value Measurements.” |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation Provision Liabilities | Changes in the carrying amount of the litigation provision liability are as follows (in thousands): Total litigation provision liability at December 31, 2020 $ 36,490 Payments (5,122) Adjustments 3,044 FX and other (102) Total litigation provision liability at March 31, 2021 34,310 Less current portion of litigation provision liability at March 31, 2021 26,570 Long-term portion of litigation provision liability at March 31, 2021 $ 7,740 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 months ended March 31, 2021 and 2020 (in thousands): Ordinary Shares Ordinary Shares - Amount Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders' Equity December 31, 2020 49,447 $ 76,300 $ 1,768,156 $ (1,034) $ 27,809 $ (752,402) $ 1,118,829 Stock-based compensation plans 8 10 2,251 236 — — 2,497 Net loss — — — — — (29,698) (29,698) Other comprehensive income — — — — (25,871) — (25,871) March 31, 2021 49,455 $ 76,310 $ 1,770,407 $ (798) $ 1,938 $ (782,100) $ 1,065,757 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 — — — — — (639) (639) Stock-based compensation plans 3 2 5,003 173 — — 5,178 Net income — — — — — 37,583 37,583 Other comprehensive loss — — — — (33,131) — (33,131) March 31, 2020 49,414 $ 76,259 $ 1,739,873 $ (1,090) $ (52,523) $ (369,811) $ 1,392,708 (1) Refer to “Note 15. New Accounting Pronouncements” |
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 three months ended March 31, 2021 and 2020 (in thousands): Change in Unrealized Gain (Loss) on Derivatives Foreign Currency Translation Adjustments Gain (Loss) (1) Total December 31, 2020 $ 2,319 $ 25,490 $ 27,809 Other comprehensive income before reclassifications, before tax (1,146) (25,875) (27,021) Tax expense 534 — 534 Other comprehensive income before reclassifications, net of tax (612) (25,875) (26,487) Reclassification of loss from accumulated other comprehensive income (loss), before tax 811 — 811 Reclassification of tax benefit (195) — (195) Reclassification of loss from accumulated other comprehensive income (loss), after tax 616 — 616 Net current-period other comprehensive income, net of tax 4 (25,875) (25,871) March 31, 2021 $ 2,323 $ (385) $ 1,938 December 31, 2019 $ 513 $ (19,905) $ (19,392) Other comprehensive loss before reclassifications, before tax (2,080) (32,100) (34,180) Tax benefit 498 — 498 Other comprehensive loss before reclassifications, net of tax (1,582) (32,100) (33,682) Reclassification of loss from accumulated other comprehensive income (loss), before tax 724 — 724 Reclassification of tax expense (173) — (173) Reclassification of loss from accumulated other comprehensive income (loss), after tax 551 — 551 Net current-period other comprehensive loss, net of tax (1,031) (32,100) (33,131) March 31, 2020 $ (518) $ (52,005) $ (52,523) (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) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 2020 Service-based restricted stock units (“RSUs”) $ 4,842 $ 4,478 Service-based stock appreciation rights (“SARs”) 3,322 2,684 Market performance-based restricted stock units 763 896 Operating performance-based restricted stock units 267 695 Employee share purchase plan 342 290 Total stock-based compensation expense $ 9,536 $ 9,043 Stock-based compensation agreements issued during the three months ended March 31, 2021, representing potential shares and their weighted average grant date fair values by type follows (shares in thousands, fair value in dollars): Three Months Ended March 31, 2021 Shares Weighted Average Grant Date Fair Value Service-based SARs 594,617 $ 29.22 Service-based RSUs 322,310 $ 73.25 Market performance-based RSUs 47,916 $ 114.74 Operating performance-based RSUs 76,040 $ 73.25 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 months ended March 31, 2021 and 2020 are as follows (in thousands): Three Months Ended March 31, 2021 2020 Basic weighted average shares outstanding 48,736 48,485 Add effects of share-based compensation instruments (1) — 284 Diluted weighted average shares outstanding 48,736 48,769 (1) Excluded from the computation of diluted earnings per share were stock options, SARs and restricted share units totaling 4.3 million and 1.5 million for the three months ended March 31, 2021 and 2020, 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) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 2020 Cardiopulmonary United States $ 35,759 $ 36,858 Europe 30,626 34,234 Rest of World 42,334 45,275 108,719 116,367 Heart Valves United States 2,717 3,373 Europe 8,284 9,529 Rest of World 10,454 12,309 21,455 25,211 Advanced Circulatory Support United States 12,560 10,076 Europe 228 370 Rest of World 204 45 12,992 10,491 Cardiovascular United States 51,036 50,307 Europe 39,138 44,133 Rest of World 52,992 57,629 143,166 152,069 Neuromodulation United States 82,300 73,276 Europe 11,679 10,583 Rest of World 9,720 5,798 103,699 89,657 Other 738 671 Totals United States 133,336 123,583 Europe (1) 50,817 54,716 Rest of World 63,450 64,098 Total (2) $ 247,603 $ 242,397 (1) Europe sales include those countries in which we have a direct sales presence, whereas European countries in which we sell through distributors are included in Rest of World. (2) No single customer represented over 10% of our consolidated net sales. No country’s net sales exceeded 10% of our consolidated sales except for the U.S. |
Schedule of Segment Reporting Information, by Segment | The table below presents a reconciliation of segment income from continuing operations to consolidated income from continuing operations before tax (in thousands): Three Months Ended March 31, 2021 2020 Cardiovascular $ 5,628 $ 8,681 Neuromodulation 34,039 33,858 Other (30,669) (26,610) Total reportable segment income from continuing operations 8,998 15,929 Merger and integration expenses 630 3,474 Restructuring expenses 6,092 1,580 Amortization of intangibles 6,699 10,267 Operating income from continuing operations (4,423) 608 Interest income (74) 148 Interest expense (15,936) (4,849) Foreign exchange and other losses (6,369) (1,914) Income from continuing operations before tax $ (26,802) $ (6,007) Assets by segment are as follows (in thousands): March 31, 2021 December 31, 2020 Cardiovascular $ 1,319,493 $ 1,361,669 Neuromodulation 642,123 673,586 Other 407,553 376,096 Total assets $ 2,369,169 $ 2,411,351 Capital expenditures by segment are as follows (in thousands): Three Months Ended March 31, 2021 2020 Cardiovascular $ 4,149 $ 5,292 Neuromodulation 40 5,239 Other 925 1,843 Total $ 5,114 $ 12,374 |
Schedule of Goodwill | The changes in the carrying amount of goodwill by segment for the three months ended March 31, 2021 were as follows (in thousands): Cardiovascular Neuromodulation Total December 31, 2020 $ 523,564 $ 398,754 $ 922,318 Foreign currency adjustments (12,326) — (12,326) March 31, 2021 $ 511,238 $ 398,754 $ 909,992 |
Long-lived Assets by Geographic Areas | Property, plant and equipment, net by geography are as follows (in thousands): March 31, 2021 December 31, 2020 United States $ 64,002 $ 64,553 Europe 87,945 93,821 Rest of World 5,945 5,431 Total $ 157,892 $ 163,805 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Inventories | Inventories consisted of the following (in thousands): March 31, 2021 December 31, 2020 Raw materials $ 42,907 $ 43,257 Work-in-process 9,755 8,055 Finished goods 71,861 75,363 $ 124,523 $ 126,675 |
Accrued Liabilities | Accrued liabilities and other consisted of the following (in thousands): March 31, 2021 December 31, 2020 Legal and administrative costs $ 15,650 $ 15,820 Operating lease liabilities 11,535 11,276 Contingent consideration (1) 9,424 13,968 Contract liabilities 9,234 6,929 Restructuring related liabilities (2) 5,569 6,258 Derivative contract liabilities (3) 2,065 7,372 Research and development costs 4,752 4,257 Provisions for agents, returns and other 2,377 3,063 Other accrued expenses 31,428 26,465 $ 92,034 $ 95,408 (1) Refer to “Note 5. Fair Value Measurements” (2) Refer to “Note 3. Restructuring” (3) Refer to “Note 7. Derivatives and Risk Management” |
New Accounting Pronouncements (
New Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 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. January 1, 2021 There was no material impact to our consolidated financial statements as a result of adopting this ASU. December 2019 ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This update simplifies various aspects related to the accounting for income taxes. The standard removes certain exceptions to the general principles in Topic 740 and also clarifies and modifies existing guidance to improve consistent application of Topic 740. January 1, 2021 There was no material impact to our consolidated financial statements as a result of adopting this ASU. August 2020 ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity This update simplifies the accounting for convertible debt instruments by removing certain accounting separation models as well as the accounting for debt instruments with embedded conversion features that are not required to be accounted for as derivative instruments. The update also improves the consistency of earnings per share calculations for convertible instruments. January 1, 2021 There was no material impact to our consolidated financial statements as a result of adopting this ASU. |
Assets and Liabilities Held F_3
Assets and Liabilities Held For Sale - Narrative (Details) $ in Thousands, € in Millions | Dec. 30, 2022EUR (€) | Apr. 09, 2021 | Mar. 31, 2021USD ($) | Dec. 02, 2020EUR (€) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Revaluation of disposal group | $ 180,200 | ||||||
Revaluation of disposal group | $ 966 | $ 0 | |||||
Heart Valves | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Consideration | $ 70,400 | € 60 | $ 70,400 | ||||
Heart Valves | Subsequent Event | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Sale and purchase deferral period | 2 years | ||||||
Heart Valves | Business Combination, Consideration, Tranche One | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sales of business, affiliate and productive assets | 58,700 | € 50 | |||||
Heart Valves | Business Combination, Consideration, Tranche Two | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sales of business, affiliate and productive assets | $ 11,700 | ||||||
Heart Valves | Forecast | Business Combination, Consideration, Tranche Two | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sales of business, affiliate and productive assets | € | € 10 |
Assets and Liabilities Held F_4
Assets and Liabilities Held For Sale- Assets & Liabilities Held-for-sale (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets [Abstract] | ||
Total assets held for sale | $ 67,475 | $ 70,539 |
Liabilities [Abstract] | ||
Deferred tax liabilities | 614 | 671 |
Other long-term liabilities | 328 | 306 |
Total liabilities held for sale | 27,118 | 29,679 |
Discontinued Operations, Disposed of by Sale | ||
Assets [Abstract] | ||
Accounts receivable, net | 20,280 | 20,059 |
Inventories | 44,623 | 45,081 |
Prepaid and refundable taxes | 2,901 | 2,751 |
Prepaid expenses and other current assets | 2,488 | 2,436 |
Property, plant and equipment, net | 24,672 | 25,042 |
Intangible assets, net | 150,197 | 153,632 |
Deferred tax assets | 0 | 0 |
Operating lease assets | 1,508 | 1,698 |
Impairment charge of disposal group | (179,194) | (180,160) |
Liabilities [Abstract] | ||
Accounts payable | 7,492 | 9,518 |
Accrued liabilities and other | 3,743 | 4,205 |
Taxes payable | 543 | 363 |
Accrued employee compensation and related benefits | 8,829 | 8,781 |
Long-term employee compensation and related benefits | 5,038 | 4,994 |
Long-term operating lease liabilities | $ 531 | $ 841 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)employee | Dec. 31, 2020USD ($)employee | Mar. 31, 2020USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 6,092 | $ 1,580 | |
Reorganization Plan 2020 | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 6,100 | $ 5,300 | |
Restructuring and related cost, severance costs, number of employees | employee | 12 | 54 |
Restructuring - Reconciliation
Restructuring - Reconciliation of Beginning and Ending Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Charges | $ 6,092 | $ 1,580 |
Reorganization Plans | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 6,295 | |
Charges | 6,092 | |
Cash payments and other | (6,781) | |
Balance at end of period | 5,606 | |
Reorganization Plans | Employee Severance and Other Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 5,749 | |
Charges | 4,110 | |
Cash payments and other | (4,652) | |
Balance at end of period | 5,207 | |
Reorganization Plans | Other | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 546 | |
Charges | 1,982 | |
Cash payments and other | (2,129) | |
Balance at end of period | $ 399 |
Restructuring - Restructuring E
Restructuring - Restructuring Expense by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Charges | $ 6,092 | $ 1,580 |
Operating Segments | Cardiovascular | ||
Restructuring Cost and Reserve [Line Items] | ||
Charges | 1,896 | 686 |
Operating Segments | Neuromodulation | ||
Restructuring Cost and Reserve [Line Items] | ||
Charges | 1,210 | 503 |
Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Charges | $ 2,986 | $ 391 |
Investments - Equity Investment
Investments - Equity Investments Included on the Balance Sheet (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 28, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Schedule of Equity Method Investments [Line Items] | |||
Investments | $ 36,436 | $ 30,701 | |
Equity method investment | 336 | 393 | |
Total investments | 36,772 | 31,094 | |
Respicardia Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 21,796 | 17,706 | |
Respicardia Inc. | Prepaid Expenses and Other Current Assets | Cost Method Investee | |||
Schedule of Equity Method Investments [Line Items] | |||
Outstanding loans | 1,300 | 800 | |
ALung Technologies, Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 3,000 | 3,000 | |
ALung Technologies, Inc. | Prepaid Expenses and Other Current Assets | Cost Method Investee | |||
Schedule of Equity Method Investments [Line Items] | |||
Outstanding loans | 2,500 | 2,500 | |
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 | |
Noctrix Health, Inc | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 3,159 | 1,359 | |
MD Start II | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 1,174 | 1,227 | |
Rainbow Medical Ltd. | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 1,149 | 1,201 | |
Highlife S.A.S. | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments | 1,113 | 1,163 | |
Zoll Medical Corporation | Cost Method Investee | |||
Schedule of Equity Method Investments [Line Items] | |||
Gain (loss) on investment | 4,600 | ||
Zoll Medical Corporation | Cost Method Investee | Subsequent Event | |||
Schedule of Equity Method Investments [Line Items] | |||
Proceeds from investment | $ 23,100 | ||
Zoll Medical Corporation | Prepaid Expenses and Other Current Assets | Cost Method Investee | |||
Schedule of Equity Method Investments [Line Items] | |||
Outstanding loans | $ 17,700 | $ 800 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Liabilities: | ||
Contingent consideration | $ 89,847 | $ 89,850 |
Capped Call | ||
Assets: | ||
Derivative asset | 84,900 | |
Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liabilities | 148,091 | |
Derivatives Not Designated as Hedging Instruments | Freestanding Instrument | ||
Liabilities: | ||
Derivative liabilities | 705 | |
Level 1 | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liabilities | 0 | |
Level 1 | Derivatives Not Designated as Hedging Instruments | Freestanding Instrument | ||
Liabilities: | ||
Derivative liabilities | 0 | |
Level 2 | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liabilities | 0 | |
Level 2 | Derivatives Not Designated as Hedging Instruments | Freestanding Instrument | ||
Liabilities: | ||
Derivative liabilities | 705 | |
Fair Value, Recurring | ||
Assets: | ||
Convertible notes receivable | 2,758 | 2,775 |
Total assets | 89,852 | 78,025 |
Liabilities: | ||
Contingent consideration | 99,271 | 103,818 |
Total liabilities | 249,950 | 234,025 |
Fair Value, Recurring | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liabilities | 121,756 | |
Fair Value, Recurring | Other Contract | ||
Liabilities: | ||
Derivative liabilities | 1,123 | 4,290 |
Fair Value, Recurring | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 1,379 | 2,893 |
Liabilities: | ||
Derivative liabilities | 724 | 14 |
Fair Value, Recurring | Derivatives Not Designated as Hedging Instruments | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 863 | 55 |
Liabilities: | ||
Derivative liabilities | 4,073 | |
Fair Value, Recurring | Derivatives Not Designated as Hedging Instruments | Capped Call | ||
Assets: | ||
Derivative asset | 84,852 | 72,302 |
Fair Value, Recurring | Derivatives Not Designated as Hedging Instruments | Interest rate swap contracts | ||
Liabilities: | ||
Derivative liabilities | 36 | 74 |
Fair Value, Recurring | Level 1 | ||
Assets: | ||
Convertible notes receivable | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Recurring | Level 1 | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liabilities | 0 | |
Fair Value, Recurring | Level 1 | Other Contract | ||
Liabilities: | ||
Derivative 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 Not Designated as Hedging Instruments | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | |
Fair Value, Recurring | Level 1 | Derivatives Not Designated as Hedging Instruments | Capped Call | ||
Assets: | ||
Derivative asset | 0 | 0 |
Fair Value, Recurring | Level 1 | Derivatives Not Designated as Hedging Instruments | Interest rate swap contracts | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets: | ||
Convertible notes receivable | 0 | 0 |
Total assets | 2,242 | 2,948 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 1,465 | 4,161 |
Fair Value, Recurring | Level 2 | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liabilities | 0 | |
Fair Value, Recurring | Level 2 | Other Contract | ||
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Assets: | ||
Derivative asset | 1,379 | 2,893 |
Liabilities: | ||
Derivative liabilities | 724 | 14 |
Fair Value, Recurring | Level 2 | Derivatives Not Designated as Hedging Instruments | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 863 | 55 |
Liabilities: | ||
Derivative liabilities | 4,073 | |
Fair Value, Recurring | Level 2 | Derivatives Not Designated as Hedging Instruments | Capped Call | ||
Assets: | ||
Derivative asset | 0 | 0 |
Fair Value, Recurring | Level 2 | Derivatives Not Designated as Hedging Instruments | Interest rate swap contracts | ||
Liabilities: | ||
Derivative liabilities | 36 | 74 |
Fair Value, Recurring | Level 3 | ||
Assets: | ||
Convertible notes receivable | 2,758 | 2,775 |
Total assets | 87,610 | 75,077 |
Liabilities: | ||
Contingent consideration | 99,271 | 103,818 |
Total liabilities | 248,485 | 229,864 |
Fair Value, Recurring | Level 3 | Embedded Derivative Financial Instruments | ||
Liabilities: | ||
Derivative liabilities | 148,091 | 121,756 |
Fair Value, Recurring | Level 3 | Other Contract | ||
Liabilities: | ||
Derivative liabilities | 1,123 | 4,290 |
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 Not Designated as Hedging Instruments | Freestanding Instrument | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 3 | Derivatives Not Designated as Hedging Instruments | Capped Call | ||
Assets: | ||
Derivative asset | 84,852 | 72,302 |
Fair Value, Recurring | Level 3 | Derivatives Not Designated as Hedging Instruments | Interest rate swap contracts | ||
Liabilities: | ||
Derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration Reconciliation (Details) - Fair Value, Recurring - Level 3 $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Liabilities Measured on Recurring Basis | |
Total at beginning period | $ 103,818 |
Total at period end | 99,271 |
Embedded Exchange Feature Derivative Liability | |
Liabilities Measured on Recurring Basis | |
Total at beginning period | 121,756 |
Payments | 0 |
Changes in fair value | 26,335 |
Total at period end | 148,091 |
Less current portion at period end | 0 |
Long-term portion at period end | 148,091 |
Other Derivative Liabilities | |
Liabilities Measured on Recurring Basis | |
Total at beginning period | 4,290 |
Payments | 0 |
Changes in fair value | (3,167) |
Total at period end | 1,123 |
Less current portion at period end | 931 |
Long-term portion at period end | 192 |
Contingent Consideration Liability Arrangements | |
Liabilities Measured on Recurring Basis | |
Total at beginning period | 103,818 |
Payments | (5,000) |
Changes in fair value | 453 |
Total at period end | 99,271 |
Less current portion at period end | 9,424 |
Long-term portion at period end | 89,847 |
Derivative Financial Instruments, Assets | |
Assets Measured on Recurring Basis | |
As of beginning period | 72,302 |
Payments | 0 |
Changes in fair value | 12,550 |
Total at period end | 84,852 |
Less current portion at period end | 0 |
Long-term portion at period end | 84,852 |
Notes Receivable | |
Assets Measured on Recurring Basis | |
As of beginning period | 2,775 |
Payments | 0 |
Changes in fair value | (17) |
Total at period end | 2,758 |
Less current portion at period end | 2,495 |
Long-term portion at period end | $ 263 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Mar. 31, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 17, 2020USD ($) |
Embedded Derivative Financial Instruments | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
10 percent decrease in stock price volatility, fair value | $ 131,700,000 | ||
10 percent increase in stock price volatility, fair value | 165,600,000 | ||
Capped Call | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
10 percent decrease in stock price volatility, fair value | 88,900,000 | ||
10 percent increase in stock price volatility, fair value | $ 78,500,000 | ||
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 Derivative Financial Instruments | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 0.34 | ||
Measurement Input, Stock Price Volatility | Capped Call | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 0.34 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Contingent Consideration by Acquisition (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | $ 89,847 | $ 89,850 |
Fair Value, Recurring | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 99,271 | 103,818 |
Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 99,271 | 103,818 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value | 99,271 | 103,818 |
ImThera Medical, Inc. (“ImThera”) | Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 89,426 | 89,436 |
CardiacAssist, Inc., doing business as TandemLife (“TandemLife”) | Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | 8,942 | 8,809 |
Miami Instruments | Fair Value, Recurring | Level 3 | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration | $ 903 | $ 5,573 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Valuations (Details) - Level 3 | Mar. 31, 2021 |
ImThera Medical, Inc. (“ImThera”) | Discounted cash flow | Discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.067 |
ImThera Medical, Inc. (“ImThera”) | Discounted cash flow | Probability of payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.85 |
ImThera Medical, Inc. (“ImThera”) | Monte Carlo simulation | Probability of payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.85 |
ImThera Medical, Inc. (“ImThera”) | Monte Carlo simulation | Revenue volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.325 |
ImThera Medical, Inc. (“ImThera”) | Minimum | Monte Carlo simulation | Risk-adjusted discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.120 |
ImThera Medical, Inc. (“ImThera”) | Minimum | Monte Carlo simulation | Credit risk discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.070 |
ImThera Medical, Inc. (“ImThera”) | Maximum | Monte Carlo simulation | Risk-adjusted discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.127 |
ImThera Medical, Inc. (“ImThera”) | Maximum | Monte Carlo simulation | Credit risk discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.078 |
CardiacAssist, Inc., doing business as TandemLife (“TandemLife”) | Discounted cash flow | Discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.049 |
CardiacAssist, Inc., doing business as TandemLife (“TandemLife”) | Discounted cash flow | Probability of payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement input | 0.70 |
Financing Arrangements - Schedu
Financing Arrangements - Schedule of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Jun. 17, 2020 | |
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 654,068 | $ 650,675 | |
Less current portion of long-term debt | 7,699 | 8,377 | |
Long-term debt obligations | $ 646,369 | 642,298 | |
Bank of America Merrill Lynch Banco Múltiplo S.A. | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.27% | ||
Mediocredito Italiano | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 0.50% | ||
Mediocredito Italiano | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.74% | ||
Bank of America, U.S. | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.75% | ||
Secured Debt | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 425,167 | 424,002 | |
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 | $ 215,145 | 212,073 | |
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 | $ 5,901 | 6,515 | |
Loans Payable | Mediocredito Italiano | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | 5,198 | 5,406 | |
Loans Payable | Bank of America, U.S. | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | 2,016 | 2,019 | |
Other | |||
Debt Instrument [Line Items] | |||
Total long-term facilities | $ 641 | $ 660 |
Financing Arrangements - Narrat
Financing Arrangements - Narrative (Details) | Dec. 30, 2020USD ($) | Jun. 17, 2020USD ($) | Jun. 10, 2020USD ($) | Mar. 31, 2021USD ($)claim$ / shares | Mar. 31, 2020USD ($) | Mar. 31, 2021£ / shares | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||||
Proceeds from long-term debt obligations | $ 0 | $ 162,899,000 | |||||
Minimum pro rata net revenue | 550,000,000 | ||||||
Amortization of debt issuance costs | $ 4,409,000 | $ 543,000 | |||||
Capped Call | |||||||
Debt Instrument [Line Items] | |||||||
Derivative, cap price per share | $ / shares | $ 100 | ||||||
Derivative asset | $ 84,900,000 | ||||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percent) | 9.95% | ||||||
Debt instrument, face amount | $ 287,500,000 | ||||||
Proceeds from long-term debt obligations | 278,000,000 | ||||||
Debt discounts and issuance costs | $ 82,000,000 | ||||||
Amortization of debt issuance costs | $ 3,100,000 | ||||||
Unamortized discount (premium), net | $ 72,400,000 | ||||||
Interest rate, stated percentage | 3.00% | 3.00% | |||||
Unamortized discount | $ 75,000,000 | ||||||
Debt issuance costs, net | $ 7,000,000 | ||||||
Debt Instrument, Redemption, Threshold Par Value | £ / shares | £ 1 | ||||||
Redemption, threshold trading days | claim | 20 | ||||||
Redemption, threshold consecutive trading days | claim | 30 | ||||||
Redemption price, percentage of exchange price | 130.00% | ||||||
Conversion price (in dollars per share) | $ / shares | $ 79.27 | ||||||
Option to exchange, price per share | $ / shares | $ 60.98 | ||||||
Redemption price, percentage | 100.00% | ||||||
Fair value of embedded derivative liability | $ 148,100,000 | ||||||
Debt instrument, exchangeable, conversion ratio | 0.016398 | ||||||
Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percent) | 9.05% | ||||||
Debt instrument, face amount | $ 450,000,000 | ||||||
Long-term debt, term | 5 years | ||||||
Proceeds from long-term debt obligations | $ 421,500,000 | ||||||
Minimum net revenue | $ 700,000,000 | ||||||
Debt discounts and issuance costs | $ 28,500,000 | ||||||
Amortization of debt issuance costs | 1,200,000 | ||||||
Unamortized discount (premium), net | $ 24,800,000 | ||||||
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% | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Short-term debt | $ 4,100,000 | $ 5,000,000 | |||||
Revolving Credit Facility 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Finance contract, borrowing base | $ 50,000,000 | ||||||
Revolving Credit Facility 2020 | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
LIBOR floor rate | 1.00% | ||||||
Debt instrument, basis spread on variable rate | 5.00% | ||||||
Revolving Credit Facility 2020 | ABR | |||||||
Debt Instrument [Line Items] | |||||||
LIBOR floor rate | 2.00% | ||||||
Debt instrument, basis spread on variable rate | 4.00% | ||||||
Minimum | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percent) | 3.06% | ||||||
Maximum | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate (percent) | 7.65% | ||||||
Debt instrument, term | 365 days |
Financing Arrangements - Levera
Financing Arrangements - Leverage Ratios (Details) | Mar. 31, 2021 |
Debt Disclosure [Abstract] | |
Secured leverage ratio, period one | 5.625 |
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 | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Foreign exchange and other losses | |||
Derivative [Line Items] | |||
Gain (loss) on derivative | $ 7.7 | $ 8.1 | |
Derivatives Not Designated as Hedging Instruments | |||
Derivative [Line Items] | |||
Notional amount | $ 200.4 | $ 352.6 |
Derivatives and Risk Manageme_4
Derivatives and Risk Management - Derivative Notional Amounts (Details) - Derivatives Designated as Hedging Instruments - Cash Flow Hedging - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Notional amount | $ 67,748 | $ 75,626 |
Foreign Exchange Contract | United Kingdom, Pounds | ||
Derivative [Line Items] | ||
Notional amount | 10,214 | 9,545 |
Foreign Exchange Contract | Japan, Yen | ||
Derivative [Line Items] | ||
Notional amount | 16,209 | 18,637 |
Foreign Exchange Contract | Euro Member Countries, Euro | ||
Derivative [Line Items] | ||
Notional amount | $ 41,325 | $ 47,444 |
Derivatives and Risk Manageme_5
Derivatives and Risk Management - Amount of Gain (Loss) Recognized in OCI and Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Losses Recognized in OCI | $ (2,223) | $ (2,080) |
Losses Reclassified from AOCI to Earnings | (811) | (724) |
Cash Flow Hedging | Foreign Exchange Contract | Foreign exchange and other losses | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Losses Recognized in OCI | (2,223) | (2,080) |
Losses Reclassified from AOCI to Earnings | (1,496) | (605) |
Cash Flow Hedging | Foreign Exchange Contract | SG&A | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Losses Recognized in OCI | 0 | 0 |
Losses Reclassified from AOCI to Earnings | 685 | (91) |
Cash Flow Hedging | Interest Rate Swap Contracts | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Losses Recognized in OCI | 0 | 0 |
Losses Reclassified from AOCI to Earnings | 0 | $ (28) |
Derivatives Designated as Hedging Instruments | Foreign Exchange Contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
After-Tax Net Loss in AOCI as of period end | 1,249 | |
Amount Expected to be Reclassified to Earnings in Next 12 Months | $ 1,249 |
Derivatives and Risk Manageme_6
Derivatives and Risk Management - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | $ 87,094 | $ 75,250 |
Total liability derivatives | 150,679 | 130,207 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 1,379 | 2,893 |
Total liability derivatives | 14 | |
Derivatives Designated as Hedging Instruments | Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 1,048 | 1,998 |
Derivatives Designated as Hedging Instruments | Accrued liabilities | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 331 | 895 |
Total liability derivatives | 724 | 14 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 85,715 | 72,357 |
Total liability derivatives | 149,955 | 130,193 |
Derivatives Not Designated as Hedging Instruments | Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 863 | 55 |
Derivatives Not Designated as Hedging Instruments | Long-term derivative assets | Capped Call | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | 72,302 | |
Derivatives Not Designated as Hedging Instruments | Accrued liabilities | Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 36 | 74 |
Derivatives Not Designated as Hedging Instruments | Accrued liabilities | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 705 | 4,073 |
Derivatives Not Designated as Hedging Instruments | Accrued liabilities | Other Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 931 | 4,106 |
Derivatives Not Designated as Hedging Instruments | Long-term derivative liability | Embedded Derivative Financial Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 148,091 | 121,756 |
Derivatives Not Designated as Hedging Instruments | Long-term derivative liability | Other Contract | ||
Derivatives, Fair Value [Line Items] | ||
Total liability derivatives | 192 | $ 184 |
Derivatives Not Designated as Hedging Instruments | Other assets | Capped Call | ||
Derivatives, Fair Value [Line Items] | ||
Total asset derivatives | $ 84,852 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) € in Thousands, $ in Thousands | Mar. 29, 2019USD ($) | Apr. 01, 2016EUR (€) | Jan. 31, 2021EUR (€)repository_site | Jan. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Apr. 28, 2021claim | Mar. 05, 2019EUR (€) | Aug. 27, 2015non-conformity |
Other Commitments [Line Items] | ||||||||||||
Product remediation liability, net | $ 400 | |||||||||||
Litigation provision, net | 3,044 | $ 0 | ||||||||||
Reimbursed legal fees | € 292 | 343 | ||||||||||
Environmental maintenance | € | € 1,000 | |||||||||||
Saluggia, Italy | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Number of national repository sites | repository_site | 67 | |||||||||||
Litigation provision, net | $ 42,200 | $ 43,000 | ||||||||||
Estimated provision | $ 41,000 | |||||||||||
Maximum | Saluggia, Italy | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Estimated provision | 55,000 | |||||||||||
Minimum | Saluggia, Italy | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Estimated provision | 43,000 | |||||||||||
Pending Litigation | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Estimate of possible loss | 671,400 | € 572,100 | ||||||||||
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] | ||||||||||||
Litigation settlement, amount awarded to other party | $ 225,000 | |||||||||||
Litigation provision liability | 34,310 | $ 36,490 | $ 36,490 | |||||||||
Product Liability | First Payment | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Payments for legal settlements | $ 135,000 | |||||||||||
Product Liability | Second Payment | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Payments for legal settlements | $ 90,000 | |||||||||||
SNIA | Pending Litigation | SNIA s.p.a | ||||||||||||
Other Commitments [Line Items] | ||||||||||||
Compensation sought | $ 4,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Product Liability (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Loss Contingency Accrual [Roll Forward] | |
Less current portion of litigation liability at period end | $ 26,570 |
Long-term portion of litigation provisions liability at period end | 7,740 |
Product Liability | |
Loss Contingency Accrual [Roll Forward] | |
Total litigation provision liability at beginning of period | 36,490 |
Payments | (5,122) |
Adjustments | 3,044 |
FX and other | (102) |
Total litigation provision liability at end of period | $ 34,310 |
Stockholders' Equity - Statemen
Stockholders' Equity - Statement of Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance (in shares) | 49,447,473 | ||
Beginning Balance | $ 1,118,829 | $ 1,383,717 | |
Stock-based compensation plans | 2,497 | 5,178 | |
Net income (loss) | (29,698) | 37,583 | |
Other comprehensive income | $ (25,871) | (33,131) | |
Ending Balance (in shares) | 49,454,726 | ||
Ending Balance | $ 1,065,757 | 1,392,708 | $ 1,383,717 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||
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) | 49,447,000 | 49,411,000 | |
Beginning Balance | $ 76,300 | $ 76,257 | |
Stock-based compensation plans (in shares) | 8,000 | 3,000 | |
Stock-based compensation plans | $ 10 | $ 2 | |
Ending Balance (in shares) | 49,455,000 | 49,414,000 | 49,411,000 |
Ending Balance | $ 76,310 | $ 76,259 | $ 76,257 |
Additional Paid-In Capital | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | 1,768,156 | 1,734,870 | |
Stock-based compensation plans | 2,251 | 5,003 | |
Ending Balance | 1,770,407 | 1,739,873 | 1,734,870 |
Treasury Stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (1,034) | (1,263) | |
Stock-based compensation plans | 236 | 173 | |
Ending Balance | (798) | (1,090) | (1,263) |
Accumulated Other Comprehensive Income (Loss) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | 27,809 | (19,392) | |
Other comprehensive income | (25,871) | (33,131) | |
Ending Balance | 1,938 | (52,523) | (19,392) |
Accumulated Deficit | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (752,402) | (406,755) | |
Net income (loss) | (29,698) | 37,583 | |
Ending Balance | $ (782,100) | (369,811) | (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 - Comprehe
Stockholders' Equity - Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | $ 1,118,829 | $ 1,383,717 |
Other comprehensive income before reclassifications, before tax | (27,021) | (34,180) |
Tax expense | 534 | 498 |
Other comprehensive income before reclassifications, net of tax | (26,487) | (33,682) |
Reclassification of loss from accumulated other comprehensive income (loss), before tax | 811 | 724 |
Reclassification of tax benefit | (195) | (173) |
Reclassification of loss from accumulated other comprehensive income (loss), after tax | 616 | 551 |
Total other comprehensive income (loss) | (25,871) | (33,131) |
Ending Balance | 1,065,757 | 1,392,708 |
Total | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | 27,809 | (19,392) |
Total other comprehensive income (loss) | (25,871) | (33,131) |
Ending Balance | 1,938 | (52,523) |
Change in Unrealized Gain (Loss) on Derivatives | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | 2,319 | 513 |
Other comprehensive income before reclassifications, before tax | (1,146) | (2,080) |
Tax expense | 534 | 498 |
Other comprehensive income before reclassifications, net of tax | (612) | (1,582) |
Reclassification of loss from accumulated other comprehensive income (loss), before tax | 811 | 724 |
Reclassification of tax benefit | (195) | (173) |
Reclassification of loss from accumulated other comprehensive income (loss), after tax | 616 | 551 |
Total other comprehensive income (loss) | 4 | (1,031) |
Ending Balance | 2,323 | (518) |
Foreign Currency Translation Adjustments Gain (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | 25,490 | (19,905) |
Other comprehensive income before reclassifications, before tax | (25,875) | (32,100) |
Tax expense | 0 | 0 |
Other comprehensive income before reclassifications, net of tax | (25,875) | (32,100) |
Reclassification of loss from accumulated other comprehensive income (loss), before tax | 0 | 0 |
Reclassification of tax benefit | 0 | 0 |
Reclassification of loss from accumulated other comprehensive income (loss), after tax | 0 | 0 |
Total other comprehensive income (loss) | (25,875) | (32,100) |
Ending Balance | $ (385) | $ (52,005) |
Stock-Based Incentive Plans - C
Stock-Based Incentive Plans - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement, compensation cost | $ 100 | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement, vesting period | 2 years | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement, vesting period | 4 years | |
Continuing Operations | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 9,536 | $ 9,043 |
Service-based restricted stock units (“RSUs”) | Continuing Operations | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 4,842 | 4,478 |
Service-based stock appreciation rights (“SARs”) | Continuing Operations | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 3,322 | 2,684 |
Market performance-based restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement, vesting period | 3 years | |
Market performance-based restricted stock units | Continuing Operations | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 763 | 896 |
Operating performance-based restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation arrangement, vesting period | 3 years | |
Operating performance-based restricted stock units | Continuing Operations | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 267 | 695 |
Employee share purchase plan | Continuing Operations | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 342 | $ 290 |
Stock-Based Incentive Plans - E
Stock-Based Incentive Plans - Executed Agreements (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Service-based restricted stock units (“RSUs”) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 594,617 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 29.22 |
Service-based stock appreciation rights (“SARs”) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 322,310 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 73.25 |
Market performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 47,916 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 114.74 |
Operating performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares (in shares) | shares | 76,040 |
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 73.25 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate (percent) | (10.70%) | 744.40% | |
Tax benefit, CARES Act | $ (41.3) | ||
Unrecognized tax benefits | 3.3 | $ 3.4 | |
Unrecognized tax benefits, potential decrease amount | $ 1.7 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Basic weighted average shares outstanding (in shares) | 48,736 | 48,485 |
Add effects of share-based compensation instruments (in shares) | 0 | 284 |
Diluted weighted average shares outstanding (in shares) | 48,736 | 48,769 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
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) | 4.3 | 1.5 |
Geographic and Segment Inform_3
Geographic and Segment Information - Segment Info (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)segmentgeographic_region | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | |||
Reportable segments | segment | 2 | ||
Number of geographic regions in which entity operates | geographic_region | 3 | ||
Net sales | $ 247,603 | $ 242,397 | |
Restructuring expenses | 6,092 | 1,580 | |
Amortization of intangibles | 6,699 | 10,267 | |
Operating (loss) income from continuing operations | (4,423) | 608 | |
Interest income | (74) | 148 | |
Interest expense | (15,936) | (4,849) | |
Foreign exchange and other losses | (6,369) | (1,914) | |
Loss from continuing operations before tax | (26,802) | (6,007) | |
Assets | 2,369,169 | $ 2,411,351 | |
Operating Segments | Cardiovascular | |||
Segment Reporting Information [Line Items] | |||
Net sales | 143,166 | 152,069 | |
Restructuring expenses | 1,896 | 686 | |
Operating Segments | Neuromodulation | |||
Segment Reporting Information [Line Items] | |||
Net sales | 103,699 | 89,657 | |
Restructuring expenses | 1,210 | 503 | |
Other | |||
Segment Reporting Information [Line Items] | |||
Net sales | 738 | 671 | |
Restructuring expenses | 2,986 | 391 | |
Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Total reportable segment income from continuing operations | 8,998 | 15,929 | |
Merger and integration expenses | 630 | 3,474 | |
Restructuring expenses | 6,092 | 1,580 | |
Amortization of intangibles | 6,699 | 10,267 | |
Operating (loss) income from continuing operations | (4,423) | 608 | |
Capital expenditures | 5,114 | 12,374 | |
Continuing Operations | Operating Segments | Cardiovascular | |||
Segment Reporting Information [Line Items] | |||
Total reportable segment income from continuing operations | 5,628 | 8,681 | |
Assets | 1,319,493 | 1,361,669 | |
Capital expenditures | 4,149 | 5,292 | |
Continuing Operations | Operating Segments | Neuromodulation | |||
Segment Reporting Information [Line Items] | |||
Total reportable segment income from continuing operations | 34,039 | 33,858 | |
Assets | 642,123 | 673,586 | |
Capital expenditures | 40 | 5,239 | |
Continuing Operations | Other | |||
Segment Reporting Information [Line Items] | |||
Total reportable segment income from continuing operations | (30,669) | (26,610) | |
Assets | 407,553 | $ 376,096 | |
Capital expenditures | 925 | 1,843 | |
United States | |||
Segment Reporting Information [Line Items] | |||
Net sales | 133,336 | 123,583 | |
United States | Operating Segments | Cardiovascular | |||
Segment Reporting Information [Line Items] | |||
Net sales | 51,036 | 50,307 | |
United States | Operating Segments | Neuromodulation | |||
Segment Reporting Information [Line Items] | |||
Net sales | 82,300 | 73,276 | |
Europe | |||
Segment Reporting Information [Line Items] | |||
Net sales | 50,817 | 54,716 | |
Europe | Operating Segments | Cardiovascular | |||
Segment Reporting Information [Line Items] | |||
Net sales | 39,138 | 44,133 | |
Europe | Operating Segments | Neuromodulation | |||
Segment Reporting Information [Line Items] | |||
Net sales | 11,679 | 10,583 | |
Rest of World | |||
Segment Reporting Information [Line Items] | |||
Net sales | 63,450 | 64,098 | |
Rest of World | Operating Segments | Cardiovascular | |||
Segment Reporting Information [Line Items] | |||
Net sales | 52,992 | 57,629 | |
Rest of World | Operating Segments | Neuromodulation | |||
Segment Reporting Information [Line Items] | |||
Net sales | 9,720 | 5,798 | |
Cardiopulmonary | |||
Segment Reporting Information [Line Items] | |||
Net sales | 108,719 | 116,367 | |
Cardiopulmonary | United States | |||
Segment Reporting Information [Line Items] | |||
Net sales | 35,759 | 36,858 | |
Cardiopulmonary | Europe | |||
Segment Reporting Information [Line Items] | |||
Net sales | 30,626 | 34,234 | |
Cardiopulmonary | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Net sales | 42,334 | 45,275 | |
Heart Valves | |||
Segment Reporting Information [Line Items] | |||
Net sales | 21,455 | 25,211 | |
Heart Valves | United States | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,717 | 3,373 | |
Heart Valves | Europe | |||
Segment Reporting Information [Line Items] | |||
Net sales | 8,284 | 9,529 | |
Heart Valves | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Net sales | 10,454 | 12,309 | |
Advanced Circulatory Support | |||
Segment Reporting Information [Line Items] | |||
Net sales | 12,992 | 10,491 | |
Advanced Circulatory Support | United States | |||
Segment Reporting Information [Line Items] | |||
Net sales | 12,560 | 10,076 | |
Advanced Circulatory Support | Europe | |||
Segment Reporting Information [Line Items] | |||
Net sales | 228 | 370 | |
Advanced Circulatory Support | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 204 | $ 45 |
Geographic and Segment Inform_4
Geographic and Segment Information - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill | |
Goodwill, beginning | $ 922,318 |
Foreign currency adjustments | (12,326) |
Goodwill, ending | 909,992 |
Cardiovascular | |
Goodwill | |
Goodwill, beginning | 523,564 |
Foreign currency adjustments | (12,326) |
Goodwill, ending | 511,238 |
Neuromodulation | |
Goodwill | |
Goodwill, beginning | 398,754 |
Foreign currency adjustments | 0 |
Goodwill, ending | $ 398,754 |
Geographic and Segment Inform_5
Geographic and Segment Information - Geographic Areas (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 157,892 | $ 163,805 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 64,002 | 64,553 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 87,945 | 93,821 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 5,945 | $ 5,431 |
Supplemental Financial Inform_3
Supplemental Financial Information - Summary of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 42,907 | $ 43,257 |
Work-in-process | 9,755 | 8,055 |
Finished goods | 71,861 | 75,363 |
Inventory, Net | 124,523 | 126,675 |
Provision for obsolescence | $ 4,000 | $ 6,600 |
Supplemental Financial Inform_4
Supplemental Financial Information - Summary of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Legal and administrative costs | $ 15,650 | $ 15,820 |
Operating lease liabilities | 11,535 | 11,276 |
Contingent consideration | 9,424 | 13,968 |
Contract liabilities | 9,234 | 6,929 |
Restructuring related liabilities | 5,569 | 6,258 |
Derivative contract liabilities | 2,065 | 7,372 |
Research and development costs | 4,752 | 4,257 |
Provisions for agents, returns and other | 2,377 | 3,063 |
Other accrued expenses | 31,428 | 26,465 |
Accrued liabilities | 92,034 | 95,408 |
Contract liability | $ 9,500 | $ 8,600 |