Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 21, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | QUIDEL CORP /DE/ | |
Entity Central Index Key | 353,569 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Name | QDEL | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 33,205,841 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 197,494 | $ 169,508 |
Accounts receivable, net | 20,943 | 24,990 |
Inventories | 22,470 | 26,045 |
Prepaid expenses and other current assets | 4,038 | 4,851 |
Total current assets | 244,945 | 225,394 |
Property, plant and equipment, net | 49,880 | 50,858 |
Goodwill | 83,837 | 83,834 |
Intangible assets, net | 25,270 | 27,639 |
Other non-current assets | 565 | 525 |
Total assets | 404,497 | 388,250 |
Current liabilities: | ||
Accounts payable | 10,433 | 16,047 |
Accrued payroll and related expenses | 7,259 | 9,642 |
Current portion of lease obligation | 106 | 98 |
Current portion of contingent consideration | 2,365 | 2,826 |
Other current liabilities | 8,967 | 4,999 |
Total current liabilities | 29,130 | 33,612 |
Long-term debt | 145,705 | 144,340 |
Lease obligation, net of current portion | 3,950 | 3,979 |
Contingent consideration—non-current | 2,324 | 2,349 |
Deferred tax liability—non-current | 59 | 58 |
Income taxes payable | 1,045 | 1,045 |
Deferred rent | 1,879 | 1,965 |
Other non-current liabilities | 287 | 272 |
Commitments and contingencies (see Note 9) | ||
Stockholders’ equity: | ||
Preferred stock, $.001 par value per share; 5,000 shares authorized; none issued or outstanding at March 31, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $.001 par value per share; 97,500 shares authorized; 33,188 and 32,897 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 33 | 33 |
Additional paid-in capital | 210,094 | 204,905 |
Accumulated other comprehensive loss | (44) | (53) |
Retained earnings (accumulated deficit) | 10,035 | (4,255) |
Total stockholders’ equity | 220,118 | 200,630 |
Total liabilities and stockholders’ equity | $ 404,497 | $ 388,250 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 97,500,000 | 97,500,000 |
Common stock, shares issued | 33,188,000 | 32,897,000 |
Common stock, shares outstanding | 33,188,000 | 32,897,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Total revenues | $ 73,692 | $ 50,321 |
Costs and expenses | ||
Cost of sales (excludes amortization of intangible assets of $1,623 and $1,590, respectively) | 23,570 | 19,249 |
Research and development | 7,875 | 12,707 |
Sales and marketing | 13,555 | 12,317 |
General and administrative | 7,172 | 7,289 |
Amortization of intangible assets from acquired businesses and technology | 2,291 | 2,219 |
Total costs and expenses | 54,463 | 53,781 |
Operating income (loss) | 19,229 | (3,460) |
Interest expense, net | (2,825) | (2,689) |
Income (loss) before income taxes | 16,404 | (6,149) |
Provision (benefit) for income taxes | 2,114 | (2,703) |
Net income (loss) | $ 14,290 | $ (3,446) |
Basic earnings (loss) per share (in dollars per share) | $ 0.43 | $ (0.11) |
Diluted earnings (loss) per share (in dollars per share) | $ 0.42 | $ (0.11) |
Shares used in basic per share calculation (in shares) | 33,202 | 32,727 |
Shares used in diluted per share calculation (in shares) | 33,998 | 32,727 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Amortization of intangible assets | $ 1,623 | $ 1,590 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Treasury Stock, Shares, Acquired | 0 | 1,152,386 |
Net income (loss) | $ 14,290 | $ (3,446) |
Other comprehensive income, net of tax | ||
Changes in cumulative translation adjustment | 9 | 2 |
Comprehensive income (loss) | $ 14,299 | $ (3,444) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ 14,290 | $ (3,446) |
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||
Depreciation, amortization and other | 5,690 | 6,123 |
Stock-based compensation expense | 1,921 | 1,980 |
Amortization of debt discount and deferred issuance costs | 1,365 | 1,429 |
Change in deferred tax assets and liabilities | (2,629) | |
Gain on extinguishment of Convertible Senior Notes | (421) | |
Changes in assets and liabilities: | ||
Accounts receivable | 4,048 | (7,719) |
Inventories | 3,576 | 2,136 |
Income taxes receivable | 2,063 | 119 |
Prepaid expenses and other current and non-current assets | (1,540) | (1,186) |
Restricted cash | 0 | 63 |
Accounts payable | (4,317) | 1,150 |
Accrued payroll and related expenses | (1,493) | (3,290) |
Income taxes payable | 1,799 | (167) |
Deferred grant revenue | 0 | (1,746) |
Other current and non-current liabilities | 2,173 | 7 |
Net cash provided by (used for) operating activities: | 29,575 | (7,597) |
INVESTING ACTIVITIES: | ||
Acquisitions of property, equipment and intangibles | (3,712) | (2,001) |
Acquisition of Immutopics, net of cash acquired | 0 | (5,094) |
Net cash used for investing activities: | (3,712) | (7,095) |
FINANCING ACTIVITIES: | ||
Payments on lease obligation | (21) | (141) |
Repurchases of common stock | (437) | (20,079) |
Repurchases of Convertible Senior Notes | 0 | (4,459) |
Proceeds from issuance of common stock | 3,065 | 1,554 |
Payments on acquisition contingencies | (486) | (195) |
Net cash provided by (used for) financing activities: | 2,121 | (23,320) |
Effect of exchange rates on cash | 2 | (12) |
Net increase (decrease) in cash and cash equivalents | 27,986 | (38,024) |
Cash and cash equivalents, beginning of period | 169,508 | |
Cash and cash equivalents, end of period | 197,494 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 211 | 279 |
Income tax (refund) paid | (1,753) | 103 |
NON-CASH INVESTING ACTIVITIES: | ||
Purchase of property and equipment by incurring current liabilities | 1,130 | 1,269 |
NON-CASH FINANCING ACTIVITIES: | ||
Reduction of other current liabilities upon issuance of restricted share units | 903 | $ 539 |
Senior 3 Point 25 Percent Convertible Notes Due 2020 [Member] | Convertible Debt [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||
Gain on extinguishment of Convertible Senior Notes | (400) | |
FINANCING ACTIVITIES: | ||
Repurchases of Convertible Senior Notes | $ (4,500) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements of Quidel Corporation and its subsidiaries (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. The information at March 31, 2017 , and for the three months ended March 31, 2017 and 2016 , is unaudited. For further information, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2016 included in the Company’s 2016 Annual Report on Form 10-K. Operating results for any quarter are historically seasonal in nature and are not necessarily indicative of the results expected for the full year. For 2017 and 2016 , the Company’s fiscal year will end or has ended on December 31, 2017 and January 1, 2017, respectively. For 2017 and 2016 , the Company’s first quarter ended on April 2, 2017 and April 3, 2016, respectively. For ease of reference, the calendar quarter end dates are used herein. The three month periods ended March 31, 2017 and 2016 each included 13 weeks. Comprehensive Income (Loss) Comprehensive income (loss) includes foreign currency translation adjustments excluded from the Company’s Consolidated Statements of Operations. Use of Estimates The preparation of financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, management evaluates its estimates, including those related to customer programs and incentives, bad debts, inventories, intangible assets, income taxes, stock-based compensation, contingencies and litigation. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Revenue Recognition The Company records revenues primarily from product sales. These revenues are recorded net of rebates and other discounts that are estimated at the time of sale, and are largely driven by various customer program offerings, including special pricing agreements, promotions and other volume-based incentives. Revenue from product sales are recorded upon passage of title and risk of loss to the customer. Passage of title to the product and recognition of revenue occurs upon delivery to the customer when sales terms are free on board (“FOB”) destination and at the time of shipment when the sales terms are FOB shipping point and there is no right of return. A portion of product sales includes revenues for diagnostic kits, which are utilized on leased instrument systems under the Company’s “reagent rental” program. The reagent rental program provides customers the right to use the instruments at no separate cost to the customer in consideration for a multi-year agreement to purchase annual minimum amounts of consumables (“reagents” or “diagnostic kits”). When an instrument is placed with a customer under a reagent rental agreement, the Company retains title to the equipment and it remains capitalized on the Company’s Consolidated Balance Sheets as property and equipment. The instrument is depreciated on a straight-line basis over the life of the instrument. Depreciation expense is recorded in cost of sales included in the Consolidated Statements of Operations. The reagent rental agreements represent one unit of accounting as the instrument and consumables (reagents) are interdependent in producing a diagnostic result and neither has a stand-alone value with respect to these agreements. No revenue is recognized at the time of instrument placement. All revenue is recognized when the title and risk of loss for the diagnostic kits have passed to the customer. Royalty income from the grant of license rights is recognized during the period in which the revenue is earned and the amount is determinable from the licensee. The Company earns income from grants for research and commercialization activities. On November 6, 2012, the Company was awarded a milestone-based grant totaling up to $8.3 million from the Bill and Melinda Gates Foundation to develop, manufacture and validate a quantitative, low-cost, nucleic acid assay for HIV drug treatment monitoring on the integrated Savanna MDx platform for use in limited resource settings. Upon execution of the grant agreement, the Company received $2.6 million to fund subsequent research and development activities and received milestone payments totaling $2.5 million in 2013. On September 10, 2014, the Company entered into an amended grant agreement with the Bill and Melinda Gates Foundation for additional funding of up to $12.6 million in order to accelerate the development of the Savanna MDx platform in the developing world. Upon execution of the amended grant agreement, the Company received $10.6 million in cash. The Company received payments of $2.4 million in April 2015 and $2.8 million in July 2016 based on milestone achievements for both the original and the amended grant agreements. Under the original and amended grant agreements, the Company recognized grant revenue on the basis of the lesser of the amount recognized on a proportional performance basis or the amount of cash payments that were non-refundable as of the end of each reporting period. The Company recognized $1.7 million as grant revenue for the three months ended March 31, 2016 . Cash payments received were restricted as to use until expenditures contemplated in the grant were incurred or committed. As of December, 31, 2016 all payment related milestones were achieved and all of the grant revenue of $20.9 million was fully recognized. As such, the Company recognized no grant revenue during the three months ended March 31, 2017 . Fair Value Measurements The Company uses the fair value hierarchy established in ASC Topic 820 , Fair Value Measurements and Disclosures, which requires the valuation of assets and liabilities subject to fair value measurements be classified and disclosed by the Company in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The carrying amounts of the Company’s financial instruments, including cash, receivables, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance codified in Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , which amends the guidance in former ASC 605, Revenue Recognition . The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current authoritative guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The FASB has issued several amendments to the new standard, which include clarification of accounting guidance related to identification of performance obligations, intellectual property licenses, and principal vs. agent considerations. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods therein. The Company has assigned internal resources to assist in the adoption of the new standard and is in the initial stages of its evaluation of the impact of the new standard on its accounting policies, processes and system requirements. The Company has begun the process of identifying, categorizing and analyzing its various revenue streams, however, has not yet completed its assessment of the impact. The Company will continue to evaluate the future impact and method of adoption of ASU 2014-09 and related amendments on the Consolidated Financial Statements and related disclosures throughout 2017. The Company will adopt the new standard beginning January 2018. In February 2016, the FASB issued guidance codified in ASU 2016-02 (Topic 842), Leases . The guidance requires a lessee to recognize a lease liability for the obligation to make lease payments and a right-to-use asset representing the right to use the underlying asset for the lease term on the balance sheet. The guidance is effective for fiscal years beginning after December 15, 2018 including interim periods therein, with early adoption permitted. The Company is currently evaluating the impact of this guidance and expects to adopt the standard in the first quarter of 2019. In March 2016, the FASB issued guidance codified in ASU 2016-09 (Topic 718), Improvements to Employee Share Based Payments Accounting (ASU 2016-09) . This guidance includes provisions to simplify several aspects of accounting for share-based payment transactions, including income tax consequences, accounting for forfeitures, classification of awards as either equity or liability, and classification on the statement of cash flows. ASU 2016-09 includes a requirement that the tax effect related to the settlement of share-based awards be recorded within income tax expense or benefit in the income statement. The simplification of income tax accounting for share-based payment transactions also impacts the computation of weighted-average diluted shares outstanding under the treasury stock method. The Company adopted ASU 2016-09 in the first quarter of 2017 and the impact of the adoption resulted in the following: • Upon adoption the balance of the unrecognized excess tax benefits of $1.8 million was recorded as an increase to deferred tax assets and a corresponding increase to the valuation allowance, resulting in no impact to retained earnings. • Excess tax benefits from share-based arrangements are to be classified within cash flow from operating activities, rather than as cash flow from financing activities. The Company applied this provision on a retrospective basis and the prior period statement of cash flows was adjusted. This adoption did not have a material impact on the Company’s cash flows. • The Company elected to continue to estimate the number of awards expected to be forfeited and adjust the estimate when appropriate, as is currently required. This adoption did not have a material impact on the Company’s consolidated results of operations, financial condition or cash flows. • There was no material impact on the computation of weighted-average diluted shares outstanding. In January 2017, the FASB issued guidance codified in ASU 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment (ASU 2017-04). Under this new guidance, an entity will no longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The guidance is effective for fiscal years beginning after December 15, 2019 including interim periods therein, with early adoption permitted. The Company is currently evaluating the impact of this guidance and expects to adopt the standard in the first quarter of 2020. |
Computation of Earnings (Loss)
Computation of Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Earnings (Loss) Per Share | Computation of Earnings (Loss) Per Share For the three months ended March 31, 2017 and 2016 , basic earnings (loss) per share was computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding, including restricted stock units (RSUs) vested during the period. Diluted earnings per share (“EPS”) reflects the potential dilution that could occur if the earnings were divided by the weighted-average number of common shares and potentially dilutive common shares from outstanding stock options as well as unvested RSUs. Potential dilutive common shares were calculated using the treasury stock method and represent incremental shares issuable upon exercise of the Company’s outstanding stock options and unvested RSUs. The following table reconciles the weighted-average shares used in computing basic and diluted earnings (loss) per share in the respective periods (in thousands): Three months ended March 31, 2017 2016 Shares used in basic earnings (loss) per share (weighted-average common shares outstanding) 33,202 32,727 Effect of dilutive stock options and restricted stock units 796 — Shares used in diluted earnings (loss) per share calculation 33,998 32,727 Potentially dilutive shares excluded from calculation due to anti-dilutive effect 1,972 3,147 Additionally, stock options are excluded from the calculation of diluted EPS when the combined exercise price and unrecognized stock-based compensation are greater than the average market price for the Company’s common stock because their effect is anti-dilutive. Stock options and RSUs that would have been included in the diluted EPS calculation if the Company had earnings amounted to 0.6 million for the three months ended March 31, 2016. As discussed in Note 6, the Company issued its 3.25% Convertible Senior Notes due 2020 (“Convertible Senior Notes”) in December 2014. It is the Company’s intent and policy to settle conversions through combination settlement, which essentially involves repayment of an amount of cash equal to the “principal portion” and delivery of the “share amount” in excess of the conversion value over the principal portion in cash or shares of common stock (“conversion premium”). No conversion premium existed as of |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Inventories consisted of the following, net of reserves of $0.6 million and $0.7 million at March 31, 2017 and December 31, 2016 , respectively (in thousands): March 31, 2017 December 31, 2016 Raw materials $ 9,060 $ 9,297 Work-in-process (materials, labor and overhead) 7,658 7,990 Finished goods (materials, labor and overhead) 5,752 8,758 Total inventories $ 22,470 $ 26,045 |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities consist of the following (in thousands): March 31, 2017 December 31, 2016 Customer incentives $ 4,400 $ 3,766 Accrued interest 1,586 227 Income taxes payable 1,792 2 Other 1,189 1,004 Total other current liabilities $ 8,967 $ 4,999 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recognized an income tax expense of $2.1 million and income tax benefit of $2.7 million for the three months ended March 31, 2017 and 2016 , respectively, which represents an effective tax rate of 12.9% and 44.0% , respectively. For the three months ended March 31, 2017 the effective tax rate was lower compared to the same period of 2016 due to a projected utilization of net operating loss and credit carryforwards available to offset 2017 domestic taxable income. The Company recorded a full valuation allowance against these tax attributes during 2016. The Company is subject to periodic audits by domestic and foreign tax authorities. Due to the carryforward of unutilized net operating loss and credit carryovers, the Company's federal tax years from 2009 and forward are subject to examination by the U.S. authorities. The Company's state and foreign tax years for 2001 and forward are subject to examination by applicable tax authorities. The Company believes that it has appropriate support for the income tax positions taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax laws applied to the facts of each matter. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt In December 2014, the Company issued $172.5 million aggregate principal amount of 3.25% Convertible Senior Notes due 2020. Debt issuance costs of approximately $5.1 million were primarily comprised of underwriters fees, legal, accounting and other professional fees of which $4.2 million were capitalized and are recorded as a reduction to long-term debt and are being amortized using the effective interest method to interest expense over the six -year term of the Convertible Senior Notes. The remaining $0.9 million of debt issuance costs were allocated as a component of equity in additional paid-in capital. Deferred issuance costs related to the Convertible Senior Notes were $2.6 million and $2.8 million as of March 31, 2017 and December 31, 2016 , respectively. The Convertible Senior Notes will be convertible into cash, shares of common stock, or a combination of cash and shares of common stock based on an initial conversion rate, subject to adjustment, of 31.1891 shares per $1,000 principal amount of the Convertible Senior Notes (which represents an initial conversion price of approximately $32.06 per share). The conversion will occur in the following circumstances and to the following extent: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2015, if the last reported sales price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the notes in effect on each applicable trading day; (2) during the five consecutive business day period following any five consecutive trading day period in which the trading price per $1,000 principal amount of the Convertible Senior Note for each such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such day; or (3) upon the occurrence of specified events described in the indenture for the Convertible Senior Notes. On or after September 15, 2020 until the close of business on the second scheduled trading day immediately preceding the stated maturity date, holders may surrender their notes for conversion at any time, regardless of the foregoing circumstances. It is the Company’s intent and policy to settle conversions through combination settlement, which essentially involves repayment of an amount of cash equal to the “principal portion” and delivery of the “share amount” in excess of the principal portion in shares of common stock or cash. In general, for each $1,000 in principal, the “principal portion” of cash upon settlement is defined as the lesser of $1,000, or the conversion value during the 25 -day observation period as described in the indenture for the Convertible Senior Notes. The conversion value is the sum of the daily conversion value which is the product of the effective conversion rate divided by 25 days and the daily volume weighted average price (“VWAP”) of the Company’s common stock. The “share amount” is the cumulative “daily share amount” during the observation period, which is calculated by dividing the daily VWAP into the difference between the daily conversion value (i.e., conversion rate x daily VWAP) and $1,000. The Company pays 3.25% interest per annum on the principal amount of the Convertible Senior Notes semi-annually in arrears in cash on June 15 and December 15 of each year. The Convertible Senior Notes mature on December 15, 2020. During the three months ended March 31, 2017 , the Company recorded total interest expense of $2.8 million related to the Convertible Senior Notes of which $1.4 million related to the amortization of the debt discount and issuance costs and $1.4 million related to the coupon due semi-annually. During the three months ended March 31, 2016 , the Company recorded total interest expense of $2.8 million related to the Convertible Senior Notes of which $1.4 million related to the amortization of the debt discount and issuance costs and $1.4 million related to the coupon due semi-annually. If a fundamental change, as defined in the indenture for the Convertible Senior Notes, such as an acquisition, merger, or liquidation of the Company, occurs prior to the maturity date, subject to certain limitations, holders of the Convertible Senior Notes may require the Company to repurchase all or a portion of their Convertible Senior Notes for cash at a repurchase price equal to 100% of the principal amount of the Convertible Senior Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date. The Company accounts separately for the liability and equity components of the Convertible Senior Notes in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. The guidance requires the carrying amount of the liability component to be estimated by measuring the fair value of a similar liability that does not have an associated conversion feature. Because the Company had no outstanding non-convertible public debt, the Company determined that senior, unsecured corporate bonds traded on the market represent a similar liability to the Convertible Senior Notes without the conversion option. Based on market data available for publicly traded, senior, unsecured corporate bonds issued by companies in the same industry with similar credit ratings and with similar maturity, the Company estimated the implied interest rate of its Convertible Senior Notes to be 6.9% , assuming no conversion option. Assumptions used in the estimate represent what market participants would use in pricing the liability component, which were defined as Level 2 observable inputs. The estimated implied interest rate was applied to the Convertible Senior Notes, which resulted in a fair value of the liability component of $141.9 million upon issuance, calculated as the present value of implied future payments based on the $172.5 million aggregate principal amount. The $30.7 million difference between the cash proceeds of $172.5 million and the estimated fair value of the liability component was recorded in additional paid-in capital, net of tax and issuance costs, as the Convertible Senior Notes were not considered redeemable. In the first quarter of 2016, the Company repurchased and retired $5.2 million in principal amount of the outstanding Convertible Senior Notes. The aggregate cash used for the transaction was $4.5 million . The repurchase resulted in a reduction in debt of $4.4 million and a reduction in additional paid-in capital of $0.5 million with a gain on extinguishment of Convertible Senior Notes of $0.4 million included in interest expense, net in the Consolidated Statements of Operations. The Company made no repurchases in principal amount of the outstanding Convertible Senior Notes in the first quarter of 2017. The following table summarizes information about the equity and liability components of the Convertible Senior Notes (dollars in thousands). The fair values of the respective notes outstanding were measured based on quoted market prices. March 31, 2017 December 31, 2016 Principal amount of Convertible Senior Notes outstanding $ 167,314 $ 167,314 Unamortized discount of liability component (19,020 ) (20,221 ) Unamortized debt issuance costs (2,589 ) (2,753 ) Net carrying amount of liability component 145,705 144,340 Less: current portion — — Long-term debt $ 145,705 $ 144,340 Carrying value of equity component, net of issuance costs $ 29,211 $ 29,211 Fair value of outstanding Convertible Senior Notes $ 170,961 $ 165,223 Remaining amortization period of discount on the liability component 3.8 years 4.0 years As a policy election under applicable guidance related to the calculation of diluted net EPS, the Company elected the combination settlement method as its stated settlement policy and applied the treasury stock method in the calculation of dilutive impact of the Convertible Senior Notes. The Convertible Senior Notes were not convertible as of March 31, 2017 and 2016 ; therefore there was no dilutive impact during the three months ended March 31, 2017 and 2016 . If the Convertible Senior Notes were converted as of March 31, 2017 , the if-converted value would not exceed the principal amount. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Issuances and Repurchases of Common Stock The Company issued 57,713 shares of common stock in conjunction with the vesting and release of RSUs, 222,378 shares of common stock upon the exercise of stock options and 32,358 shares of common stock in connection with the Company’s employee stock purchase plan (the “ESPP”), resulting in net proceeds to the Company of approximately $3.1 million during the three months ended March 31, 2017 . The Company repurchased no shares of common stock under its previously announced share repurchase program during three months ended March 31, 2017 . The Company withheld 21,538 shares of outstanding common stock in connection with payment of minimum tax withholding obligations for certain employees relating to the lapse of restrictions on certain RSUs for approximately $0.4 million during the three months ended March 31, 2017 . The Company repurchased 1,152,386 shares of common stock under its previously announced share repurchase program for approximately $19.6 million during the three months ended March 31, 2016 . The Company withheld 24,932 shares of outstanding common stock in connection with payment of minimum tax withholding obligations for certain employees relating to the lapse of restrictions on certain RSUs for approximately $0.4 million during the three months ended March 31, 2016 . As of March 31, 2017 , there was $35.0 million available under the Company’s share repurchase program. Stock-Based Compensation The compensation expense related to the Company’s stock-based compensation plans included in the accompanying Consolidated Statements of Operations was as follows (in thousands): Three months ended March 31, 2017 2016 Cost of sales $ 130 $ 235 Research and development 412 297 Sales and marketing 470 (63 ) General and administrative 909 1,511 Total stock-based compensation expense $ 1,921 $ 1,980 Total compensation expense recognized for the three months ended March 31, 2017 includes $1.1 million related to stock options and $0.8 million related to RSUs. Total compensation expense recognized for the three months ended March 31, 2016 includes $1.4 million related to stock options and $0.6 million related to RSUs. There was a one-time benefit for stock award forfeitures recorded during the three months ended March 31, 2016 resulting in a credit to stock-based compensation expense in sales and marketing. As of March 31, 2017 , total unrecognized compensation expense related to non-vested stock options was $6.7 million , which is expected to be recognized over a weighted-average period of approximately 2.6 years . As of March 31, 2017 , total unrecognized compensation expense related to non-vested restricted stock was $6.7 million , which is expected to be recognized over a weighted-average period of approximately 2.7 years . Compensation expense capitalized to inventory and compensation expense related to the Company’s ESPP were not material for the three months ended March 31, 2017 or 2016 . The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants. Three months ended March 31, 2017 2016 Risk-free interest rate 2.33 % 1.46 % Expected option life (in years) 6.63 6.46 Volatility rate 36 % 36 % Dividend rate — % — % The weighted-average fair value of stock options granted during the three months ended March 31, 2017 and 2016 was $8.55 and $5.85 , respectively. The Company granted 230,261 and 626,413 stock options during the three months ended March 31, 2017 and 2016 , respectively. The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the grant date. The weighted-average fair value of RSUs granted during the three months ended March 31, 2017 and 2016 was $21.06 and $15.39 , respectively. The Company granted 289,338 and 131,972 shares of restricted stock during the three months ended March 31, 2017 and 2016 , respectively. |
Industry and Geographic Informa
Industry and Geographic Information | 3 Months Ended |
Mar. 31, 2017 | |
Industry And Geographic Information [Abstract] | |
Industry and Geographic Information | Industry and Geographic Information The Company operates in one reportable segment. Sales to customers outside the U.S. represented $8.3 million ( 11% ) and $9.8 million ( 19% ) of total revenue for the three months ended March 31, 2017 and 2016 , respectively. As of March 31, 2017 and December 31, 2016 , balances due from foreign customers were $4.1 million and $6.8 million , respectively. The Company had sales to individual customers in excess of 10% of total revenues, as follows: Three months ended March 31, 2017 2016 Customer: A 27 % 9 % B 17 % 15 % C 15 % 16 % 59 % 40 % As of March 31, 2017 and December 31, 2016 , accounts receivable from customers with balances due in excess of 10% of total accounts receivable totaled $14.7 million and $13.9 million , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal The Company is involved in various claims and litigation matters from time to time in the ordinary course of business. Management believes that all such current legal actions, in the aggregate, will not have a material adverse effect on the Company. The Company also maintains insurance, including coverage for product liability claims, in amounts which management believes are appropriate given the nature of its business. No accruals have been recorded as of March 31, 2017 and as of December 31, 2016 related to such matters as they are not probable and/or reasonably estimable. Licensing Arrangements The Company has entered into various licensing and royalty agreements, which largely require payments by the Company based on specified product sales as well as the achievement of specified milestones. The Company had royalty and license expenses relating to those agreements of approximately $0.2 million for each of the three months ended March 31, 2017 and 2016 . Research and Development Agreements The Company has entered into various research and development agreements that provide it with rights to develop, manufacture and market products using the intellectual property and technology of its collaborative partners. Under the terms of certain of these agreements, the Company is required to make periodic payments based on achievement of certain milestones or resource expenditures. These milestones generally include achievement of prototype assays, validation lots and clinical trials. At March 31, 2017 and December 31, 2016 , total future commitments under the terms of these agreements are estimated at $1.1 million and $2.3 million , respectively. The commitments will fluctuate as the Company agrees to new phases of development under the existing arrangements. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the following periods (in thousands): March 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 130,653 $ — $ — $ 130,653 $ 133,540 $ — $ — $ 133,540 Total assets measured at fair value $ 130,653 $ — $ — $ 130,653 $ 133,540 $ — $ — $ 133,540 Liabilities: Contingent consideration — — 4,689 4,689 — — 5,175 5,175 Total liabilities measured at fair value $ — $ — $ 4,689 $ 4,689 $ — $ — $ 5,175 $ 5,175 There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 categories of the fair value hierarchy during the three month periods ended March 31, 2017 and the year ended December 31, 2016 . The Company used Level 1 inputs to determine the fair value of its cash equivalents, which primarily consist of funds held in government money market accounts and commercial paper. As such, the carrying value of cash equivalents approximates fair value. As of March 31, 2017 and December 31, 2016 , the carrying value of cash equivalents was $130.7 million and $133.5 million , respectively. In conjunction with the acquisitions of BioHelix Corporation in May 2013, AnDiaTec GmbH & Co. KG in August 2013 and Immutopics, Inc. in March 2016, the Company has recorded contingent consideration of $4.7 million as of March 31, 2017 and $5.2 million as of December 31, 2016 . The Company assesses the fair value of contingent consideration to be settled in cash related to acquisitions using a discounted revenue model. Significant assumptions used in the measurement include revenue projections and discount rates. This fair value measurement of contingent consideration is based on significant inputs not observed in the market and thus represent Level 3 measurements. Excluding cash payments, there were no changes to the fair value of the contingent consideration for the three months ended March 31, 2017 . Changes in estimated fair value of contingent consideration liabilities from December 31, 2016 through March 31, 2017 are as follows (in thousands): Contingent consideration liabilities Balance at December 31, 2016 $ 5,175 Cash payments (486 ) Balance at March 31, 2017 $ 4,689 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policy) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of Quidel Corporation and its subsidiaries (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. The information at March 31, 2017 , and for the three months ended March 31, 2017 and 2016 , is unaudited. For further information, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2016 included in the Company’s 2016 Annual Report on Form 10-K. Operating results for any quarter are historically seasonal in nature and are not necessarily indicative of the results expected for the full year. For 2017 and 2016 , the Company’s fiscal year will end or has ended on December 31, 2017 and January 1, 2017, respectively. For 2017 and 2016 , the Company’s first quarter ended on April 2, 2017 and April 3, 2016, respectively. For ease of reference, the calendar quarter end dates are used herein. The three month periods ended March 31, 2017 and 2016 each include |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) includes foreign currency translation adjustments excluded from the Company’s Consolidated Statements of Operations. |
Use of Estimates | Use of Estimates The preparation of financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, management evaluates its estimates, including those related to customer programs and incentives, bad debts, inventories, intangible assets, income taxes, stock-based compensation, contingencies and litigation. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. |
Revenue Recognition | Revenue Recognition The Company records revenues primarily from product sales. These revenues are recorded net of rebates and other discounts that are estimated at the time of sale, and are largely driven by various customer program offerings, including special pricing agreements, promotions and other volume-based incentives. Revenue from product sales are recorded upon passage of title and risk of loss to the customer. Passage of title to the product and recognition of revenue occurs upon delivery to the customer when sales terms are free on board (“FOB”) destination and at the time of shipment when the sales terms are FOB shipping point and there is no right of return. A portion of product sales includes revenues for diagnostic kits, which are utilized on leased instrument systems under the Company’s “reagent rental” program. The reagent rental program provides customers the right to use the instruments at no separate cost to the customer in consideration for a multi-year agreement to purchase annual minimum amounts of consumables (“reagents” or “diagnostic kits”). When an instrument is placed with a customer under a reagent rental agreement, the Company retains title to the equipment and it remains capitalized on the Company’s Consolidated Balance Sheets as property and equipment. The instrument is depreciated on a straight-line basis over the life of the instrument. Depreciation expense is recorded in cost of sales included in the Consolidated Statements of Operations. The reagent rental agreements represent one unit of accounting as the instrument and consumables (reagents) are interdependent in producing a diagnostic result and neither has a stand-alone value with respect to these agreements. No revenue is recognized at the time of instrument placement. All revenue is recognized when the title and risk of loss for the diagnostic kits have passed to the customer. Royalty income from the grant of license rights is recognized during the period in which the revenue is earned and the amount is determinable from the licensee. The Company earns income from grants for research and commercialization activities. On November 6, 2012, the Company was awarded a milestone-based grant totaling up to $8.3 million from the Bill and Melinda Gates Foundation to develop, manufacture and validate a quantitative, low-cost, nucleic acid assay for HIV drug treatment monitoring on the integrated Savanna MDx platform for use in limited resource settings. Upon execution of the grant agreement, the Company received $2.6 million to fund subsequent research and development activities and received milestone payments totaling $2.5 million in 2013. On September 10, 2014, the Company entered into an amended grant agreement with the Bill and Melinda Gates Foundation for additional funding of up to $12.6 million in order to accelerate the development of the Savanna MDx platform in the developing world. Upon execution of the amended grant agreement, the Company received $10.6 million in cash. The Company received payments of $2.4 million in April 2015 and $2.8 million in July 2016 based on milestone achievements for both the original and the amended grant agreements. Under the original and amended grant agreements, the Company recognized grant revenue on the basis of the lesser of the amount recognized on a proportional performance basis or the amount of cash payments that were non-refundable as of the end of each reporting period. The Company recognized $1.7 million as grant revenue for the three months ended March 31, 2016 . Cash payments received were restricted as to use until expenditures contemplated in the grant were incurred or committed. As of December, 31, 2016 all payment related milestones were achieved and all of the grant revenue of $20.9 million was fully recognized. |
Fair Value Measurements | Fair Value Measurements The Company uses the fair value hierarchy established in ASC Topic 820 , Fair Value Measurements and Disclosures, which requires the valuation of assets and liabilities subject to fair value measurements be classified and disclosed by the Company in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The carrying amounts of the Company’s financial instruments, including cash, receivables, accounts payable, and accrued liabilities approximate their fair values due to their short-term nature. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance codified in Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , which amends the guidance in former ASC 605, Revenue Recognition . The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current authoritative guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The FASB has issued several amendments to the new standard, which include clarification of accounting guidance related to identification of performance obligations, intellectual property licenses, and principal vs. agent considerations. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods therein. The Company has assigned internal resources to assist in the adoption of the new standard and is in the initial stages of its evaluation of the impact of the new standard on its accounting policies, processes and system requirements. The Company has begun the process of identifying, categorizing and analyzing its various revenue streams, however, has not yet completed its assessment of the impact. The Company will continue to evaluate the future impact and method of adoption of ASU 2014-09 and related amendments on the Consolidated Financial Statements and related disclosures throughout 2017. The Company will adopt the new standard beginning January 2018. In February 2016, the FASB issued guidance codified in ASU 2016-02 (Topic 842), Leases . The guidance requires a lessee to recognize a lease liability for the obligation to make lease payments and a right-to-use asset representing the right to use the underlying asset for the lease term on the balance sheet. The guidance is effective for fiscal years beginning after December 15, 2018 including interim periods therein, with early adoption permitted. The Company is currently evaluating the impact of this guidance and expects to adopt the standard in the first quarter of 2019. In March 2016, the FASB issued guidance codified in ASU 2016-09 (Topic 718), Improvements to Employee Share Based Payments Accounting (ASU 2016-09) . This guidance includes provisions to simplify several aspects of accounting for share-based payment transactions, including income tax consequences, accounting for forfeitures, classification of awards as either equity or liability, and classification on the statement of cash flows. ASU 2016-09 includes a requirement that the tax effect related to the settlement of share-based awards be recorded within income tax expense or benefit in the income statement. The simplification of income tax accounting for share-based payment transactions also impacts the computation of weighted-average diluted shares outstanding under the treasury stock method. The Company adopted ASU 2016-09 in the first quarter of 2017 and the impact of the adoption resulted in the following: • Upon adoption the balance of the unrecognized excess tax benefits of $1.8 million was recorded as an increase to deferred tax assets and a corresponding increase to the valuation allowance, resulting in no impact to retained earnings. • Excess tax benefits from share-based arrangements are to be classified within cash flow from operating activities, rather than as cash flow from financing activities. The Company applied this provision on a retrospective basis and the prior period statement of cash flows was adjusted. This adoption did not have a material impact on the Company’s cash flows. • The Company elected to continue to estimate the number of awards expected to be forfeited and adjust the estimate when appropriate, as is currently required. This adoption did not have a material impact on the Company’s consolidated results of operations, financial condition or cash flows. • There was no material impact on the computation of weighted-average diluted shares outstanding. In January 2017, the FASB issued guidance codified in ASU 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment (ASU 2017-04). Under this new guidance, an entity will no longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The guidance is effective for fiscal years beginning after December 15, 2019 including interim periods therein, with early adoption permitted. The Company is currently evaluating the impact of this guidance and expects to adopt the standard in the first quarter of 2020. |
Computation of Earnings (Loss19
Computation of Earnings (Loss) Per Share Schedule of Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the weighted-average shares used in computing basic and diluted earnings (loss) per share in the respective periods (in thousands): Three months ended March 31, 2017 2016 Shares used in basic earnings (loss) per share (weighted-average common shares outstanding) 33,202 32,727 Effect of dilutive stock options and restricted stock units 796 — Shares used in diluted earnings (loss) per share calculation 33,998 32,727 Potentially dilutive shares excluded from calculation due to anti-dilutive effect 1,972 3,147 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following, net of reserves of $0.6 million and $0.7 million at March 31, 2017 and December 31, 2016 , respectively (in thousands): March 31, 2017 December 31, 2016 Raw materials $ 9,060 $ 9,297 Work-in-process (materials, labor and overhead) 7,658 7,990 Finished goods (materials, labor and overhead) 5,752 8,758 Total inventories $ 22,470 $ 26,045 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other current liabilities consist of the following (in thousands): March 31, 2017 December 31, 2016 Customer incentives $ 4,400 $ 3,766 Accrued interest 1,586 227 Income taxes payable 1,792 2 Other 1,189 1,004 Total other current liabilities $ 8,967 $ 4,999 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Senior Notes | The fair values of the respective notes outstanding were measured based on quoted market prices. March 31, 2017 December 31, 2016 Principal amount of Convertible Senior Notes outstanding $ 167,314 $ 167,314 Unamortized discount of liability component (19,020 ) (20,221 ) Unamortized debt issuance costs (2,589 ) (2,753 ) Net carrying amount of liability component 145,705 144,340 Less: current portion — — Long-term debt $ 145,705 $ 144,340 Carrying value of equity component, net of issuance costs $ 29,211 $ 29,211 Fair value of outstanding Convertible Senior Notes $ 170,961 $ 165,223 Remaining amortization period of discount on the liability component 3.8 years 4.0 years |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Compensation Expense Related to Stock-Based Compensation Plans | The compensation expense related to the Company’s stock-based compensation plans included in the accompanying Consolidated Statements of Operations was as follows (in thousands): Three months ended March 31, 2017 2016 Cost of sales $ 130 $ 235 Research and development 412 297 Sales and marketing 470 (63 ) General and administrative 909 1,511 Total stock-based compensation expense $ 1,921 $ 1,980 |
Estimated Fair Value of Each Stock Option Award | The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants. Three months ended March 31, 2017 2016 Risk-free interest rate 2.33 % 1.46 % Expected option life (in years) 6.63 6.46 Volatility rate 36 % 36 % Dividend rate — % — % |
Industry and Geographic Infor24
Industry and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Industry And Geographic Information [Abstract] | |
Sales to Individual Customers in Excess of 10% of Total Revenues | The Company had sales to individual customers in excess of 10% of total revenues, as follows: Three months ended March 31, 2017 2016 Customer: A 27 % 9 % B 17 % 15 % C 15 % 16 % 59 % 40 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the following periods (in thousands): March 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 130,653 $ — $ — $ 130,653 $ 133,540 $ — $ — $ 133,540 Total assets measured at fair value $ 130,653 $ — $ — $ 130,653 $ 133,540 $ — $ — $ 133,540 Liabilities: Contingent consideration — — 4,689 4,689 — — 5,175 5,175 Total liabilities measured at fair value $ — $ — $ 4,689 $ 4,689 $ — $ — $ 5,175 $ 5,175 |
Changes in Estimated Fair Value of Contingent Consideration Liabilities | Changes in estimated fair value of contingent consideration liabilities from December 31, 2016 through March 31, 2017 are as follows (in thousands): Contingent consideration liabilities Balance at December 31, 2016 $ 5,175 Cash payments (486 ) Balance at March 31, 2017 $ 4,689 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | Sep. 10, 2014 | Nov. 06, 2012 | Jul. 31, 2016 | Apr. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2013 | Sep. 30, 2016 |
Revenue Recognition, Milestone Method [Line Items] | ||||||||
Valuation Allowances and Reserves, Balance | $ 1.8 | |||||||
Company milestone-based grant | $ 12.6 | $ 8.3 | ||||||
Fund received for research and development activities | $ 2.6 | |||||||
Milestone payments received | $ 10.6 | $ 2.8 | $ 2.4 | $ 2.5 | ||||
Company grant revenue | $ 0 | $ 1.7 | $ 20.9 |
Computation of Earnings (Loss27
Computation of Earnings (Loss) Per Share - Additional Information (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares used in basic per share calculation (in shares) | 33,202 | 32,727 |
Shares excluded from calculation of diluted (loss) earnings per share ("EPS") | 600 | |
Shares used in diluted per share calculation (in shares) | 33,998 | 32,727 |
Equity Option and Restricted Stock [Member] | ||
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Effect of dilutive stock options and restricted stock units (in shares) | 796 | 0 |
Stock options [Member] | ||
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from calculation of diluted (loss) earnings per share ("EPS") | 1,972 | 3,147 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Net of reserves, inventories | $ 0.6 | $ 0.7 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 9,060 | $ 9,297 |
Work-in-process (materials, labor and overhead) | 7,658 | 7,990 |
Finished goods (materials, labor and overhead) | 5,752 | 8,758 |
Total inventories | $ 22,470 | $ 26,045 |
Other Current Liabilities (Deta
Other Current Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Customer incentives | $ 4,400 | $ 3,766 |
Accrued interest | 1,586 | 227 |
Income taxes payable | 1,792 | 2 |
Other | 1,189 | 1,004 |
Total other current liabilities | $ 8,967 | $ 4,999 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) for income taxes | $ 2,114 | $ (2,703) |
Effective tax rate | 12.90% | 44.00% |
Debt Convertible Senior Notes T
Debt Convertible Senior Notes Textual -Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2017USD ($)d$ / shares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2014USD ($) | Dec. 08, 2014USD ($) | |
Debt Instrument [Line Items] | |||||
Gains (Losses) on Extinguishment of Debt | $ 421,000 | ||||
Interest Expense, Debt | $ 2,800,000 | ||||
Amortization of debt discount (premium) | 1,400,000 | ||||
Interest Expense, Debt, Excluding Amortization | 1,400,000 | ||||
Repayments of Convertible Debt | 0 | $ 4,459,000 | |||
Convertible Debt [Member] | Senior 3 Point 25 Percent Convertible Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Gains (Losses) on Extinguishment of Debt | $ 400,000 | ||||
Convertible Senior Notes, face amount | $ 172,500,000 | ||||
Senior Credit Facility, applicable margin | 3.25% | ||||
Debt issuance cost | 5,100,000 | ||||
Deferred financing costs | $ (4,200,000) | ||||
Remaining amortization period of discount on the liability component | 3 years 9 months | 4 years | 6 years | ||
Adjustments to additional paid in capital | $ 900,000 | ||||
Convertible Senior Notes, conversion ratio | 31.1891 | ||||
Convertible Senior Notes, conversion price (in usd per share) | $ / shares | $ 32.06 | ||||
Convertible Senior Notes, threshold trading days | d | 20 | ||||
Convertible Senior Notes, threshold consecutive trading days | 30 days | ||||
Convertible Senior Notes, threshold percentage of stock price trigger | 130.00% | ||||
Convertible Senior Notes, threshold consecutive business days | 5 days | ||||
Convertible Senior Notes, threshold consecutive trading days, following consecutive business days | 5 days | ||||
Convertible Senior Notes, threshold percentage of stock price trigger, following consecutive business days | 98.00% | ||||
Convertible Senior Notes, observation period | 25 days | ||||
Interest Expense, Debt | $ 2,800,000 | ||||
Amortization of debt discount (premium) | 1,400,000 | ||||
Interest Expense, Debt, Excluding Amortization | $ 1,400,000 | ||||
Debt Conversion, Converted Instrument, Rate | 100.00% | ||||
Debt Instrument, Interest Rate, Effective Percentage | 6.90% | ||||
Convertible Senior Notes, fair value disclosures | $ 141,900,000 | ||||
Carrying value of equity component, net of issuance costs | $ 29,211,000 | $ 29,211,000 | $ 30,700,000 | ||
Repurchase of Convertible Debt | 5,200,000 | ||||
Repayments of Convertible Debt | 4,500,000 | ||||
Other Current Assets [Member] | Convertible Debt [Member] | Senior 3 Point 25 Percent Convertible Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Deferred financing costs | $ (2,589,000) | $ (2,753,000) |
Debt Convertible Notes (Details
Debt Convertible Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 08, 2014 | |
Debt Instrument [Line Items] | |||||
Interest Expense, Debt, Excluding Amortization | $ 1,400 | ||||
Gain on extinguishment of Convertible Senior Notes | $ (421) | ||||
Interest Expense, Debt | 2,800 | ||||
Amortization of debt discount (premium) | 1,400 | ||||
Long-term debt | 145,705 | $ 144,340 | |||
Convertible Debt [Member] | Senior 3 Point 25 Percent Convertible Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Adjustments to Additional Paid in Capital, Other | 4,400 | ||||
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt, Subsequent Adjustments | 500 | ||||
Interest Expense, Debt, Excluding Amortization | 1,400 | ||||
Gain on extinguishment of Convertible Senior Notes | (400) | ||||
Interest Expense, Debt | 2,800 | ||||
Amortization of debt discount (premium) | 1,400 | ||||
Principal amount of Convertible Senior Notes outstanding | 167,314 | 167,314 | |||
Unamortized discount of liability component | (19,020) | (20,221) | |||
Unamortized debt issuance costs | $ (4,200) | ||||
Net carrying amount of liability component | 145,705 | 144,340 | |||
Less: current portion | 0 | 0 | |||
Long-term debt | 145,705 | 144,340 | |||
Carrying value of equity component, net of issuance costs | 29,211 | 29,211 | $ 30,700 | ||
Fair value of outstanding Convertible Senior Notes | $ 170,961 | $ 165,223 | |||
Remaining amortization period of discount on the liability component | 3 years 9 months | 4 years | 6 years | ||
Other Current Assets [Member] | Convertible Debt [Member] | Senior 3 Point 25 Percent Convertible Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Unamortized debt issuance costs | $ (2,589) | $ (2,753) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock issued in conjunction with the vesting and release of restricted stock units (in shares) | 57,713 | |
Common stock issued due to exercise of stock options (in shares) | 222,378 | |
Common stock issued in connection with employee stock purchase plan (in shares) | 32,358 | |
Proceeds from Issuance of Common Stock | $ 3,065 | $ 1,554 |
Repurchase of common stock, shares (in shares) | 0 | 1,152,386 |
Repurchase of common stock | $ 19,600 | |
Shares Paid for Tax Withholding for Share Based Compensation (in shares) | 21,538 | 24,932 |
Payments Related to Tax Withholding for Share-based Compensation | $ 400 | $ 400 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 35,000 | |
Share-based compensation expense recognized | 1,921 | 1,980 |
Stock options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense recognized | 1,100 | $ 1,400 |
Total unrecognized compensation expense related to non-vested stock options | $ 6,700 | |
Expected weighted-average period of recognition for unrecognized compensation expense | 2 years 7 months | |
Weighted-average grant date fair value of stock options granted (in usd per share) | $ 8.55 | $ 5.85 |
Stock options granted (in shares) | 230,261 | 626,413 |
Restricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense recognized | $ 800 | $ 600 |
Expected weighted-average period of recognition for unrecognized compensation expense | 2 years 8 months | |
Total unrecognized compensation expense related to non-vested restricted stock | $ 6,700 | |
Weighted-average grant date fair value of stock options granted (in usd per share) | $ 21.06 | $ 15.39 |
Stock options granted (in shares) | 289,338 | 131,972 |
Stockholders' Equity - Compensa
Stockholders' Equity - Compensation Expense Related to Stock-Based Compensation Plans (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 1,921 | $ 1,980 |
Cost of sales [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 130 | 235 |
Research and development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 412 | 297 |
Sales and marketing [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 470 | (63) |
General and administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 909 | 1,511 |
Stock options [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 1,100 | 1,400 |
Restricted stock [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 800 | $ 600 |
Stockholders' Equity - Estimate
Stockholders' Equity - Estimated Fair Value of Each Stock Option Award (Detail) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Equity [Abstract] | ||
Risk-free interest rate | 2.33% | 1.46% |
Expected option life (in years) | 6 years 7 months 18 days | 6 years 5 months 15 days |
Volatility rate | 36.00% | 36.00% |
Dividend rate | 0.00% | 0.00% |
Industry and Geographic Infor37
Industry and Geographic Information - Additional Information (Detail) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)Segment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Revenue, Major Customer [Line Items] | |||
Number of reportable segments | Segment | 1 | ||
Sales [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of risk concentration by major customer | 10.00% | ||
Customer Concentration Risk [Member] | Non-U.S. Customers [Member] | |||
Revenue, Major Customer [Line Items] | |||
Sales to customers outside the U.S. | $ 8.3 | $ 9.8 | |
Accounts receivable | $ 4.1 | $ 6.8 | |
Customer Concentration Risk [Member] | Sales [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of risk concentration by major customer | 59.00% | 40.00% | |
Customer Concentration Risk [Member] | Sales [Member] | Non-U.S. Customers [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of risk concentration by major customer | 11.00% | 19.00% | |
Credit Concentration Risk [Member] | |||
Revenue, Major Customer [Line Items] | |||
Accounts receivable | $ 14.7 | $ 13.9 | |
Credit Concentration Risk [Member] | Accounts receivable [Member] | Minimum [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of risk concentration by major customer | 10.00% | 10.00% |
Industry and Geographic Infor38
Industry and Geographic Information - Sales to Individual Customers in Excess of 10% of Total Revenues (Detail) - Sales [Member] | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue, Major Customer [Line Items] | ||
Sales percentage | 10.00% | |
Customer Concentration Risk [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales percentage | 59.00% | 40.00% |
Customer Concentration Risk [Member] | Customer A [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales percentage | 27.00% | 9.00% |
Customer Concentration Risk [Member] | Customer B [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales percentage | 17.00% | 15.00% |
Customer Concentration Risk [Member] | Customer C [Member] | ||
Revenue, Major Customer [Line Items] | ||
Sales percentage | 15.00% | 16.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Sale Leaseback Transaction [Line Items] | ||
Accrued in other current liabilities | $ 8,967 | $ 4,999 |
Company had royalty and license expenses relating to those agreements | 200 | |
Claims and litigation [Member] | ||
Sale Leaseback Transaction [Line Items] | ||
Accrued in other current liabilities | 0 | |
Research and Development Agreements [Member] | ||
Sale Leaseback Transaction [Line Items] | ||
Current commitments | $ 1,100 | $ 2,300 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Change in fair value of acquisition contingencies | $ 0 | |
Assets: | ||
Total assets measured at fair value | 130,653,000 | $ 133,540,000 |
Liabilities: | ||
Total liabilities measured at fair value | 4,689,000 | 5,175,000 |
Money Market Funds [Member] | ||
Assets: | ||
Cash Equivalents, at Carrying Value | 130,653,000 | 133,540,000 |
Contingent consideration [Member] | ||
Liabilities: | ||
Total liabilities measured at fair value | 4,689,000 | 5,175,000 |
Level 1 [Member] | ||
Assets: | ||
Total assets measured at fair value | 130,653,000 | 133,540,000 |
Liabilities: | ||
Total liabilities measured at fair value | 0 | 0 |
Level 1 [Member] | Money Market Funds [Member] | ||
Assets: | ||
Cash Equivalents, at Carrying Value | 130,653,000 | 133,540,000 |
Level 1 [Member] | Contingent consideration [Member] | ||
Liabilities: | ||
Total liabilities measured at fair value | 0 | 0 |
Level 2 [Member] | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Total liabilities measured at fair value | 0 | 0 |
Level 2 [Member] | Money Market Funds [Member] | ||
Assets: | ||
Cash Equivalents, at Carrying Value | 0 | 0 |
Level 2 [Member] | Contingent consideration [Member] | ||
Liabilities: | ||
Total liabilities measured at fair value | 0 | 0 |
Level 3 [Member] | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Total liabilities measured at fair value | 4,689,000 | 5,175,000 |
Level 3 [Member] | Money Market Funds [Member] | ||
Assets: | ||
Cash Equivalents, at Carrying Value | 0 | 0 |
Level 3 [Member] | Contingent consideration [Member] | ||
Liabilities: | ||
Total liabilities measured at fair value | $ 4,689,000 | $ 5,175,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Transfer of assets and liabilities between levels | $ 0 | |
Loss recorded in research and development due to change in fair value of contingent consideration liabilities | 0 | |
Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash Equivalents, at Carrying Value | 130,653,000 | $ 133,540,000 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash Equivalents, at Carrying Value | $ 130,653,000 | $ 133,540,000 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Estimated Fair Value of Contingent Consideration Liabilities (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at December 31, 2016 | $ 4,689,000 | $ 5,175,000 |
Change in fair value of acquisition contingencies | 0 | |
Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at December 31, 2016 | 4,689,000 | 5,175,000 |
Cash payments | (486,000) | |
Balance at March 31, 2017 | 4,689,000 | |
Commitments [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at December 31, 2016 | 4,689,000 | 5,175,000 |
Commitments [Member] | Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at December 31, 2016 | $ 4,689,000 | $ 5,175,000 |