Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 07, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'PHOTOMEDEX INC | ' |
Entity Central Index Key | '0000711665 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 19,876,015 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | |
Cash and cash equivalents | $30,470 | $44,348 | [1] |
Short term bank deposit | 18,481 | 18,000 | [1] |
Accounts receivable, net of allowance for doubtful accounts of $8,832 and $6,917, respectively | 21,510 | 19,064 | [1] |
Inventories, net | 27,633 | 22,467 | [1] |
Deferred tax asset | 17,997 | 19,441 | [1] |
Prepaid expenses and other current assets | 13,762 | 12,853 | [1] |
Total current assets | 129,853 | 136,173 | [1] |
Property and equipment, net | 10,001 | 6,759 | [1] |
Patents and licensed technologies, net | 11,209 | 12,673 | [1] |
Other intangible assets | 9,943 | 10,854 | [1] |
Goodwill | 24,605 | 24,500 | [1] |
Deferred tax asset | 18,195 | 20,186 | [1] |
Funds in respect of employee rights upon retirement and other assets | 985 | 745 | [1] |
Total assets | 204,791 | 211,890 | [1] |
Current liabilities: | ' | ' | |
Current portion of notes payable | 57 | 609 | [1] |
Current portion of long-term debt | 0 | 10 | [1] |
Accounts payable | 11,609 | 10,025 | [1] |
Accrued compensation and related expenses | 2,688 | 2,494 | [1] |
Other accrued liabilities | 13,213 | 22,099 | [1] |
Deferred revenues | 6,304 | 5,259 | [1] |
Total current liabilities | 33,871 | 40,496 | [1] |
Long-term liabilities: | ' | ' | |
Long-term note payable, net of current maturities | 97 | 0 | [1] |
Deferred revenues | 2,381 | 3,313 | [1] |
Other liabilities | 219 | 166 | [1] |
Liability for employee rights upon retirement | 776 | 588 | [1] |
Total liabilities | 37,344 | 44,563 | [1] |
Stockholders' equity: | ' | ' | |
Preferred Stock, $.01 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2013 and December 31, 2012 | 0 | 0 | [1] |
Common stock, $.01 par value, 50,000,000 shares authorized; 19,876,015 and 21,043,947 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 199 | 210 | [1] |
Additional paid-in capital | 115,801 | 130,954 | [1] |
Retained earnings | 50,494 | 35,302 | [1] |
Accumulated other comprehensive income | 953 | 861 | [1] |
Total stockholders' equity | 167,447 | 167,327 | [1] |
Total liabilities and stockholders' equity | $204,791 | $211,890 | [1] |
[1] | Restated |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets: | ' | ' |
Accounts receivable, allowance for doubtful accounts | $8,832 | $6,917 |
Stockholders' Equity | ' | ' |
Preferred Stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred Stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred Stock, issued (in shares) | 0 | 0 |
Preferred Stock, outstanding (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $0.01 | $0.01 |
Common Stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Common Stock, issued (in shares) | 19,876,015 | 21,043,947 |
Common Stock, outstanding (in shares) | 19,876,015 | 21,043,947 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract] | ' | ' | ' | ' |
Revenues | $45,893 | $56,681 | $161,174 | $165,860 |
Cost of revenues | 9,066 | 11,281 | 32,322 | 34,870 |
Gross profit | 36,827 | 45,400 | 128,852 | 130,990 |
Operating expenses: | ' | ' | ' | ' |
Engineering and product development | 805 | 628 | 2,392 | 2,146 |
Selling and marketing | 30,973 | 28,285 | 90,767 | 85,188 |
General and administrative | 5,972 | 6,231 | 17,899 | 22,593 |
Total operating expenses | 37,750 | 35,144 | 111,058 | 109,927 |
Operating profit | -923 | 10,256 | 17,794 | 21,063 |
Other income (loss): | ' | ' | ' | ' |
Interest and other financing income (expense), net | 473 | -231 | 470 | -862 |
Income (loss) before income tax expense | -450 | 10,025 | 18,264 | 20,201 |
Income tax expense (benefit) | -1,336 | 2,500 | 3,072 | 3,606 |
Net income | 886 | 7,525 | 15,192 | 16,595 |
Net income per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.04 | $0.35 | $0.74 | $0.83 |
Diluted (in dollars per share) | $0.04 | $0.35 | $0.72 | $0.81 |
Shares used in computing net income per share: | ' | ' | ' | ' |
Basic (in shares) | 19,982,967 | 21,205,675 | 20,518,493 | 20,001,456 |
Diluted (in shares) | 20,441,262 | 21,752,845 | 20,976,788 | 20,548,626 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustments | 1,884 | 961 | 92 | 865 |
Comprehensive income | $2,770 | $8,486 | $15,284 | $17,460 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) (USD $) | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (loss) [Member] | Total | |
In Thousands, except Share data, unless otherwise specified | ||||||
BALANCE at Dec. 31, 2012 | $210 | $130,954 | $35,302 | $861 | $167,327 | [1] |
BALANCE (in shares) at Dec. 31, 2012 | 21,043,947 | ' | ' | ' | 21,043,947 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | |
Stock-based compensation related to stock options and restricted stock | 0 | 3,706 | 0 | 0 | 3,706 | |
Stock options issued to consultants for services | 0 | 89 | 0 | 0 | 89 | |
Options exercised | 0 | 23 | 0 | 0 | 23 | |
Options exercised (in shares) | 3,750 | ' | ' | ' | ' | |
Other comprehensive income | 0 | 0 | 0 | 92 | 92 | |
Retirement of company stock | -11 | -18,971 | 0 | 0 | -18,982 | |
Retirement of common stock (in shares) | -1,171,682 | ' | ' | ' | ' | |
Net income | 0 | 0 | 15,192 | 0 | 15,192 | |
BALANCE at Sep. 30, 2013 | $199 | $115,801 | $50,494 | $953 | $167,447 | |
BALANCE (in shares) at Sep. 30, 2013 | 19,876,015 | ' | ' | ' | 19,876,015 | |
[1] | Restated |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | |
Cash Flows From Operating Activities: | ' | ' | |
Net income | $15,192 | $16,595 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | |
Depreciation and amortization | 4,510 | 4,176 | |
Provision for doubtful accounts | 3,428 | 3,404 | |
Deferred income taxes | 3,438 | -332 | |
Stock-based compensation | 3,795 | 4,817 | |
Changes in operating assets and liabilities: | ' | ' | |
Accounts receivable | -5,761 | -11,434 | |
Inventories | -5,142 | -4,680 | |
Prepaid expenses and other assets | -994 | -7,533 | |
Accounts payable | 1,456 | 3,040 | |
Accrued compensation and related expenses | 200 | -729 | |
Other accrued liabilities | -9,158 | -619 | |
Other liabilities | 188 | 3,274 | |
Deferred revenues | 252 | 1,052 | |
Net cash provided by operating activities | 11,404 | 11,031 | |
Cash Flows From Investing Activities: | ' | ' | |
Purchases of property and equipment | -710 | -277 | |
Lasers placed in service | -4,430 | -2,129 | |
Proceeds (investment) in short-term deposits | -481 | -18,000 | |
Acquisition of business, net of cash acquired | 84 | 0 | |
Increase in funds - employees retirement rights | -188 | -34 | |
Net cash used in investing activities | -5,725 | -20,440 | |
Cash Flows From Financing Activities: | ' | ' | |
Payments on notes payable | -624 | -457 | |
Repayments of long term debt | -28 | -2,000 | |
Issuance of warrants | 0 | 98 | |
Proceeds from issuance of common stock, net | 0 | 37,514 | |
Proceeds from option exercises | 23 | 54 | |
Proceeds from warrant exercises | 0 | 134 | |
Repurchase of common stock | -18,982 | -5,342 | |
Net cash (used in) provided by financing activities | -19,611 | 30,001 | |
Effect of exchange rate changes on cash | 54 | -334 | |
Net (decrease) increase in cash and cash equivalents | -13,878 | 20,258 | |
Cash and cash equivalents, beginning of period | 44,348 | [1] | 16,549 |
Cash and cash equivalents, end of period | 30,470 | 36,807 | |
Supplemental information: | ' | ' | |
Cash paid for income taxes | 6,582 | 11,190 | |
Cash paid for interest | $13 | $77 | |
[1] | Restated |
The_Company
The Company | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
The Company [Abstract] | ' | ||||||||||||||||
The Company | ' | ||||||||||||||||
Note 1 | |||||||||||||||||
The Company: | |||||||||||||||||
Background | |||||||||||||||||
PhotoMedex, Inc. (and its subsidiaries) (the “Company”) is a Global Skin Health company providing integrated disease management and aesthetic solutions to dermatologists, professional aestheticians and consumers. The Company provides proprietary products and services that address skin diseases and conditions including psoriasis, vitiligo, acne, actinic keratosis (a precursor to certain types of skin cancer) and photo damage. Its experience in the physician market provides the platform to expand its skin health solutions to spa markets, as well as traditional retail, online and infomercial outlets for home-use products. | |||||||||||||||||
On December 13, 2011, the Company closed the reverse merger with Radiancy, Inc. Immediately following the reverse merger, the pre-reverse merger shareholders of PhotoMedex, Inc. (“Pre-merged PhotoMedex”) collectively owned approximately 20% of the Company’s outstanding common stock, and the former Radiancy, Inc. stockholders owned approximately 80% of the Company’s outstanding common stock. | |||||||||||||||||
The merger was accounted for as a reverse acquisition with Radiancy treated for accounting purposes as the acquirer. As such, the financial statements of Radiancy, Inc. were treated as the historical financial statements of the Company, with the results of Pre-merged PhotoMedex, Inc. being included from December 14, 2011 and thereafter. | |||||||||||||||||
As a result of the acquisition, the Company implemented a business plan focused on three key components – a highly-trained direct sales force to target the Physician and Professional Segments; a multi-tiered marketing platform targeting the global consumer; and a full product-life-cycle model representing the ability to develop and commercialize innovative products from concept through regulatory and physician acceptance and ultimately, direct-marketing to the consumer as dictated by normal product-life-cycle evolution. The Company reorganized its business into three operating segments to better align its organization based upon the Company’s management structure, products and services offered, markets served and types of customers. | |||||||||||||||||
On July 1, 2013, PhotoMedex’ wholly-owned subsidiary, Radiancy, Inc., completed the acquisition of 100% of the shares of LK Technology Importaçăo E Exportaçăo LTDA (“LK”), a privately-held distributor in Brazil based in Sao Paulo, and has begun to market and sell its no!no!® products in Brazil in the third quarter through its acquisition of LK. (See Note 2.) | |||||||||||||||||
Basis of Presentation: | |||||||||||||||||
The accompanying condensed consolidated financial statements and related notes should be read in conjunction with our consolidated financial statements and related notes contained in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2012 (“fiscal 2012”). The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature. | |||||||||||||||||
The results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013 or for any other interim period or for any future period. | |||||||||||||||||
Principles of Consolidation | |||||||||||||||||
The consolidated financial statements include the accounts of the Company and the wholly- and majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company recognizes revenues from product sales when the following four criteria have been met: (i) the product has been delivered and the Company has no significant remaining obligations; (ii) persuasive evidence of an arrangement exists; (iii) the price to the buyer is fixed or determinable; and (iv) collection is reasonably assured. Revenues from product sales are recorded net of provisions for estimated chargebacks, rebates, expected returns and cash discounts. | |||||||||||||||||
The Company ships most of its products FOB shipping point, although from time to time certain customers, for example governmental customers, will insist upon FOB destination. Among the factors the Company takes into account when determining the proper time at which to recognize revenue are (i) when title to the goods transfers and (ii) when the risk of loss transfers. Shipments to distributors or physicians that do not fully satisfy the collection criteria are recognized when invoiced amounts are fully paid or fully assured. | |||||||||||||||||
For revenue arrangements with multiple deliverables within a single, contractually binding arrangement (usually sales of products with separately priced extended warranty), each element of the contract is accounted for as a separate unit of accounting when it provides the customer value on a stand-alone basis and there is objective evidence of the fair value of the related unit. | |||||||||||||||||
With respect to sales arrangements under which the buyer has a right to return the related product, revenue is recognized only if all the following conditions are met: the price is fixed or determinable at the date of sale; the buyer has paid, or is obligated to pay and the obligation is not contingent on resale of the product; the buyer's obligation would not be changed in the event of theft or physical destruction or damage of the product; the buyer has economic substance; the Company does not have significant obligations for future performance to directly bring about resale of the product by the buyer; and the amount of future returns can be reasonably estimated. | |||||||||||||||||
The Company provides a provision for product returns based on the experience with historical sales returns, in accordance with ASC Topic 605-15 with respect to sales of product when a right of return exists. Reported revenues are shown net of the returns provision. Such allowance for sales returns is included in Other Accrued Liabilities. (See Note 8.) | |||||||||||||||||
Deferred revenue includes amounts received with respect to extended warranty maintenance, repairs and other billable services and amounts not yet recognized as revenues. Revenues with respect to such activities are deferred and recognized on a straight-line basis over the duration of the warranty period, the service period or when service is provided, as applicable to each service. | |||||||||||||||||
The Company has two distribution channels for its phototherapy treatment equipment. The Company either (i) sells its lasers through a distributor or directly to a physician or (ii) places its lasers in a physician’s office (at no charge to the physician) and generally charges the physician a fee for an agreed upon number of treatments. In some cases, the Company and the customer stipulate to a quarterly or other periodic target of procedures to be performed, and accordingly revenue is recognized ratably over the period. | |||||||||||||||||
When the Company places a laser in a physician’s office, it generally recognizes service revenue based on the number of patient treatments performed, or purchased under a periodic commitment, by the physician. Amounts collected with respect to treatments to be performed through laser-access codes that are sold to physicians free of a periodic commitment, but not yet used, are deferred and recognized as a liability until the physician performs the treatment. Unused treatments remain an obligation of the Company because the treatments can only be performed on Company-owned equipment. Once the treatments are delivered to a patient, this obligation has been satisfied. | |||||||||||||||||
The Company defers substantially all revenue from sales of treatment codes ordered by and delivered to its customers within the last two weeks of the period in determining the amount of procedures performed by its physician-customers. Management believes this approach closely approximates the actual amount of unused treatments that existed at the end of a period. | |||||||||||||||||
Functional Currency | |||||||||||||||||
The currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the US dollar ("$" or "dollars"), except for the operations of Photo Therapeutics, Ltd. which are conducted in Great Britain Pounds (GBP) and LK Technologies which are conducted in Brazilian Real (BRL). Substantially all of the Group's revenues are derived in dollars or in other currencies linked to the dollar. Purchases of most materials and components are carried out in, or linked to the dollar. Thus, the functional (and reporting currency) of the Company and its subsidiaries (other than Photo Therapeutics, Ltd. and LK Technologies) is the dollar. | |||||||||||||||||
Balances denominated in, or linked to, foreign currencies are stated on the basis of the exchange rates prevailing at the balance sheet date. For foreign currency transactions included in the statement of comprehensive income, the exchange rates applicable to the relevant transaction dates are used. Transaction gains or losses arising from changes in the exchange rates used in the translation of such balances are carried to financing income or expenses. | |||||||||||||||||
Assets and liabilities of a foreign subsidiary, whose functional currency is the local currency, are translated from its respective functional currency to U.S. dollars at the balance sheet date exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the period. Translation adjustments of the foreign subsidiary for which the local currency is the functional currency are reflected in the consolidated balance sheets as a component of accumulated other comprehensive income (loss). Deferred taxes are not provided on translation adjustments as the earnings of the subsidiary are considered to be permanently reinvested. | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The Company measures and discloses fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions there exists a three-tier fair-value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | |||||||||||||||||
• | Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. | ||||||||||||||||
• | Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. | ||||||||||||||||
• | Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors. | ||||||||||||||||
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. | |||||||||||||||||
The fair value of cash and cash equivalents is based on its demand value, which is equal to its carrying value. The estimated fair values of notes payable and long-term debt which are based on borrowing rates that are available to the Company for loans with similar terms, collateral and maturity approximate the carrying values. The fair value of the amounts funded in insurance policies in respect of employee liability for employee rights upon retirement is usually identical or close to their carrying value. Additionally, the carrying value of all other monetary assets and liabilities is estimated to be equal to their fair value due to the short-term nature of these instruments. | |||||||||||||||||
Derivative financial instruments are measured at fair value, on a recurring basis. The fair value of derivatives generally reflects the estimated amounts that the Group would receive or pay to terminate the contracts at the reporting dates, based on the prevailing currency prices and the relevant interest rates. Such measurement is classified within Level 2. | |||||||||||||||||
In addition to items that are measured at fair value on a recurring basis, there are also assets and liabilities that are measured at fair value on a nonrecurring basis. Assets and liabilities that are measured at fair value on a nonrecurring basis include certain long-lived assets including goodwill. As such, we have determined that these fair value measurements reside within Level 3 of the fair value hierarchy. | |||||||||||||||||
Derivatives | |||||||||||||||||
The group applies the provisions of Accounting Standards Codification Topic 815, Derivatives and Hedging ("ASC Topic 815"). In accordance with ASC Topic 815, all the derivative financial instruments are recognized as either financial assets or financial liabilities on the balance sheet at fair value. The accounting for changes in the fair value of a derivative financial instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For derivative financial instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. | |||||||||||||||||
From time to time the Company carries out transactions involving foreign exchange derivative financial instruments (mainly forward exchange contracts) which are designed to hedge the cash flows expected to be paid with respect to forecasted expenses of the Israeli subsidiary (Radiancy) denominated in Israeli local currency (NIS) which is different than its functional currency. | |||||||||||||||||
Such derivatives were not designated as hedging instruments, and accordingly they were recognized in the balance sheet at their fair value, with changes in the fair value carried to the Statement of Comprehensive Income and included in financing income (expenses), net. | |||||||||||||||||
At September 30, 2013, the balance of such derivative instruments amounted to approximately $314 in assets and approximately $288 and $494 were recognized as financing income in the Statement of Comprehensive Income for the three and nine months ended September 30, 2013, respectively. | |||||||||||||||||
The nominal amounts of foreign currency derivatives as of September 30, 2013 consist of forward transactions for the exchange of $13,600 into NIS. | |||||||||||||||||
Accrued Warranty Costs | |||||||||||||||||
The Company offers a standard warranty on product sales generally for a one to two-year period. In the case of domestic sales of XTRAC lasers, however, the Company has offered longer warranty periods, ranging from three to four years, in order to meet competition offers or customer demands. The Company provides for the estimated cost of the future warranty claims on the date the product is sold. Total accrued warranty is included in Other Accrued Liabilities on the balance sheet. The activity in the warranty accrual during the nine months ended September 30, 2013 and 2012 is summarized as follows: | |||||||||||||||||
September 30, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Accrual at beginning of year | $ | 1,440 | $ | 1,661 | |||||||||||||
Additions charged to warranty expense | 1,123 | 1,189 | |||||||||||||||
Expiring warranties | (344 | ) | (307 | ) | |||||||||||||
Claims satisfied | (1,077 | ) | (1,076 | ) | |||||||||||||
Total | 1,142 | 1,467 | |||||||||||||||
Less: current portion | (1,071 | ) | (1,229 | ) | |||||||||||||
Accrued long-term warranty | $ | 71 | $ | 238 | |||||||||||||
For extended warranty on the consumer products, see Revenue Recognition above. | |||||||||||||||||
Earnings Per Share | |||||||||||||||||
Basic and diluted earnings per common share were calculated using the following weighted-average shares outstanding: | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Weighted-average number of common and common equivalent shares outstanding: | |||||||||||||||||
Basic number of common shares outstanding | 19,982,967 | 21,205,675 | 20,518,493 | 20,001,456 | |||||||||||||
Dilutive effect of stock options and warrants | 458,295 | 547,170 | 458,295 | 547,170 | |||||||||||||
Diluted number of common and common stock equivalent shares outstanding | 20,441,262 | 21,752,845 | 20,976,788 | 20,548,626 | |||||||||||||
Diluted earnings per share for the three and nine months ended September 30, 2013, exclude the impact of common stock options and warrants, totaling 2,101,873 shares, as the effect of their inclusion would be anti-dilutive. | |||||||||||||||||
Adoption of New Accounting Standards | |||||||||||||||||
Effective January 1, 2013, the Company adopted Accounting Standard Update No. 2013-02, Comprehensive Income: Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income ("ASU Topic 220") This ASU requires entities to provide information about significant amounts reclassified out of accumulated other comprehensive income. The standard became effective, prospectively, for interim and annual periods beginning after December 15, 2012. The adoption of the standard did not impact the Company's consolidated results of operations and financial condition. | |||||||||||||||||
Effective January 1, 2013, the Company adopted Accounting Standard Update No. 2011-11, Balance Sheet – Disclosure about Offsetting Assets and Liabilities ("ASU 2011-11"). ASU 2011-11 enhances disclosures about financial instruments and derivative instruments that are either offset in accordance with the Accounting Standards Codification or are subject to an enforceable master netting arrangement or similar agreement. The amended guidance became effective, in a retrospective manner to all comparative periods presented, for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of the standard did not have a material impact on the Company's consolidated results of operations and financial condition. | |||||||||||||||||
Recently Issued Accounting Standards | |||||||||||||||||
In July 2013 the FASB has issued Accounting Standard Update 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force) ("ASU 2013-11"). | |||||||||||||||||
The amendments in ASU 2013-11 state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. | |||||||||||||||||
ASU 2013-11 applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. For public companies the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. | |||||||||||||||||
The adoption of the amendments is not expected to have material impact on the Company's consolidated results of operations and financial condition. | |||||||||||||||||
In March 2013, the FASB issued Accounting Standards Update 2013-5, Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity ("ASU 2013-5"). | |||||||||||||||||
ASU 2013-5 clarifies that, when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in-substance real estate or conveyance of oil and gas mineral rights) within a foreign entity, the parent is required to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. ASU 2013-5 also clarifies that if the business combination achieved in stages relates to a previously held equity method investment (step-acquisition) that is a foreign entity, the amount of accumulated other comprehensive income that is reclassified and included in the calculation of gain or loss shall include any foreign currency translation adjustment related to that previously held investment. | |||||||||||||||||
For public companies, the amendments in this Update will be effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. Early adoption is permitted. If an entity elects to early adopt the amendments, it should apply them as of the beginning of the entity’s fiscal year of adoption. The adoption of the standard is not expected to have a material impact on the Company's consolidated results of operations and financial condition. |
Acquisition
Acquisition | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Acquisition [Abstract] | ' | ||||
Acquisition | ' | ||||
Note 2 | |||||
Acquisition | |||||
On July 1, 2013, PhotoMedex’ wholly-owned subsidiary, Radiancy, Inc., completed the acquisition of 100% of the shares of LK Technology Importaçăo E Exportaçăo LTDA (“LK”), a privately-held distributor in Brazil. | |||||
LK brings to PhotoMedex all required licenses, authorizations and permits to immediately begin its consumer business operating locally. LK was founded in 2003 and is based in Sao Paulo. LK has been operating for several years selling Radiancy’s professional line of products in Brazil. The local manager of LK will remain in his position. | |||||
The total consideration was $181, consisting of $41 cash down payment, $59 to be paid on the $100 consideration and $81 (a contingent consideration component) liability for an estimated amount to be due for the profit to be earned on the remaining inventory at acquisition date. | |||||
The fair value of the assets acquired and liabilities assumed were based on management estimates. Based on the initial purchase price allocation, the following table summarizes the fair value amounts of the assets acquired and liabilities assumed at the date of the acquisition: | |||||
Cash and cash equivalents | $ | 125 | |||
Accounts receivable | 1 | ||||
Inventories | 20 | ||||
Prepaid expenses and other current assets | 2 | ||||
Total assets acquired at fair value | 148 | ||||
Accounts payable | (75 | ) | |||
Accrued compensation and related expenses | (2 | ) | |||
Other accrued liabilities | (11 | ) | |||
Total liabilities assumed | (88 | ) | |||
Net assets acquired | $ | 60 | |||
The purchase price exceeded the fair value of the net assets acquired by $121, which was recorded as goodwill. | |||||
The consolidated results of operations do not include any revenues or expenses related to the LK business on or prior to July 1, 2013, the consummation date of the acquisition. Assuming the acquisition of LK had occurred on January 1, 2012, the impact on the Company’s results for the nine months ended September 30, 2013 and 2012 would have been immaterial. However this determination does not purport to be indicative of the results of operations which would have actually resulted had the acquisition occurred on January 1, 2012, nor to be indicative of future results of operations. |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
Note 3 | |||||||||
Inventories: | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
(unaudited) | |||||||||
Raw materials and work in progress | $ | 11,148 | $ | 9,012 | |||||
Finished goods | 16,485 | 13,455 | |||||||
Total inventories | $ | 27,633 | $ | 22,467 | |||||
Work-in-process is immaterial, given the Company’s typically short manufacturing cycle, and therefore is disclosed in conjunction with raw materials. |
Property_and_Equipment
Property and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
Note 4 | |||||||||
Property and Equipment: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
(unaudited) | |||||||||
Lasers-in-service | $ | 11,660 | $ | 7,301 | |||||
Equipment, computer hardware and software | 4,563 | 4,015 | |||||||
Furniture and fixtures | 668 | 617 | |||||||
Leasehold improvements | 501 | 396 | |||||||
17,392 | 12,329 | ||||||||
Accumulated depreciation and amortization | (7,391 | ) | (5,570 | ) | |||||
Property and equipment, net | $ | 10,001 | $ | 6,759 | |||||
Depreciation and related amortization expense was $2,085 and $1,746 for the nine months ended September 30, 2013 and 2012, respectively. |
Patents_and_Licensed_Technolog
Patents and Licensed Technologies, net | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Patents and Licensed Technologies, net [Abstract] | ' | ||||||||
Patents and Licensed Technologies, net | ' | ||||||||
Note 5 | |||||||||
Patents and Licensed Technologies, net: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
(unaudited) | |||||||||
Gross Amount beginning of period | $ | 15,411 | $ | 15,124 | |||||
Additions | 81 | 181 | |||||||
Translation differences | (3 | ) | 106 | ||||||
Gross Amount end of period | 15,489 | 15,411 | |||||||
Accumulated amortization | (4,280 | ) | (2,738 | ) | |||||
Patents and licensed technologies, net | $ | 11,209 | $ | 12,673 | |||||
Related amortization expense was $1,532 and $1,530 for the nine months ended September 30, 2013 and 2012, respectively. | |||||||||
Estimated amortization expense for amortizable patents and licensed technologies assets for the next five years is as follows: | |||||||||
Last three months of 2013 | $ | 512 | |||||||
2014 | 2,046 | ||||||||
2015 | 2,039 | ||||||||
2016 | 2,019 | ||||||||
2017 | 899 | ||||||||
Thereafter | 3,694 | ||||||||
Total | $ | 11,209 | |||||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Goodwill and Other Intangible Assets [Abstract] | ' | ||||||||||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||||||||||
Note 6 | |||||||||||||||||||||||||
Goodwill and Other Intangible Assets: | |||||||||||||||||||||||||
Balance at January 1, 2013, as restated | $ | 24,500 | |||||||||||||||||||||||
Additions to goodwill | 121 | ||||||||||||||||||||||||
Translation differences | (16 | ) | |||||||||||||||||||||||
Balance at September 30, 2013 | $ | 24,605 | |||||||||||||||||||||||
The Company has no impairment loss as of September 30, 2013. | |||||||||||||||||||||||||
Set forth below is a detailed listing of other definite-lived intangible assets: | |||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Trademarks | Customer Relationships | Total | Trademarks | Customer Relationships | Total | ||||||||||||||||||||
Gross Amount beginning of period | $ | 5,744 | $ | 6,372 | $ | 12,116 | $ | 5,700 | $ | 6,300 | $ | 12,000 | |||||||||||||
Translation differences | (1 | ) | (2 | ) | (3 | ) | 44 | 72 | 116 | ||||||||||||||||
Gross Amount end of period | 5,743 | 6,370 | 12,113 | 5,744 | 6,372 | 12,116 | |||||||||||||||||||
Accumulated amortization | (1,029 | ) | (1,141 | ) | (2,170 | ) | (598 | ) | (664 | ) | (1,262 | ) | |||||||||||||
Net Book Value | $ | 4,714 | $ | 5,229 | $ | 9,943 | $ | 5,146 | $ | 5,708 | $ | 10,854 | |||||||||||||
Related amortization expense was $900 and $900 for the periods ended September 30, 2013 and 2012, respectively. Customer Relationships embody the value to the Company of relationships that Pre-merged PhotoMedex had formed with its customers. Trademarks include the trade names and various trademarks associated with Pre-merged PhotoMedex products (e.g. “XTRAC”, “Neova” “Omnilux” and “Lumiere”). | |||||||||||||||||||||||||
Estimated amortization expense for the above amortizable intangible assets for the next five years is as follows: | |||||||||||||||||||||||||
Last three months of 2013 | $ | 300 | |||||||||||||||||||||||
2014 | 1,200 | ||||||||||||||||||||||||
2015 | 1,200 | ||||||||||||||||||||||||
2016 | 1,200 | ||||||||||||||||||||||||
2017 | 1,200 | ||||||||||||||||||||||||
Thereafter | 4,843 | ||||||||||||||||||||||||
Total | $ | 9,943 | |||||||||||||||||||||||
Accrued_Compensation_and_relat
Accrued Compensation and related expenses | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accrued Compensation and related expenses [Abstract] | ' | ||||||||
Accrued Compensation and related expenses | ' | ||||||||
Note 7 | |||||||||
Accrued Compensation and related expenses: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
(unaudited) | |||||||||
Accrued payroll and related taxes | $ | 729 | $ | 1,010 | |||||
Accrued vacation | 340 | 262 | |||||||
Accrued commissions and bonus | 1,619 | 1,222 | |||||||
Total accrued compensation and related expense | $ | 2,688 | $ | 2,494 |
Other_Accrued_Liabilities
Other Accrued Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other Accrued Liabilities [Abstract] | ' | ||||||||
Other Accrued Liabilities | ' | ||||||||
Note 8 | |||||||||
Other Accrued Liabilities: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
(unaudited) | |||||||||
Accrued warranty, current | $ | 1,071 | $ | 1,274 | |||||
Accrued taxes, net (2) | 914 | 4,304 | |||||||
Accrued sales returns (1) | 8,433 | 11,901 | |||||||
Other accrued liabilities | 2,795 | 4,620 | |||||||
Total other accrued liabilities | $ | 13,213 | $ | 22,099 | |||||
(1) | The activity in the sales returns liability account was as follows: | ||||||||
Nine Months Ended September 30, | |||||||||
2013 | 2012 | ||||||||
(unaudited) | (unaudited) | ||||||||
Balance at beginning of year | $ | 11,901 | $ | 6,143 | |||||
Additions that reduce net sales | 29,246 | 22,224 | |||||||
Deductions from reserves | (32,714 | ) | (16,578 | ) | |||||
Balance at end of period | $ | 8,433 | $ | 11,789 | |||||
(2) | The December 31, 2012 balance is shown as restated |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes [Abstract] | ' |
Income Taxes | ' |
Note 9 | |
Income Taxes: | |
The Company's effective tax rate is dependent upon the geographic distribution of its earnings or losses (mainly between the US, UK and Israel). | |
The difference between the Company's effective tax rates for the three and nine month periods ended September 30, 2013 and the U.S. Federal statutory rate (34%) resulted primarily from Pre-merged PhotoMedex current operations which have generated losses, which reduced the overall corporate tax expense and which will have effect on current tax expense when the Company elects to file a U.S. consolidated income tax return. In addition, the Israeli and UK subsidiaries’ earnings are effectively taxed at rates lower than the federal statutory rate (generally 20% to 24%, respectively). | |
As more fully described in the consolidated financial statements for fiscal 2012, under Israeli law, the Israeli subsidiary is entitled to various tax benefits by virtue of the “approved enterprise” status that was granted by the Investment Center to a number of its production facilities. | |
In December 2010, the Israeli parliament passed the Economic Policy Law for the Years 2011 and 2012 (Legislative Amendments) – 2011 (hereinafter – the “Amendment”) which set out, among other things, amendments to the Law for the Encouragement of Capital Investments. The Amendment went into effect on January 1, 2011. The Amendment changes the benefit tracks of the Law and applies a uniform tax rate on all of the preferred income of the Israeli subsidiary. According to the Amendment the Israeli subsidiary has the right to elect (with no option to withdraw such election) to be subject to the Amendment and from the date of such election and thereafter, it will be subject to the amended tax rates which are as follows: in 2011 and 2012 – 15%, 2013 and 2014 – 12.5% and in 2015 and thereafter – 12%. The reduced tax rates apply to an unlimited period of time in respect of a preferred enterprise which complies with the terms set out in the law. | |
In May 2013, the Israeli subsidiary determined to apply the Amendment provisions to its approved enterprise which was subject to the provisions of the law prior to the Amendment, commencing with the 2013 tax year | |
On July 30, 2013, the Israeli parliament approved the Law for the Change in National Priorities (Legislative Amendments to Achieve Budgetary Goals for 2013 and 2014) – 2013 (hereinafter – the “Law for the Change in National Priorities”), which was published in the Official Gazette on August 5, 2013. | |
According to the Law for the Change in National Priorities, commencing on January 1, 2014 and thereafter, the income of a preferred enterprise, located in an area that is not Development Zone A (which is applicable to the preferred income of the Israeli subsidiary from the preferred enterprise) will be subject to a tax rate of 16% (instead of a rate of 12.5%). In addition, according to the Law for the Change in National Priorities the standard corporate income tax rate will be increased from 25% to 26.5% effective as of January 1, 2014. This change of tax rate did not have material effect on the deferred tax assets of the Israeli subsidiary. | |
The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and can be ambiguous; the Company is, therefore, obliged to make many subjective assumptions and judgments regarding the application of such laws and regulations to its facts and circumstances. In addition, interpretations of and guidance surrounding income tax laws and regulations are subject to changes over time. Any changes in the Company's subjective assumptions and judgments could materially affect amounts recognized in its consolidated balance sheets and statements of income. |
Employee_Stock_Benefit_Plans
Employee Stock Benefit Plans | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Employee Stock Benefit Plans [Abstract] | ' | ||||
Employee Stock Benefit Plans | ' | ||||
Note 10 | |||||
Employee Stock Benefit Plans: | |||||
Post-Reverse Merger | |||||
Following the closing of the reverse acquisition, the previous Non-Employee Director Stock Option Plan of PhotoMedex (the acquired entity) was adopted by the group. This plan has authorized 120,000 shares; of which 7,000 shares had been issued or were reserved for issuance as awards of shares of common stock, and 17,285 shares were reserved for outstanding stock options. | |||||
In addition, following the closing of the reverse acquisition, the previous 2005 Equity Compensation Plan (“2005 Equity Plan”) of Pre-merged PhotoMedex (the acquired entity) was also adopted for use by the group. The 2005 Equity Plan has authorized 3,000,000 shares, of which 753,095 shares had been issued or were reserved for issuance as awards of shares of common stock, and 1,116,714 shares were reserved for outstanding options. | |||||
Stock option activity under all of the Company’s share-based compensation plans for the nine months ended September 30, 2013 was as follows: | |||||
Number of Options | Weighted Average Exercise Price | ||||
Outstanding, January 1, 2013 | 898,541 | $16.65 | |||
Granted | 259,625 | 16.59 | |||
Exercised | -3,750 | 6.24 | |||
Cancelled | -19,166 | 23.52 | |||
Outstanding, September 30, 2013 | 1,135,250 | $16.62 | |||
Options exercisable at September 30, 2013 | 322,625 | $17.75 | |||
At September 30, 2013, there was $9,703 of total unrecognized compensation cost related to non-vested option grants and stock awards that is expected to be recognized over a weighted-average period of 3.0 years. The intrinsic value of options outstanding and exercisable at September 30, 2013 was not significant. | |||||
The Company calculates expected volatility for a share-based grants based on historic daily stock price observations of its common stock. For estimating the expected term of share-based grants made in the nine months ended September 30, 2013, the Company has adopted the simplified method. The Company has used historical data to estimate expected employee behaviors related to option exercises and forfeitures and included these expected forfeitures as a part of the estimate of expense as of the grant date. | |||||
The Company uses the Black-Scholes option-pricing model to estimate fair value of grants of stock options with the following weighted-average assumptions: | |||||
Nine Months Ended | |||||
30-Sep-13 | |||||
Risk-free interest rate | 1.26% | ||||
Volatility | 85.25% | ||||
Expected dividend yield | 0% | ||||
Expected life | 5.5 years | ||||
Estimated forfeiture rate | 0% | ||||
With respect to grants of options, the risk-free rate of interest is based on the U.S. Treasury rates appropriate for the expected term of the grant or award. | |||||
On February 28, 2013, the Company granted an aggregate of 177,125 options to purchase common stock to a number of employees and consultants with a strike price of $15, which was higher than the quoted market value of our stock at the date of grants. The options vest over five years and expire ten years from the date of grant. Also on February 28, 2013, the Company granted an aggregate of 82,500 non-qualified options to purchase common stock to two executive employees with a strike price of $20, which was set to match the exercise price of the warrants issued in the reverse merger and was higher than the quoted market value of our stock at the date of grant. The aggregate fair value of the options granted was $2,590. The options vest over five years and expire ten years from the date of grant. | |||||
Total stock based compensation expense was $3,795 and $4,817 for the nine months ended September 30, 2013 and 2012. |
Business_Segments_and_Geograph
Business Segments and Geographic Data | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Business Segment and Geographic Data [Abstract] | ' | ||||||||||||||||
Business Segment and Geographic Data | ' | ||||||||||||||||
Note 11 | |||||||||||||||||
Business Segments and Geographic Data: | |||||||||||||||||
The Company organized its business into three operating segments to better align its organization based upon the Company’s management structure, products and services offered, markets served and types of customers, as follows: The Consumer segment derives its revenues from the design, development, manufacturing and selling of long-term hair reduction and acne consumer products. The Physician Recurring segment derives its revenues from the XTRAC procedures performed by dermatologists, the sales of skincare products, the sales of surgical disposables and accessories to hospitals and surgery centers, and on the repair, maintenance and replacement parts on our various products. The Professional segment generates revenues from the sale of equipment, such as lasers, medical and esthetic light and heat-based products and LED products. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance. | |||||||||||||||||
Unallocated operating expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Unallocated assets include cash and cash equivalents, prepaid expenses and deposits. | |||||||||||||||||
The following tables reflect results of operations from our business segments for the periods indicated below: | |||||||||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||
CONSUMER | PHYSICIAN RECURRING | PROFESSIONAL | TOTAL | ||||||||||||||
Revenues | $ | 36,910 | $ | 7,359 | $ | 1,624 | $ | 45,893 | |||||||||
Costs of revenues | 4,730 | 3,272 | 1,064 | 9,066 | |||||||||||||
Gross profit | 32,180 | 4,087 | 560 | 36,827 | |||||||||||||
Gross profit % | 87.2 | % | 55.5 | % | 34.5 | % | 80.2 | % | |||||||||
Allocated operating expenses: | |||||||||||||||||
Engineering and product development | 279 | 341 | 185 | 805 | |||||||||||||
Selling and marketing expenses | 26,958 | 3,370 | 645 | 30,973 | |||||||||||||
Unallocated operating expenses | - | - | - | 5,972 | |||||||||||||
27,237 | 3,711 | 830 | 37,750 | ||||||||||||||
Operating profit (loss) | 4,943 | 376 | (270 | ) | (923 | ) | |||||||||||
Interest and other financing expense, net | - | - | - | 473 | |||||||||||||
Income (loss) before income tax expense | $ | 4,943 | $ | 376 | $ | ( 270 | ) | $ | ( 450 | ) | |||||||
Three Months Ended September 30, 2012 | |||||||||||||||||
CONSUMER | PHYSICIAN RECURRING | PROFESSIONAL | TOTAL | ||||||||||||||
Revenues | $ | 49,638 | $ | 5,121 | $ | 1,922 | $ | 56,681 | |||||||||
Costs of revenues | 7,366 | 2,811 | 1,104 | 11,281 | |||||||||||||
Gross profit | 42,272 | 2,310 | 818 | 45,400 | |||||||||||||
Gross profit % | 85.2 | % | 45.1 | % | 42.6 | % | 80.1 | % | |||||||||
Allocated operating expenses: | |||||||||||||||||
Engineering and product development | 165 | 278 | 185 | 628 | |||||||||||||
Selling and marketing expenses | 24,980 | 2,575 | 730 | 28,285 | |||||||||||||
Unallocated operating expenses | - | - | - | 6,231 | |||||||||||||
25,145 | 2,853 | 915 | 35,144 | ||||||||||||||
Operating profit (loss) | 17,127 | (543 | ) | (97 | ) | 10,256 | |||||||||||
Interest and other financing expense, net | - | - | - | (231 | ) | ||||||||||||
Income (loss) before income tax expense | $ | 17,127 | $ | ( 543 | ) | $ | ( 97 | ) | $ | 10,025 | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||
CONSUMER | PHYSICIAN RECURRING | PROFESSIONAL | TOTAL | ||||||||||||||
Revenues | $ | 134,643 | 20,690 | $ | 5,841 | $ | 161,174 | ||||||||||
Costs of revenues | 19,422 | 9,217 | 3,683 | 32,322 | |||||||||||||
Gross profit | 115,221 | 11,473 | 2,158 | 128,852 | |||||||||||||
Gross profit % | 85.6 | % | 55.5 | % | 36.9 | % | 79.9 | % | |||||||||
Allocated operating expenses: | |||||||||||||||||
Engineering and product development | 775 | 982 | 635 | 2,392 | |||||||||||||
Selling and marketing expenses | 79,293 | 9,777 | 1,697 | 90,767 | |||||||||||||
Unallocated operating expenses | - | - | - | 17,899 | |||||||||||||
80,068 | 10,759 | 2,332 | 111,058 | ||||||||||||||
Operating profit (loss) | 35,153 | 714 | (174 | ) | 17,794 | ||||||||||||
Interest and other financing income, net | - | - | - | 470 | |||||||||||||
Income (loss) before income tax expense | $ | 35,153 | $ | 714 | $ | ( 174 | ) | $ | 18,264 | ||||||||
Nine Months Ended September 30, 2012 | |||||||||||||||||
CONSUMER | PHYSICIAN RECURRING | PROFESSIONAL | TOTAL | ||||||||||||||
Revenues | $ | 142,303 | $ | 15,467 | $ | 8,090 | $ | 165,860 | |||||||||
Costs of revenues | 22,307 | 8,095 | 4,468 | 34,870 | |||||||||||||
Gross profit | 119,996 | 7,372 | 3,622 | 130,990 | |||||||||||||
Gross profit % | 84.3 | % | 47.7 | % | 44.8 | % | 79 | % | |||||||||
Allocated operating expenses: | |||||||||||||||||
Engineering and product development | 642 | 863 | 641 | 2,146 | |||||||||||||
Selling and marketing expenses | 74,673 | 7,526 | 2,989 | 85,188 | |||||||||||||
Unallocated operating expenses | - | - | - | 22,593 | |||||||||||||
75,315 | 8,389 | 3,630 | 109,927 | ||||||||||||||
Operating profit (loss) | 44,681 | (1,017 | ) | ( 8 | ) | 21,063 | |||||||||||
Interest and other financing expense, net | - | - | - | (862 | ) | ||||||||||||
Income before income tax expense | $ | 44,681 | $ | ( 1,017 | ) | $ | ( 8 | ) | $ | 20,201 | |||||||
For the three and nine months ended September 30, 2013 and 2012, net revenues by geographic area were as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
North America 1 | $ | 35,239 | $ | 38,888 | $ | 122,170 | $ | 121,524 | |||||||||
Asia Pacific 2 | 1,778 | 9,533 | 16,980 | 23,306 | |||||||||||||
Europe (including Israel) | 8,083 | 7,170 | 19,577 | 18,623 | |||||||||||||
South America | 793 | 1,090 | 2,447 | 2,407 | |||||||||||||
$ | 45,893 | $ | 56,681 | $ | 161,174 | $ | 165,860 | ||||||||||
1 United States | $ | 30,287 | $ | 31,380 | $ | 98,832 | $ | 101,473 | |||||||||
2 Japan | $ | 205 | $ | 8,144 | $ | 11,455 | $ | 18,318 | |||||||||
As of September 30, 2013 and December 31, 2012, long-lived assets by geographic area were as follows: | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
(unaudited) | |||||||||||||||||
North America | $ | 8,701 | $ | 5,772 | |||||||||||||
Asia Pacific | - | - | |||||||||||||||
Europe (including Israel) | 1,300 | 987 | |||||||||||||||
South America | - | - | |||||||||||||||
$ | 10,001 | $ | 6,759 | ||||||||||||||
The Company discusses segmental details in its Management Discussion and Analysis found elsewhere in this Quarterly Report on Form 10-Q. |
Significant_Customer_Concentra
Significant Customer Concentration | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Significant Customer Concentration [Abstract] | ' | |||||
Significant Customer Concentration | ' | |||||
Note 12 | ||||||
Significant Customer Concentration: | ||||||
Three Months Ended September 30, 2012 | Nine Months Ended September 30, 2012 | |||||
Customer A | 14% | 10% | ||||
Customer B | 9% | 8% | ||||
No other customer represented more than 10% of total company revenues for the three and nine months ended September 30, 2012. There was no customer that represented more than 10% of total company revenues for the three and nine months ended September 30, 2013. | ||||||
The_Company_Policies
The Company (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
The Company [Abstract] | ' | ||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||
Basis of Presentation: | |||||||||||||||||
The accompanying condensed consolidated financial statements and related notes should be read in conjunction with our consolidated financial statements and related notes contained in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2012 (“fiscal 2012”). The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature. | |||||||||||||||||
The results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013 or for any other interim period or for any future period. | |||||||||||||||||
Principles of Consolidation | ' | ||||||||||||||||
Principles of Consolidation | |||||||||||||||||
The consolidated financial statements include the accounts of the Company and the wholly- and majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company recognizes revenues from product sales when the following four criteria have been met: (i) the product has been delivered and the Company has no significant remaining obligations; (ii) persuasive evidence of an arrangement exists; (iii) the price to the buyer is fixed or determinable; and (iv) collection is reasonably assured. Revenues from product sales are recorded net of provisions for estimated chargebacks, rebates, expected returns and cash discounts. | |||||||||||||||||
The Company ships most of its products FOB shipping point, although from time to time certain customers, for example governmental customers, will insist upon FOB destination. Among the factors the Company takes into account when determining the proper time at which to recognize revenue are (i) when title to the goods transfers and (ii) when the risk of loss transfers. Shipments to distributors or physicians that do not fully satisfy the collection criteria are recognized when invoiced amounts are fully paid or fully assured. | |||||||||||||||||
For revenue arrangements with multiple deliverables within a single, contractually binding arrangement (usually sales of products with separately priced extended warranty), each element of the contract is accounted for as a separate unit of accounting when it provides the customer value on a stand-alone basis and there is objective evidence of the fair value of the related unit. | |||||||||||||||||
With respect to sales arrangements under which the buyer has a right to return the related product, revenue is recognized only if all the following conditions are met: the price is fixed or determinable at the date of sale; the buyer has paid, or is obligated to pay and the obligation is not contingent on resale of the product; the buyer's obligation would not be changed in the event of theft or physical destruction or damage of the product; the buyer has economic substance; the Company does not have significant obligations for future performance to directly bring about resale of the product by the buyer; and the amount of future returns can be reasonably estimated. | |||||||||||||||||
The Company provides a provision for product returns based on the experience with historical sales returns, in accordance with ASC Topic 605-15 with respect to sales of product when a right of return exists. Reported revenues are shown net of the returns provision. Such allowance for sales returns is included in Other Accrued Liabilities. (See Note 8.) | |||||||||||||||||
Deferred revenue includes amounts received with respect to extended warranty maintenance, repairs and other billable services and amounts not yet recognized as revenues. Revenues with respect to such activities are deferred and recognized on a straight-line basis over the duration of the warranty period, the service period or when service is provided, as applicable to each service. | |||||||||||||||||
The Company has two distribution channels for its phototherapy treatment equipment. The Company either (i) sells its lasers through a distributor or directly to a physician or (ii) places its lasers in a physician’s office (at no charge to the physician) and generally charges the physician a fee for an agreed upon number of treatments. In some cases, the Company and the customer stipulate to a quarterly or other periodic target of procedures to be performed, and accordingly revenue is recognized ratably over the period. | |||||||||||||||||
When the Company places a laser in a physician’s office, it generally recognizes service revenue based on the number of patient treatments performed, or purchased under a periodic commitment, by the physician. Amounts collected with respect to treatments to be performed through laser-access codes that are sold to physicians free of a periodic commitment, but not yet used, are deferred and recognized as a liability until the physician performs the treatment. Unused treatments remain an obligation of the Company because the treatments can only be performed on Company-owned equipment. Once the treatments are delivered to a patient, this obligation has been satisfied. | |||||||||||||||||
The Company defers substantially all revenue from sales of treatment codes ordered by and delivered to its customers within the last two weeks of the period in determining the amount of procedures performed by its physician-customers. Management believes this approach closely approximates the actual amount of unused treatments that existed at the end of a period. | |||||||||||||||||
Functional Currency | ' | ||||||||||||||||
Functional Currency | |||||||||||||||||
The currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the US dollar ("$" or "dollars"), except for the operations of Photo Therapeutics, Ltd. which are conducted in Great Britain Pounds (GBP) and LK Technologies which are conducted in Brazilian Real (BRL). Substantially all of the Group's revenues are derived in dollars or in other currencies linked to the dollar. Purchases of most materials and components are carried out in, or linked to the dollar. Thus, the functional (and reporting currency) of the Company and its subsidiaries (other than Photo Therapeutics, Ltd. and LK Technologies) is the dollar. | |||||||||||||||||
Balances denominated in, or linked to, foreign currencies are stated on the basis of the exchange rates prevailing at the balance sheet date. For foreign currency transactions included in the statement of comprehensive income, the exchange rates applicable to the relevant transaction dates are used. Transaction gains or losses arising from changes in the exchange rates used in the translation of such balances are carried to financing income or expenses. | |||||||||||||||||
Assets and liabilities of a foreign subsidiary, whose functional currency is the local currency, are translated from its respective functional currency to U.S. dollars at the balance sheet date exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the period. Translation adjustments of the foreign subsidiary for which the local currency is the functional currency are reflected in the consolidated balance sheets as a component of accumulated other comprehensive income (loss). Deferred taxes are not provided on translation adjustments as the earnings of the subsidiary are considered to be permanently reinvested. | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The Company measures and discloses fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions there exists a three-tier fair-value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | |||||||||||||||||
• | Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. | ||||||||||||||||
• | Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. | ||||||||||||||||
• | Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors. | ||||||||||||||||
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. | |||||||||||||||||
The fair value of cash and cash equivalents is based on its demand value, which is equal to its carrying value. The estimated fair values of notes payable and long-term debt which are based on borrowing rates that are available to the Company for loans with similar terms, collateral and maturity approximate the carrying values. The fair value of the amounts funded in insurance policies in respect of employee liability for employee rights upon retirement is usually identical or close to their carrying value. Additionally, the carrying value of all other monetary assets and liabilities is estimated to be equal to their fair value due to the short-term nature of these instruments. | |||||||||||||||||
Derivative financial instruments are measured at fair value, on a recurring basis. The fair value of derivatives generally reflects the estimated amounts that the Group would receive or pay to terminate the contracts at the reporting dates, based on the prevailing currency prices and the relevant interest rates. Such measurement is classified within Level 2. | |||||||||||||||||
In addition to items that are measured at fair value on a recurring basis, there are also assets and liabilities that are measured at fair value on a nonrecurring basis. Assets and liabilities that are measured at fair value on a nonrecurring basis include certain long-lived assets including goodwill. As such, we have determined that these fair value measurements reside within Level 3 of the fair value hierarchy. | |||||||||||||||||
Derivatives | ' | ||||||||||||||||
Derivatives | |||||||||||||||||
The group applies the provisions of Accounting Standards Codification Topic 815, Derivatives and Hedging ("ASC Topic 815"). In accordance with ASC Topic 815, all the derivative financial instruments are recognized as either financial assets or financial liabilities on the balance sheet at fair value. The accounting for changes in the fair value of a derivative financial instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For derivative financial instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. | |||||||||||||||||
From time to time the Company carries out transactions involving foreign exchange derivative financial instruments (mainly forward exchange contracts) which are designed to hedge the cash flows expected to be paid with respect to forecasted expenses of the Israeli subsidiary (Radiancy) denominated in Israeli local currency (NIS) which is different than its functional currency. | |||||||||||||||||
Such derivatives were not designated as hedging instruments, and accordingly they were recognized in the balance sheet at their fair value, with changes in the fair value carried to the Statement of Comprehensive Income and included in financing income (expenses), net. | |||||||||||||||||
At September 30, 2013, the balance of such derivative instruments amounted to approximately $314 in assets and approximately $288 and $494 were recognized as financing income in the Statement of Comprehensive Income for the three and nine months ended September 30, 2013, respectively. | |||||||||||||||||
The nominal amounts of foreign currency derivatives as of September 30, 2013 consist of forward transactions for the exchange of $13,600 into NIS. | |||||||||||||||||
Accrued Warranty Costs | ' | ||||||||||||||||
Accrued Warranty Costs | |||||||||||||||||
The Company offers a standard warranty on product sales generally for a one to two-year period. In the case of domestic sales of XTRAC lasers, however, the Company has offered longer warranty periods, ranging from three to four years, in order to meet competition offers or customer demands. The Company provides for the estimated cost of the future warranty claims on the date the product is sold. Total accrued warranty is included in Other Accrued Liabilities on the balance sheet. The activity in the warranty accrual during the nine months ended September 30, 2013 and 2012 is summarized as follows: | |||||||||||||||||
September 30, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Accrual at beginning of year | $ | 1,440 | $ | 1,661 | |||||||||||||
Additions charged to warranty expense | 1,123 | 1,189 | |||||||||||||||
Expiring warranties | (344 | ) | (307 | ) | |||||||||||||
Claims satisfied | (1,077 | ) | (1,076 | ) | |||||||||||||
Total | 1,142 | 1,467 | |||||||||||||||
Less: current portion | (1,071 | ) | (1,229 | ) | |||||||||||||
Accrued long-term warranty | $ | 71 | $ | 238 | |||||||||||||
For extended warranty on the consumer products, see Revenue Recognition above. | |||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Earnings Per Share | |||||||||||||||||
Basic and diluted earnings per common share were calculated using the following weighted-average shares outstanding: | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Weighted-average number of common and common equivalent shares outstanding: | |||||||||||||||||
Basic number of common shares outstanding | 19,982,967 | 21,205,675 | 20,518,493 | 20,001,456 | |||||||||||||
Dilutive effect of stock options and warrants | 458,295 | 547,170 | 458,295 | 547,170 | |||||||||||||
Diluted number of common and common stock equivalent shares outstanding | 20,441,262 | 21,752,845 | 20,976,788 | 20,548,626 | |||||||||||||
Diluted earnings per share for the three and nine months ended September 30, 2013, exclude the impact of common stock options and warrants, totaling 2,101,873 shares, as the effect of their inclusion would be anti-dilutive. | |||||||||||||||||
Adoption of New Accounting Standards | ' | ||||||||||||||||
Adoption of New Accounting Standards | |||||||||||||||||
Effective January 1, 2013, the Company adopted Accounting Standard Update No. 2013-02, Comprehensive Income: Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income ("ASU Topic 220") This ASU requires entities to provide information about significant amounts reclassified out of accumulated other comprehensive income. The standard became effective, prospectively, for interim and annual periods beginning after December 15, 2012. The adoption of the standard did not impact the Company's consolidated results of operations and financial condition. | |||||||||||||||||
Effective January 1, 2013, the Company adopted Accounting Standard Update No. 2011-11, Balance Sheet – Disclosure about Offsetting Assets and Liabilities ("ASU 2011-11"). ASU 2011-11 enhances disclosures about financial instruments and derivative instruments that are either offset in accordance with the Accounting Standards Codification or are subject to an enforceable master netting arrangement or similar agreement. The amended guidance became effective, in a retrospective manner to all comparative periods presented, for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of the standard did not have a material impact on the Company's consolidated results of operations and financial condition. | |||||||||||||||||
Recently Issued Accounting Standards | ' | ||||||||||||||||
Recently Issued Accounting Standards | |||||||||||||||||
In July 2013 the FASB has issued Accounting Standard Update 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force) ("ASU 2013-11"). | |||||||||||||||||
The amendments in ASU 2013-11 state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. | |||||||||||||||||
ASU 2013-11 applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. For public companies the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. | |||||||||||||||||
The adoption of the amendments is not expected to have material impact on the Company's consolidated results of operations and financial condition. | |||||||||||||||||
In March 2013, the FASB issued Accounting Standards Update 2013-5, Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity ("ASU 2013-5"). | |||||||||||||||||
ASU 2013-5 clarifies that, when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in-substance real estate or conveyance of oil and gas mineral rights) within a foreign entity, the parent is required to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. ASU 2013-5 also clarifies that if the business combination achieved in stages relates to a previously held equity method investment (step-acquisition) that is a foreign entity, the amount of accumulated other comprehensive income that is reclassified and included in the calculation of gain or loss shall include any foreign currency translation adjustment related to that previously held investment. | |||||||||||||||||
For public companies, the amendments in this Update will be effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. Early adoption is permitted. If an entity elects to early adopt the amendments, it should apply them as of the beginning of the entity’s fiscal year of adoption. The adoption of the standard is not expected to have a material impact on the Company's consolidated results of operations and financial condition. |
The_Company_Tables
The Company (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
The Company [Abstract] | ' | ||||||||||||||||
Activity in the warranty accrual | ' | ||||||||||||||||
The activity in the warranty accrual during the nine months ended September 30, 2013 and 2012 is summarized as follows: | |||||||||||||||||
September 30, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Accrual at beginning of year | $ | 1,440 | $ | 1,661 | |||||||||||||
Additions charged to warranty expense | 1,123 | 1,189 | |||||||||||||||
Expiring warranties | (344 | ) | (307 | ) | |||||||||||||
Claims satisfied | (1,077 | ) | (1,076 | ) | |||||||||||||
Total | 1,142 | 1,467 | |||||||||||||||
Less: current portion | (1,071 | ) | (1,229 | ) | |||||||||||||
Accrued long-term warranty | $ | 71 | $ | 238 | |||||||||||||
Calculation of basic and diluted earnings per common share using weighted average shares outstanding | ' | ||||||||||||||||
Basic and diluted earnings per common share were calculated using the following weighted-average shares outstanding: | |||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Weighted-average number of common and common equivalent shares outstanding: | |||||||||||||||||
Basic number of common shares outstanding | 19,982,967 | 21,205,675 | 20,518,493 | 20,001,456 | |||||||||||||
Dilutive effect of stock options and warrants | 458,295 | 547,170 | 458,295 | 547,170 | |||||||||||||
Diluted number of common and common stock equivalent shares outstanding | 20,441,262 | 21,752,845 | 20,976,788 | 20,548,626 |
Acquisition_Tables
Acquisition (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Acquisition [Abstract] | ' | ||||
Schedule of Purchase Price Allocation | ' | ||||
The fair value of the assets acquired and liabilities assumed were based on management estimates. Based on the initial purchase price allocation, the following table summarizes the fair value amounts of the assets acquired and liabilities assumed at the date of the acquisition: | |||||
Cash and cash equivalents | $ | 125 | |||
Accounts receivable | 1 | ||||
Inventories | 20 | ||||
Prepaid expenses and other current assets | 2 | ||||
Total assets acquired at fair value | 148 | ||||
Accounts payable | (75 | ) | |||
Accrued compensation and related expenses | (2 | ) | |||
Other accrued liabilities | (11 | ) | |||
Total liabilities assumed | (88 | ) | |||
Net assets acquired | $ | 60 |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Schedule of Inventories | ' | ||||||||
Inventories: | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
(unaudited) | |||||||||
Raw materials and work in progress | $ | 11,148 | $ | 9,012 | |||||
Finished goods | 16,485 | 13,455 | |||||||
Total inventories | $ | 27,633 | $ | 22,467 | |||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
Schedule property and equipment | ' | ||||||||
Property and Equipment: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
(unaudited) | |||||||||
Lasers-in-service | $ | 11,660 | $ | 7,301 | |||||
Equipment, computer hardware and software | 4,563 | 4,015 | |||||||
Furniture and fixtures | 668 | 617 | |||||||
Leasehold improvements | 501 | 396 | |||||||
17,392 | 12,329 | ||||||||
Accumulated depreciation and amortization | (7,391 | ) | (5,570 | ) | |||||
Property and equipment, net | $ | 10,001 | $ | 6,759 |
Patents_and_Licensed_Technolog1
Patents and Licensed Technologies, net (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Patents and Licensed Technologies, net [Abstract] | ' | ||||||||
Schedule of patents and licensed technologies | ' | ||||||||
Patents and Licensed Technologies, net: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
(unaudited) | |||||||||
Gross Amount beginning of period | $ | 15,411 | $ | 15,124 | |||||
Additions | 81 | 181 | |||||||
Translation differences | (3 | ) | 106 | ||||||
Gross Amount end of period | 15,489 | 15,411 | |||||||
Accumulated amortization | (4,280 | ) | (2,738 | ) | |||||
Patents and licensed technologies, net | $ | 11,209 | $ | 12,673 | |||||
Amortization expense for amortizable patents and licensed technologies | ' | ||||||||
Estimated amortization expense for amortizable patents and licensed technologies assets for the next five years is as follows: | |||||||||
Last three months of 2013 | $ | 512 | |||||||
2014 | 2,046 | ||||||||
2015 | 2,039 | ||||||||
2016 | 2,019 | ||||||||
2017 | 899 | ||||||||
Thereafter | 3,694 | ||||||||
Total | $ | 11,209 |
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Goodwill and Other Intangible Assets [Abstract] | ' | ||||||||||||||||||||||||
Schedule of goodwill acquired | ' | ||||||||||||||||||||||||
Goodwill and Other Intangible Assets: | |||||||||||||||||||||||||
Balance at January 1, 2013, as restated | $ | 24,500 | |||||||||||||||||||||||
Additions to goodwill | 121 | ||||||||||||||||||||||||
Translation differences | (16 | ) | |||||||||||||||||||||||
Balance at September 30, 2013 | $ | 24,605 | |||||||||||||||||||||||
Schedule of other definite-lived intangible assets | ' | ||||||||||||||||||||||||
Set forth below is a detailed listing of other definite-lived intangible assets: | |||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Trademarks | Customer Relationships | Total | Trademarks | Customer Relationships | Total | ||||||||||||||||||||
Gross Amount beginning of period | $ | 5,744 | $ | 6,372 | $ | 12,116 | $ | 5,700 | $ | 6,300 | $ | 12,000 | |||||||||||||
Translation differences | (1 | ) | (2 | ) | (3 | ) | 44 | 72 | 116 | ||||||||||||||||
Gross Amount end of period | 5,743 | 6,370 | 12,113 | 5,744 | 6,372 | 12,116 | |||||||||||||||||||
Accumulated amortization | (1,029 | ) | (1,141 | ) | (2,170 | ) | (598 | ) | (664 | ) | (1,262 | ) | |||||||||||||
Net Book Value | $ | 4,714 | $ | 5,229 | $ | 9,943 | $ | 5,146 | $ | 5,708 | $ | 10,854 | |||||||||||||
Schedule of estimated amortization expense for amortizable intangible assets | ' | ||||||||||||||||||||||||
Estimated amortization expense for the above amortizable intangible assets for the next five years is as follows: | |||||||||||||||||||||||||
Last three months of 2013 | $ | 300 | |||||||||||||||||||||||
2014 | 1,200 | ||||||||||||||||||||||||
2015 | 1,200 | ||||||||||||||||||||||||
2016 | 1,200 | ||||||||||||||||||||||||
2017 | 1,200 | ||||||||||||||||||||||||
Thereafter | 4,843 | ||||||||||||||||||||||||
Total | $ | 9,943 |
Accrued_Compensation_and_relat1
Accrued Compensation and related expenses (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accrued Compensation and related expenses [Abstract] | ' | ||||||||
Schedule of accrued compensation and related expenses | ' | ||||||||
Accrued Compensation and related expenses: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
(unaudited) | |||||||||
Accrued payroll and related taxes | $ | 729 | $ | 1,010 | |||||
Accrued vacation | 340 | 262 | |||||||
Accrued commissions and bonus | 1,619 | 1,222 | |||||||
Total accrued compensation and related expense | $ | 2,688 | $ | 2,494 |
Other_Accrued_Liabilities_Tabl
Other Accrued Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Other Accrued Liabilities [Abstract] | ' | ||||||||
Schedule of other accrued liabilities | ' | ||||||||
Other Accrued Liabilities: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
(unaudited) | |||||||||
Accrued warranty, current | $ | 1,071 | $ | 1,274 | |||||
Accrued taxes, net (2) | 914 | 4,304 | |||||||
Accrued sales returns (1) | 8,433 | 11,901 | |||||||
Other accrued liabilities | 2,795 | 4,620 | |||||||
Total other accrued liabilities | $ | 13,213 | $ | 22,099 | |||||
(1) | The activity in the sales returns liability account was as follows: | ||||||||
Nine Months Ended September 30, | |||||||||
2013 | 2012 | ||||||||
(unaudited) | (unaudited) | ||||||||
Balance at beginning of year | $ | 11,901 | $ | 6,143 | |||||
Additions that reduce net sales | 29,246 | 22,224 | |||||||
Deductions from reserves | (32,714 | ) | (16,578 | ) | |||||
Balance at end of period | $ | 8,433 | $ | 11,789 | |||||
(2) | The December 31, 2012 balance is shown as restated |
Employee_Stock_Benefit_Plans_T
Employee Stock Benefit Plans (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Employee Stock Benefit Plans [Abstract] | ' | ||||
Stock option activity under share-based compensation plans | ' | ||||
Stock option activity under all of the Company’s share-based compensation plans for the nine months ended September 30, 2013 was as follows: | |||||
Number of Options | Weighted Average Exercise Price | ||||
Outstanding, January 1, 2013 | 898,541 | $16.65 | |||
Granted | 259,625 | 16.59 | |||
Exercised | -3,750 | 6.24 | |||
Cancelled | -19,166 | 23.52 | |||
Outstanding, September 30, 2013 | 1,135,250 | $16.62 | |||
Options exercisable at September 30, 2013 | 322,625 | $17.75 | |||
Weighted average assumptions used to estimate fair value of stock options | ' | ||||
The Company uses the Black-Scholes option-pricing model to estimate fair value of grants of stock options with the following weighted-average assumptions: | |||||
Nine Months Ended | |||||
30-Sep-13 | |||||
Risk-free interest rate | 1.26% | ||||
Volatility | 85.25% | ||||
Expected dividend yield | 0% | ||||
Expected life | 5.5 years | ||||
Estimated forfeiture rate | 0% | ||||
Business_Segments_and_Geograph1
Business Segments and Geographic Data (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Business Segment and Geographic Data [Abstract] | ' | ||||||||||||||||
Results of operations from business segments | ' | ||||||||||||||||
The following tables reflect results of operations from our business segments for the periods indicated below: | |||||||||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||
CONSUMER | PHYSICIAN RECURRING | PROFESSIONAL | TOTAL | ||||||||||||||
Revenues | $ | 36,910 | $ | 7,359 | $ | 1,624 | $ | 45,893 | |||||||||
Costs of revenues | 4,730 | 3,272 | 1,064 | 9,066 | |||||||||||||
Gross profit | 32,180 | 4,087 | 560 | 36,827 | |||||||||||||
Gross profit % | 87.2 | % | 55.5 | % | 34.5 | % | 80.2 | % | |||||||||
Allocated operating expenses: | |||||||||||||||||
Engineering and product development | 279 | 341 | 185 | 805 | |||||||||||||
Selling and marketing expenses | 26,958 | 3,370 | 645 | 30,973 | |||||||||||||
Unallocated operating expenses | - | - | - | 5,972 | |||||||||||||
27,237 | 3,711 | 830 | 37,750 | ||||||||||||||
Operating profit (loss) | 4,943 | 376 | (270 | ) | (923 | ) | |||||||||||
Interest and other financing expense, net | - | - | - | 473 | |||||||||||||
Income (loss) before income tax expense | $ | 4,943 | $ | 376 | $ | ( 270 | ) | $ | ( 450 | ) | |||||||
Three Months Ended September 30, 2012 | |||||||||||||||||
CONSUMER | PHYSICIAN RECURRING | PROFESSIONAL | TOTAL | ||||||||||||||
Revenues | $ | 49,638 | $ | 5,121 | $ | 1,922 | $ | 56,681 | |||||||||
Costs of revenues | 7,366 | 2,811 | 1,104 | 11,281 | |||||||||||||
Gross profit | 42,272 | 2,310 | 818 | 45,400 | |||||||||||||
Gross profit % | 85.2 | % | 45.1 | % | 42.6 | % | 80.1 | % | |||||||||
Allocated operating expenses: | |||||||||||||||||
Engineering and product development | 165 | 278 | 185 | 628 | |||||||||||||
Selling and marketing expenses | 24,980 | 2,575 | 730 | 28,285 | |||||||||||||
Unallocated operating expenses | - | - | - | 6,231 | |||||||||||||
25,145 | 2,853 | 915 | 35,144 | ||||||||||||||
Operating profit (loss) | 17,127 | (543 | ) | (97 | ) | 10,256 | |||||||||||
Interest and other financing expense, net | - | - | - | (231 | ) | ||||||||||||
Income (loss) before income tax expense | $ | 17,127 | $ | ( 543 | ) | $ | ( 97 | ) | $ | 10,025 | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||
CONSUMER | PHYSICIAN RECURRING | PROFESSIONAL | TOTAL | ||||||||||||||
Revenues | $ | 134,643 | 20,690 | $ | 5,841 | $ | 161,174 | ||||||||||
Costs of revenues | 19,422 | 9,217 | 3,683 | 32,322 | |||||||||||||
Gross profit | 115,221 | 11,473 | 2,158 | 128,852 | |||||||||||||
Gross profit % | 85.6 | % | 55.5 | % | 36.9 | % | 79.9 | % | |||||||||
Allocated operating expenses: | |||||||||||||||||
Engineering and product development | 775 | 982 | 635 | 2,392 | |||||||||||||
Selling and marketing expenses | 79,293 | 9,777 | 1,697 | 90,767 | |||||||||||||
Unallocated operating expenses | - | - | - | 17,899 | |||||||||||||
80,068 | 10,759 | 2,332 | 111,058 | ||||||||||||||
Operating profit (loss) | 35,153 | 714 | (174 | ) | 17,794 | ||||||||||||
Interest and other financing income, net | - | - | - | 470 | |||||||||||||
Income (loss) before income tax expense | $ | 35,153 | $ | 714 | $ | ( 174 | ) | $ | 18,264 | ||||||||
Nine Months Ended September 30, 2012 | |||||||||||||||||
CONSUMER | PHYSICIAN RECURRING | PROFESSIONAL | TOTAL | ||||||||||||||
Revenues | $ | 142,303 | $ | 15,467 | $ | 8,090 | $ | 165,860 | |||||||||
Costs of revenues | 22,307 | 8,095 | 4,468 | 34,870 | |||||||||||||
Gross profit | 119,996 | 7,372 | 3,622 | 130,990 | |||||||||||||
Gross profit % | 84.3 | % | 47.7 | % | 44.8 | % | 79 | % | |||||||||
Allocated operating expenses: | |||||||||||||||||
Engineering and product development | 642 | 863 | 641 | 2,146 | |||||||||||||
Selling and marketing expenses | 74,673 | 7,526 | 2,989 | 85,188 | |||||||||||||
Unallocated operating expenses | - | - | - | 22,593 | |||||||||||||
75,315 | 8,389 | 3,630 | 109,927 | ||||||||||||||
Operating profit (loss) | 44,681 | (1,017 | ) | ( 8 | ) | 21,063 | |||||||||||
Interest and other financing expense, net | - | - | - | (862 | ) | ||||||||||||
Income before income tax expense | $ | 44,681 | $ | ( 1,017 | ) | $ | ( 8 | ) | $ | 20,201 | |||||||
Net revenues and long-lived assets by geographical area | ' | ||||||||||||||||
For the three and nine months ended September 30, 2013 and 2012, net revenues by geographic area were as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
North America 1 | $ | 35,239 | $ | 38,888 | $ | 122,170 | $ | 121,524 | |||||||||
Asia Pacific 2 | 1,778 | 9,533 | 16,980 | 23,306 | |||||||||||||
Europe (including Israel) | 8,083 | 7,170 | 19,577 | 18,623 | |||||||||||||
South America | 793 | 1,090 | 2,447 | 2,407 | |||||||||||||
$ | 45,893 | $ | 56,681 | $ | 161,174 | $ | 165,860 | ||||||||||
1 United States | $ | 30,287 | $ | 31,380 | $ | 98,832 | $ | 101,473 | |||||||||
2 Japan | $ | 205 | $ | 8,144 | $ | 11,455 | $ | 18,318 | |||||||||
As of September 30, 2013 and December 31, 2012, long-lived assets by geographic area were as follows: | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
(unaudited) | |||||||||||||||||
North America | $ | 8,701 | $ | 5,772 | |||||||||||||
Asia Pacific | - | - | |||||||||||||||
Europe (including Israel) | 1,300 | 987 | |||||||||||||||
South America | - | - | |||||||||||||||
$ | 10,001 | $ | 6,759 |
Significant_Customer_Concentra1
Significant Customer Concentration (Tables) | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Significant Customer Concentration [Abstract] | ' | |||||
Significant customer concentration | ' | |||||
Significant Customer Concentration: | ||||||
Three Months Ended September 30, 2012 | Nine Months Ended September 30, 2012 | |||||
Customer A | 14% | 10% | ||||
Customer B | 9% | 8% | ||||
The_Company_Details
The Company (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Channel | |||||
Segment | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Effective date of merger | ' | ' | 1-Jul-13 | ' | ' |
Number of operating units | ' | ' | 3 | ' | ' |
Revenue Recognition [Abstract] | ' | ' | ' | ' | ' |
Number of distribution channels | ' | ' | 2 | ' | ' |
Period of sales deferred | ' | ' | '14 days | ' | ' |
Derivatives [Abstract] | ' | ' | ' | ' | ' |
Balance of derivative instruments | $314 | ' | $314 | ' | ' |
Amount recognized as financing income | 288 | ' | 494 | ' | ' |
Notional amounts of foreign currency derivatives | 13,600 | ' | 13,600 | ' | ' |
Activity in warranty accrual [Roll Forward] | ' | ' | ' | ' | ' |
Accrual at beginning of year | ' | ' | 1,440 | 1,661 | ' |
Additions charged to warranty expense | ' | ' | 1,123 | 1,189 | ' |
Expiring warranties | ' | ' | -344 | -307 | ' |
Claims satisfied | ' | ' | -1,077 | -1,076 | ' |
Total | 1,142 | 1,467 | 1,142 | 1,467 | ' |
Less: current portion | -1,071 | -1,229 | -1,071 | -1,229 | -1,274 |
Accrued long-term warranty | $71 | $238 | $71 | $238 | ' |
Weighted-average number of common and common equivalent shares outstanding [Abstract] | ' | ' | ' | ' | ' |
Basic number of common shares outstanding (in shares) | 19,982,967 | 21,205,675 | 20,518,493 | 20,001,456 | ' |
Dilutive effect of stock options and warrants (in shares) | 458,295 | 547,170 | 458,295 | 547,170 | ' |
Diluted number of common and common stock equivalent shares outstanding (in shares) | 20,441,262 | 21,752,845 | 20,976,788 | 20,548,626 | ' |
Common stock options and warrants excluded from computation of diluted earnings per share (in shares) | ' | ' | 2,101,873 | ' | ' |
Minimum [Member] | ' | ' | ' | ' | ' |
Warranty on Product Sales [Line Items] | ' | ' | ' | ' | ' |
Period of warranty on product sales | ' | ' | '1 year | ' | ' |
Extended period of warranty on domestic sale of laser equipment | ' | ' | '3 years | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' |
Warranty on Product Sales [Line Items] | ' | ' | ' | ' | ' |
Period of warranty on product sales | ' | ' | '2 years | ' | ' |
Extended period of warranty on domestic sale of laser equipment | ' | ' | '4 years | ' | ' |
PhotoMedex, Inc. [Member] | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Percentage of ownership on reverse merger (in hundredths) | ' | ' | 20.00% | ' | ' |
Radiancy, Inc. [Member] | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Percentage of ownership on reverse merger (in hundredths) | ' | ' | 80.00% | ' | ' |
Acquisition_Details
Acquisition (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Acquisition [Abstract] | ' |
Effective date of merger | 1-Jul-13 |
Percentage of shares acquired by wholly-owned subsidiary (in hundredths) | 100.00% |
Amount of consideration | $181 |
Consideration transferred in cash | 41 |
Cash down payment | 59 |
Fair value of the assets acquired and liabilities assumed [Abstract] | ' |
Cash and cash equivalents | 125 |
Accounts receivable | 1 |
Inventories | 20 |
Prepaid expenses and other current assets | 2 |
Total assets acquired at fair value | 148 |
Accounts payable | -75 |
Accrued compensation and related expenses | -2 |
Other accrued liabilities | -11 |
Total liabilities assumed | -88 |
Net assets acquired | 60 |
Goodwill recognized under reverse acquisition | $121 |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Schedule of inventories [Abstract] | ' | ' | |
Raw materials and work-in-process | $11,148 | $9,012 | |
Finished goods | 16,485 | 13,455 | |
Total inventories | $27,633 | $22,467 | [1] |
[1] | Restated |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Schedule property and equipment [Abstract] | ' | ' | ' | |
Property and equipment, gross | $17,392 | ' | $12,329 | |
Accumulated depreciation and amortization | -7,391 | ' | -5,570 | |
Total property and equipment, net | 10,001 | ' | 6,759 | [1] |
Depreciation and related amortization expense | 2,085 | 1,746 | ' | |
Lasers-in-Service [Member] | ' | ' | ' | |
Schedule property and equipment [Abstract] | ' | ' | ' | |
Property and equipment, gross | 11,660 | ' | 7,301 | |
Equipment, Computer Hardware and Software [Member] | ' | ' | ' | |
Schedule property and equipment [Abstract] | ' | ' | ' | |
Property and equipment, gross | 4,563 | ' | 4,015 | |
Furniture and Fixtures [Member] | ' | ' | ' | |
Schedule property and equipment [Abstract] | ' | ' | ' | |
Property and equipment, gross | 668 | ' | 617 | |
Leasehold Improvements [Member] | ' | ' | ' | |
Schedule property and equipment [Abstract] | ' | ' | ' | |
Property and equipment, gross | $501 | ' | $396 | |
[1] | Restated |
Patents_and_Licensed_Technolog2
Patents and Licensed Technologies, net (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Patents and Licensed Technologies [Abstract] | ' | ' | ' | |
Patents and licensed technologies, net | $11,209 | ' | $12,673 | [1] |
Estimated amortization expense for amortizable patents and licensed technologies assets [Abstract] | ' | ' | ' | |
Patents and licensed technologies, net | 11,209 | ' | 12,673 | [1] |
Patents and Licensed Technologies [Member] | ' | ' | ' | |
Patents and Licensed Technologies [Abstract] | ' | ' | ' | |
Gross Amount beginning of period | 15,411 | 15,124 | 15,124 | |
Additions | 81 | ' | 181 | |
Translation differences | -3 | ' | 106 | |
Gross Amount end of period | 15,489 | ' | 15,411 | |
Accumulated amortization | -4,280 | ' | -2,738 | |
Patents and licensed technologies, net | 11,209 | ' | 12,673 | |
Amortization expense | 1,532 | 1,530 | ' | |
Estimated amortization expense for amortizable patents and licensed technologies assets [Abstract] | ' | ' | ' | |
Last three months of 2013 | 512 | ' | ' | |
2014 | 2,046 | ' | ' | |
2015 | 2,039 | ' | ' | |
2016 | 2,019 | ' | ' | |
2017 | 899 | ' | ' | |
Thereafter | 3,694 | ' | ' | |
Patents and licensed technologies, net | $11,209 | ' | $12,673 | |
[1] | Restated |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | ||
Goodwill [Roll Forward] | ' | ' | ' | ||
Goodwill, beginning balance, as restated | $24,500 | [1] | ' | ' | |
Additions to goodwill | 121 | ' | ' | ||
Translation differences | -16 | ' | ' | ||
Goodwill, ending balance | 24,605 | ' | 24,500 | [1] | |
Accumulated impairment loss | 0 | ' | ' | ||
Schedule of definite-lived intangible assets [Abstract] | ' | ' | ' | ||
Gross Amount beginning of period | 12,116 | 12,000 | 12,000 | ||
Translation differences | -3 | ' | 116 | ||
Gross Amount end of period | 12,113 | ' | 12,116 | ||
Accumulated amortization | -2,170 | ' | -1,262 | ||
Net Book Value | 9,943 | ' | 10,854 | ||
Amortization expense | 900 | 900 | ' | ||
Estimated amortization expense for amortizable intangible assets [Abstract] | ' | ' | ' | ||
Last three months of 2013 | 300 | ' | ' | ||
2014 | 1,200 | ' | ' | ||
2015 | 1,200 | ' | ' | ||
2016 | 1,200 | ' | ' | ||
2017 | 1,200 | ' | ' | ||
Thereafter | 4,843 | ' | ' | ||
Net Book Value | 9,943 | ' | 10,854 | ||
Trademarks [Member] | ' | ' | ' | ||
Schedule of definite-lived intangible assets [Abstract] | ' | ' | ' | ||
Gross Amount beginning of period | 5,744 | 5,700 | 5,700 | ||
Translation differences | -1 | ' | 44 | ||
Gross Amount end of period | 5,743 | ' | 5,744 | ||
Accumulated amortization | -1,029 | ' | -598 | ||
Net Book Value | 4,714 | ' | 5,146 | ||
Estimated amortization expense for amortizable intangible assets [Abstract] | ' | ' | ' | ||
Net Book Value | 4,714 | ' | 5,146 | ||
Customer Relationships [Member] | ' | ' | ' | ||
Schedule of definite-lived intangible assets [Abstract] | ' | ' | ' | ||
Gross Amount beginning of period | 6,372 | 6,300 | 6,300 | ||
Translation differences | -2 | ' | 72 | ||
Gross Amount end of period | 6,370 | ' | 6,372 | ||
Accumulated amortization | -1,141 | ' | -664 | ||
Net Book Value | 5,229 | ' | 5,708 | ||
Estimated amortization expense for amortizable intangible assets [Abstract] | ' | ' | ' | ||
Net Book Value | $5,229 | ' | $5,708 | ||
[1] | Restated |
Accrued_Compensation_and_relat2
Accrued Compensation and related expenses (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Accrued Compensation and related expenses [Abstract] | ' | ' | |
Accrued payroll and related taxes | $729 | $1,010 | |
Accrued vacation | 340 | 262 | |
Accrued commissions and bonus | 1,619 | 1,222 | |
Total accrued compensation and related expense | $2,688 | $2,494 | [1] |
[1] | Restated |
Other_Accrued_Liabilities_Deta
Other Accrued Liabilities (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 | ||
In Thousands, unless otherwise specified | ||||||
Other Accrued Liabilities [Abstract] | ' | ' | ' | ' | ||
Accrued warranty, current | $1,071 | $1,274 | $1,229 | ' | ||
Accrued taxes, net | 914 | 4,304 | [1] | ' | ' | |
Accrued sales return | 8,433 | [2] | 11,901 | [2] | 11,789 | 6,143 |
Other accrued liabilities | 2,795 | 4,620 | ' | ' | ||
Total other accrued liabilities | $13,213 | $22,099 | [3] | ' | ' | |
[1] | The December 31, 2012 balance is shown as Restated. | |||||
[2] | The activity in the sales returns liability account was as follows: Nine Months Ended September 30, 2013 2012 (unaudited) (unaudited) Balance at beginning of year $ 11,901 $ 6,143 Additions that reduce net sales 29,246 22,224 Deductions from reserves (32,714 ) (16,578 ) Balance at end of period $ 8,433 $ 11,789 | |||||
[3] | Restated |
Other_Accrued_Liabilities_Sale
Other Accrued Liabilities, Sales returns liability Rollforward (Details) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | |
Sales returns liability roll forward [Abstract] | ' | ' | |
Balance at beginning of year | $11,901 | [1] | $6,143 |
Additions that reduce net sales | 29,246 | 22,224 | |
Deductions from reserves | -32,714 | -16,578 | |
Balance at end of period | $8,433 | [1] | $11,789 |
[1] | The activity in the sales returns liability account was as follows: Nine Months Ended September 30, 2013 2012 (unaudited) (unaudited) Balance at beginning of year $ 11,901 $ 6,143 Additions that reduce net sales 29,246 22,224 Deductions from reserves (32,714 ) (16,578 ) Balance at end of period $ 8,433 $ 11,789 |
Income_Taxes_Details
Income Taxes (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Effective income tax rate reconciliation [Line Items] | ' |
Statutory income tax rate (in hundredths) | 34.00% |
Israeli subsidiaries [Member] | ' |
Effective income tax rate reconciliation [Line Items] | ' |
Rate at which subsidiary earnings are taxed (in hundredths) | 20.00% |
Israeli amendment one time electives tax rates [Abstract] | ' |
Preferred income tax rate elect for 2011 (in hundredths) | 15.00% |
Preferred income tax rate elect for 2012 (in hundredths) | 15.00% |
Preferred Income Tax Rate Elect For 2013 (in hundredths) | 12.50% |
Preferred Income Tax Rate Elect For 2014 (in hundredths) | 12.50% |
Preferred Income Tax Rate Elect For 2015 and thereafter (in hundredths) | 12.00% |
Israeli subsidiaries [Member] | Current Period [Member] | ' |
Israeli amendment one time electives tax rates [Abstract] | ' |
Preferred income tax rate ( in hundredths) | 12.50% |
Standard corporate income tax rate (in hundredths) | 25.00% |
Israeli subsidiaries [Member] | Prospective [Member] | ' |
Israeli amendment one time electives tax rates [Abstract] | ' |
Preferred income tax rate ( in hundredths) | 16.00% |
Standard corporate income tax rate (in hundredths) | 26.50% |
UK Subsidiaries [Member] | ' |
Effective income tax rate reconciliation [Line Items] | ' |
Rate at which subsidiary earnings are taxed (in hundredths) | 24.00% |
Employee_Stock_Benefit_Plans_D
Employee Stock Benefit Plans (Details) (USD $) | 9 Months Ended | 1 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Stock Options [Member] | Stock Options [Member] | Stock Options [Member] | Non-Employee Director Stock Option Plan [Member] | Non-Employee Director Stock Option Plan [Member] | Non-Employee Director Stock Option Plan [Member] | 2005 Equity Plan [Member] | 2005 Equity Plan [Member] | 2005 Equity Plan [Member] | |||
Employees And Consultants [Member] | Executive Employees [Member] | Common Stock [Member] | Stock Options [Member] | Common Stock [Member] | Stock Options [Member] | ||||||
Executive | |||||||||||
Employee Stock Benefit Plan [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock authorized in stock option plan (in shares) | ' | ' | ' | ' | ' | 120,000 | ' | ' | 3,000,000 | ' | ' |
Common stock issued or reserved for issuance (in shares) | ' | ' | ' | ' | ' | ' | 7,000 | 17,285 | ' | 753,095 | 1,116,714 |
Number of Options [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding (in shares) | ' | ' | 898,541 | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | 259,625 | 177,125 | 82,500 | ' | ' | ' | ' | ' | ' |
Exercised (in shares) | ' | ' | -3,750 | ' | ' | ' | ' | ' | ' | ' | ' |
Cancelled (in shares) | ' | ' | -19,166 | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding (in shares) | ' | ' | 1,135,250 | ' | ' | ' | ' | ' | ' | ' | ' |
Options exercisable (in shares) | ' | ' | 322,625 | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding (in dollars per share) | ' | ' | $16.65 | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | $16.59 | $15 | $20 | ' | ' | ' | ' | ' | ' |
Exercised (in dollars per share) | ' | ' | $6.24 | ' | ' | ' | ' | ' | ' | ' | ' |
Cancelled (in dollars per share) | ' | ' | $23.52 | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding (in dollars per share) | ' | ' | $16.62 | ' | ' | ' | ' | ' | ' | ' | ' |
Options exercisable (in dollars per share) | ' | ' | $17.75 | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost related to non-vested option grants and stock awards | $9,703 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average period over which unrecognized compensation is expected to be recognized | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average assumptions to estimate fair value of grants of stock options [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate (in hundredths) | ' | ' | 1.26% | ' | ' | ' | ' | ' | ' | ' | ' |
Volatility (in hundredths) | ' | ' | 85.25% | ' | ' | ' | ' | ' | ' | ' | ' |
Expected dividend yield (in hundredths) | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Expected life | ' | ' | '5 years 6 months | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated forfeiture rate (in hundredths) | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Options granted to purchase common stock (in shares) | ' | ' | 259,625 | 177,125 | 82,500 | ' | ' | ' | ' | ' | ' |
Strike price of options granted (in dollars per share) | ' | ' | $16.59 | $15 | $20 | ' | ' | ' | ' | ' | ' |
Vesting period of options granted | ' | ' | ' | '5 years | '5 years | ' | ' | ' | ' | ' | ' |
Expiration period of options granted | ' | ' | ' | '10 years | '10 years | ' | ' | ' | ' | ' | ' |
Number of executive employees | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Aggregate fair value of options granted | ' | ' | ' | ' | 2,590 | ' | ' | ' | ' | ' | ' |
Total stock based compensation expense | $3,795 | $4,817 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business_Segments_and_Geograph2
Business Segments and Geographic Data (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment | ||||
Business Segment and Geographic Data [Abstract] | ' | ' | ' | ' |
Number of operating units | ' | ' | 3 | ' |
Results of operations from business segments [Abstract] | ' | ' | ' | ' |
Revenues | $45,893 | $56,681 | $161,174 | $165,860 |
Cost of revenues | 9,066 | 11,281 | 32,322 | 34,870 |
Gross profit | 36,827 | 45,400 | 128,852 | 130,990 |
Gross profit % (in hundredths) | 80.20% | 80.10% | 79.90% | 79.00% |
Allocated operating expenses [Abstract] | ' | ' | ' | ' |
Engineering and product development | 805 | 628 | 2,392 | 2,146 |
Selling and marketing expenses | 30,973 | 28,285 | 90,767 | 85,188 |
Unallocated operating expenses | 5,972 | 6,231 | 17,899 | 22,593 |
Total operating expenses | 37,750 | 35,144 | 111,058 | 109,927 |
Operating profit | -923 | 10,256 | 17,794 | 21,063 |
Interest and other financing income (expense), net | 473 | -231 | 470 | -862 |
Income (loss) before income tax expense | -450 | 10,025 | 18,264 | 20,201 |
CONSUMER [Member] | ' | ' | ' | ' |
Results of operations from business segments [Abstract] | ' | ' | ' | ' |
Revenues | 36,910 | 49,638 | 134,643 | 142,303 |
Cost of revenues | 4,730 | 7,366 | 19,422 | 22,307 |
Gross profit | 32,180 | 42,272 | 115,221 | 119,996 |
Gross profit % (in hundredths) | 87.20% | 85.20% | 85.60% | 84.30% |
Allocated operating expenses [Abstract] | ' | ' | ' | ' |
Engineering and product development | 279 | 165 | 775 | 642 |
Selling and marketing expenses | 26,958 | 24,980 | 79,293 | 74,673 |
Unallocated operating expenses | 0 | 0 | 0 | 0 |
Total operating expenses | 27,237 | 25,145 | 80,068 | 75,315 |
Operating profit | 4,943 | 17,127 | 35,153 | 44,681 |
Interest and other financing income (expense), net | 0 | 0 | 0 | 0 |
Income (loss) before income tax expense | 4,943 | 17,127 | 35,153 | 44,681 |
PHYSICIAN RECURRING [Member] | ' | ' | ' | ' |
Results of operations from business segments [Abstract] | ' | ' | ' | ' |
Revenues | 7,359 | 5,121 | 20,690 | 15,467 |
Cost of revenues | 3,272 | 2,811 | 9,217 | 8,095 |
Gross profit | 4,087 | 2,310 | 11,473 | 7,372 |
Gross profit % (in hundredths) | 55.50% | 45.10% | 55.50% | 47.70% |
Allocated operating expenses [Abstract] | ' | ' | ' | ' |
Engineering and product development | 341 | 278 | 982 | 863 |
Selling and marketing expenses | 3,370 | 2,575 | 9,777 | 7,526 |
Unallocated operating expenses | 0 | 0 | 0 | 0 |
Total operating expenses | 3,711 | 2,853 | 10,759 | 8,389 |
Operating profit | 376 | -543 | 714 | -1,017 |
Interest and other financing income (expense), net | 0 | 0 | 0 | 0 |
Income (loss) before income tax expense | 376 | -543 | 714 | -1,017 |
PROFESSIONAL [Member] | ' | ' | ' | ' |
Results of operations from business segments [Abstract] | ' | ' | ' | ' |
Revenues | 1,624 | 1,922 | 5,841 | 8,090 |
Cost of revenues | 1,064 | 1,104 | 3,683 | 4,468 |
Gross profit | 560 | 818 | 2,158 | 3,622 |
Gross profit % (in hundredths) | 34.50% | 42.60% | 36.90% | 44.80% |
Allocated operating expenses [Abstract] | ' | ' | ' | ' |
Engineering and product development | 185 | 185 | 635 | 641 |
Selling and marketing expenses | 645 | 730 | 1,697 | 2,989 |
Unallocated operating expenses | 0 | 0 | 0 | 0 |
Total operating expenses | 830 | 915 | 2,332 | 3,630 |
Operating profit | -270 | -97 | -174 | -8 |
Interest and other financing income (expense), net | 0 | 0 | 0 | 0 |
Income (loss) before income tax expense | ($270) | ($97) | ($174) | ($8) |
Business_Segment_and_Geographi
Business Segment and Geographic Data, Revenue by Geographical Data (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | ||||
Net revenues by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Revenues | $45,893 | $56,681 | $161,174 | $165,860 | ' | ||||
Long-lived assets by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Long-lived assets | 10,001 | ' | 10,001 | ' | 6,759 | ||||
North America [Member] | ' | ' | ' | ' | ' | ||||
Net revenues by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Revenues | 35,239 | [1] | 38,888 | [1] | 122,170 | [1] | 121,524 | [1] | ' |
Long-lived assets by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Long-lived assets | 8,701 | ' | 8,701 | ' | 5,772 | ||||
Asia Pacific [Member] | ' | ' | ' | ' | ' | ||||
Net revenues by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Revenues | 1,778 | [2] | 9,533 | [2] | 16,980 | [2] | 23,306 | [2] | ' |
Long-lived assets by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Long-lived assets | 0 | ' | 0 | ' | 0 | ||||
Europe (Including Israel) [Member] | ' | ' | ' | ' | ' | ||||
Net revenues by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Revenues | 8,083 | 7,170 | 19,577 | 18,623 | ' | ||||
Long-lived assets by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Long-lived assets | 1,300 | ' | 1,300 | ' | 987 | ||||
South America [Member] | ' | ' | ' | ' | ' | ||||
Net revenues by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Revenues | 793 | 1,090 | 2,447 | 2,407 | ' | ||||
Long-lived assets by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Long-lived assets | 0 | ' | 0 | ' | 0 | ||||
United States [Member] | ' | ' | ' | ' | ' | ||||
Net revenues by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Revenues | 30,287 | 31,380 | 98,832 | 101,473 | ' | ||||
Japan [Member] | ' | ' | ' | ' | ' | ||||
Net revenues by geographic area [Abstract] | ' | ' | ' | ' | ' | ||||
Revenues | $205 | $8,144 | $11,455 | $18,318 | ' | ||||
[1] | United States $ 30,287 $ 31,380 $ 98,832 $ 101,473 | ||||||||
[2] | Japan $ 205 $ 8,144 $ 11,455 $ 18,318 |
Significant_Customer_Concentra2
Significant Customer Concentration (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2012 | Sep. 30, 2012 | |
Customer A [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Percentage of revenue generated by single major customer (in hundredths) | 14.00% | 10.00% |
Customer B [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Percentage of revenue generated by single major customer (in hundredths) | 9.00% | 8.00% |