Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 24, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Central Index Key | 784,199 | |
Entity Registrant Name | CRYOLIFE INC | |
Trading Symbol | cry | |
Entity Common Stock, Shares Outstanding | 32,848,419 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Products | $ 28,004 | $ 19,859 | $ 85,067 | $ 59,168 |
Preservation services | 17,248 | 16,844 | 50,284 | 46,892 |
Total revenues | 45,252 | 36,703 | 135,351 | 106,060 |
Cost of products and preservation services: | ||||
Products | 6,598 | 4,278 | 21,299 | 13,555 |
Preservation services | 8,872 | 9,443 | 26,348 | 28,302 |
Total cost of products and preservation services | 15,470 | 13,721 | 47,647 | 41,857 |
Gross margin | 29,782 | 22,982 | 87,704 | 64,203 |
Operating expenses: | ||||
General, administrative, and marketing | 20,592 | 17,494 | 69,302 | 55,790 |
Research and development | 3,714 | 2,960 | 9,602 | 7,896 |
Total operating expenses | 24,306 | 20,454 | 78,904 | 63,686 |
Gain from sale of business components | (7,915) | |||
Operating income | 5,476 | 2,528 | 16,715 | 517 |
Interest expense | 742 | (78) | 2,256 | (18) |
Interest income | (18) | (14) | (48) | (29) |
Gain on sale of Medafor investment | (891) | |||
Other expense (income), net | 21 | (238) | (146) | 204 |
Income before income taxes | 4,731 | 2,858 | 14,653 | 1,251 |
Income tax expense (benefit) | 1,738 | 713 | 6,772 | (118) |
Net income | $ 2,993 | $ 2,145 | $ 7,881 | $ 1,369 |
Income per common share: | ||||
Basic | $ 0.09 | $ 0.08 | $ 0.24 | $ 0.05 |
Diluted | $ 0.09 | 0.07 | $ 0.24 | 0.05 |
Dividends declared per common share | $ 0.03 | $ 0.09 | ||
Weighted-average common shares outstanding: | ||||
Basic | 32,151 | 27,823 | 31,731 | 27,687 |
Diluted | 33,165 | 28,596 | 32,568 | 28,487 |
Other comprehensive loss | $ (31) | $ (349) | $ (459) | $ (124) |
Comprehensive income | $ 2,962 | $ 1,796 | $ 7,422 | $ 1,245 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 54,131 | $ 37,588 |
Restricted securities | 744 | 830 |
Receivables, net | 30,054 | 26,672 |
Inventories | 25,534 | 14,643 |
Deferred preservation costs | 28,051 | 24,741 |
Prepaid expenses and other | 3,581 | 5,189 |
Total current assets | 142,095 | 109,663 |
Property and equipment, net | 17,218 | 11,484 |
Restricted cash | 5,000 | |
Goodwill | 76,474 | 11,365 |
Patents, net | 1,021 | 1,417 |
Trademarks and other intangibles, net | 66,784 | 18,480 |
Deferred income taxes | 18,188 | |
Other | 5,265 | 5,582 |
Total assets | 308,857 | 181,179 |
Current liabilities: | ||
Accounts payable | 5,688 | 4,648 |
Accrued compensation | 7,666 | 6,335 |
Accrued procurement fees | 4,350 | 4,445 |
Accrued expenses and other | 5,249 | 4,177 |
Current portion of long-term debt | 1,805 | |
Total current liabilities | 24,758 | 19,605 |
Long-term debt | 69,633 | |
Deferred income taxes | 2,033 | |
Deferred liabilities | 5,120 | 3,753 |
Other | 3,151 | 2,570 |
Total liabilities | 104,695 | 25,928 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock | ||
Common stock (issued shares of 34,205 in 2016 and 29,766 in 2015) | 342 | 298 |
Additional paid-in capital | 185,243 | 142,888 |
Retained earnings | 31,246 | 23,365 |
Accumulated other comprehensive loss | (535) | (76) |
Treasury stock at cost (shares of 1,356 in 2016 and 1,265 in 2015) | (12,134) | (11,224) |
Total shareholders' equity | 204,162 | 155,251 |
Total liabilities and shareholders' equity | $ 308,857 | $ 181,179 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Shareholders' equity: | ||
Common stock, shares issued | 34,205 | 29,766 |
Treasury stock at cost, shares | 1,356 | 1,265 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Net cash flows from operating activities: | ||
Net income | $ 7,881 | $ 1,369 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Gain from sale of business components | (7,915) | |
Depreciation and amortization | 6,248 | 4,539 |
Non-cash compensation | 4,617 | 3,727 |
Gain on sale of Medafor investment | (891) | |
Other non-cash adjustments to income | 5,595 | 3,314 |
Changes in operating assets and liabilities: | ||
Receivables | 3,729 | (1,580) |
Inventories and deferred preservation costs | (5,739) | (692) |
Prepaid expenses and other assets | (46) | (1,267) |
Accounts payable, accrued expenses, and other liabilities | 304 | 1,508 |
Net cash flows provided by operating activities | 14,674 | 10,027 |
Net cash flows from investing activities: | ||
Acquisition of On-X, net of cash acquired | (91,152) | |
Acquisition of PhotoFix technology | (1,226) | |
Proceeds from sale of business components | 19,795 | |
Decrease in restricted cash | 5,000 | |
Capital expenditures | (3,511) | (3,186) |
Proceeds from sale of Medafor investment | 891 | |
Other | (12) | (508) |
Net cash flows used in investing activities | (71,106) | (2,803) |
Net cash flows from financing activities: | ||
Proceeds from issuance of term loan | 75,000 | |
Repayment of term loan | (1,406) | |
Payment of debt issuance costs | (2,289) | |
Cash dividends paid | (2,553) | |
Proceeds from exercise of stock options and issuance of common stock | 2,116 | 1,408 |
Other | (28) | (809) |
Net cash flows provided by (used in) financing activities | 73,393 | (1,954) |
Effect of exchange rate changes on cash | (418) | (148) |
Increase in cash and cash equivalents | 16,543 | 5,122 |
Cash and cash equivalents, beginning of period | 37,588 | 33,375 |
Cash and cash equivalents, end of period | $ 54,131 | $ 38,497 |
Basis Of Presentation
Basis Of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | 1. Basis of Presentation The accompanying summary consolidated financial statements include the accounts of CryoLife, Inc. and its subsidiaries (“CryoLife,” the “Company,” “we,” or “us”) . All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying Summary Consolidated Balance Sheet as of December 31, 2015 has been derived from audited financial statements. The accompanying unaudited summary consolidated financial statements as of, and for the three and nine months ended , September 30, 2016 and 2015 have been prepared in accordance with (i) accounting principles generally accepted in the U.S. for interim financial information and (ii) the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, such statements do not include all of the information and disclosures required by accounting principles generally accepted in the U.S. for a complete presentation of financial statements. In the opinion of management, all adjustments (including those of a normal, recurring nature) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . These summary consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in CryoLife’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 16, 2016. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments [Abstract] | |
Financial Instruments | 2. Financial Instruments The following is a summary of the Company’s financial instruments measured at fair value (in thousands): September 30, 2016 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 2,260 $ -- $ -- $ 2,260 Restricted securities: Money market funds 744 -- -- 744 Total assets $ 3,004 $ -- $ -- $ 3,004 December 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 549 $ -- $ -- $ 549 Restricted securities: Money market funds 830 -- -- 830 Total assets $ 1,379 $ -- $ -- $ 1,379 The Company used prices quoted from its investment management companies to determine the Level 1 valuation of its investments in money market funds. |
Cash Equivalents And Restricted
Cash Equivalents And Restricted Cash And Securities | 9 Months Ended |
Sep. 30, 2016 | |
Cash Equivalents And Restricted Cash And Securities [Abstract] | |
Cash Equivalents And Restricted Cash And Securities | 3. Cash Equivalents and Restricted Cash and Securities The following is a summary of cash equivalents and restricted cash and securities (in thousands): Unrealized Estimated Holding Market September 30, 2016 Cost Basis Gains Value Cash equivalents: Money market funds $ 2,260 $ -- $ 2,260 Restricted cash and securities: Money market funds 744 -- 744 Unrealized Estimated Holding Market December 31, 2015 Cost Basis Gains Value Cash equivalents: Money market funds $ 549 $ -- $ 549 Restricted cash and securities: Cash 5,000 -- 5,000 Money market funds 830 -- 830 As of September 30, 2016 and December 31, 2015 $744,000 and $830,000 , respectively, of the Company’s money market funds were designated as short-term restricted securities due to a contractual commitment to hold the securities as pledged collateral relating primarily to international tax obligations. As of December 31, 2015 $5.0 million of the Company’s cash was designated as long-term restricted cash due to a financial covenant requirement under the Company’s debt agreement. As of September 30, 2016 the Company no longer had a financial covenant requirement for restricted cash under the Company’s amended debt agreement. See further discussion of the Company’s debt agreements in Note 11 . There were no gross realized gains or losses on cash equivalents in the three and nine months ended September 30, 2016 and 2015 . As of September 30, 2016 $224,000 of the Company’s restricted securities had a maturity date within three months and $520,000 had a maturity date between three months and one year. As of December 31, 2015 $595,000 of the Company’s restricted securities had a maturity date within three months and $235,000 had a maturity date between three months and one year. As of December 31, 2015 $ 5.0 million of the Company’s long-term restricted cash had no maturity date. |
Acquisition Of On-X Life Techno
Acquisition Of On-X Life Technologies | 9 Months Ended |
Sep. 30, 2016 | |
Acquisition Of On-X Life Technologies [Abstract] | |
Acquisition Of On-X Life Technologies | 4. Acquisition of On-X Life Technologies Overview On December 22, 2015 the Company entered into an Agreement and Plan of Merger (“On-X Agreement”) to acquire On-X Life Technologies Holdings, Inc. (“On-X”), an Austin, Texas-based, privately held mechanical heart valve company, for approximately $130.0 million, subject to certain adjustments. The transaction closed on January 20, 2016 , and On-X is being operated as a wholly owned subsidiary of CryoLife. The On-X catalogue of products includes the On-X prosthetic aortic and mitral heart valves and the On-X ascending aortic prosthesis (“AAP”). On-X also distributes CarbonAid CO 2 diffusion catheters, manufactures Chord-X ePTFE sutures for mitral chordal replacement, and offers pyrolytic carbon coating services to other medical device manufacturers. CryoLife believes that the On-X products fit well into its product portfolio of medical devices for cardiac surgery and that the Company is capitalizing on the significant opportunity for CryoLife’s sales team to leverage their strong relationships with cardiac surgeons to introduce and to expand utilization of the On-X valves in the U.S. and internationally. Accounting for the Transaction The purchase price of the On-X transaction totaled approximately $128.2 million, consisting of cash of $93.6 million and 3,703,699 shares of CryoLife common stock, with a value of $34.6 million as determined on the date of the closing. This purchase price is subject to several potential adjustments, which have not yet been finalized. The Company’s preliminary allocation of the $128.2 million purchase price to On-X’s tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated fair values as of January 20, 2016, is included in the table below. Goodwill is recorded based on the amount by which the purchase price exceeds the fair value of the net assets acquired and is not deductible for tax purposes. The preliminary purchase price allocation as of January 20, 2016 is as follows (in thousands): Opening Balance Sheet Cash and cash equivalents $ 2,472 Receivables 6,371 Inventories 13,039 Intangible assets 53,950 Goodwill 66,409 Other assets 6,416 Liabilities assumed (20,440) Total purchase price $ 128,217 The preliminary allocation of the purchase price is based on preliminary valuations performed to determine the fair value of such assets as of the acquisition date. As the Company’s acquisition accounting is incomplete, the Company may adjust the amounts recorded as of September 30, 2016 to reflect any revised evaluations of the assets acquired or liabilities assumed. Goodwill from this transaction will be allocated to the Company’s M edical D evices segment. CryoLife incurred transaction and integration costs of $6.8 million for the nine months ended September 30, 2016 related to the acquisition, which include, among other costs, expenses related to the termination of international and domestic distribution agreements. These costs were expensed as incurred and were primarily recorded as general, administrative, and marketing expenses on the Co mpany’s Summary Consolidated Statements of Operations and Comprehensive Income. Pro Forma Results The Company’s unaudited pro forma results of operations for the nine months ended September 30, 2016 and 2015 , assuming the On-X acquisition had occurred as of January 1, 2015, are presented for comparative purposes below. These amounts are based on available information of the results of operations of On-X prior to the acquisition date and are not necessarily indicative of what the results of operations would have been had the acquisition been completed on January 1, 2015. The pro forma adjustments related to the acquisition of On-X are based on a preliminary purchase price allocation. Differences between the preliminary and final purchase price allocation could have an impact on the pro forma financial information presented below and that impact could be material. This unaudited pro forma information does not project operating results post acquisition. This preliminary pro forma information is as follows (in thousands, except per share amounts): Nine Months Ended September 30, 2016 2015 Total revenues $ 136,978 $ 131,143 Net income (loss) 14,552 (5,737) Pro forma income (loss) per common share - basic $ 0.45 $ (0.18) Pro forma income (loss) per common share - diluted $ 0.44 $ (0.18) Pro forma net income (loss) was calculated using a normalized tax rate of approximately 38% . |
Sales Of Business Components
Sales Of Business Components | 9 Months Ended |
Sep. 30, 2016 | |
Sales Of Business Components [Abstract] | |
Sales Of Business Components | 5. Sales of Business Components Divestiture of the HeRO Graft Product Line On February 3, 2016 the Company sold its Hemodialysis Reliable Outflow Graft (“HeRO ® Graft”) product line to Merit Medical Systems, Inc. (“Merit”) for $18.5 million in cash (“HeRO Sale”), of which $17.8 million was received on the transaction date. Under terms of the agreement, Merit acquired the HeRO Graft product line, including worldwide marketing rights, customer relationships, intellectual property, inventory, and certain property and equipment. The Company continued to manufacture the HeRO Graft under a transition supply agreement until the sales transfer to Merit was completed in the second quarter of 2016. Sales prices under the transition supply agreement were at lower average prices than the Company’s previous sales to hospitals at end-user prices. The HeRO Graft product line was included as part of the Company’s Medical Devices segment. The Company recorded a pre-tax gain of approximately $8.8 million on the HeRO Sale. Divestiture of the ProCol Product Line On March 18, 2016 the Company sold its ProCol ® Vascular Bioprosthesis (“ProCol”) distribution rights and purchase option to LeMaitre Vascular, Inc. (“LeMaitre”) for $2.0 million in cash (“ProCol Sale”), all of which was received by March 31, 2016. Under terms of the agreement, LeMaitre acquired the ProCol related assets, including inventory, customer lists, related marketing assets, and the Company’s purchase option to acquire ProCol. LeMaitre exercised the option to acquire ProCol from Hancock Jaffe Laboratories. The ProCol product was included as part of the Company’s Medical Devices segment. The Company recorded a pre-tax loss of approximately $845,000 on the ProCol Sale. In 2014 CryoLife acquired the exclusive worldwide distribution rights to ProCol from Hancock Jaffe Laboratories, Inc. (“Hancock Jaffe”). In accordance with the terms of the agreement with Hancock Jaffe, CryoLife made payments to Hancock Jaffe of $1.7 million during 2014 and $576,000 in January 2015. In exchange for these payments, CryoLife obtained the right to receive a designated amount of ProCol inventory for resale, portions of which the Company received in 2014, 2015, and 2016. CryoLife made additional payments of $1.2 million in the aggregate during 2015 and the first quarter of 2016. As of September 30, 2016 CryoLife had made a total of $3.4 million in payments to Hancock Jaffe and had received $1.7 million in inventory. The remaining $1.7 million in prepayments were settled as part of the ProCol Sale. Disclosure of the HeRO Sale and the ProCol Sale Financial Accounting Standards Board (“FASB”) ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, defines the criteria for reporting discontinued operations and requires additional disclosures about discontinued operations. The standard requires that an entity report as a discontinued operation only a disposal that represents a strategic shift in operations that has a major effect on the Company’s operations and financial results. In the first quarter of 2016 the Company completed the HeRO Sale and the ProCol Sale. The Company received cash for these transactions and recorded the results of these sales in March 2016. Therefore, as of March 31, 2016 both transactions met the disposed of by sale criteria under discontinued operations. The Company then evaluated the HeRO Sale and the ProCol Sale to determine whether these disposals represent a strategic shift that has, or will have, a major effect on the Company’s financial position, results of operations, or cash flows. The Company evaluated the impact of the HeRO Sale and the ProCol Sale on the Company’s business. As the HeRO Graft and ProCol product lines combined represented less than 10% of total Company revenues for the year ended December 31, 2015 and the Company’s total assets as of December 31, 2015, the Company believes that these transactions did not have a major effect on the Company’s operations and financial condition, either individually or in the aggregate, and therefore the Company did not disclose these transactions as discontinued operations. The combined net gain from the HeRO Sale and ProCol Sale was therefore reported as gain from sale of business components on the Company’s Summary Consolidated Statements of Operations and Comprehensive Income. |
PhotoFix Distribution Agreement
PhotoFix Distribution Agreement And Acquisition | 9 Months Ended |
Sep. 30, 2016 | |
PhotoFix Distribution Agreement And Acquisition [Abstract] | |
PhotoFix Distribution Agreement And Acquisition | 6. PhotoFix Distribution Agreement and Acquisition Overview In 2014 CryoLife entered into an exclusive supply and distribution agreement with Genesee Biomedical, Inc. (“GBI”) to acquire the distribution rights to PhotoFix TM , a bovine pericardial patch stabilized using a dye-mediated photo-fixation process that requires no glutaraldehyde. PhotoFix has received U.S. Food and Drug Administration (“FDA”) 510(k) clearance and is indicated for use in intracardiac repair, including ventricular repair and atrial repair, great vessel repair and suture line buttressing, and pericardial closure. In January 2015 the Company received its initial shipments and launched its distribution of PhotoFix. The agreement between CryoLife and GBI (the “GBI Agreement”) had an initial five -year term and was renewable for two one -year periods at CryoLife’s option. Under the terms of the GBI Agreement, CryoLife purchased PhotoFix inventory for resale at an agreed upon transfer price and had the option, which became effective in March 2015, to acquire the PhotoFix product line from GBI. Accounting for the Transaction On April 13, 2016 the Company exercised its right to acquire the PhotoFix technology from GBI for approximately $2.3 million, of which $1.2 million was paid in cash at closing, approximately $600,000 was previously provided to GBI as an advance under the distribution agreement, and approximately $400,000 is payable to GBI within 18 months of signing or earlier, subject to certain conditions. The Company’s preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired, based on their estimated fair values resulted in the allocation of the majority of the purchase price to amortizable intangible assets. GBI will continue to manufacture PhotoFix until the Company is able to establish manufacturing operations. |
Medafor Matters
Medafor Matters | 9 Months Ended |
Sep. 30, 2016 | |
Medafor Matters [Abstract] | |
Medafor Matters | 7. Medafor Matters Investment in Medafor Common Stock In 2009 and 2010 CryoLife purchased shares of common stock in Medafor, Inc., (“Medafor”) a developer and supplier of plant based hemostatic agents. The Company initially recorded its investment using the cost method as a long-term asset, investment in equity securities, on the Company’s Summary Consolidated Balance Sheets. On October 1, 2013 C.R. Bard, Inc. (“Bard”), and its subsidiaries completed its acquisition of all outstanding shares of Medafor common stock. The Company received payments of approximately $15.4 million in 2013, $530,000 in 2014, and $891,000 in April 2015 for its 2.4 million shares of Medafor common stock . The final release of transaction consideration from escrow is expected to be received in October 2017 and is expected to be nominal. This subsequent payment will be recorded as an additional gain if, and when, received by the Company. Legal Action In April 2014 CryoLife filed a declaratory judgment lawsuit against Bard, and its subsidiaries Davol, Inc. (“Davol”) and Medafor (collectively, “Defendants”), in the District Court for the District of Delaware (the “Court”) . CryoLife requested that the Court declare that CryoLife’s manufacture, use, offer for sale, and sale of PerClot in the U.S. does not, and would not, infringe Bard’s U.S. Patent No. 6,060,461 (the “‘461 Patent”). In addition, CryoLife requested that the Court declare that the claims of the ‘461 Patent are invalid. CryoLife also requested injunctive relief and an award of attorneys’ fees. The lawsuit against the Defendants followed the receipt by CryoLife of a letter from Medafor in September 2012 stating that PerClot, when introduced in the U.S., would infringe the ‘461 Patent when used in accordance with the method published in CryoLife’s literature and with the instructions for use. CryoLife received FDA 510(k) clearance for the sale of PerClot Topical in April 2014 and began distributing this product in August 2014. PerClot Topical is a version of the Company’s PerClot product, which was manufactured by the Company at its headquarters and labeled for use in certain topical indications. CryoLife also received investigational device exemption approval in March 2014 to begin clinical trials for PerClot in certain surgical indications. In August 2014 Medafor filed a counterclaim against CryoLife for infringement of the ‘461 Patent. In September 2014 Medafor filed a motion for a preliminary injunction, asking the Court to enjoin CryoLife’s marketing and sale of PerClot in the U.S. In March 2015 the Court ruled that CryoLife’s declaratory judgment lawsuit against Medafor may proceed but dismissed Bard and Davol from the lawsuit. The Court also granted Medafor’s motion for a preliminary injunction, which prohibited CryoLife from marketing, selling, and distributing PerClot in the U.S. while the litigation proceeded. In March 2015 CryoLife ceased all marketing, sales, and distribution of PerClot in the U.S., including PerClot Topical, in accordance with the Court’s order. In April 2015 CryoLife appealed the Court’s ruling on the preliminary injunction motion to the U.S. Court of Appeals for the Federal Circuit. CryoLife dismissed this appeal in June 2015. On November 18, 2015, the lawsuit was resolved by entry by the Court of the Parties’ Joint Stipulation for Dismissal, which resulted in the dismissal with prejudice of all parties’ claims and counterclaims in the lawsuit, the continuation of the preliminary injunction prohibiting CryoLife from marketing, selling and distributing PerClot in the U.S. until expiration of the ‘461 Patent on February 8, 2019, each party bearing its own attorneys’ fees and costs associated with the lawsuit, and the continuation of the Court’s jurisdiction over the parties to enforce the resolution. |
Inventories And Deferred Preser
Inventories And Deferred Preservation Costs | 9 Months Ended |
Sep. 30, 2016 | |
Inventories And Deferred Preservation Costs [Abstract] | |
Inventories And Deferred Preservation Costs | 8. Inventories and Deferred Preservation Costs Inventories at September 30, 2016 and December 31, 2015 are comprised of the following (in thousands): September 30, December 31, 2016 2015 Raw materials and supplies $ 9,156 $ 8,590 Work-in-process 2,981 633 Finished goods 13,397 5,420 Total inventories $ 25,534 $ 14,643 Deferred preservation costs at September 30, 2016 and December 31, 2015 are comprised of the following (in thousands): September 30, December 31, 2016 2015 Cardiac tissues $ 14,577 $ 11,722 Vascular tissues 13,474 13,019 Total deferred preservation costs $ 28,051 $ 24,741 The Company maintains consignment inventory of its On-X heart valves at domestic and international hospital locations to facilitate usage. The Company retains title to this consignment inventory until the valve is implanted, at which time the Company invoices the hospital. As of September 30, 2016 the Company had $4.4 million in consignment inventory, with approximately 80% in domestic locations and 20% in foreign locations. |
Goodwill And Other Intangible A
Goodwill And Other Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Other Intangible Assets [Abstract] | |
Goodwill And Other Intangible Assets | 9. Goodwill and Other Intangible Assets Indefinite Lived Intangible Assets As of September 30, 2016 and December 31, 2015 the carrying values of the Company’s indefinite lived intangible assets are as follows (in thousands): September 30, December 31, 2016 2015 Goodwill $ 76,474 $ 11,365 Procurement contracts and agreements 2,013 2,013 Trademarks 841 860 Based on its experience with similar agreements, the Company believes that its acquired procurement contracts and agreements have indefinite useful lives, as the Company expects to continue to renew these contracts for the foreseeable future. The Company believes that its trademarks have indefinite useful lives as the Company currently anticipates that these trademarks will contribute to cash flows of the Company indefinitely. As of September 30, 2016 and December 31, 2015 the value of the Company’s goodwill, all of which is related to its Medical Devices segment, is as follows (in thousands): Medical Devices Segment Balance as of December 31, 2015 $ 11,365 Goodwill from On-X acquisition 66,409 Goodwill allocated to sale of HeRO Graft product line (1,200) Goodwill allocated to sale of ProCol distribution rights and purchase option (100) Balance as of September 30, 2016 $ 76,474 Definite Lived Intangible Assets As of September 30, 2016 and December 31, 2015 the gross carrying values, accumulated amortization, and approximate amortization period of the Company’s definite lived intangible assets are as follows (in thousands): Gross Carrying Accumulated Amortization September 30, 2016 Value Amortization Period Acquired technology $ 38,478 $ 5,403 11 – 22 Years Customer lists and relationships 29,140 1,791 13 – 22 Years Distribution and manufacturing rights and know-how 4,059 1,460 11 – 15 Years Patents 3,726 2,705 17 Years Non-compete agreement 381 372 10 Years Other 1,355 457 3 Years Gross Carrying Accumulated Amortization December 31, 2015 Value Amortization Period Acquired technology $ 14,020 $ 4,954 11 – 16 Years Customer lists and relationships 3,370 1,054 13 – 17 Years Distribution and manufacturing rights and know-how 4,059 1,245 11 – 15 Years Patents 4,081 2,664 17 Years Non-compete agreement 381 343 10 Years Other 1,583 210 3 – 5 Years The increase in gross carrying value of the Company’s intangible assets as of September 30, 2016 when compared to December 31, 2015 is primarily due to the Company’s acquisitions of On-X and PhotoFix, partially offset by reductions due to the HeRO Sale. See Note 4 for further discussion of the acquisition of On-X, Note 6 for further discussion of the acquisition of PhotoFix, and Note 5 for further discussion of the HeRO Sale. Amortization Expense The following is a summary of amortization expense as recorded in general, administrative, and marketing expenses on the Company’s Summary Consolidated Statement of Operations and Comprehensive Income (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Amortization expense $ 1,155 $ 503 $ 3,273 $ 1,520 As of September 30, 2016 scheduled amortization of intangible assets for the next five years is as follows (in thousands): Remainder of 2016 2017 2018 2019 2020 2021 Amortization expense $ 1,155 $ 4,575 $ 4,457 $ 4,114 $ 3,950 $ 3,926 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 10. Income Taxes Income Tax Expense The Company’s effective income tax rate was approximately 37% and 46% for the three and nine months ended September 30, 2016 , respectively, as compared to an expense of 25% and benefit of 9% for the three and nine months ended September 30, 2015 , respectively. The Company’s income tax rate for the nine months ended September 30, 2016 was unfavorably impacted by the tax treatment of certain expenses related to the On-X acquisition, which had a larger impact on the tax rate in the first quarter of 2016, and by book/tax basis differences related to the HeRO Sale. The Company’s income tax rate for both the three and nine months ended September 30, 2015 was favorably affected by the reversal of $794,000 in uncertain tax positions , primarily related to research and development tax credits for which the statute of limitations has expired. This was partially offset by the unfavorable effect of the absence of the domestic production activities deduction, as the Company had not anticipated being eligible for this deduction in 2015. The Company’s income tax rate for the nine months ended September 30, 2015 did not include an anticipated benefit from the research and development tax credit, as this credit had not yet been enacted at that time. Deferred Income Taxes Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax return purposes. The Company generates deferred tax assets primarily as a result of book write-downs, reserves, or impairments which are not immediately deductible for tax return purposes. The Company acquired deferred tax assets, primarily net operating loss carryforwards, from its acquisitions of On-X in the first quarter of 2016, and from the acquisitions of Hemosphere and Cardiogenesis Corporation. The Company currently estimates that a portion of its state net operating loss carryforwards will not be recoverable and has, therefore, recorded a valuation allowance against these state net operating loss carryforwards. As of September 30, 2016 the Company maintained a total of $2.3 million in valuation allowances against deferred tax assets, related to state net operating loss carryforwards, and had a net deferred tax liability of $2.0 million. As of December 31, 2015 the Company had a total of $2.1 million in valuation allowances against deferred tax assets and a net deferred tax asset of $18.2 million. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt [Abstract] | |
Debt | 11. Debt GE Credit Agreement On September 26, 2014 CryoLife amended and restated its credit agreement with GE Capital, extending the expiration date and amending other terms, which are discussed further below. CryoLife’s second amended and restated credit agreement with GE Capital (the “GE Credit Agreement”) provided revolving credit for working capital, permitted acquisitions, and general corporate purposes . The GE Credit Agreement had aggregate commitments of $20.0 million for revolving loans, including swing loans, subject to a sublimit, and letters of credit, and was due to mature on September 26, 2019 . Amounts borrowed under the GE Credit Agreement were secured by substantially all of the tangible and intangible assets of CryoLife and its subsidiaries. Commitment fees were paid based on the unused portion of the facility. As of December 31, 2015 the aggregate interest rate was 4.75% . As of December 31, 2015 the outstanding balance of the GE Credit Agreement was zero , and the remaining availability was $20.0 million. The GE Credit Agreement placed limitations on the amount that the Company may borrow and included various affirmative and negative covenants, including financial covenants such as a requirement that CryoLife (i) not exceed a defined leverage ratio and (ii) maintain minimum earnings subject to defined adjustments as of specified dates. The agreement also (i) limited the payment of cash dividends, up to specified maximums and subject to satisfaction of specified conditions, (ii) required that, after giving effect to a stock repurchase, the Company maintain liquidity, as defined within the agreement, of at least $20.0 million, (iii) limited acquisitions or mergers except for certain permitted acquisitions, (iv) set specified limits on the amount the Company can pay to purchase or redeem CryoLife common stock pursuant to a stock repurchase program and to fund estimated tax liabilities incurred by officers, directors, and employees as a result of awards of stock or stock equivalents, and (v) included customary conditions on incurring new indebtedness. As required under the terms of the GE Credit Agreement, the Company maintained cash and cash equivalents of at least $5.0 million in accounts in which GE Capital had a first priority perfected lien. These amounts were recorded as long-term restricted cash as of December 31, 2015 on the Company’s Summary Consolidated Balance Sheet, as they were restricted for the term of the GE Credit Agreement. Amended Debt Agreement In connection with the closing of the On-X acquisition, discussed above in Note 4 , on January 20, 2016 the Company and certain of its subsidiaries entered into the Third Amended and Restated Credit Agreement (“Amended Debt Agreement”) with Capital One, National Association, who acquired GE Capital’s Healthcare Financial Services lending business in late 2015. The designated credit parties are Healthcare Financial Solutions, LLC; Fifth Third Bank; and Citizens Bank, National Association, collectively the (“Lending Parties”). The Amended Debt Agreement amended and restated the GE Credit Agreement discussed above and provides the Company with a senior secured credit facility in an aggregate principal amount of $95 million, which includes a $75 million term loan and a $20 million revolving credit facility (including a $4 million letter of credit sub-facility and a $3 million swing-line sub-facility). The $75 million term loan was used to finance, in part, the acquisition of On-X and will mature on January 20, 2021 . The Company and its domestic subsidiaries, subject to certain exceptions and exclusions, have guaranteed the obligations of the Amended Debt Agreement. Borrowings under the Amended Debt Agreement are secured by substantially all of the Company’s real and personal property. The loans under the Amended Debt Agreement (other than the swing-line loans) bear interest, at the Company’s option, at either a floating rate equal to the base rate, as defined in the Amended Debt Agreement, plus a margin of between 1.75% and 2.75% , depending on the Company’s consolidated leverage ratio, or a per annum rate equal to LIBOR plus a margin of between 2.75% and 3.75% , depending on the Company’s consolidated leverage ratio. As of September 30, 2016 the aggregate interest rate was approximately 3.28% . Swing-line loans shall bear interest at a floating rate equal to the base rate plus a margin of between 1.75% and 2.75% , depending on the Company’s consolidated leverage ratio. The Company is obligated to pay an unused commitment fee equal to 0.50% of the un-utilized portion of the revolving loans. In addition, the Company is also obligated to pay other customary fees for a credit facility of this size and type. If and while a payment event of default exists, the Company is obligated to pay a per annum default rate of interest of 2.00% above the applicable interest rate on the past due principal amount of the loans outstanding. If and while a bankruptcy or insolvency event of default exists, the Company is obligated to pay a per annum default rate of interest of 2.00% above the applicable interest rate on all loans outstanding. Interest is due and payable, with respect to base rate loans, on a quarterly basis. Interest is due and payable, with respect to LIBOR loans, on the last day of the applicable interest period, if the interest period is shorter than six months, or on the last day of each three month interval, if the interest period is six months or greater. The Amended Debt Agreement prohibits the Company from exceeding a maximum consolidated leverage ratio during the term of the Amended Debt Agreement and requires the Company to maintain a minimum interest coverage ratio. In addition, the Amended Debt Agreement contains certain customary affirmative and negative covenants, including covenants that limit the ability of the Company and its subsidiaries which are parties to the loan agreement to, among other things, grant liens ; incur debt ; dispose of assets ; make loans and investments ; make acquisitions ; make certain restricted payments ; merge or consolidate ; and change their business and accounting or reporting practices, in each case subject to customary exceptions for a credit facility of this size and type. As of September 30, 2016 the Company was in compliance with the covenants of the Amended Debt Agreement. The Amended Debt Agreement includes certain customary events of default that include, among other things, non-payment of principal, interest or fees; inaccuracy of representations and warranties; violation of covenants; cross-default on certain other indebtedness; bankruptcy and insolvency; and change of control. Upon the occurrence and during the continuance of an event of default, the lenders may declare all outstanding principal and accrued but unpaid interest under the Amended Debt Agreement immediately due and payable, and may exercise the other rights and remedies provided for under the Amended Debt Agreement and related loan documents. The short-term and long-term balances of the Company’s term loan are as follows (in thousands): As of September 30, 2016 2015 Term loan balance $ 73,594 $ -- Less unamortized loan origination costs (2,156) -- Total borrowed 71,438 -- Less short-term loan balance (1,805) -- Long-term loan balance $ 69,633 $ -- Interest Expense Interest expense was $742,000 and $2.3 million for the three and nine months ended September 30, 2016 , respectively. Interest expense was a favorable $78,000 and $18,000 for the three and nine months ended September 30, 2015 , respectively , due to the reversal of interest on uncertain tax positions as discussed in Note 10 . Interest expense in all periods included interest on debt and uncertain tax positions. |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | 12. Commitments and Contingencies Liability Claims The Company’s estimated unreported loss liability was $1.7 million and $1.4 million as of September 30, 2016 and December 31, 2015 , respectively . As of September 30, 2016 and December 31, 2015 , the related recoverable insurance amounts were $643,000 and $600,000 , respectively. The Company accrues its estimate of unreported product and tissue processing liability claims as a component of other long ‑term liabilities and records the related recoverable insurance amount as a component of other long ‑term assets, as appropriate. Further analysis indicated that the liability as of September 30, 2016 could have been estimated to be as high as $3.1 million, after including a reasonable margin for statistical fluctuations calculated based on actuarial simulation techniques. Employment Agreements The employment agreement of the Company’s Chairman, President, and Chief Executive Officer (“CEO”), Mr. J. Patrick Mackin, provides for a severance payment, which would become payable upon the occurrence of certain employment termination events, including termination by the Company without cause. The employment agreement of the Company’s former President, CEO, and Executive Chairman, Mr. Steven G. Anderson, conferred certain benefits on Mr. Anderson upon his retirement or termination of employment in conjunction with certain change in control events. On April 9, 2015 Mr. Anderson retired from service as an employee of the Company and Chair of its Board of Directors, and entered into a separation agreement with the Company. The Company recorded expense of approximately $1.4 million related to Mr. Anderson’s separation agreement in the second quarter of 2015. The Company had remaining obligations due under Mr. Anderson’s separation agreement of $93,000 and $195,000 as of September 30, 2016 and December 31, 2015 , respectively. PerClot Technology On September 28, 2010 the Company entered into a worldwide distribution agreement (the “Distribution Agreement”) and a license and manufacturing agreement (the “License Agreement”) with Starch Medical, Inc. (“ SMI”), for PerClot, a polysaccharide hemostatic agent used in surgery. The Distribution Agreement has a term of 15 years, but can be terminated for any reason before the expiration date by CryoLife by providing 180 days’ notice. The Distribution Agreement also contains minimum purchase requirements that expire upon the termination of the Distribution Agreement or following U.S. regulatory approval for PerClot. Separate and apart from the terms of the Distribution Agreement, pursuant to the License Agreement, as amended by a September 2, 2011 technology transfer agreement, CryoLife can manufacture and sell PerClot, assuming appropriate regulatory approvals, in the U.S. and certain other jurisdictions and may be required to pay royalties to SMI at certain rates on net revenues of products. CryoLife paid $500,000 to SMI in January 2015 related to the achievement of a contingent milestone. The Company may make additional contingent payments to SMI of up to $1.0 million if certain U.S. regulatory and certain commercial milestones are achieved. The Company is conducting its pivotal clinical trial to gain approval to commercialize PerClot for surgical indications in the U.S. Th e Company began enrollment in the trial in the second quarter of 2015 but later suspended enrollment pending consultation with the FDA regarding the trial protocol. These discussions resulted in two amendments to the trial protocol, the last of which was approved by the FDA in July 2016. The Company is in the process of conducting site start-up activities and anticipates resuming enrollment into the trial in the fourth quarter of 2016 with the goal of receiving Premarket Approval (“PMA”) from the FDA in 2019. As of September 30, 2016 the Company had $1.5 million in prepaid royalties, $3.0 million in net intangible assets, and $1.2 million in property and equipment, net on the Company’s Summary Consolidated Balance Sheets related to the PerClot product line. If the Company does not ultimately pursue or receive FDA approval to commercialize PerClot in the U.S., these assets could be materially impaired in future periods. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 13. Shareholders’ Equity Cash Dividends The Company initiated a cash dividend in the third quarter of 2012 and paid the dividend quarterly until the Company’s Board of Directors discontinued dividend payments for the foreseeable future in December 2015. The Company paid dividend payments of $853,000 and $2.6 million for the three and nine months ended September 30, 2015 , respectively, from cash on hand. The dividend payments were recorded as a reduction to retained earnings on the Company’s Summary Consolidated Balance Sheets. Common Shares Issued In January 2016 the Company issued 3,703,699 shares of CryoLife common stock, as part of the consideration for the acquisition of On-X. The stock had a value of $34.6 million as determined on the date of the closing. See Note 4 for further discussion of the On-X acquisition. |
Stock Compensation
Stock Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Stock Compensation [Abstract] | |
Stock Compensation | 14. Stock Compensation Overview The Company has stock option and stock incentive plans for employees and non-employee Directors that provide for grants of restricted stock awards (“RSAs”), performance stock awards (“PSAs”), restricted stock units (“RSUs”), performance stock units (“PSUs”), and options to purchase shares of Company common stock at exercise prices generally equal to the fair value of such stock at the dates of grant. The Company also maintains a shareholder-approved Employee Stock Purchase Plan (the “ESPP”) for the benefit of its employees. The ESPP allows eligible employees to purchase common stock on a regular basis at the lower of 85% of the market price at the beginning or end of each offering period. Equity Grants During the nine months ended September 30, 2016 the Compensation Committee of the Company’s Board of Directors (the “Committee”) authorized awards from approved stock incentive plans of RSUs to certain employees and RSAs and PSUs to certain Company officers, which, assuming that performance under the PSUs were to be achieved at target levels, together totaled 478,000 shares and had an aggregate grant date market value of $5.3 million. The PSUs granted in 2016 represent the right to receive from 60% to 150% of the target number of shares of common stock. The performance component of PSU awards granted in 2016 was based on attaining specified levels of adjusted EBITDA, adjusted inventory levels, and trade accounts receivable days sales outstanding, each as defined in the PSU grant documents, for the 2016 calendar year. The Company currently believes that achievement of the performance component is probable, and it reevaluates this likelihood on a quarterly basis. During the nine months ended September 30, 2015 the Committee authorized awards from approved stock incentive plans of RSUs to certain employees and RSAs and PSUs to certain Company officers, which, including PSUs at target levels, together totaled 405,000 shares of common stock and had an aggregate grant date market value of $4.3 million . The PSUs granted in 2015 represented the right to receive from 60% to 150% of the target number of shares of common stock. The performance component of PSU awards granted in 2015 was based on attaining specified levels of adjusted EBITDA, as defined in the PSU grant documents, for the 2015 calendar year. The PSUs granted in 2015 earned 127% of the target number of shares. The Committee authorized, from approved stock incentive plans, grants of stock options to purchase a total of 387,000 and 328,000 shares to certain Company officers during the nine months ended September 30, 2016 and 2015 , respectively. The exercise prices of the options were equal to the closing stock prices on their respective grant dates. Employees purchased common stock totaling 52,000 and 90,000 shares in the three and nine months ended September 30, 2016 , respectively, and 42,000 and 78,000 shares in the three and nine months ended September 30, 2015 , respectively, through the ESPP. Stock Compensation Expense The following weighted ‑average assumptions were used to determine the fair value of options: Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Stock Options ESPP Options Stock Options ESPP Options Expected life of options 4.8 Years 0.5 Years 4.8 Years 0.5 Years Expected stock price volatility 0.40 0.30 0.40 0.30 Dividends --% --% --% --% Risk-free interest rate 1.19% 0.49% 1.20% 0.49% Three Months Ended Nine Months Ended September 30, 2015 September 30, 2015 Stock Options ESPP Options Stock Options ESPP Options Expected life of options 4.8 Years 0.5 Years 4.5 Years 0.5 Years Expected stock price volatility 0.45 0.30 0.44 0.34 Dividends 1.24% 1.06% 1.12% 1.06% Risk-free interest rate 1.49% 0.11% 1.41% 0.12% The following table summarizes total stock compensation expenses prior to the capitalization of amounts into deferred preservation and inventory costs (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 RSA, PSA, RSU, and PSU expense $ 1,397 $ 343 $ 3,616 $ 2,833 Stock option and ESPP option expense 421 289 1,203 1,084 Total stock compensation expense $ 1,818 $ 632 $ 4,819 $ 3,917 Included in the total stock compensation expense, as applicable in each period, were expenses related to RSAs, PSAs, RSUs, PSUs, and stock options issued in each respective year, as well as those issued in prior periods that continue to vest during the period, and compensation related to the ESPP. These amounts were recorded as stock compensation expense and were subject to the Company’s normal allocation of expenses to inventory costs and deferred preservation costs. The Company capitalized $70,000 and $202,000 in the three and nine months ended September 30, 2016 , respectively, and $79,000 and $190,000 in the three and nine months ended September 30, 2015 , respectively, of the stock compensation expense into its inventory costs and deferred preservation costs. As of September 30, 2016 the Company had total unrecognized compensation costs of $6.0 million related to RSAs, PSAs, RSUs, and PSUs and $2.2 million related to unvested stock options, before considering the effect of expected forfeitures. As of September 30, 2016 this expense is expected to be recognized over a weighted-average period of 2.1 years for RSUs, 1.8 years for stock options, 1.5 years for RSAs, 1.0 years for PSUs, and 0.9 years for PSAs. |
Income Per Common Share
Income Per Common Share | 9 Months Ended |
Sep. 30, 2016 | |
Income Per Common Share [Abstract] | |
Income Per Common Share | 15. Income Per Common Share T he following table sets forth the computation of basic and diluted income per common share (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, Basic income per common share 2016 2015 2016 2015 Net income $ 2,993 $ 2,145 $ 7,881 $ 1,369 Net income allocated to participating securities (58) (44) (152) (31) Net income allocated to common shareholders $ 2,935 $ 2,101 $ 7,729 $ 1,338 Basic weighted-average common shares outstanding 32,151 27,823 31,731 27,687 Basic income per common share $ 0.09 $ 0.08 $ 0.24 $ 0.05 Three Months Ended Nine Months Ended September 30, September 30, Diluted income per common share 2016 2015 2016 2015 Net income $ 2,993 $ 2,145 $ 7,881 $ 1,369 Net income allocated to participating securities (56) (44) (148) (32) Net income allocated to common shareholders $ 2,937 $ 2,101 $ 7,733 $ 1,337 Basic weighted-average common shares outstanding 32,151 27,823 31,731 27,687 Effect of dilutive stock options and awards a 1,014 773 837 800 Diluted weighted-average common shares outstanding 33,165 28,596 32,568 28,487 Diluted income per common share $ 0.09 $ 0.07 $ 0.24 $ 0.05 ___________________ a The Company excluded stock options from the calculation of diluted weighted-average common shares outstanding if the per share value, including the sum of (i) the exercise price of the options and (ii) the amount of the compensation cost attributed to future services and not yet recognized, was greater than the average market price of the shares because the inclusion of these stock options would be antidilutive to income per common share. The Company also excluded common stock equivalents from stock awards from the calculation of diluted weighted-average common shares outstanding during periods of net losses because the inclusion of these common stock equivalents would be antidilutive to income per common share. Accordingly, stock options to purchase a weighted-average 1,000 and 810,000 shares for the three and nine months ended September 30, 2016 , respectively, and 714,000 and 787,000 shares for the three and nine months ended September 30, 2015 , respectively, were excluded from the calculation of diluted weighted-average common shares outstanding. |
Segment And Geographic Informat
Segment And Geographic Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Information [Abstract] | |
Segment Information | 16. Segment Information The Company has two reportable segments organized according to its products and services: Medical Devices and Preservation Services. The Medical Devices segment includes external revenues from product sales of BioGlue ® Surgical Adhesive; BioFoam ® Surgical Matrix; On-X products, since the acquisition of On-X; CardioGenesis cardiac laser therapy; PerClot; PhotoFix; HeRO Graft, through the second quarter of 2016; and ProCol, through the date of the ProCol Sale. The Preservation Services segment includes external services revenues from the preservation of cardiac and vascular tissues. There are no intersegment revenues. The primary measure of segment performance, as viewed by the Company’s management, is segment gross margin, or net external revenues less cost of products and preservation services. The Company does not segregate assets by segment; therefore, asset information is excluded from the segment disclosures below. The following table summarizes revenues, cost of products and services, and gross margins for the Company’s operating segments (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenues: Medical devices $ 28,004 $ 19,859 $ 85,067 $ 59,168 Preservation services 17,248 16,844 50,284 46,892 Total revenues 45,252 36,703 135,351 106,060 Cost of products and preservation services: Medical devices 6,598 4,278 21,299 13,555 Preservation services 8,872 9,443 26,348 28,302 Total cost of products and preservation services 15,470 13,721 47,647 41,857 Gross margin: Medical devices 21,406 15,581 63,768 45,613 Preservation services 8,376 7,401 23,936 18,590 Total gross margin $ 29,782 $ 22,982 $ 87,704 $ 64,203 The following table summarizes net revenues by product and service (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Products: BioGlue and BioFoam $ 15,976 $ 14,283 $ 47,479 $ 42,844 On-X 8,890 -- 25,159 -- CardioGenesis cardiac laser therapy 1,653 1,852 5,497 5,932 PerClot 950 975 2,983 2,987 PhotoFix 535 444 1,406 959 HeRO Graft -- 1,934 2,325 5,538 ProCol -- 371 218 908 Total products 28,004 19,859 85,067 59,168 Preservation services: Cardiac tissue 8,279 7,537 22,255 21,089 Vascular tissue 8,969 9,307 28,029 25,803 Total preservation services 17,248 16,844 50,284 46,892 Total revenues $ 45,252 $ 36,703 $ 135,351 $ 106,060 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments [Abstract] | |
Summary Of Financial Instruments Measured At Fair Value | September 30, 2016 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 2,260 $ -- $ -- $ 2,260 Restricted securities: Money market funds 744 -- -- 744 Total assets $ 3,004 $ -- $ -- $ 3,004 December 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 549 $ -- $ -- $ 549 Restricted securities: Money market funds 830 -- -- 830 Total assets $ 1,379 $ -- $ -- $ 1,379 |
Cash Equivalents And Restrict23
Cash Equivalents And Restricted Cash And Securities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Cash Equivalents And Restricted Cash And Securities [Abstract] | |
Summary Of Cash Equivalents And Restricted Cash And Securities | Unrealized Estimated Holding Market September 30, 2016 Cost Basis Gains Value Cash equivalents: Money market funds $ 2,260 $ -- $ 2,260 Restricted cash and securities: Money market funds 744 -- 744 Unrealized Estimated Holding Market December 31, 2015 Cost Basis Gains Value Cash equivalents: Money market funds $ 549 $ -- $ 549 Restricted cash and securities: Cash 5,000 -- 5,000 Money market funds 830 -- 830 |
Acquisition Of On-X Life Tech24
Acquisition Of On-X Life Technologies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Acquisition Of On-X Life Technologies [Abstract] | |
Preliminary Purchase Price Allocation | Opening Balance Sheet Cash and cash equivalents $ 2,472 Receivables 6,371 Inventories 13,039 Intangible assets 53,950 Goodwill 66,409 Other assets 6,416 Liabilities assumed (20,440) Total purchase price $ 128,217 |
Preliminary Pro Forma Information | Nine Months Ended September 30, 2016 2015 Total revenues $ 136,978 $ 131,143 Net income (loss) 14,552 (5,737) Pro forma income (loss) per common share - basic $ 0.45 $ (0.18) Pro forma income (loss) per common share - diluted $ 0.44 $ (0.18) |
Inventories And Deferred Pres25
Inventories And Deferred Preservation Costs (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventories And Deferred Preservation Costs [Abstract] | |
Schedule Of Inventories | September 30, December 31, 2016 2015 Raw materials and supplies $ 9,156 $ 8,590 Work-in-process 2,981 633 Finished goods 13,397 5,420 Total inventories $ 25,534 $ 14,643 |
Schedule Of Deferred Preservation Costs | September 30, December 31, 2016 2015 Cardiac tissues $ 14,577 $ 11,722 Vascular tissues 13,474 13,019 Total deferred preservation costs $ 28,051 $ 24,741 |
Goodwill And Other Intangible26
Goodwill And Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Other Intangible Assets [Abstract] | |
Schedule Of Carrying Values Of Indefinite Lived Intangible Assets | September 30, December 31, 2016 2015 Goodwill $ 76,474 $ 11,365 Procurement contracts and agreements 2,013 2,013 Trademarks 841 860 |
Schedule Of Goodwill By Reportable Segment | Medical Devices Segment Balance as of December 31, 2015 $ 11,365 Goodwill from On-X acquisition 66,409 Goodwill allocated to sale of HeRO Graft product line (1,200) Goodwill allocated to sale of ProCol distribution rights and purchase option (100) Balance as of September 30, 2016 $ 76,474 |
Schedule Of Gross Carrying Values, Accumulated Amortization, And Approximate Amortization Period Of Definite Lived Intangible Assets | Gross Carrying Accumulated Amortization September 30, 2016 Value Amortization Period Acquired technology $ 38,478 $ 5,403 11 – 22 Years Customer lists and relationships 29,140 1,791 13 – 22 Years Distribution and manufacturing rights and know-how 4,059 1,460 11 – 15 Years Patents 3,726 2,705 17 Years Non-compete agreement 381 372 10 Years Other 1,355 457 3 Years Gross Carrying Accumulated Amortization December 31, 2015 Value Amortization Period Acquired technology $ 14,020 $ 4,954 11 – 16 Years Customer lists and relationships 3,370 1,054 13 – 17 Years Distribution and manufacturing rights and know-how 4,059 1,245 11 – 15 Years Patents 4,081 2,664 17 Years Non-compete agreement 381 343 10 Years Other 1,583 210 3 – 5 Years |
Summary Of Amortization Expense | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Amortization expense $ 1,155 $ 503 $ 3,273 $ 1,520 |
Scheduled Amortization Of Intangible Assets For Next Five Years | Remainder of 2016 2017 2018 2019 2020 2021 Amortization expense $ 1,155 $ 4,575 $ 4,457 $ 4,114 $ 3,950 $ 3,926 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt [Abstract] | |
Schedule Of Short-Term And Long-Term Balances Of Term Loan | As of September 30, 2016 2015 Term loan balance $ 73,594 $ -- Less unamortized loan origination costs (2,156) -- Total borrowed 71,438 -- Less short-term loan balance (1,805) -- Long-term loan balance $ 69,633 $ -- |
Stock Compensation (Tables)
Stock Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock Compensation [Abstract] | |
Schedule Of Weighted-Average Assumptions Used To Determine The Fair Value Of Options | Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Stock Options ESPP Options Stock Options ESPP Options Expected life of options 4.8 Years 0.5 Years 4.8 Years 0.5 Years Expected stock price volatility 0.40 0.30 0.40 0.30 Dividends --% --% --% --% Risk-free interest rate 1.19% 0.49% 1.20% 0.49% Three Months Ended Nine Months Ended September 30, 2015 September 30, 2015 Stock Options ESPP Options Stock Options ESPP Options Expected life of options 4.8 Years 0.5 Years 4.5 Years 0.5 Years Expected stock price volatility 0.45 0.30 0.44 0.34 Dividends 1.24% 1.06% 1.12% 1.06% Risk-free interest rate 1.49% 0.11% 1.41% 0.12% |
Summary Of Total Stock Compensation Expenses | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 RSA, PSA, RSU, and PSU expense $ 1,397 $ 343 $ 3,616 $ 2,833 Stock option and ESPP option expense 421 289 1,203 1,084 Total stock compensation expense $ 1,818 $ 632 $ 4,819 $ 3,917 |
Income Per Common Share (Tables
Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income Per Common Share [Abstract] | |
Computation Of Basic And Diluted Income Per Common Share | Three Months Ended Nine Months Ended September 30, September 30, Basic income per common share 2016 2015 2016 2015 Net income $ 2,993 $ 2,145 $ 7,881 $ 1,369 Net income allocated to participating securities (58) (44) (152) (31) Net income allocated to common shareholders $ 2,935 $ 2,101 $ 7,729 $ 1,338 Basic weighted-average common shares outstanding 32,151 27,823 31,731 27,687 Basic income per common share $ 0.09 $ 0.08 $ 0.24 $ 0.05 Three Months Ended Nine Months Ended September 30, September 30, Diluted income per common share 2016 2015 2016 2015 Net income $ 2,993 $ 2,145 $ 7,881 $ 1,369 Net income allocated to participating securities (56) (44) (148) (32) Net income allocated to common shareholders $ 2,937 $ 2,101 $ 7,733 $ 1,337 Basic weighted-average common shares outstanding 32,151 27,823 31,731 27,687 Effect of dilutive stock options and awards a 1,014 773 837 800 Diluted weighted-average common shares outstanding 33,165 28,596 32,568 28,487 Diluted income per common share $ 0.09 $ 0.07 $ 0.24 $ 0.05 ___________________ a The Company excluded stock options from the calculation of diluted weighted-average common shares outstanding if the per share value, including the sum of (i) the exercise price of the options and (ii) the amount of the compensation cost attributed to future services and not yet recognized, was greater than the average market price of the shares because the inclusion of these stock options would be antidilutive to income per common share. The Company also excluded common stock equivalents from stock awards from the calculation of diluted weighted-average common shares outstanding during periods of net losses because the inclusion of these common stock equivalents would be antidilutive to income per common share. Accordingly, stock options to purchase a weighted-average 1,000 and 810,000 shares for the three and nine months ended September 30, 2016 , respectively, and 714,000 and 787,000 shares for the three and nine months ended September 30, 2015 , respectively, were excluded from the calculation of diluted weighted-average common shares outstanding. |
Segment And Geographic Inform30
Segment And Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Information [Abstract] | |
Revenues, Cost Of Products And Services, And Gross Margins For Operating Segments | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Revenues: Medical devices $ 28,004 $ 19,859 $ 85,067 $ 59,168 Preservation services 17,248 16,844 50,284 46,892 Total revenues 45,252 36,703 135,351 106,060 Cost of products and preservation services: Medical devices 6,598 4,278 21,299 13,555 Preservation services 8,872 9,443 26,348 28,302 Total cost of products and preservation services 15,470 13,721 47,647 41,857 Gross margin: Medical devices 21,406 15,581 63,768 45,613 Preservation services 8,376 7,401 23,936 18,590 Total gross margin $ 29,782 $ 22,982 $ 87,704 $ 64,203 |
Summary Of Net Revenues By Product And Service | Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Products: BioGlue and BioFoam $ 15,976 $ 14,283 $ 47,479 $ 42,844 On-X 8,890 -- 25,159 -- CardioGenesis cardiac laser therapy 1,653 1,852 5,497 5,932 PerClot 950 975 2,983 2,987 PhotoFix 535 444 1,406 959 HeRO Graft -- 1,934 2,325 5,538 ProCol -- 371 218 908 Total products 28,004 19,859 85,067 59,168 Preservation services: Cardiac tissue 8,279 7,537 22,255 21,089 Vascular tissue 8,969 9,307 28,029 25,803 Total preservation services 17,248 16,844 50,284 46,892 Total revenues $ 45,252 $ 36,703 $ 135,351 $ 106,060 |
Financial Instruments (Summary
Financial Instruments (Summary Of Financial Instruments Measured At Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | $ 3,004 | $ 1,379 |
Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 2,260 | 549 |
Restricted securities | 744 | 830 |
Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 3,004 | 1,379 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 2,260 | 549 |
Restricted securities | 744 | 830 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | ||
Level 2 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | ||
Restricted securities | ||
Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | ||
Level 3 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | ||
Restricted securities |
Cash Equivalents And Restrict32
Cash Equivalents And Restricted Cash And Securities (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted securities | $ 744 | $ 744 | $ 830 | ||
Restricted cash | 5,000 | ||||
Gross realized gains or losses on cash equivalents | 0 | $ 0 | 0 | $ 0 | |
Cash [Member] | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted cash | 5,000 | ||||
Money Market Funds [Member] | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted securities | 744 | 744 | 830 | ||
Maturity Date Within Three Months [Member] | Money Market Funds [Member] | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted securities | 224 | 224 | 595 | ||
Maturity Date Between Three Months And One Year [Member] | Money Market Funds [Member] | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted securities | $ 520 | $ 520 | $ 235 | ||
Minimum [Member] | Maturity Date Between Three Months And One Year [Member] | Money Market Funds [Member] | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted securities maturity period | 3 months | 3 months | |||
Maximum [Member] | Maturity Date Within Three Months [Member] | Money Market Funds [Member] | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted securities maturity period | 3 months | ||||
Maximum [Member] | Maturity Date Between Three Months And One Year [Member] | Money Market Funds [Member] | |||||
Restricted Cash and Cash Equivalents Items [Line Items] | |||||
Restricted securities maturity period | 1 year | 1 year |
Cash Equivalents And Restrict33
Cash Equivalents And Restricted Cash And Securities (Summary Of Cash Equivalents And Restricted Cash And Securities) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Cash and Cash Equivalents [Line Items] | ||||
Cost Basis | $ 54,131 | $ 37,588 | $ 38,497 | $ 33,375 |
Cost Basis | 5,000 | |||
Cost Basis | 744 | 830 | ||
Cash [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cost Basis | 5,000 | |||
Unrealized Holding Gains | ||||
Estimated Market Value | 5,000 | |||
Money Market Funds [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cost Basis | 2,260 | 549 | ||
Cost Basis | 744 | 830 | ||
Unrealized Holding Gains | ||||
Estimated Market Value | 2,260 | 549 | ||
Estimated Market Value | $ 744 | $ 830 |
Acquisition Of On-X Life Tech34
Acquisition Of On-X Life Technologies (Narrative) (Details) - USD ($) $ in Thousands | Jan. 20, 2016 | Jan. 20, 2016 | Dec. 22, 2015 | Sep. 30, 2016 |
Business Acquisition [Line Items] | ||||
Cash consideration | $ 1,226 | |||
Total purchase price | $ 91,152 | |||
On-X Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Agreement date | Dec. 22, 2015 | |||
Acquisition price | $ 128,200 | |||
Close date | Jan. 20, 2016 | |||
Total purchase price | $ 128,217 | $ 128,217 | ||
Cash consideration | $ 93,600 | |||
Common shares issued | 3,703,699 | |||
Common stock consideration | $ 34,600 | |||
Transaction and integration costs | $ 6,800 | |||
Plan [Member] | On-X Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition price | $ 130,000 |
Acquisition Of On-X Life Tech35
Acquisition Of On-X Life Technologies (Preliminary Purchase Price Allocation) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jan. 20, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 76,474 | $ 11,365 | |
On-X Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 2,472 | ||
Receivables | 6,371 | ||
Inventories | 13,039 | ||
Intangible assets | 53,950 | ||
Goodwill | 66,409 | ||
Other assets | 6,416 | ||
Liabilities assumed | (20,440) | ||
Total purchase price | $ 128,217 |
Acquisition Of On-X Life Tech36
Acquisition Of On-X Life Technologies (Preliminary Pro Forma Information) (Details) - On-X Agreement [Member] - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Business Acquisition [Line Items] | ||
Total revenues | $ 136,978 | $ 131,143 |
Net income (loss) | $ 14,552 | $ (5,737) |
Pro forma income (loss) per common share - basic | $ 0.45 | $ (0.18) |
Pro forma income (loss) per common share - diluted | $ 0.44 | $ (0.18) |
Pro forma tax rate | 38.00% | 38.00% |
Sales Of Business Components (D
Sales Of Business Components (Details) - USD ($) | Mar. 18, 2016 | Feb. 03, 2016 | Jan. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from divestiture of business | $ 19,795,000 | |||||
Payments to acquire distribution rights | 1,226,000 | |||||
Distribution agreement amount of payment | $ 576,000 | $ 1,700,000 | ||||
HJ Agreement [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Distribution agreement amount of payment | 3,400,000 | |||||
Inventory | $ 1,700,000 | |||||
HeRO Graft Product Line [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Amount of consideration received from sale of product line | $ 18,500,000 | |||||
Proceeds from divestiture of business | 17,800,000 | |||||
Pre-tax gain (loss) on sale business components | $ 8,800,000 | |||||
ProCol [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from divestiture of business | $ 2,000,000 | |||||
Pre-tax gain (loss) on sale business components | (845,000) | |||||
Remaining prepayments settled | $ 1,700,000 | |||||
HeRO Graft And ProCol Product Lines [Member] | Maximum [Member] | Product Lines Concentration Risk [Member] | Total Revenues [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Concentration percentage | 10.00% | |||||
HeRO Graft And ProCol Product Lines [Member] | Maximum [Member] | Product Lines Concentration Risk [Member] | Long-Lived Assets [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Concentration percentage | 10.00% |
PhotoFix Distribution Agreeme38
PhotoFix Distribution Agreement And Acquisition (Details) | Apr. 13, 2016USD ($) | Sep. 30, 2016USD ($)item |
Cash consideration | $ 1,226,000 | |
GBI Agreement [Member] | ||
Initial term of contract for distribution rights | 5 years | |
Number of contract renewals | item | 2 | |
Term of contract renewals | 1 year | |
Close date | Apr. 13, 2016 | |
Total purchase price | $ 2,300,000 | |
Cash consideration | 1,200,000 | |
Advance consideration | 600,000 | |
Payment after successful transfer | $ 400,000 |
Medafor Matters (Details)
Medafor Matters (Details) - USD ($) $ in Thousands, shares in Millions | Oct. 01, 2013 | Apr. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Additional payment received from C.R. Bard for acquisition of outstanding shares | $ 891 | $ 891 | $ 530 | $ 15,400 | |
C.R. Bard, Inc. [Member] | |||||
Shares of Medafor common stock acquired by C.R. Bard | 2.4 |
Inventories And Deferred Pres40
Inventories And Deferred Preservation Costs (Narrative) (Details) $ in Millions | Sep. 30, 2016USD ($) |
Inventory [Line Items] | |
Consignment inventory | $ 4.4 |
Domestic [Member] | |
Inventory [Line Items] | |
Consignment inventory percentage | 80.00% |
Foreign [Member] | |
Inventory [Line Items] | |
Consignment inventory percentage | 20.00% |
Inventories And Deferred Pres41
Inventories And Deferred Preservation Costs (Schedule Of Inventories) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventories And Deferred Preservation Costs [Abstract] | ||
Raw materials and supplies | $ 9,156 | $ 8,590 |
Work-in-process | 2,981 | 633 |
Finished goods | 13,397 | 5,420 |
Total inventories | $ 25,534 | $ 14,643 |
Inventories And Deferred Pres42
Inventories And Deferred Preservation Costs (Schedule Of Deferred Preservation Costs) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Total deferred preservation costs | $ 28,051 | $ 24,741 |
Cardiac Tissues [Member] | ||
Total deferred preservation costs | 14,577 | 11,722 |
Vascular Tissues [Member] | ||
Total deferred preservation costs | $ 13,474 | $ 13,019 |
Goodwill And Other Intangible43
Goodwill And Other Intangible Assets (Schedule Of Carrying Values Of Indefinite Lived Intangible Assets)(Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Indefinite-lived Intangible Assets [Line Items] | ||
Goodwill | $ 76,474 | $ 11,365 |
Procurement Contracts And Agreements [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets | 2,013 | 2,013 |
Trademarks [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets | $ 841 | $ 860 |
Goodwill And Other Intangible44
Goodwill And Other Intangible Assets (Schedule Of Goodwill By Reportable Segment) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Line Items] | |
Balance as of December 31, 2015 | $ 11,365 |
Goodwill from On-X acquisition | 66,409 |
Balance as of September 30, 2016 | 76,474 |
HeRO Graft [Member] | |
Goodwill [Line Items] | |
Goodwill allocated to sale | (1,200) |
ProCol [Member] | |
Goodwill [Line Items] | |
Goodwill allocated to sale | $ (100) |
Goodwill And Other Intangible45
Goodwill And Other Intangible Assets (Schedule Of Gross Carrying Values, Accumulated Amortization, And Approximate Amortization Period Of Definite Lived Intangible Assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 38,478 | $ 14,020 |
Accumulated Amortization | 5,403 | 4,954 |
Customer Lists And Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 29,140 | 3,370 |
Accumulated Amortization | 1,791 | 1,054 |
Distribution And Manufacturing Rights And Know-How [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 4,059 | 4,059 |
Accumulated Amortization | 1,460 | 1,245 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 3,726 | 4,081 |
Accumulated Amortization | 2,705 | 2,664 |
Non-Compete Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 381 | 381 |
Accumulated Amortization | 372 | 343 |
Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 1,355 | 1,583 |
Accumulated Amortization | $ 457 | $ 210 |
Minimum [Member] | Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 11 years | 11 years |
Minimum [Member] | Customer Lists And Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 13 years | 13 years |
Minimum [Member] | Distribution And Manufacturing Rights And Know-How [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 11 years | 11 years |
Minimum [Member] | Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 3 years | |
Maximum [Member] | Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 22 years | 16 years |
Maximum [Member] | Customer Lists And Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 22 years | 17 years |
Maximum [Member] | Distribution And Manufacturing Rights And Know-How [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 15 years | 15 years |
Maximum [Member] | Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 17 years | 17 years |
Maximum [Member] | Non-Compete Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 10 years | 10 years |
Maximum [Member] | Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 3 years | 5 years |
Goodwill And Other Intangible46
Goodwill And Other Intangible Assets (Summary Of Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill And Other Intangible Assets [Abstract] | ||||
Amortization expense | $ 1,155 | $ 503 | $ 3,273 | $ 1,520 |
Goodwill And Other Intangible47
Goodwill And Other Intangible Assets (Scheduled Amortization Of Intangible Assets For Next Five Years) (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Goodwill And Other Intangible Assets [Abstract] | |
Amortization expense, Remainder of 2016 | $ 1,155 |
Amortization expense, 2017 | 4,575 |
Amortization expense, 2018 | 4,457 |
Amortization expense, 2019 | 4,114 |
Amortization expense, 2020 | 3,950 |
Amortization expense, 2021 | $ 3,926 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Effective income tax rate | 37.00% | 25.00% | 46.00% | 9.00% | |
Valuation allowances against deferred tax assets | $ 2,300,000 | $ 2,300,000 | $ 2,100,000 | ||
Net deferred tax liability | $ 2,000,000 | $ 2,000,000 | |||
Net deferred tax asset | $ 18,200,000 | ||||
Research [Member] | |||||
Reversal in uncertain tax positions | $ 794,000 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Line of Credit Facility [Line Items] | ||
Term loan balance | $ 73,594,000 | |
Restricted cash and cash equivalents | $ 5,000,000 | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility aggregate commitments | $ 20,000,000 | |
Credit facility maturity date | Sep. 26, 2019 | |
Credit facility aggregate interest rate | 4.75% | |
Credit facility outstanding balance | $ 0 | |
Credit facility remaining availability | $ 20,000,000 | |
Revolving Credit Facility [Member] | On-X Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility commitment fee percentage | 0.50% | |
Revolving Credit Facility [Member] | On-X Agreement [Member] | Amended Debt Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility aggregate commitments | $ 20,000,000 | |
Revolving Credit Facility [Member] | Minimum [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility, liquidity requirement after effect to stock repurchase | 20,000,000 | |
Senior Secured Credit Facility [Member] | On-X Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility aggregate commitments | $ 95,000,000 | |
Credit facility aggregate interest rate | 3.28% | |
Credit facility default interest rate | 2.00% | |
Senior Secured Credit Facility [Member] | Minimum [Member] | On-X Agreement [Member] | Base Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility margin | 1.75% | |
Senior Secured Credit Facility [Member] | Minimum [Member] | On-X Agreement [Member] | LIBOR [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility margin | 2.75% | |
Senior Secured Credit Facility [Member] | Maximum [Member] | On-X Agreement [Member] | Base Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility margin | 2.75% | |
Senior Secured Credit Facility [Member] | Maximum [Member] | On-X Agreement [Member] | LIBOR [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility margin | 3.75% | |
Term Loan [Member] | On-X Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Term loan balance | $ 75,000,000 | |
Credit facility maturity date | Jan. 20, 2021 | |
Letter Of Credit Sub-Facility [Member] | On-X Agreement [Member] | Amended Debt Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility aggregate commitments | $ 4,000,000 | |
Swing-Line Sub-Facility [Member] | On-X Agreement [Member] | Amended Debt Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility aggregate commitments | $ 3,000,000 | |
Swing-Line Sub-Facility [Member] | Minimum [Member] | On-X Agreement [Member] | Base Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility margin | 1.75% | |
Swing-Line Sub-Facility [Member] | Maximum [Member] | On-X Agreement [Member] | Base Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility margin | 2.75% |
Debt (Schedule Of Short-Term An
Debt (Schedule Of Short-Term And Long-Term Balances Of Term Loan) (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Debt [Abstract] | |
Term loan balance | $ 73,594 |
Less unamortized loan origination costs | (2,156) |
Total borrowed | 71,438 |
Less short-term loan balance | (1,805) |
Long-term loan balance | $ 69,633 |
Commitments And Contingencies (
Commitments And Contingencies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jan. 31, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Other Commitments [Line Items] | ||||
Unreported loss liability | $ 1,700,000 | $ 1,400,000 | ||
Recoverable insurance amounts | 643,000 | 600,000 | ||
Property and equipment, net | 17,218,000 | 11,484,000 | ||
PerClot [Member] | ||||
Other Commitments [Line Items] | ||||
Prepaid royalties | 1,500,000 | |||
Net intangible assets | 3,000,000 | |||
Property and equipment, net | 1,200,000 | |||
CEO [Member] | ||||
Other Commitments [Line Items] | ||||
Incremental expense related to agreement | $ 1,400,000 | 93,000 | $ 195,000 | |
Maximum [Member] | ||||
Other Commitments [Line Items] | ||||
Estimated loss | 3,100,000 | |||
Starch Technology Purchase [Member] | ||||
Other Commitments [Line Items] | ||||
Expected future contingent payment amounts to be initially recorded as research and development expense | $ 1,000,000 | |||
Term of distribution agreement | 15 years | |||
Number of notice days | 180 days | |||
Amount paid related to achievement of contingent milestone | $ 500,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | Jan. 20, 2016 | Sep. 30, 2015 | Sep. 30, 2015 |
Equity, Class of Treasury Stock [Line Items] | |||
Dividend payment from cash on hand | $ 853,000 | $ 2,600,000 | |
On-X Agreement [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Common shares issued | 3,703,699 | ||
Common stock consideration | $ 34,600,000 |
Stock Compensation (Narrative)
Stock Compensation (Narrative) (Details) - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Employees purchased common stock, shares | 90 | 42 | 78 | ||
Capitalized stock compensation expense | $ 70,000 | $ 79,000 | $ 202,000 | $ 190,000 | |
ESPP Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
ESPP, percentage of market price for eligible employees | 85.00% | ||||
RSAs, RSUs, And PSUs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized awards from approved stock incentive plans | 478 | 405 | |||
Aggregate grant date market value | $ 5,300,000 | $ 4,300,000 | |||
Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation costs | 2,200,000 | $ 2,200,000 | |||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 1 year 9 months 18 days | ||||
RSAs, RSUs, PSUs, And PSAs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation costs | $ 6,000,000 | $ 6,000,000 | |||
Restricted Stock Awards (RSAs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 1 year 6 months | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 2 years 1 month 6 days | ||||
Performance Stock Units (PSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of target number of shares of common stock granted as Performance Stock Units | 127.00% | ||||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 1 year | ||||
Performance Stock Awards (PSAs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 10 months 24 days | ||||
Minimum [Member] | Performance Stock Units (PSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of target number of shares of common stock granted as Performance Stock Units | 60.00% | 60.00% | |||
Maximum [Member] | Performance Stock Units (PSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of target number of shares of common stock granted as Performance Stock Units | 150.00% | 150.00% | |||
Officers [Member] | Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants of stock options | 387 | 328 |
Stock Compensation (Schedule Of
Stock Compensation (Schedule Of Weighted-Average Assumptions Used To Determine The Fair Value Of Options) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life of options | 4 years 9 months 18 days | 4 years 9 months 18 days | 4 years 9 months 18 days | 4 years 6 months |
Expected stock price volatility | 40.00% | 0.45% | 40.00% | 0.44% |
Dividends | 1.24% | 1.12% | ||
Risk-free interest rate | 1.19% | 1.49% | 1.20% | 1.41% |
ESPP Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life of options | 6 months | 6 months | 6 months | 6 months |
Expected stock price volatility | 30.00% | 0.30% | 30.00% | 0.34% |
Dividends | 1.06% | 1.06% | ||
Risk-free interest rate | 0.49% | 0.11% | 0.49% | 0.12% |
Stock Compensation (Summary Of
Stock Compensation (Summary Of Total Stock Compensation Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 1,818 | $ 632 | $ 4,819 | $ 3,917 |
RSAs, RSUs, PSUs, And PSAs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | 1,397 | 343 | 3,616 | 2,833 |
Stock Option And ESPP Option Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 421 | $ 289 | $ 1,203 | $ 1,084 |
Income Per Common Share (Detail
Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Net income | $ 2,993 | $ 2,145 | $ 7,881 | $ 1,369 | |
Net income (loss) allocated to participating securities | (58) | (44) | (152) | (31) | |
Net income allocated to common shareholders | $ 2,935 | $ 2,101 | $ 7,729 | $ 1,338 | |
Basic weighted-average common shares outstanding | 32,151 | 27,823 | 31,731 | 27,687 | |
Basic income per common share | $ 0.09 | $ 0.08 | $ 0.24 | $ 0.05 | |
Net income (loss) allocated to participating securities, diluted | $ (56) | $ (44) | $ (148) | $ (32) | |
Net income allocated to common shareholders, diluted | $ 2,937 | $ 2,101 | $ 7,733 | $ 1,337 | |
Effect of dilutive stock options and awards | [1] | 1,014 | 773 | 837 | 800 |
Diluted weighted-average common shares outstanding | 33,165 | 28,596 | 32,568 | 28,487 | |
Diluted income per common share | $ 0.09 | $ 0.07 | $ 0.24 | $ 0.05 | |
Stock Options [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share | 1 | 714 | 810 | 787 | |
[1] | The Company excluded stock options from the calculation of diluted weighted-average common shares outstanding if the per share value, including the sum of (i) the exercise price of the options and (ii) the amount of the compensation cost attributed to future services and not yet recognized, was greater than the average market price of the shares because the inclusion of these stock options would be antidilutive to income per common share. The Company also excluded common stock equivalents from stock awards from the calculation of diluted weighted-average common shares outstanding during periods of net losses because the inclusion of these common stock equivalents would be antidilutive to income per common share. Accordingly, stock options to purchase a weighted-average 1,000 and 810,000 shares for the three and nine months ended September 30, 2016, respectively, and 714,000 and 787,000 shares for the three and nine months ended September 30, 2015, respectively, were excluded from the calculation of diluted weighted-average common shares outstanding. |
Segment And Geographic Inform57
Segment And Geographic Information (Revenues, Cost Of Products And Services, And Gross Margins For Operating Segments) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Total revenues | $ 45,252 | $ 36,703 | $ 135,351 | $ 106,060 |
Total cost of products and preservation services | 15,470 | 13,721 | 47,647 | 41,857 |
Total gross margin | 29,782 | 22,982 | 87,704 | 64,203 |
Operating Segments [Member] | Medical Devices [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 28,004 | 19,859 | 85,067 | 59,168 |
Total cost of products and preservation services | 6,598 | 4,278 | 21,299 | 13,555 |
Total gross margin | 21,406 | 15,581 | 63,768 | 45,613 |
Operating Segments [Member] | Preservation Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 17,248 | 16,844 | 50,284 | 46,892 |
Total cost of products and preservation services | 8,872 | 9,443 | 26,348 | 28,302 |
Total gross margin | $ 8,376 | $ 7,401 | $ 23,936 | $ 18,590 |
Segment And Geographic Inform58
Segment And Geographic Information (Summary Of Net Revenues By Product And Service) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Product Information [Line Items] | ||||
Total revenues | $ 45,252 | $ 36,703 | $ 135,351 | $ 106,060 |
BioGlue And BioFoam [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 15,976 | 14,283 | 47,479 | 42,844 |
On-X [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 8,890 | 25,159 | ||
CardioGenesis Cardiac Laser Therapy [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 1,653 | 1,852 | 5,497 | 5,932 |
PerClot [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 950 | 975 | 2,983 | 2,987 |
PhotoFix [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 535 | 444 | 1,406 | 959 |
HeRO Graft [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 1,934 | 2,325 | 5,538 | |
ProCol [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 371 | 218 | 908 | |
Cardiac Tissues [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 8,279 | 7,537 | 22,255 | 21,089 |
Vascular Tissues [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 8,969 | 9,307 | 28,029 | 25,803 |
Operating Segments [Member] | Total Products [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | 28,004 | 19,859 | 85,067 | 59,168 |
Operating Segments [Member] | Total Preservation Services [Member] | ||||
Product Information [Line Items] | ||||
Total revenues | $ 17,248 | $ 16,844 | $ 50,284 | $ 46,892 |